Profitable production

Agriculture is a business requiring entrepreneurship. Farmers are entrepreneurs, and most of them run a demanding business despite the scale of their operation. At the same time, a large number of the billion or so farmers worldwide are still engaged in subsistence agriculture, largely detached from commercial markets. These farmers barely make a living from the land, and are neither able to grow enough food to feed their own families nor generate revenues to pay for other living expenses. A major challenge within the economic dimension of sustainable agriculture is to develop subsistence farms into viable small-scale businesses.

Farming in the developing world tends to be dominated by small landholders. Their patches of land gradually become less productive because of intensive cultivation and soil depletion. Many live on depleted land prone to drought, and poor farmers often face the threat of eviction. In some developing regions, particularly Africa, a large percentage of the farmers are women who often are barred from inheriting and owning land for cultural reasons. They’re also unable to obtain credit, since they lack collateral.

In the developed world, many farmers have left their farms because they’ve been unable to make a living off the land. Small farmers in particular have lost their land because of economic pressure. More than 155,000 farms in the USA were lost between 1987 and 1997. The huge capital requirements of modern farming have prompted large farms to apply ever more intensive methods: Not necessarily the most sustainable solution from an ecological perspective, but often the only economic option.

Regional potential

The true economic sustainability of agriculture in developed regions is questionable, as long as it to a great extent depends on government subsidies and other stimulus to remain commercially viable. Agriculture in Europe, Japan and the USA is heavily subsidized, which poses a threat to farmers in developing countries who can’t compete against subsidized products on the world market.

Farming in developing countries, meanwhile, remains labor-intensive while farming in developed countries is capital-intensive. In both cases, farming requires considerable investment to be productive and profitable.

The Green Revolution of the 1960s and ‘70s revolutionized agriculture especially in South Asia and Latin America, greatly expanding yields through the introduction of new technologies, high-yielding seeds, mineral fertilizers and crop protection agents. Although disputed because of some negative environmental and economic effects, the Green Revolution produced dramatically more food and saved hundreds of millions of people from starvation.

African Green Revolution

A second such revolution could create an improved foundation for a more viable agricultural sector able to feed the world – at the same time learning from the experiences of the past and truly contributing towards sustainability.

A particular call has been made for a genuine African Green Revolution. Africa south of the Sahara was, for several reasons, bypassed by the original Green Revolution. Its agriculture remains generally far less productive and profitable than elsewhere, even though it’s the mainstay of African society. Africa has great potential for profitable farming, with recent experiences from Malawi, for example, showing that yields can double from one growing season to the next and triple in three to five years.

Yara, as the world’s leading producer of mineral fertilizers, is a key player in improving agricultural productivity and securing a profitable, viable business for farmers all over the globe. Yara offers a wide range of fertilizer products – and extensive agronomic knowledge that is shared with the farming community. The company has supported development programs in Africa and works closely with customers all over the world to help them best use Yara’s plant nutrients, to boost their yields.

Since listing on the Oslo Stock Exchange in 2004, Yara has delivered strong results based on its business model and global presence. Through its core business of fertilizer production, its co-products and applications, expertise and global reach, Yara is building a sustainable business of its own and is eager to help make agriculture sustainable and profitable, as well.