ECONOMY

Major interest reported in franchise farming

The notion of “franchise farming” has entered the Greek parlance over the last few months in response to the budding trend among young Greeks to go into agriculture, particularly alternative cultivations that they think will generate quick profits during the ongoing credit crunch, but not everyone is convinced.

When the financial crisis erupted a few years ago and unemployment started soaring, some people who lost office jobs or were forced to close their small businesses turned to the primary sector and started cultivating agricultural products – a move that was encouraged by the government at the time. However, their decision proved hasty in most cases.

Out of those who did turn to agriculture, few were successful in their first attempts setting up a farm without the basic know-how or previous experience. Many farming upstarts realized that the media had been cultivating myths about major crops yields while alternative cultivations proved not to offer the returns many had expected.

The state acknowledged the skills gap and the Education Ministry has now started offering agricultural training programs for people aged 24-40 in Athens, with a notable take-up rate. Next month it will extend the program, named “Triptolemos,” to Thessaloniki and then to other cities via local universities. Other institutions have also started offering such programs.

Besides the essential practical skills, new farmers usually need funding to help them get off the ground, a need which the state has tried to meet with subsidies offered to 24- to 40-year-olds who decide to start a new farming business. These subsidies range between 15,000 and 20,000 euros, depending on where the farm is located (valleys, islands or mountains). That is where franchise farming comes in.

This model has been successfully applied abroad, as it entails significant savings in product development costs, training and marketing expenses, while the risk factor is lower and the start-up process accelerated. It does mean, however, that farmers have to concede some or all control of their business operations and a significant part of their produce in return for a degree of profit.

Mpimpas Group Investing, based in eastern Attica, has embarked on a publicity campaign to promote franchise farming for alternative cultivations such as mushrooms, aloe vera, snails, stevia, pomegranates etc. It promises returns such as 40,000 euros per year per 1,000 square meters, a remarkable yield by all accounts.

Group Vice President Marilena Manioudaki tells Kathimerini English Edition that the program makes use of European Union subsidies and has already attracted the interest of “thousands of people within the last month,” adding that it will begin operating “in the next 15 days.”

She says the group offers certified quality control by scientific experts, leaving nothing to chance, and notes that the program capitalizes on Greek farmers’ swing toward exports “as Greece has huge untapped potential in terms of farming.”

However, others are not convinced by such pledges. Vangelis Vergos, director of the Center for Agricultural Entrepreneurship at the American Farm School in Thessaloniki, urges caution on high expectations from alternative cultivations. “I have my reservations because it promises huge money out of nowhere, like a magician. These new cultivations have arrived suddenly to replace the existing ones, while our research shows that is not possible,” he says, pointing to the already declining snail trade.

“The future is in vertical units, from production to manufacturing to serving on the plate, not in horizontal practices,” he adds.