Farmer Lee Farms: Planting for the Future

Farmer Lee Farms was a family-owned farm 70 kilometres from Johannesburg, South Africa. The farm was founded in 2005 by Jimmy Botha, a sixty-year-old, first-generation Black commercial farmer. From 2005 to 2017, the farm had experienced steady growth and was recognized as a Black business success story in post-apartheid South Africa. During this period, the farm had a clear target market of high-end food packaging houses and food retailers and specialized in the supply of high-quality, high-value fresh produce. However, a severe hailstorm in 2017 destroyed important infrastructure on the farm that was crucial for growing the farm’s temperature-sensitive products. The capital required to repair the infrastructure was not available. As a result, the farm lost key off-take agreements with high-end retail customers and Botha had to change his crops to hardier but lower-value cash crops. In November 2020, the farm urgently needed to re-evaluate its strategy to avoid bankruptcy, for which Botha was considering four options: continue growing cash crops and hope for a market turnaround, apply for a bank loan for funds to repair the damaged infrastructure, access the available government grants to carry out repairs to the infrastructure, or change his farming methods entirely and learn an alternative farming technique known as hydroponics.

This case can be used in graduate- and executive-level courses on strategy or entrepreneurship. After working through the case and assignment questions, students will be able to<ul><li>learn about the limitations caused by an “operator mindset” in agriculture business models;</li><li>learn about strategic resources and capabilities; and</li><li>use VRIO analysis (value, rarity, imitability, organization) to make recommendations.</li></ul>

• entrepreneurship
• agriculture
• strategy