an evaluation of factors affecting entrepreneurship …
TRANSCRIPT
i
AN EVALUATION OF FACTORS AFFECTING ENTREPRENEURSHIP
SKILLS OF SMALL SCALE FARMERS: A CASE STUDY OF
KANAKANTAPA FARMING AREA.
By
HAZVENEYI MAREBESA
A Dissertation Report Submitted in Partial Fulfillment of the
Requirements for the Award of Bachelor of Development Studies Degree of
the Cavendish University Zambia
ii
DECLARATION
I Hazveneyi Marebesa declare that the work in this thesis was carried out in accordance with
the regulations of the Cavendish University Zambia and is original except where indicated by
specific reference in the text. No part of the thesis has been submitted as part of any other
academic award. The thesis has not been presented to any other education institution. Any
views expressed in the thesis are those of the author and in no way represent those of the
School.
Signature……………………………………………
Date………………………………
iii
ACKNOWLEDGEMENTS
First of all, I would like to thank God and express my sincere gratitude to all people, who
supported me during the preparation of the study journey. I wish to acknowledge the
tremendous efforts of my supervisor Mr. Hapompwe, for his timeless effort in guiding me to
come up with this project report and make this work a success. My gratitude go to Cavendish
University Zambia for having given me a chance and a conducive environment to undertake
my studies, my gratitude also goes to all the university lecturers who thought me in various
courses while undertaking my Bachelors program in Development Studies.
.
iv
DEDICATION
I dedicate this work to my dear mother Daphine Adams for her unwavering financial and
moral support that has brought me this far. May the Almighty God bless you. I sincerely
thank you for your guidance and support
v
TABLE OF CONTENTS
DECLARATION.................................................................................................................................... i
ACKNOWLEDGEMENTS ................................................................................................................ iii
DEDICATION...................................................................................................................................... iii
LIST OF TABLES ............................................................................................................................. viii
LIST OF FIGURES ............................................................................................................................. ix
LIST OF ACRONYMS AND ABBREVIATIONS ............................................................................ x
OPERATIONAL DEFINITION OF TERMS ................................................................................... xi
ABSTRACT ......................................................................................................................................... 12
1.0 CHAPTER ONE: INTRODUCTION ......................................................................................... 13
1.1 Introduction ..................................................................................................................................... 13
1.2 Background to the study ................................................................................................................. 14
1.3 Problem statement ........................................................................................................................... 15
1.4 Objectives of study ......................................................................................................................... 16
1.4.1 General objective of study ........................................................................................................... 16
1.4.2 Specific Objectives of Study ........................................................................................................ 16
1.5 Research Question .......................................................................................................................... 17
1.6 Significance and Justification of the Study ..................................................................................... 17
1.7 Limitations ...................................................................................................................................... 17
1.8. Scope of the Study ......................................................................................................................... 17
2.0 CHAPTER TWO: LITERATURE REVIEW ............................................................................ 19
2.1 Introduction ..................................................................................................................................... 19
2.2 Operational Definitions ................................................................................................................... 19
2.2.1 Entrepreneurship .......................................................................................................................... 19
2.2.2 Entrepreneurship Skills in the Farming Business ........................................................................ 20
2.3. Theoretical Framework .................................................................................................................. 21
2.4 Previous studies .............................................................................................................................. 23
2.4.1 Educational training and Information .......................................................................................... 23
2.4.2 Access to credit and Financial Literacy ....................................................................................... 23
2.4.3 Access to Markets ........................................................................................................................ 24
2.5. Research Variables arising from Literature Review ...................................................................... 24
2.5.1 Challenges in Acquiring Entrepreneurship Skills by Small Scale Farmers ................................. 24
2.5.2 Successful Farm Entrepreneurship Development ........................................................................ 26
vi
2.6 Conceptual Framework ................................................................................................................... 28
Figure 2.1: Conceptual Framework ...................................................................................................... 28
2.7 Conclusion ...................................................................................................................................... 28
3.0 CHAPTER THREE: METHODOLOGY AND DESIGN ......................................................... 29
3.1 Introduction ..................................................................................................................................... 29
3.2. Research design ............................................................................................................................. 30
3.3. Population of study ........................................................................................................................ 30
3.4 Sample size ..................................................................................................................................... 30
3.5 Sampling Design ............................................................................................................................. 31
3.6. Research Instruments ..................................................................................................................... 31
3.7 Validity and Reliability of Research Instruments ........................................................................... 32
3.8 Response Rate ................................................................................................................................. 32
3.9 Data Analysis .................................................................................................................................. 33
3.10 Ethical Considerations .................................................................................................................. 33
4.0 CHAPTER FOUR- DATA PRESENTATION AND ANALYSIS ............................................ 34
4.0 Introduction ..................................................................................................................................... 34
4.1 Demographics Data Analysis .......................................................................................................... 34
Table 4.1: Demographics summary Statistics ....................................................................................... 34
4.1.1 Gender .......................................................................................................................................... 35
Table 4.2. Respondents Gender frequency distribution ........................................................................ 35
Figure 4.1. Respondents Gender Histogram ......................................................................................... 36
4.1.2 Age ............................................................................................................................................... 37
Table 4.3. Respondents Age frequency distribution ............................................................................. 37
Figure 4.2. Respondents Age frequency distribution ............................................................................ 38
Figure 4.3. Respondents Age Pie Chart ................................................................................................ 39
4.1.3 Farm Size ..................................................................................................................................... 40
Table 4.4. Respondents Farm Size frequency distribution ................................................................... 40
4.1.4 Full Time or Part Time Farmer .................................................................................................... 40
Table 4.5. Respondents Full Time or Part Time Farmer Histogram ..................................................... 40
Figure 4.4. Respondents Full Time or Part Time Farmer Histogram ................................................... 41
4.1.5 Demographic Data Correlation Analysis ..................................................................................... 42
Table 4. 6: Pearson Correlation Analysis .............................................................................................. 42
4.2 Factors that hinders development of entrepreneurship skills among small scale farmers .............. 42
Table 4.7: Education, Training and Entrepreneurship Skills Descriptive Statistics ............................. 42
Table 4.8: Financial Literacy Descriptive Statistics ............................................................................. 43
4.3 Factors affecting entrepreneurship skills ........................................................................................ 44
Table 4.9: Education, Training and Entrepreneurship Skills Frequency Distributions ........................ 45
vii
Table 4.10: Financial Literacy Frequency Distributions ....................................................................... 48
5.0 CHAPTER FIVE: INTERPRETATION & DISCUSSION OF FINDINGS ........................... 50
5.1 Introduction ..................................................................................................................................... 50
5.2 Factors That Hinders Development of Entrepreneurship Skills among Small Scale Farmers ........ 50
5.3 Extent to which the factors affecting entrepreneurship skills have contributed to the stagnation of
small scale farmers ................................................................................................................................ 51
5.4 Effectiveness of the Measures Taken To Develop Entrepreneurship Skills among Small Scale
Farmers ................................................................................................................................................. 52
6.0 CHAPTER SIX- CONCLUSIONS AND RECOMMENDATIONS ........................................ 54
6.1 Introduction ..................................................................................................................................... 54
6.2 Conclusions ..................................................................................................................................... 54
6.3 Recommendations ........................................................................................................................... 55
REFERENCES .................................................................................................................................... 56
APPENDIX I: QUESTIONNAIRE ........................................................ Error! Bookmark not defined.
viii
LIST OF TABLES
Table 4.1: Demographics summary Statistics .......................... Error! Bookmark not defined.
Table 4. 2: Pearson Correlation Analysis ................................................................................ 32
Table 4.3: Education, Training and Entrepreneurship Skills Descriptive Statistics ................ 42
Table 4.4: Education, Training and Entrepreneurship Skills Frequency Distributions ........... 45
Table 4.5: Financial Literacy Descriptive Statistics ................................................................ 43
Table 4.6: Financial Literacy Frequency Distributions ........................................................... 48
ix
LIST OF FIGURES
Figure 2.1: Conceptual Framework ......................................................................................... 19
Figure 4.1. Respondents Gender frequency distribution ......................................................... 26
Figure 4.2. Respondents Gender Histogram ............................................................................ 26
Figure 4.3. Respondents Age frequency distribution............................................................... 27
Figure 4.4. Respondents Age Pie Chart ................................................................................... 29
Figure 4.5. Respondents Farm Size frequency distribution ..................................................... 30
Figure 4.6. Respondents Full Time or Part Time Farmer Histogram ...................................... 31
x
LIST OF ACRONYMS AND ABBREVIATIONS
SPSS Statistical Package for Social Science
SME Small and Medium Enterprises
SMME Micro and Medium Enterprise
NGO Non-Governmental Organization
xi
OPERATIONAL DEFINITION OF TERMS
Entrepreneurship: The definition of entrepreneurs by Ahmad and Hoffman (2008)
is adjusted for the purpose of this study to define small scale
farming entrepreneurs as those individuals with a potential to
generate value, through the creation, expansion or innovation of
economic activity by identification and exploitation of new
agricultural products, agro-processes or markets.
Entrepreneurship Skills: In Entrepreneurial skill can be defined as the ability to create
something new with value by devoting the necessary time and
effort, assuming the accompanying financial, psychic and social
risks, and receiving the resulting rewards of monetary and
personal satisfaction and independence (Hisrich & Peters, 2002).
Farming: Farming is a great way to describe the lifestyle and work of
people whose jobs are in the agriculture industry. People often
have a romantic idea of what farming is like roosters crowing,
farmers driving tractors and milking goats although farming can
be very hard work, dependent on food prices and weather.
12
ABSTRACT
Small Scale Farming business in Zambian’s agricultural sector has not performed
well enough to play their expected vital role in the economic growth and development of
the country. This situation has been of great concern to the government, citizenry, sector
operators, practitioners and the organised private sector groups.
The purpose of this study was to evaluate the factors which influence performance of Small Scale
Farmers in Kanakantapa Farming Area. The study had the following objectives: To identify the
factors that hinders development of entrepreneurship skills among small scale farmers. To examine
the extent to which the factors affecting entrepreneurship skills have contributed to the stagnation
of small scale farmers in Kanakantapa Farming Area of Zambia. To establish the effectiveness of
the measures taken to develop entrepreneurship skills among small scale farmers. The study
employed descriptive and explanatory survey research design to evaluate the factors which
influence performance of Small Scale Farmers in Kanakantapa Farming Area. The sample size
consisted of 67 Small scale farmers obtained from a total population
of 500 Small scale farmers. The respondents were selected through simple random sampling
techniques. The research instruments used were questionnaires and interview schedules. The
results were interpreted and placed on frequency distribution tables in percentages that display
systematically the results and give meaning of reported figures; these were used to provide an
adequate statistical report to the findings. The last section of the report contains a summary of
findings of the study as well as discussions and conclusions based on the findings.
13
1.0 CHAPTER ONE: INTRODUCTION
1.1 Introduction
The term entrepreneurship is used to describe a dynamic process of creating incremental wealth
(Shailesh et al., 2013). This wealth is created by individuals who take the major risks in
terms of equity, time and career commitment of providing value to some product or services,
the product or service itself may or may not be new or unique but value must somehow be infused
by the entrepreneur by securing and allocating the necessary skill and resources. In other words
entrepreneurship is the application of energy for initiating and building an enterprise (Mishra
et al., 2010). Presently, in Nigeria an entrepreneur is an innovator who recognizes and seizes
opportunities, converts those opportunities into workable ideas, adds value, effort, money,
skill and assumes risks of competition to actualize the ideas and takes the reward.
Entrepreneurship is associated with innovative and dynamic developments within the Small,
Micro and Medium Enterprise (SMME) sector (United State Department of Agriculture, 2011).
Therefore, entrepreneurship is a charismatic concept, widely used and widely defined; for
example, as a creative and innovative response to the environment (Chandramouli et al., 2007).
Onubuogu and Esiobu (2014) opined that sustainable development of agribusiness requires
the development of entrepreneurial and organizational competency in farmers. Developing
entrepreneurial skills of farmers can take two tracks. The first is to amend the social, economic,
political, and cultural frameworks that hinders, and foster those that stimulate their development.
The second is encouragement of farmers, via their personalities and capabilities, to kindle the
development of entrepreneurship. If farming competitiveness is to be improved by nurturing
entrepreneurial behaviour, both tracks have to be considered. The improvement of
entrepreneurial skills in agriculture is an important condition to generate sustainable rural
development (de Wolf and Schoorlemmer, 2007). If entrepreneurship is an instrument for
improving the quality of life for families and communities, and for sustaining a fit economy
and environment, fostering entrepreneurship skill must be regarded as an urgently needed
development component (Chandramouli et al., 2007). Though government development
programmes are put in place to promote entrepreneurship, most agribusinesses are still
encountering challenges that stagnates entrepreneurial activities
14
1.2 Background to the study
Entrepreneurship is known as self-acknowledged conviction by a person that they intend to set up
a new business venture and consciously do so at some point in future (Kuckertz and Wagner, 2010;
Thompson, 2009). Entrepreneurship is about initiating and creating innovative entities that create
wealth. It involves starting or creating a new venture, innovating or putting together new
combinations of resources, relentlessly pursuing opportunities, acquiring resources, taking
calculated risks, ensuring profit seeking and crafting value (Kuratko, Morris and Covin, 2011).
This study therefore intends to assess the entrepreneurship skills of small scale farmers.
Entrepreneurs mobilize resources for exploitation of the opportunity recognized. Schumpeter
(1942) describes entrepreneurs as bearers of risk, people that bring together factors of production
or organizers of innovation. Entrepreneurs create value where there was none before by using
resources in an innovative and unique way (Kuratko, Morris & Covin, 2011).
Hussain et al and Mukoki congruently identified several constraining factors in small scale
agriculture. Among others, inability to convert resources such as latest technology in farming,
information from agricultural research centers, cross-breeding strategies and water management
skills to profitable production has been one a challenge hindering probable rural development
through farming. An alternative way to approach entrepreneurship on farms would be is to put
emphasis on the value adding activities such as processing food or direct sales and developing
niche products. Unlike the mere scale enlargement in bulk production the value adding activities
are tailor made for changing position of the farm in relation to the commodity chains and the
process in which the value is generated. In many countries, regions and sectors, the value adding
activities have not been conventional on the farms. Therefore, in respect to this, they can be viewed
as innovations. Therefore, if one accepts innovation as the key element in entrepreneurship, it
seems feasible to associate entrepreneurship on farms especially with the value adding activities
(Knudson etal , 2004)
The small scale farming subsector is now seen as a critical player in rural development drive. There
have been considerable differences in the economic performances of farmers and this can be
15
attributed to huge differences associated with the entrepreneurship skills of the farmers. Farming
is one of the main economic activities in the rural areas of Zambia in Kanakantapa farming area,
for instance, farmers, all year round, are engaged in agriculture related activities.
If the country is to make agriculture the economic mainstay, there is need to alleviate challenges
faced by small scale farmers by providing them with the necessary agricultural inputs as well as
incentives to do with entrepreneurship. The primary production on the farms has been largely
invisible. In recent years, studies have been published on farming businesses focusing specifically
on the business diversification of farms. In most of these studies, the view on entrepreneurship is
explicitly stated and utilized (Carter, 2003).
Successful entrepreneurship requires the farmer to possess a vision for growth, good interpersonal
skills, strong marketing strategies, sound management skills and sharp cost-benefit consciousness.
In the studying of entrepreneurship, it must be stated that farming has not been a popular context
for studying entrepreneurship until recently; some studies have dealt with entrepreneurship in the
business activities related to processing and marketing of farm products (Barth 2000). The
researcher will therefore endeavor to assess the entrepreneurship skills among small scale farmers;
this will as a result create a better perspective on how these farmers can better their market sales
and contribute to the overall economic growth of the country.
1.3 Problem statement
Recently, there has been an increase in farming activities mostly among small scale farmers, but
despite this growth, small scale farmers are not able to participate in long term commercial
contracts (Freguin-Gresh et al., 2012; Jagwe and Machethe, 2011; Jari and Fraser, 2009; Louw et
al., 2008; Randela et al., 2008; Shiimi et al., 2012; World Bank Report, 2013). Farmers in
developing countries such as Zambia lack a lot of incentives that can enable them attain better
entrepreneurship skills. Farmers in Kanakantapa Farming Area have availability of arable land for
agriculture but still lack the ability to have great profit margins and sales out of their agriculture
produce.
Undeniably, much ground has been covered in order to lessen farming constraints mainly in rural
areas. While most farmers have received government support to transform the rural agriculture
gamut, entrepreneurial skills associated with running productive farming are scarce among the
16
small-scale farmers. This problem can therefore be attributed to the lack of sensitization in the area
of entrepreneurship, lack of market information, inadequate experience on grades and standards,
insufficient and inadequate contractual agreements. The challenge of poor road network has been
a great concern among Farmers as they are disadvantaged when it comes to the transportation of
crops to the markets thereby affecting the market participation of farmers.
Markets are critical for sustainability and profitability of smallholder farmers because they act as
a medium of exchange. Market participation by smallholder farming entrepreneurs is critical
because they derive a livelihood, income and opportunities for exploitation. Marketing activities
such as cleaning, grading, storage, transportation and selling has the potential to increase
profitability and sustainability of smallholder farmers (Jari and Fraser, 2009). At regional,
provincial and national level, market participation by smallholder farming entrepreneurs is critical
for sustainable agriculture and economic growth (World Bank Report, 2013).
Smallholder farming entrepreneurs have to decide where to sell their produce to maximize profit.
When making a decision on where to sell, the smallholder farming entrepreneur is influenced by
factors such as transport cost to the market, volume and quality of products to be sold, anticipated
price, certainty of clinching a deal, payments terms, storage capacity in case products are not sold
and type of products (Jagwe and Machethe, 2011; Louw et al., 2013; Makhura, 2001; Ortmann
and King, 2010). All of which have a direct bearing on transaction costs smallholder farming
entrepreneurs face.
1.4 Objectives of study
1.4.1 General objective of study
To assess the factors affecting entrepreneurship skills of small scale farmers in Kanakantapa
Farming Area of Zambia.
1.4.2 Specific Objectives of Study
1. To identify the factors that hinders development of entrepreneurship skills among small
scale farmers
17
2. To examine the extent to which the factors affecting entrepreneurship skills have
contributed to the stagnation of small scale farmers in Kanakantapa Farming Area of
Zambia
3. To establish the effectiveness of the measures taken to develop entrepreneurship skills
among small scale farmers
1.5 Research Question
1. What factors hinders development of entrepreneurship skills among small scale farmers?
2. To what extent has the factors affecting entrepreneurship skills have contributed to the
stagnation of small scale farmers in Kanakantapa Farming Area of Zambia?
3. How effective have been the measures taken to develop entrepreneurship skills among
small scale farmers?
1.6 Significance and Justification of the Study
Entrepreneurship skills are a crucial dynamic force in the development of small scale farming
business. The relevance of entrepreneurial skills in farming is associated with the aim of survival
of farms. Thus, it is pragmatic to develop the essence of entrepreneurship skills among small scale
farmers in the society. In social sciences skills, it has been common to approach farming as those
who do not conform to the image of market driven profit making enterprise. Farmers are said to
have been detached from the market logic and are therefore viewed as peasants rather than
enterprise (Ploeg, 2003). Further, it has been claimed that the self-identity of the farmers is
persistently based on their role as a producers than their role as an entrepreneur. Thus, a study on
the assessment of the entrepreneurship skills of small scale farmers is of prime importance to the
study.
1.7 Limitations
The study was constrained by several factors. The study focused on farmers concentrated in the
Kanakantapa resettlement area. The time availed was not enough to collect data from all the
respondents. Most farmers were not literate enough to be able to read and answer the questionnaire.
It was difficult to convince respondents that the questionnaire was solely for academic purposes.
Most of the respondents’ had either wrong or outdated email addresses. However, these limitations
didn’t have any significant interference with outcome of this study.
1.8. Scope of the Study
18
The study will be carried out in Kanakantapa Farming Area. Kanakantapa Farming Area is located
in Chongwe district in the region of the Lusaka province in Zambia. The area has got great
agriculture potential, the area mainly consists of small scale farmers whose main livelihood is
agriculture. The study will concentrate on small holder farmers of maize production in total
exclusion of commercial farmers. In this case, the researcher will cover farmers specifically in H
village, J village and K village in Kanakantapa. This was based on the fact that the researcher was
conducting the research simultaneously with his studies, and therefore (as he strived to balance the
research and other academic programs of his study) it was difficult and partly it resulted onto create
of some biasness. This mostly happened, because the researcher at various occasions was
sometimes forced to rush in order to meet the dissertation submission deadlines and other deadlines
of his academic programs
.
19
2.0 CHAPTER TWO: LITERATURE REVIEW
2.1 Introduction
This Chapter highlights the definition of entrepreneurship. It further highlights the studies that
have been done in relation to the researcher’s topic focusing mostly on the relevant fields of the
researcher’s study being entrepreneurship skills in farming business, challenges of acquiring
entrepreneurship skills by small scale farmers and successful farm entrepreneurship development.
Lastly, it highlights the theoretical models that can be used to explain entrepreneurship skills.
2.2 Operational Definitions
2.2.1 Entrepreneurship
The definition of entrepreneurs by Ahmad and Hoffman (2008) is adjusted for the purpose of this
study to define small scale farming entrepreneurs as those individuals with a potential to generate
value, through the creation, expansion or innovation of economic activity by identification and
exploitation of new agricultural products, agro-processes or markets. Other scholars such a
Kuckertz and Wagner (2010) have viewed entrepreneurship as a catalyst for innovation and
economic development. The ability to innovate continually has become a source of competitive
advantage (Kuratko, 2009). Entrepreneurs have existed for many years. Individuals have,
throughout history, spotted an opportunity and set-up a business to exploit this opportunity while
bearing calculated and minimal risk (Venter et al., 2008). Entrepreneurs mobilize resources for
exploitation of the opportunity recognized. Schumpeter (1942) describes entrepreneurs as bearers
20
of risk, people that bring together factors of production or organisers of innovation. Entrepreneurs
create value where there was none before by using resources in an innovative and unique way
(Kuratko, Morris & Covin, 2011).
Although there is no universally accepted definition for entrepreneurship (Kuratko and Hodgetts,
1992; Kuratko et al., 2011), various researchers have attempted to articulate definition of the
concept. Entrepreneurship relates to the functional role of entrepreneurs that encompass functions
like coordination, innovation, uncertainty bearing, capital supply, decision-making, ownership and
resource allocation (Barreto, 1989).
2.2.2 Entrepreneurship Skills in the Farming Business
A study done on small holder farmers in South Africa by Tindisa (2014) empirically tested the
relationships between participation in agro-processing activities by smallholder farming
entrepreneurs and human capital, social capital and market access and the degree to which each
was moderated by the transaction cost. The study tested the relationship between participation in
agro-processing activities, all variables jointly and cumulatively. Structured questionnaires were
administered during smallholder farmer meetings in three provinces namely, Western Cape,
Limpopo and Gauteng. A hierarchical multi-regression analysis was used as the main statistical
tool to test hypotheses.
The main findings of the study were that the relationship between human capital and participation
in agro-processing activities by smallholder farming entrepreneurs is positive and significant.
Similarly, the relationship between social capital and participation in agro-processing activities is
positive and significant. However, the relationship between market access and participation in
agro-processing activities was negative and significant. Finally, transaction cost had an enhancing
moderating effect on the relationship between market access and participation in agro-processing.
The findings further suggested that human capital is fundamental to sustainable development
considering participation in agro-processing activities. Social capital of smallholder farming
entrepreneurs may be enhanced through mentorships and partnerships with neighboring
21
commercial farmers and agro-processors. Lower transaction costs were likely to enhance market
access by smallholder farmer’s activities by smallholder farming entrepreneurs.
2.3. Theoretical Framework
The discovery theory stresses the importance of exogenous variables in opportunity recognition.
Discovery theory posits that entrepreneurs are fundamental to search and sourcing opportunities
in the environment. Through searching, entrepreneurs discover opportunities for supply of new
products, new services, and new systems (Alvarez and Barney, 2007; Shane 2000).
The creation theory states that opportunities are endogenously created by deeds and actions of
entrepreneurs through exploration of channels geared for producing new products, new services
and new systems. Creation theory assumes actions of entrepreneurs are fundamental to opportunity
discovery and recognition (Baker and Nelson, 2005).
Another theory is that of the schema theory which explains how entrepreneurs identify
opportunities. Schemas are defined as knowledge or cognitive ability structures representing
content and organization of knowledge that develop as a result of cumulative experience, learning
and meanings that an individual encounters within a specific domain (Gaglio and Katz, 2001;
Ucbasaran, Westhead and Wright, 2009). Schemas determine how individuals respond to new set
of information as a result of disequilibrium in the market, including alertness and ability to search
for such information (Shane, 2000; Shockley and Frank, 2011). Schemas are prone to over-
confidence and familiarity bias that has the potential to hinder creativity and innovation.
Furthermore, the human capital theory postulates that knowledge enhances individuals with
increases in their cognitive ability resulting in the likelihood of more productive entrepreneurial
activity (Davidsson and Honig, 2003; Venter et al., 2008). It assumes that individuals are bound
to maximize economic benefits that accrue from their human capital. Individuals with broader
pools of human capital may be associated with increased levels of productivity. Taylor and Thorpe
(2004) broadened the concept of human capital to include individuals’ cognitive characteristics as
well as accumulated work that has potential to impact on productivity. Knowledge and skills
emanate from human capital investment, including education and work experience, which provides
individuals with increases in cognitive abilities (Becker, 1964). Human capital is defined as a set
22
of skills and knowledge that an individual acquires through investment in schooling, on the job
training, and other types of experience (Unger et al, 2011).
Human capital is not only a result of formal education but also experience and knowledge. There
is a positive relationship between human capital and success. Knowledge can be described as either
tacit or explicit (Venter et al., 2008). Tacit-knowledge refers to know-how, which is taken as the
non-codified components of activity while explicit knowledge refers to know-what describing
information conveyed in procedures, processes, formal written documents and educational
institutions (Davidsson and Honig, 2003). Solving complex agricultural problems and deciding on
whether to participate or not participate in agro-processing activities requires both sets of tacit and
explicit knowledge.
Explicit knowledge may be increased through accumulation of formal education such as attending
and graduating at colleges or universities and also through work experience and non-formal
education (Davidsson and Honig, 2003).
Shane (2000) recognizes and identifies the critical imperative of explicit learning towards the
establishment of business. Information and skills required for the exploitation of entrepreneurial
opportunities can be learned through observation of others. Linkage of smallholder farming
entrepreneurs with established commercial farmers is critical for learning and sharing information.
Three dimensions of prior knowledge are critical to the process of entrepreneurial opportunity
discovery and these being prior knowledge of markets, Prior knowledge of ways to serve markets
and prior knowledge of customer problems. Knowledge is not only about formal education. Human
capital encompasses both innate and acquired skills through formal and non-formal education
(Maman, 2000). Human capital is not only a consequence of formal education but also prior work
experience including on-the-job, hands-on practical learning as well as non-formal education such
as training courses that may not be part of the formal education process (Venter et al., 2008).
Entrepreneurial intentions including opportunity recognition was shown to be significantly
constrained by lack of knowledge, inspiration and resources (Mosey, Noke and Binks, 2012).
Social set-up and systems within which an individual operates has the potential to influence over-
or under-investment in education. Furthermore, the magnitude of investment in human capital may
influence attitude towards entrepreneurial activity resulting in individuals that are highly
23
certificated discouraged to take risks while under investment in human capital may encourage risk
taking (Davidsson and Honig, 2003). Opportunity recognition is likely to be heightened when
several factors combine and come into effect. These factors may include prior knowledge,
experience and education levels of the entrepreneur but also social networks considering both weak
and strong ties (Shane and Venkataraman, 2000; Sherperd and DeTienne, 2005).
Factors that may influence the process of opportunity recognition and development leading to
recognition and exploitation of opportunities include entrepreneurial alertness, prior knowledge
and experience, social networks, personality traits and type of opportunity. The ability by
smallholder farming entrepreneurs to discover, recognize and exploit agro-processing
opportunities is preceded by entrepreneurial alertness and prior relevant knowledge and
experience. Thus, human capital aspect in understanding and explaining entrepreneurship skills
(ibid, 2005).
2.4 Previous studies
2.4.1 Educational training and Information
Formal education, formal training and non-formal training programs are the major ways of
capacity building. Orienting farmers to thinking and acting in an entrepreneurship perspective
focuses on formal training and non-formal capacity building (McElwee & Bosworth, 2010). For
purposeful development of a farmer’s capacity, formal training designed after a need analysis is
most suitable. In this way, new thinking and positive attitudes towards further agricultural
development are imparted. The intended outcome should be change in knowledge and behavior
that should enable farmers not only increase productivity but engage in practices that lead to
livelihood diversification. While farmer training has been done by many organizations including
universities, it is noted that most do not go beyond disseminating agronomic and managerial
practices.
2.4.2 Access to credit and Financial Literacy
24
Financial education programs teach the knowledge, skills and attitudes required to adopt good
management practices for earning, spending, saving, borrowing and investing. Participants in these
programs become equipped with information and tools to make better financial choices, work
towards their financial goals and ultimately enhance their economic well-being. (Henry ,2006),
Considering limited savings/ retained earnings by agricultural MSEs, their lack of collateral and
minimum balance requirements by commercial banks, there is very limited interaction between
the two (MSEs and established financial institutions) - Attempts to link them through micro-
finance institutions and other potential intermediaries are hampered by the regulatory environment
existing within the financial sector. The result is limited financial leveraging (Kimuyu and Omiti,
2000).
Small scale Agricultural financing remains one of the critical enablers to facilitate within sector
growth commensurate with achieving poverty reduction, food, and nutrition security, and
employment creation through Small and Medium Enterprises (SME’s). Yet access to agricultural
financing, let alone commercial cash loans to the sector, remains poor in most developing
countries. It is estimated that globally, only 1% of loans from commercial sources go to the
agricultural sector. This is at variance with agriculture’s importance in economic growth. Inherent
risks contribute to this situation, with agriculture prone to production and marketing risks (FAO
2000.)
2.4.3 Access to Markets
Markets are critical for sustainability and profitability of smallholder farmers because they act as
a medium of exchange. Market participation by smallholder farming entrepreneurs is critical
because they derive a livelihood, income and opportunities for exploitation (Makhura, 2001).
Marketing activities such as cleaning, grading, storage, transportation and selling has the potential
to increase profitability and sustainability of smallholder farmers (Jari and Fraser, 2009). At
regional, provincial and national level, market participation by smallholder farming entrepreneurs
is critical for sustainable agriculture and economic growth (World Bank Report, 2013)
2.5. Research Variables arising from Literature Review
2.5.1 Challenges in Acquiring Entrepreneurship Skills by Small Scale Farmers
25
A study in this area was conducted in Ghana by Becx et al. (2010) and it identified constraints for
entrepreneurship of smallholder farmers to be as follows Mindset of farmers limits entrepreneurial
activity, due to a perceived lack of credit facilities, lack of access to markets, inadequate and
inefficient government support systems; Lack of incentives to invest in farming production
technology as a result of unfavorable input and output prices and poor infrastructure; and
Inordinate risks and uncertainties that smallholder farmers face due to unpredictable climate,
hostile corporate institutions and unreliable markets. Improving the level of skills and knowledge
of smallholder farming entrepreneurship is critical towards increasing agricultural production
(Ashby et 32 al., 2009). Skills improvement should be coupled with improvements in rural
infrastructure including access to credit and markets (World Bank Report, 2013).
A study carried out in Kenya by Ntale Et al (2015) that investigated the factors that affect agro-
entrepreneurship on small farms in Kenya and attempted to develop an agro entrepreneurship
readiness model informed by theoretical and empirical evidence. The study used a cross-sectional
survey research design and a multi-stage sampling technique to identify the 15 locations from the
study area of Kiambu and Murang’a counties where the samples were drawn from. Line transect
sampling technique was employed to pick the 388 farms. Qualitative and quantitative descriptions
were used to measure the extent of agro entrepreneurship among the small farms, while correlation
analysis was used to estimate the association of readiness factors with agro-entrepreneurship on
the small farms. The study revealed that Kenya’s agrarian economy is suffering from limited agro-
entrepreneurship as the statistics show that only 6% of small farmers were adding value to their
agricultural produce. It was discovered that farm sizes are negatively correlated with agro
entrepreneurship. The study showed that the further the farmers are from the local markets, the
more likely they are to add value to their primary agricultural produce. Loan accessibility is highly
correlated with value addition among the small scale farmers. Agro-entrepreneurship readiness
model is rooted in personal & social factors, work experience, cultural, and economic environment
of the small farmers. It was recommended that policy makers therefore, should come up with
incentive to motivate small farmers in practicing agro-entrepreneurship
Another study carried out South Africa by Muzekenyi Et al (2019) reviewed agronomic
entrepreneurial constrictions faced by small-scale farmers in South Africa. Agronomic constraints
that included lack of access to credit, strenuous climate change, and lack of irrigation water among
26
others were discovered. Water constraints was however, regarded as a major constraint in rural
areas and empirical studies showed that the impacts can be very severe. Empirical interaction on
a variety of constraints in rural agriculture revealed generalized evidence which, however, created
loopholes in order to quantify the gist of the matter. Thus, the premise of the study was to clearly
single out entrepreneurial constraints faced by small-scale farmers.
2.5.2 Successful Farm Entrepreneurship Development
A study that explores entrepreneurship development in agriculture among small-scale farmers in
Taraba State was carried out by Pev and Yaro (2017) with a focus on bridging the gap of deep
dearth in research, knowledge and literature on agribusiness development in the North Eastern part
of Nigeria. One hundred and fifty agribusiness entrepreneurs were selected using multi-stage
random sampling technique. Data was collected from respondents using a validated and tested
structured interview schedule with a reliability coefficient of 0.78 based on Cronbach Alpha
formula. Four research questions guided the study. Data collected were analyzed using
descriptive statistical tools and measure of central tendency. Result of the analysis revealed
that personal intension, need for autonomy and displacement as well as disruption in life
constitute the key drive to entrepreneurship development in the study area.
Furthermore, Agribusiness Entrepreneurship enterprises have been invaluable to small scale
farmers in the state. However, the Study identified poor access to entrepreneurship information,
inadequate start-up capital and reoccurrence of ethno religious violence in many parts of the
state as major impediment to entrepreneurship development in Agriculture in the area.
Despite this shortcomings small scale farmers perceived their extent of entrepreneurship
drive and participation to be high (x=2.80). It was therefore recommended that effective and
adequate entrepreneurship policies and programmers should be developed for farmers while
urgently addressing the negative factors that hinder its growth and development in the area.
Fostering entrepreneurship education at all levels to ensure capacity building for diverse
enterprises in agriculture was also advocated. Ultimately, government at all levels and private
sector support fund is necessary to enhance entrepreneurship spirit and development among
farmers in the area. Most importantly urgent measures should be taken to curb the destructive
activities of the Fulani cattle herdsmen so as to create a peaceful environment for agribusiness
investors in Taraba state, Nigeria.
27
Another study was on entrepreneurship development in agriculture among arable crop farmers in
Imo State, Nigeria was carried out by Esiobu Et al (2015). In this study, sixty household’s
entrepreneurs were selected using multi-stage random sampling techniques. Well-structured
questionnaire was the main tool for data collection. Data collected were analyzed using descriptive
statistical tools and 3-point likert scale rating of highly, moderately and low. Mean age was
42.11years. Majority (76.33%) were males. Greater proportions (71.67%) were married with an
average household size of 5.0 persons. Farmers cultivated on an average farm size of 1.61Ha.
Average annual farm income was N118, 392.00 ($789.28). Reasonable proportion of the farmers
identified personal intension, wanting autonomy and displacement/disruption in life as the key
drive to entrepreneurship development in the area. Entrepreneurship enterprises have been
invaluable to farmers in the area. However, farmers complained of poor access to entrepreneurship
information, inadequate start-up capital and long distance between farms and market in the area.
Despite this shortcomings farmers perceived their extent of entrepreneurship drive and
participation as been high (X=4.50). It was therefore recommended that effective and adequate
entrepreneurship policies and programmes should be developed for farmers while urgently
addressing the negative factors that hinder its growth and development in the area. Fostering
entrepreneurship education at all levels to ensure capacity building for diverse enterprises in
agriculture was also advocated. Ultimately, government at all levels and private's sector support
fund is necessary to enhance entrepreneurship spirit and development among farmers in the area
and beyond
Another study was carried out by Carter (1998) that investigated the business ownership activities
of 296 farm owners in Cambridgeshire. The results revealed extensive business ownership
activities, particularly among younger and better trained farm owners. It is argued that additional
business activities are best viewed as a continuum from the diversification of existing assets to the
ownership of a portfolio of businesses. Although farms are normally excluded from small business
analyses of rural entrepreneurship, the paper concluded that farmers are an important element of
the small business owning population. This is demonstrated not only in their ownership of farm
businesses, but also in their propensity to engage in farm-centered diversification activities, their
ability to start new non-farm enterprises and in their rental of farm land and buildings to external
businesses.
28
2.6 Conceptual Framework
Figure 2.1: Conceptual Framework
The figure above on the conceptual framework brings into view the interaction of the factors that
could influence the entrepreneurship skills of small scale farmers in Kanakantapa area. Education
and training as a variable includes the following indicators; level of education, technical training
and professional skills. Financial Literacy variable as an independent factor includes indicators
like maintenance financial records, the business’ cash flow, debt repayment and budgeting.
Market accessibility as an independent variable includes indicators such as road transport,
packaging and branding, distance to markets and availability of customers. These factors will be
assessed to determine how they influence the entrepreneurship skills of small scale farmers in
fisenge area. Influence of government support and NGOs together with the personal traits of the
entrepreneur on their business’ performance are considered intervening and moderating variables
respectively and will not be subjects of analysis in this study.
2.7 Conclusion
This chapter has reviewed literature relevant for the study. It specifically reviewed the theories
guiding the study including: Financial literacy, Market accessibility and Education and training
which all explain how entrepreneurship skills affect small scale farmers. The study further
reviewed empirical studies done both from international and local perspectives.
Financial literacy
Market accessibility
Education and training
Enhanced
Production Output
29
3.0 CHAPTER THREE: METHODOLOGY AND DESIGN
3.1 Introduction
This chapter presents research design which will be used in the research process as well as
providing the reasons why the selected methods will be used. The chapter contains the Research
30
Design, Source of Data, Sampling frame, Data Collection Techniques, Reliability and Validity of
Data, Data Analysis, Ethical consideration and Limitations of study.
3.2. Research design
Research design refers to the way a study is planned and conducted, the procedures and techniques
employed to answer the research problem or question (McMillan and Schumacher, 1984).
To guide the researcher in the collection, analysis and interpretation of observed facts, the
quantitative approach was adopted as a framework for the study. This was used as a guide in
collecting and analyzing of the data (Bless and Achola, 1988). The quantitative approach was
applied in terms of defining with precision, the relationship between the internal and external
factors. Quantitative techniques were used to determine the levels of impact (that is how much and
how often). This approach required gathering statistical data that would be used to test the variables
developed for this study. Cooper and Schindler (2011) indicate that quantitative data consists of
responses that are coded, categorized, and reduced to numbers so that these data may be
manipulated for statistical analysis.
3.3. Population of study
The study will be carried out in Kanakantapa Farming Area. Kanakantapa Farming Area is located
in Chongwe district in the region of the Lusaka province in Zambia. The area has got great
agriculture potential, the area mainly consists of small scale farmers whose main livelihood is
agriculture. In this case, the farmers in Kanakantapa are 500 out of a population of 6056 people
living in Kanakantapa. The village under investigations are H village, J village and K village).
3.4 Sample size
31
Owing to lack official statistics, a sample of 75 farmers will be randomly and purposively selected
from the villages in the resettlement scheme. Random sampling will be done using village
registers.
3.5 Sampling Design
A sample design is a definite plan for obtaining a sample from a given population (Kothari, 2004).
It refers to the technique or the procedure the researcher would adopt in selecting items for the
sample. Sample design may as well lay down the number of items to be included in the sample,
that is, the size of the sample. There are many sample designs from which a researcher can choose.
Some designs are relatively more precise and easier to apply than others. Researcher must
select/prepare a sample design, which should be reliable and appropriate for his research study
(Kothari, 2004). In this study, the researcher will use random sampling design.
3.6. Research Instruments
Research instruments are tools used for collecting data needed to find solutions to the issues under
investigation. The researcher will use face to face interactions with the respondents and a
questionnaire as the main research instrument. The questionnaires will be distributed by hand and
through electronic means. A questionnaire is a list of carefully structured questions chosen for
considerable testing with a view to elicit reliable responses from a chosen sample. Also, the
researcher decided to make use of questionnaires because they are simple, easy to administer and
allows for easy analysis. More so, the researcher can collect large volumes of data. Participants
can be free to give information as they remain anonymous. In addition, since the questionnaire
provides written information, there is less danger of misrepresentation of facts or information
(Kothari, 2004).
In addition, the researcher shall take both pre and post control measures for dealing with
disadvantages of using questionnaires. Pre-control measures shall include making sure that all
questions are concise and clear to avoid any misinterpretations. Most questions in the questionnaire
will be closed questions and participants will required to select alternative from a list of possible
answers. More so, participants shall be informed that the research is an academic exercise and that
names are not going to be divulged and this will help in ensuring that questions are answered
without any fear.
32
Thus, in this study, both primary and secondary data will be collected. Primary data will be
collected from small scale farmers using structured questionnaires. Secondary data will be
collected from various publications and authentic internet source
3.7 Validity and Reliability of Research Instruments
The tools designed should measure the variables actually intended to be measured in the study.
Validity in research is essential to see if the research tools are practically measuring the variables
that the research is focusing on. This is done to eliminate the measuring extraneous variables which
are part of the study. There are ways in which validity can be measured and these are content
validity and construct validity (Saunders et al, 2012).
The researcher shall utilise content and construct validity. Content validity focus on ascertaining
whether research instruments contain enough questions to cover the purpose of study. The
researcher shall ensure content validity by making sure that research questions and all the identified
gaps in literature review are well covered. The researcher will make sure that all questions are
concise and clear. In addition, there shall be use of closed questions that shall make it easier for
participants to complete questionnaires.
Reliability is defined as the extent to which a questionnaire, test, observation or any measurement
procedure produces the same results on repeated trials (Saunders et al, 2012). Reliability will be
enhanced through asking statistical questions (for example, the volume and monetary value of
transactions) and asking questions to various stakeholders (which will enhance the correctness of
data collected).
3.8 Response Rate
Sixty-seven (67) respondents replied out of the targeted 75, translating into the 89.33 percent
response rate. Eight (8) of respondents could not reply despite making several appointments. The
reasons for avoidance of interviews were not known. The reasons for non-respondents can be as
follows:
a) Pressure of work at the time the questionnaires were received; and
b) The use of online platforms due to covid 19 pandemic as some respondents lacked
information technology skills
33
However, this response is supported by Easterby-Smith et al. (2006) who stated that the expected
industry norm is of the order 25 to 30 percent if appropriate measures for increasing responses
are undertaken.
3.9 Data Analysis
Data analysis is a pivotal part of the research process to arrive at findings in Quantitative analysis
using the Statistical Package for Social Sciences (SPSS) version 20. SPSS is a software package
used in data analysis and is a menu-driven system that allows for in-depth data access and
preparation, analytical reporting and modelling (Saunders et al, 2012). Qualitative data analysis
will be conducted using content analysis. Ritchie and Lewis (2003) argue that qualitative content
analysis involves a process designed to condense raw data into categories or themes based on valid
inference and interpretation. Therefore, the field data will be analysed using SPSS to produce
descriptive statistics and the output will be organized using excel.
3.10 Ethical Considerations
Ethics define the right and wrong conduct in research. According to Saunders et al (2012), ethics
of research include informed consent, confidentiality, protection of privacy, protection against
harm, and protection against identity. Ethical considerations are observed when participants are
informed about the study and consent is sought. Participants will be told not to write their names
on questionnaires and this will ensure anonymity. In addition, participants will be informed that
data collected is to be used for academic purposes only and that the information collected shall to
be treated with confidentiality.
34
4.0 CHAPTER FOUR- DATA PRESENTATION AND ANALYSIS
4.0 Introduction
In the previous chapter, the research methodologies used in this study were described. Research
design and strategies to achieve the main aim and objectives of this study were also discussed.
Research strategies reviewed included; exploratory, descriptive and explanatory studies. The
survey was identified as the most suitable method to achieve the research objectives in this study.
Questionnaire survey using online and non-online platforms were the research instruments used in
the data collection.
4.1 Demographics Data Analysis
Table 4.1: Demographics summary Statistics
Statistics
Gender Age Full/Part Time Period Active Farm Size
Total 67 67 67 67 67
Mean 1.5522 3.0597 1.4179 2.4925 1.7761
Std. Deviation 0.50102 0.75640 0.49694 0.74616 0.67016
Minimum 1.00 2.00 1.00 1.00 1.00
Maximum 2.00 4.00 2.00 4.00 3.00
Source: Survey Data (2020)
Table 4.1 shows the respondents profile comprised of Gender with mean 1.5522 and standard
deviation 0.50102.Respondents Age having the mean 3.0597 and standard deviations of 0.75640.
Full/Part Time farmer category comprising of mean 1.4179 and standard deviations of 0.49694.
Further, Period Active and Farm Size having the mean of 2.4925 and 1.7761 respectively. Standard
deviation of 0.74616 and 0.67016 respectively.
35
4.1.1 Gender
Table 4.2. Respondents Gender frequency distribution
Gender
Frequency Percent Valid Percent Cumulative Percent
Male 30 44.8 44.8 44.8
Female 37 55.2 55.2 100.0
Total 67 100.0 100.0
Source: Survey Data (2020)
Figure 4.1 shows that from the respondents thirty (30) were male, and thirty-seven (37) were
females. The gender distribution shows that forty-four point eight (44.8%) were male and fifty-
five point two percent were female (55.2%).
37
4.1.2 Age
Table 4.3. Respondents Age frequency distribution
Age
Frequency Percent Valid Percent Cumulative Percent
25-32yrs 17 25.4 25.4 25.4
32-40 yrs 29 43.3 43.3 68.7
Above
40yrs 21 31.3 31.3 100.0
Total 67 100.0 100.0
Source: Survey Data (2020)
Table 4.3 indicates the age of the respondents. Majority of the respondents were between the age
of 32 and 40 years, making a percentage of forty-three point three (43.3%).Respondents aged
above 40 years also made thirty-one point three percent (31.3%) of the sample. The respondents
aged between 25 and 32 was twenty-five point four percent (25.4%) of the sample.
40
4.1.3 Farm Size
Table 4.4. Respondents Farm Size frequency distribution
Farm Size
Frequency Percent
Valid
Percent
Cumulative
Percent
Small 24 35.8 35.8 35.8
Medium 34 50.7 50.7 86.6
Large 9 13.4 13.4 100.0
Total 67 100.0 100.0
Source: Survey Data (2020)
The frequency distribution table above shows the Farm Size of respondents who participated. The
Medium Farm Size had the most respondents at fifty point seven percent (50.7%). The Small farm
size had thirty-five point eight percent (35.8%) of respondents and large category held thirty point
four percent (13.4%) of respondents.
4.1.4 Full Time or Part Time Farmer
Table 4.5. Respondents Full Time or Part Time Farmer Histogram
Full or Part Time
Frequency Percent
Valid
Percent
Cumulative
Percent
Yes 39 58.2 58.2 58.2
No 28 41.8 41.8 100.0
Total 67 100.0 100.0
Source: Survey Data (2020)
41
Table 4.5. Shows the Full Time or Part Time Farmer of the respondents, majority of the
respondents were Full Time farmers, they made up a percentage of fifty-eight percent point two
(58.2%). Part Time Farmer held the percentage of forty-one point eight (41.8%).
Figure 4.4. Respondents Full Time or Part Time Farmer Histogram
Source: Survey Data (2020)
42
4.1.5 Demographic Data Correlation Analysis
Table 4. 6: Pearson Correlation Analysis
Gender Age Full/ Part-time Period Active Farm Size
Gender 1 -0.288* 0.154 -0.131 -0.032
Age -0.288* 1 -0.148 -0.053 0.057
Full/ Part-time 0.154 -0.148 1 -0.073 0.012
Period Active -0.131 -0.053 -0.073 1 0.012
Farm Size -0.032 0.057 0.012 0.012 1
Source: Survey Data (2020)
From Table 4.6. The Gender and Age had a negative correlation with a co-efficient of -0.288.
There was a positive relationship between the Farm Size and the Period Active as indicated by a
co-efficient of 0.012. The Farm Size had a positive correlation with the Respondents Age n with a
co-efficient of 0.057. Full/ Part-time had a weak positive co-relation with Gender as shown by the
0.154 correlation co-efficient.
4.2 Factors that hinders development of entrepreneurship skills among small scale farmers
Table 4.7: Education, Training and Entrepreneurship Skills Descriptive Statistics
43
Variables
Total
Min
Score
Max
Score
Mean
Score
Std.
Dev
EL: The highest level of education you have attained 67 1.00 5.00 2.0000 0.9374
TECHSUP: Technical support or training on business
management and farming as a business from the
extension staff
67 1.00 2.00 1.3284 0.4731
BUSMGT: Apply any business management tools
learnt in managing your agricultural enterprise 67 1.00 2.00 1.4925 0.5037
AGRBOINF: Do Agribusiness officers and other
extension staff provide information 67 1.00 4.00 2.4030 0.7988
FARMT: Training on farming skills 67 1.00 2.00 1.3284 0.4736
FRMSKIL: Farmers have skills more than others 67 1.00 2.00 1.4925 0.5037
Source: Survey Data (2020)
The mean score for (EL: The highest level of education you have attained) was 2.00, (TECHSUP:
Technical support or training on business management and farming as a business from the
extension staff) was 1.3284, (BUSMGT: Apply any business management tools learnt in
managing your agricultural enterprise) was 1.4925, ( AGRBOINF: Do Agribusiness officers and
other extension staff provide information) was 2.4030, (FARMT: Training on farming skills) was
1.3284 and (FRMSKIL: Farmers have skills more than others) was1.4925.
Table 4.8: Financial Literacy Descriptive Statistics
44
Total
Min
Score
Max
Score
Mean
Score
Std.
Dev
FLFR: Maintain any farm/business financial
records 67 1.00 2.00 1.6716 .47316
FLCFAGR: Level of satisfaction in terms of
cash flow from your agricultural enterprise 67 1.00 4.00 2.5821 .65480
FLDEBT: Repay all your debts in time or you
have been facing serious difficulties in meeting
your financial obligations
67 1.00 2.00 1.6269 .48729
FLBUDG: Prepare partial or complete farm
budgets to assist you maintain your expenditure
within the planned levels
67 1.00 2.00 1.2537 .43843
FLGROSMGA: Enterprise specific plans or
gross margin analysis to help you operate the
most economically viable enterprise with
relative advantages
67 1.00 2.00 1.7761 .41999
FLEXPEARN: Expected earnings under ideal
conditions 67 1.00 4.00 1.9851 .70695
Source: Survey Data (2020)
Table 4.8, in the second row, it can be observed that the minimum score among the variables was
1 whereas the maximum was 4(Mean= 2.5821, Standard deviation= 0.65480) and in the sixth row,
it can be observed that the minimum score among the variables was 1 whereas the maximum was
4(Mean= 1.9851, Standard deviation= 0.70695). However, the other rows had the minimum score
among the variables was 1 whereas the maximum was 2.These scores indicate that the respondents
used the entire survey scale, implying adequate variability amongst the response.4.3 Factors
affecting entrepreneurship skills
45
Table 4.9: Education, Training and Entrepreneurship Skills Frequency Distributions
EL: The highest level of education you have attained
Frequency Percent Valid Percent Cumulative Percent
Valid 1 23 34.3 34.3 34.3
2 26 38.8 38.8 73.1
3 14 20.9 20.9 94.0
4 3 4.5 4.5 98.5
5 1 1.5 1.5 100.0
Total 67 100.0 100.0
(1= None, 2= Primary, 3= Secondary, 4= Diploma, 5=Degree)
TECHSUP: Technical support or training on business management and farming as a
business from the extension staff
Frequency Percent Valid Percent Cumulative Percent
Valid 1 45 67.2 67.2 67.2
2 22 32.8 32.8 100.0
Total 67 100.0 100.0
(1= Yes, 2= No)
BUSMGT: Apply any business management tools learnt in managing your agricultural
enterprise
Frequency Percent Valid Percent Cumulative Percent
Valid 1 34 50.7 50.7 50.7
2 33 49.3 49.3 100.0
Total 67 100.0 100.0
(1= Yes, 2= No)
AGRBOINF: Do Agribusiness officers and other extension staff provide information
Frequency Percent Valid Percent Cumulative Percent
Valid 1 8 11.9 11.9 11.9
2 29 43.3 43.3 55.2
3 25 37.3 37.3 92.5
4 5 7.5 7.5 100.0
Total 67 100.0 100.0
1=Record keeping, 2= Marketing, 3=Capital sourcing, 4=Farm business planning
46
FARMT: Training on farming skills
Frequency Percent Valid Percent Cumulative Percent
Valid 1 45 67.2 67.2 67.2
2 22 32.8 32.8 100.0
Total 67 100.0 100.0
(1= Yes, 2= No)
FRMSKIL: Farmers have skills more than others
(1= Yes, 2= No)
Frequency Percent Valid Percent Cumulative Percent
Valid 1 34 50.7 50.7 50.7
2 33 49.3 49.3 100.0
Total 67 100.0 100.0
Source: Survey Data (2020)
Table 4. 9 represents Education, Training and Entrepreneurship Skills of the respondents. The
respondents revealed, their level of agreement or disagreement to the situations.
The highest level of education you have attained had 34.3% of the respondents indicated that they
none in terms of level of education. 38.8% Primary level of education, while 20.9% Secondary
level. 4.5% Diploma, and 1.5% had Degree level of education. TECHSUP: Technical support or
training on business management and farming as a business from the extension staff revealed
67.2% of respondents agreed that they receive technical support or training on business
management and farming as a business from the extension staff and 32.8% disagreed.
BUSMGT: Apply any business management tools learnt in managing your agricultural enterprise
shows 50.7% of respondents agreed that they apply business management tools learnt in managing
agricultural enterprise, while 49.3% of respondents disagreed. AGRBOINF: Do Agribusiness
officers and other extension staff provide information represent 11.9% of respondents are provided
by extension staff information on Record keeping, while 43.3%) of the respondents are provided
with Marketing information. 37.3%) of the respondents are provided with Capital sourcing
information, while 7.5% of respondents are provided with Farm business planning information.
47
FARMT: Training on farming skills had 67.2% of the respondents strongly agreed that they have
received training on farming skills. 32.8% of respondents disagreed. FRMSKIL: Farmers have
skills more than others represented 50.7%) of respondents strongly agreed, whilst 49.3% disagreed
on the matter.
48
Table 4.10: Financial Literacy Frequency Distributions
FLFR: Maintain any farm/business financial records
Frequency Percent Valid Percent Cumulative Percent
Valid 1 22 32.8 32.8 32.8
2 45 67.2 67.2 100.0
Total 67 100.0 100.0
(1= Yes, 2= No)
FLCFAGR: Level of satisfaction in terms of cash flow from your agricultural enterprise
Frequency Percent Valid Percent Cumulative Percent
Valid 1 1 1.5 1.5 1.5
2 31 46.3 46.3 47.8
3 30 44.8 44.8 92.5
4 5 7.5 7.5 100.0
Total 67 100.0 100.0
((1= Very satisfied, 2= Satisfied, 3= Dissatisfied, 4=Very dissatisfied)
FLDEBT: Repay all your debts in time or you have been facing serious difficulties in meeting
your financial obligations
Frequency Percent Valid Percent Cumulative Percent
Valid 1 25 37.3 37.3 37.3
2 42 62.7 62.7 100.0
Total 67 100.0 100.0
(1= Yes, 2= No)
FLBUDG: Prepare partial or complete farm budgets to assist you maintain your expenditure
within the planned levels
Frequency Percent Valid Percent Cumulative Percent
Valid 1 50 74.6 74.6 74.6
2 17 25.4 25.4 100.0
Total 67 100.0 100.0
(1= Yes, 2= No)
FLGROSMGA: Enterprise specific plans or gross margin analysis to help you operate the most
economically
Frequency Percent Valid Percent Cumulative Percent
49
Valid 1 15 22.4 22.4 22.4
2 52 77.6 77.6 100.0
Total 67 100.0 100.0
(1= Yes, 2= No)
FLEXPEARN: Expected earnings under ideal conditions
(1= Less than K5,000, 2= K6000-K10,000 , 3= K 11,000-K15,000, 4= More than K20,000 )
Frequency Percent Valid Percent Cumulative Percent
Valid 1 13 19.4 19.4 19.4
2 46 68.7 68.7 88.1
3 4 6.0 6.0 94.0
4 4 6.0 6.0 100.0
Total 67 100.0 100.0
Source: Survey Data (2020)
From Table 4.10, FLFR: Maintain any farm/business financial records revealed 32.8% of
respondents agreed that they maintain any farm/business financial records, while 67.2% disagreed
on the matter. FLCFAGR: Level of satisfaction in terms of cash flow from your agricultural
enterprise had 1.5% of respondents very satisfied, while 46.3% of the respondents satisfied. 44.8%
of respondents dissatisfied, whilst 7.5% very dissatisfied on the matter.
FLDEBT: Repay all your debts in time or you have been facing serious difficulties in meeting
your financial obligations had 37.3% of respondents strongly agreed. 62.7% of respondents
disagreed. 74.6% of respondents agreed that they prepare partial or complete farm budgets to assist
maintain expenditure within the planned levels and 25.4% disagreed. FLGROSMGA: Enterprise
specific plans or gross margin analysis to help you operate the most economically showed 22.4%
of respondents strongly agreed. 77.6% of respondents disagreed on this matter. FLEXPEARN:
Expected earnings under ideal conditions revealed 19.4% of the respondents had Less than K5,
000 expected earnings, whilst 68.7% had expected earnings between K6, 000 and K10, 000. 6.0%
of the respondents had between K 11,000 and K15, 000 and 6.0% had expected earing of More
than K20, 000.
50
5.0 CHAPTER FIVE: INTERPRETATION & DISCUSSION OF FINDINGS
5.1 Introduction
The Objective of this study was to find out to identify the factors that hinders development of
entrepreneurship skills among small scale farmers, examine the extent to which the factors
affecting entrepreneurship skills have contributed to the stagnation of small scale farmers in
Kanakantapa Farming Area of Zambia and to establish the effectiveness of the measures taken to
develop entrepreneurship skills among small scale farmers. The study was carried out in
Kanakantapa Farming Area. Sample of sixty-seven (67) small scale farmers were selected to
answer the questionnaire provided. This chapter discusses the findings, based on the data collected.
5.2 Factors That Hinders Development of Entrepreneurship Skills among Small Scale
Farmers
This research study touched on various factors affecting entrepreneurship skills of small scale
farmers. The study looked at the Demographics characteristics of respondents, and education,
training and entrepreneurship skills and financial literacy.
This is a preliminary stage of data processing that creates a summary of collected data to yield
useful information and prepare the data for further analysis. In this study it was used to measure
central tendency and dispersion.
The current study was undertaken among small scale farmers kanakantapa. The gender distribution
showed the majority of female compared to male. Female entrepreneurs tend to mainly concentrate
on micro-businesses due to gender inequalities in income distribution. The research findings may
probably be explained by the fact that Zambia like most African countries is a matriarchal society
where women dominate in most spheres of life and especially so in farming matters. The research
sought to establish the duration of time that the small scale farmer have been in operation since
inception, young businesses face serious challenges that make the owners consider their businesses
as doing poorly within the first year of startup. This finding is clearly supported by the literature
reviewed at the beginning of the study. It also shows that most micro and small businesses hit their
peak at the fifth year. After the fifth year, most entrepreneurs seem to suffer from what may be
described as entrepreneurial burnout and the excitement declines. This may partly explain why
51
most businesses that are more than 5 years and above consider their businesses as being in the
process of failing. This finding seems to confirm the observation made by Longenecker et al.,
(2006) that entrepreneurial burnout may lead to entrepreneurs losing interest in one business
venture and instead look out for other opportunities.
5.3 Extent to which the factors affecting entrepreneurship skills have contributed to the
stagnation of small scale farmers
In relation to respondents’ financial literacy the research focused on the ability of the agribusiness
community to maintain income and expenditure records, business cash flow
adequacy, budgeting and ability to repay debts when borrowed. In terms of records
maintained a good proportion (67.2%) of the respondents, do not keep any forms of records
especially amongst the farmers; however most of the other off farm businesses maintain
incomplete records which averaged (32.8%), this can be utilized to construct complete
records. The Records come in handy when carrying out farm budgeting and planning and
they are also important since they guide business operators keep track of costs and
income and eventually profit determination.
The study findings also indicate that cash flows resulting from the agricultural enterprises
operations are either insufficient or poorly recorded. Up to 52.3 % of the respondents are
not satisfied with the cash flows from their enterprises. The finances are seasonal with
some periods having enough cash while at times liquid cash is totally lacking, this leads
to inability to meet their day to day financial obligations. These findings are in agreement with
Hardwork (1997) who explains that the basic economic problem is that of allocating
scarce resources among competing ones.
The results obtained also signify that agricultural business operators are also unable to
repay debts incurred during the production or procurement period and attribute this to
insufficiency in cash flow. The study revealed that 62.7% out of 100% incurred short
term debts of which many were not able to pay back due to various reasons. Some of
these reasons include lack of a ready market for their commodities, poor prices and high
input costs and they can therefore not breakeven to allow them recoup production costs.
52
In terms of budgeting many agribusiness operators carried some form of budgeting
whether in the prescribed format or in some informal way, the respondents not budgeting
also indicated that their purchases were based on need to need case (impulse) otherwise
nearly half of them budgeted. This is in line with the findings of Kapoor (2011) whose
findings revealed that planned spending through budgeting is the key to achieving
organizational goals and future financial security. In his research he explained that most
projects fail within the first few years of formation, due to financial difficulties caused by
poor financial management.
The study findings show positive relationship between financial literacy as interrogated
by the above discussed indicators on business performance. We may therefore infer that
not only do businesses need to have adequate access to finance but they also need the
financial literacy to be able to optimally utilize whatever resources at their disposal.
Existing policy interventions should be geared towards successful linkages and support
services to farmers and other agricultural businesses such as training on investment and
financial management to empower the recipients make prudent use of the credit
advanced. Effective financial management would help expand their businesses and
diversify to related ventures aimed at improving their ability to generate a constant flow
of income, to fulfill repayment schedules as spelt out by financiers.
5.4 Effectiveness of the Measures Taken To Develop Entrepreneurship Skills among Small
Scale Farmers
Overall small and micro agricultural enterprises incur higher operational costs. The firms
suffer from diseconomies of scale, the small scale farmers have been experiencing difficulties in
accessing lucrative markets for their products Market accessibility can be influenced by
the size of the firm, micro and small enterprises may not be able to access far off markets,
on the other hand larger companies enjoy the advantages of economies of scale and can
therefore be able to access far off markets. Given the importance of enterprise age and
size in access to credit, short life expectancy of small scale farmers, especially informal ones, is
an impediment to market access. As part the study findings, the growth rate and expansion
of agricultural entrepreneurs is directly influenced by the size of the firm, data obtained show
53
that a majority of the respondents (80%) are experiencing a slow growth rate which they
directly attribute to their micro or small scale of operation.
Managerial competencies are sets of knowledge, skills, behaviors and attitudes that
contribute to personal effectiveness (Hellriegel et al, 2008). Managerial competencies are
very important to the survival and growth of agricultural entrepreneurs. Martin and Staines
(2008) found that lack of managerial experience and skills are the main reasons why new
firms fail before their fifth birthday. The research sought to interrogate the academic
qualifications, trainings attended and the technical services received by the agribusiness
operators consulted as indicators of their managerial competencies. It was ascertained
that all the agricultural enterprise operators interviewed had some formal education
acquired either from formal academic institutions or from other trainings conducted by
government agencies and other development partners. The skills gained assist the
respondents in making crucial decisions relating to their business operations based on
available information, this in the long run has a significant influence on the agribusiness’
performance.
54
6.0 CHAPTER SIX- CONCLUSIONS AND RECOMMENDATIONS
6.1 Introduction
This chapter outlines the conclusions and recommendations of the study. The study evaluated
factors affecting entrepreneurship skills of small scale farmers in kanakantapa farming area. The
study utilized percentage tables and correlation models in trying to analyze the data obtained.
6.2 Conclusions
The research findings on the small scale farmers’ demographic characteristics data reveal a bias in
gender distribution on the part of the respondents. The study therefore concluded that most
agricultural entrepreneurs in kanakantapa are females and therefore agricultural based economic
activities are dominated by female gender especially on agribusinesses dealing in trade, brokerage
and transportation of agricultural produce. In this regard there is need to put in place strategies that
would encourage more males to participate effectively in non-farm based activities. Study findings
in terms of the ages of the respondents concluded that most of the youth do not participate in
agricultural enterprises while the aging population who have opted out of other professions
(retirees) are actively engaged in agriculture as an economic activity either directly or indirectly.
There should be interventions to attract the young and energetic population to these ventures to
guarantee its growth and secure its future.
The findings also concluded that the level of education and training on agricultural best practices
and business management has a direct and positive relationship with the performance of the
agricultural enterprises studied which was analysed in terms of earnings realized per season. The
participants with basic education i.e. primary and secondary level qualifications are the majority
55
of the participants involved in agricultural based economic activities. Owing to the fact that this
group of respondents possess no additional skills or training, efforts should be put in place to
facilitate their more active participation because they have no alternative jobs, these are their
primary occupations. It also concluded that irrespective of the level of education all agribusiness
entrepreneurs require specialized training to equip them with skills on current technologies and
bring them up to date on production and market trends. The findings also revealed low levels of
interactions with the agribusiness officers on the ground implementing government projects to
transform agriculture from subsistence focus to commercial ventures while providing demand
driven trainings. The regulatory environment directly impacts on the performance of agricultural
entrepreneurs as it stipulates trading rules, taxes and licences which are direct costs that work to
reduce the incomes realizable by the enterprises.
6.3 Recommendations
Agricultural entrepreneurs should be able to produce business plans that forecast cash flow
requirements, have an operational plan and demonstrate viability and sustainability in order
to secure and effectively manage finance.
Provide up-to-date training programmes that focus on the needs of entrepreneurs rather
than outdated programmes. It is important to include technology in the school curricula as
well as adult education programmes to ensure that the wider population becomes more
familiar with technology. Tax incentives need to be put in place to favour new venture
creation and development. Interest rates reviews should consider the uniqueness of
agricultural entrepreneurs.
Further studies on how to increase the number of youths participating in agricultural
activities ought to be undertaken, while measures to improve record keeping for farm based
enterprises need further examination to devise simple templates on record management.
56
REFERENCES
Ahmad, N., and Hoffmann, A. N. (2008). A framework for addressing and measuring
entrepreneurship. Paris: Organisation of Economic Cooperation and Development (OECD)
Report 2008.
Alvarez, S.A., & Barney, J.B. (2007). Discovery and creation: Alternative theories for
entrepreneurial action. Strategic Entrepreneurship Journal, 1 (1-2):11-26
Barth F, (2000). Economic Spheres in Darfur. In R Swerdberg (Ed) Entrepreneurship the Social
Science View. Oxford: Oxford University Press.
Barreto, H. (1989). The Entrepreneur in Microeconomic Theory. London, Routledge.
Carter S and Rosa P (1998) Indigenous Rural firms: Farms Enterprise in the UK. International
small business journal (16)4 14-27
Carter, S. (1998). Portfolio Entrepreneurship in the Farm Sector Indigenous Growth in Rural
Areas
Davidsson, P., & Honig, B. (2003). The role of social and human capital among nascent
entrepreneurs. Journal of Business Venturing 18 (2003): 301-331
Esiobu Et al (2015) .Analysis of Entrepreneurship Development in Agriculture among arable crop
farmers in Imo State, Nigeria.
Freguin-Gresh, S., d'Haese, M., & Anseeuw, W. (2012). Demystifying contract farming: Evidence
from rural South Africa, Agrekon: Agricultural Economics Research, Policy and Practice in
Southern Africa, 51(3): 24-51
Gaglio, C.M., & Katz, J.A. (2001). The psychological basis of opportunity recognition and
identification: Entrepreneurial alertness. Journal of Small Business Economics, 16: 95-111
Hussain MD, Et al. Eradicating poverty through micro, small, and medium enterprises: an
empirical exploration.
Hoang, H., & Antoncic, B. (2003). Network-based research in entrepreneurship: A critical review.
Journal of Business Venturing, 18: 165-187
57
Jari, B., & Fraser, G.C.G. (2009). An analysis of institutional and technical factors influencing
agricultural marketing among smallholder farmers in the Kat River Valley, Eastern Cape
Province, South Africa. African Journal of Agricultural Research 4(11): 1129-1137
Kuratko, D.F., & Hodgetts, R. M. (1998). Entrepreneurship: A contemporary approach. 4th
edition. The Dryden Press. New York.
Kuckertz, A & Wagner, M. (2010). The influence of sustainable orientation on entrepreneurial
intentions – Investigating the role of business experience. Journal of Business Venturing, 25: 524-
539
Kuratko, D.F. (2009). The entrepreneurial imperative of the 21st century. Business Horizons, 52:
421-428
Knudson W. Et al (2004) Entrepreneurship and Innovation in the third agric food system the
American Journal of agriculture economics 86 (5) 1330-1336
Maman, D. (2000). Who accumulates directorship of big business firms in Israel? Organisational
structure, social capital and human capital. Human relations, 53(5): 603-630
Muzekenyi, M Et al (2019). Review of South Africa’s Small-scale Farming Entrepreneurial
Constraints and Opportunities: A Rural Perspective. University of Venda, Limpopo, South Africa
Mosey, S., Noke, H., & Binks, M. (2012). The influence of human capital and social capital upon
entrepreneurial intentions and destinations of 132
Ntale, J. Et al (2015). Agro-entrepreneurship readiness models an empirical investigation in
Kenya. Nairobi: Catholic University of Eastern Africa
Ploeg J. D 2004 the virtue farmer, past, present and future of the Dutch Peasantry. Assen Royal
Van Grocum
Pev I and Yaro A ( 2017) Analysis of Entrepreneurship and Development in Agriculture among
small scale farmers in Taraba State Nigeria.
Schumpeter, J.A. 1942. Capitalism, Socialism and Democracy. Harper & Row, New York.
58
Saunders M. N. Et al (2007) Research Methods for Business Students. Harlow. Prentoice hall.
Shane, S. (2000). Prior knowledge and the discovery of entrepreneurial opportunities.
Organisation Science, 11: 448-469.
Sherperd, D.A., & DeTienne, D.R. (2005). Prior Knowledge, Potential Financial Reward and
Opportunity Identification. Entrepreneurship Theory and Practice, January 2005
Taylor, D.W., & Thorpe, R. (2004). Entrepreneurial learning: A process of participation. Journal
of Small Business and Enterprise Development, 11: 203-211
Unger, J.M., Rauch, A., Frese, M., & Rosenbausch N. (2011). Human Capital and entrepreneurial
success: A meta-analytic review. Journal of Business Venturing, 26(3): 341-358.
Venter, R., Urban, B., Rwigema, H., & Marks, J. (2008). Entrepreneurship: Theory in practice
(2nd edition). Cape Town: Oxford University Press, Southern Africa.
World Bank Report (2013). Growing Africa: Unlocking the Potential of Agribusiness.
Zambia Daily Mail Limited July 18, 2018