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Entrepreneurial farmers leading economic progress worldwide

In June and July, this column looked at ways entrepreneurship in agriculture influences the local economy. This month’s column expands the horizon a bit and examines how entrepreneur farmers are leading the change in the global economy.

Since the late 1980s, free markets have led the way in helping developing countries become more prosperous. Since 1990, the number of people in developing countries in extreme poverty fell from 43 percent to 21 percent. One billion fewer people now are living below the worldwide extreme poverty level of $1.25 a day. America’s poverty line is $32 a day for one person.

The rise of capitalism is the reason most often cited for this rise in income around the world. The end of communism in Eastern Europe and other parts of the world allowed individuals to own businesses and the profits coming from them.

Contributing to this reduction in poverty are applications of technology that have led to higher productivity in agriculture. Technological advances have improved the quantity and quality of food produced in the developed and developing worlds.

While developed countries such as the United States rely less on farming to provide jobs, agriculture still is the primary industry in most developing countries. For example, agriculture accounts for only 4.2 percent of employment in developed nations, but employs more than 52 percent of the workforce in Africa and between 30 percent and 40 percent in Asia.

With the onset of capitalism, farmers in many of these developing countries need to become more entrepreneurial. They are learning better farming techniques to be more productive.

Similar to what has been reported about farmers becoming more entrepreneurial in this country, farmers around the world are learning how to be better business people. They are learning how to take calculated risks and find more ways to make their farms more profitable.

Around the world, farms have undergone dramatic changes. Some of these changes have been initiated by external factors. They continuously look for better ways to organize their farms, grow new crops, raise better animals and find ways to diversify production to reduce risks.

Farmers have found new revenue streams. This additional income may have some link to agriculture, but is also found outside the direct realm of agriculture. One example is agro-tourism, in which farmers welcome vacationers for a short visit and in many places offer a bed and breakfast where guests participate in hands-on local agricultural activity.

Farmers have the responsibility of being the leaders of economic change in many developing countries. They face huge challenges in that they have to constantly improve yields as governments sign more trade agreements allowing for lower-priced produce to enter their countries. If successful, the new generation of farmers will provide food at lower costs and higher profits. As leaders, they are expected to pull their country forward as entrepreneurs.

One program equipping farmers for this role of entrepreneurial farmer is offered by Arava International Center for Agricultural Training – AICAT – in Sapir, Israel. Eyal Policar is the faculty manager in charge of the economic training of the center. I have had the pleasure to work with Policar on some entrepreneurial research over the past two years.

AICAT brings more than 1,000 trainees from eight developing countries in Asia and Africa to Israel.

“The idea that university undergrads can see innovation firsthand has a powerful effect on their future understandings of what is possible,” Policar said. “The training is a doing-by-learning, learning-by-doing approach.”

The students are partnered with local farmers to complete a research project that includes a business plan for when they return to their home countries. The trainees are future farmers in their countries and middle managers in agricultural firms. Some enter government positions where this training is applied forming government policies.

Programs like AICAT are being started around the world to help feed people and improve the lives of those living in these developing countries.

Perry Haan is professor of marketing and entrepreneurship at Tiffin University. He can be reached at (419) 618-2867.