Most farmers know what they sold. Far fewer know what they kept. This issue gives you a simple system to find your real profit for every crop, cage or animal, using a notebook or the free Farm Profit Calculator. It takes about ten minutes a week.
Why “I think I made money” is not enough
Ask a farmer how last season went and you will often hear a sales figure: “I sold 40 bags” or “I got KES 80,000 from tomatoes.” Sales are not profit. Profit is what is left after every cost has been paid, including the ones that never feel like costs: your own labour, the boda to the market, the airtime to call buyers, and the interest on the loan that bought the fertiliser.
Without that number you cannot answer the three questions that decide whether a farm grows or stalls:
- Which enterprise pays best? Your kale might earn twice as much per shilling invested as your maize, or the other way round.
- What is my break-even price? If you know it costs you KES 28 to produce a kilo of kunde, you will never again accept KES 20 from a broker without knowing you are losing money.
- Can I prove my income? Chamas, SACCOs, banks and buyers trust farmers who can show records. Records turn “trust me” into “here are the numbers.”
The three numbers every farmer should know
1. Total cost per enterprise
Treat each crop, plot, cage or flock as a small business of its own. Give it a name (“Kunde plot A”, “Cage 1”) and record every cost against it. Shared costs, such as a water pump used on two plots, can be split by area or by days of use.
2. Cost per unit
Divide the total cost by what you harvested. This is your cost per kilo, per bag or per fish. It is the single most useful number on a farm, because you can compare it directly with the market price.
Cost per kilo = total cost ÷ kilos harvested
3. Margin
Profit divided by sales, as a percentage. A margin of 20% means you keep KES 20 of every KES 100 you sell. It lets you compare a small enterprise with a big one fairly.
Margin = (sales − total cost) ÷ sales
A worked example
Here is an illustrative budget for one acre of kunde for one season, taken from the Crop Budget Templates in Issue 2. The prices are examples, not market prices; your own will differ.
| Item | Example cost (KES) |
|---|---|
| Seed, manure, fertiliser, foliar feed, pest control | 14,300 |
| Hired labour (40 days) | 20,000 |
| Family labour, valued (40 days) | 20,000 |
| Water and irrigation | 5,000 |
| Transport and market fees (30 trips) | 24,000 |
| Packaging | 6,000 |
| Land rent | 10,000 |
| Total cost | 99,300 (illustrative example) |
If the plot yields 3,500 kg and sells at KES 35 a kilo, sales are KES 122,500. Profit is KES 23,200 and the margin is about 19%. The cost per kilo is about KES 28.
Now look at what happens if you forget the “invisible” costs. Leave out family labour, transport and market fees and the cost drops to about KES 55,300. The farm suddenly looks like it made KES 67,000 and a 55% margin. That is the trap: the farm feels profitable, but the cash never seems to be there. The missing money went on boda rides, market fees and your own unpaid days.
The ten-minute weekly records habit
- Write it the same day. Keep a small notebook in your pocket or use the calculator on your phone. Memory fades by Friday.
- One line per money movement. Date, enterprise, income or cost, category, what it was, quantity, price. That is all.
- Value your own time. Use the daily wage you would pay a worker in your area. If the farm cannot pay you that, you need to know.
- Keep receipts and M-Pesa messages. Your M-Pesa statement is a free record of most of your costs. Download it monthly.
- Total up every Sunday. Ten minutes: add the week’s lines into your summary. In the calculator this happens automatically.
- Review at harvest. Compare cost per kilo with the price you got. Decide what to keep, change or drop next season.
Using the Farm Profit Calculator
The download below is a spreadsheet that works in Excel, Google Sheets and free phone apps such as Google Sheets for Android.
- Records sheet: fill in the yellow cells. Choose “Income” or “Cost” and a category from the drop-down. The amount is calculated for you.
- Summary sheet: type each enterprise name once. You instantly see income, costs, profit, margin and what share of your costs each category takes.
- The first record is an example. Overwrite it with your own.
No smartphone? Draw the same columns in a notebook: Date | Enterprise | In/Out | What | Qty | Price | Amount. The method matters more than the tool.
What good looks like after one season
- You can say what each enterprise earned, to the nearest thousand shillings.
- You know your cost per kilo or per fish, and you know your walk-away price with buyers.
- You can show a chama, SACCO or lender a clean summary of your farm income.
- You have spotted at least one cost you can cut, such as transport, if you sell together with neighbours.
Do this week
Next: Issue 2 shows you how to budget a crop before you plant, so you know your break-even price before you spend a shilling.
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