Access to land close to the city markets is a huge advantage in this business. You should also arrange for close water sources (wells, bore holes, pipe-borne water etc.) to allow all-year round vegetable farming.
Income from vegetable sales during the dry season can be up to three times the wet season prices. As a result, entrepreneurs must target a huge proportion of their production volumes to coincide with this period.
As the markets are flooded with vegetables during the wet season, prices are usually low and are likely to lead to poor profits. A dry season-focused strategy is sure to be very rewarding.
Vegetables that require a short duration (like lettuces and other leafy vegetables) can be used for immediate returns. However, it is important that African entrepreneurs understand and can predict the trend in demand for various vegetables in the local market.
Another important strategy is to sell beyond the farm. Vegetable vendors (who sell in the markets) are known to earn up to four times more than the actual vegetable farmers. Obtaining direct access to consumers will be a good way to increase the profit potential of this venture.
Restaurants, households, major supermarkets (green grocers), chefs and caterers are very good targets and will be glad to buy directly from farmers due to the lower costs (compared to the open markets) and freshness of the product. However, you must be prepared for the strict quality standards required by some of these customers.
Since access to land and water are major constraints to this business, entrepreneurs who have access to these can enter into arrangements such as:
Share cropping: Allow experienced vegetable farmers access to your land and facilities and receive a share of the harvest (maybe 50 percent or more). This arrangement provides an ownership incentive to the farmers who will ensure a bumper harvest while the entrepreneur bears little or no risk. However, you may need to be very vigilant, especially during the harvest and sales, to avoid cheating or theft.
Tenancy or Caretaking: Charge vegetable farmers a fixed fee or rent for use of your land and facilities. This arrangement is independent of the farm’s harvest or sales and is a very low risk option for the entrepreneur. Owners of undeveloped and fallow urban land without the time for close monitoring will find this option useful.
Wages: Employ the services of cheap labor who can be taught to properly grow the desired vegetables and pay them a daily, weekly or monthly wage. This option requires a lot of involvement as the entrepreneur bears all the risks of the business. In addition, there is little or no incentive for laborers to ensure a quality harvest. However, if this arrangement is properly done, the entrepreneur enjoys all the rewards of the harvests; which can be huge!