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John Hudson | The future of agriculture is already here

John Hudson | The future of agriculture is already here
02-11-22 / John Hudson

John Hudson | The future of agriculture is already here

The South African agricultural sector continues to exceed expectations with consistent growth and innovation and it remains competitive and agile regardless of the challenges it faces on multiple fronts. The sector has shown remarkable resilience over the past few years and has introduced fresh approaches and disruptive developments to reshape its potential and build solid foundations for growth. From input manufacturing to production to marketing, logistics, retail and consumers, the value chain has evolved to adapt to unique South African circumstances, and the innovations that mark this evolution are noteworthy on both local and global stages.

Major challenges facing the agriculture sector and value chain include rapid urbanisation, climate change, increased production cost, scarce and unreliable resources, infrastructure inefficiency, recurring biosecurity threats, crime and poverty and inequality. These are just some of the systemic and structural challenges that negatively impact the growth and sustainability of the sector.

However, these legacy challenges have also become a catalyst for change. Innovators and disruptors across the value chain have created solutions that overcome these challenges and introduce efficiencies that are redefining the shape of the South African agricultural landscape.

Input producers are using technology to develop seeds, fertiliser, fuel, chemicals, and other essential items that are more resilient and sustainable to improve growth.

Agrico, Netafim, Corteva Agrisciences, Bayers, John Deere and New Holland are just some of the input manufacturers that have developed smart solutions to complex problems. This innovation is driven by shrinking profit margins that demand new approaches to ensure that the sector can bounce back and upwards during these uncertain times.

In the input agriculture vertical, some of the key innovations include the development of new hybrids and digital solutions that have kept South Africa at the forefront of grain production, globally.

Research and development across the Agricultural Research Council (ARC), CSIR, the Technology Innovation Agency (TIA), academia and input manufacturers remains a high priority.

The TIA recently funded AgriViro, a start-up focused on developing novel biopesticides; they supported the development of iBATECH, a natural botanica adjuvant; and developed a point-of-care diagnostic test kit for the early detection of foot-and-mouth disease. The CSIR played a role in supporting the latter development, and licensed it to start-up company, TokaBio, that also recently hosted a machine-learning programme for earth observation in its agriculture programme.

Farmers have also played huge role in driving innovative solutions and refining best practice to ensure soil health, water efficiencies, sustainable farming practices and more. There has been a notable shift towards sustainable practice that has been recognised by companies like Nedbank.

In 2021, Andrew Morphew of Colbourne Farm near Howick in KwaZulu-Natal won the Milk Producers' Organisation (MPO) Nedbank Stewardship Award for exceptional commitment to sustainable dairy farming. This commitment to legacy, sustainability and the future is echoed in numerous programmes and sustainable farming approaches upheld by South African producers.

Today, new players are developing products grown indoors and are shifting the benchmarks in sustainable and innovative approaches to food production. These new players include Can-Agri (vertical farming) and Mzansi Foods (laboratory farming).

Marketing agents and farmers have also looked at smart and inventive ways to make markets more inclusive and improve margins of all role players, diversify incomes and make businesses increasingly resilient against external shocks, such as market fluctuations, political instability and conflict. Platforms such as HelloChoice, Nile.ag, SwiftVee, Khula! and Livestock Wealth have shifted the conversations in this sector by connecting consumers directly to agricultural investments and introducing new ways of engaging with the sector.

Livestock Wealth shifted cattle to investment using a smart tool that puts farming at the fingertips of intrepid consumer investors, while HelloChoice has created a direct online agriculture marketplace that instantly connects farmers with buyers.

Logistics has taken some hard knocks over the past few years, particularly with crumbling infrastructure hampering operations and the supply chain. Initiatives are being taken to resolve these issues across roads, ports and rail to smoothen the running of the sector and to reduce the costs of transport for both consumers and producers. This focus on refining the value chain and functionality is echoed in the FMCG space where companies are focusing on regenerative agriculture and have put programmes in place to support farmers in transitioning to this practice. PepsiCo and McCain are two names that sit in this space, while Pick n Pay has partnered with CAN-agri, one of Africa’s biggest vertical farming companies, to ensure that it can supply its stores with specific produce all year round and at the lowest.

The innovations and investments shaping the sector are also being driven by other key players.

Financial institutions have introduced smart and tailored solutions that are highly agile and relevant to the unique needs of the sector.

Insurance companies have also been paying attention, curating solutions that fit the risk while also providing better support for agriculture companies struggling with the public sector's poor safety net. Index insurance is a perfect example of how disruptors in the insurance space are making insurance accessible to all.

That said, government is putting money where the problems are, with billions of rands earmarked for improving approvals of innovations and developments – currently a bottleneck causing significant delays – and for addressing infrastructure challenges. Some of these innovations include Aerobotics and artificial intelligence with data analytics, focusing on orchard health (under the precision farming banner).

They are also adding to this by introducing yield estimation to their offering, ensuring that agronomists and engineers are able to provide farmers with insights that could support precision growing and crop maintenance through the use of drones and satellite imagery. Alternatively, thanks to the ubiquity of technology, there are significant innovations in the fields of data collation and analysis that enable farmers and agri-institutions to analyse multiple vectors and factors to refine soil, temperature, yield and more.

Nedbank has paid close attention to the challenges and complexities that hinder the potential of the agricultural sector and to the opportunities that it presents. To this end, Nedbank has developed a platform that also embraces the development and adoption of more sustainable agricultural practices with solutions such as shade-netting finance, renewable-energy finance, water efficiency, recycling and food distribution and transformation.

Nedbank has also enhanced its financial offering with Avo, our super-app, designed to connect more companies across more industries via a one-stop space and delivering precisely what companies within the agri sector need. Companies can easily sign up with Avo and sell services, connect with other businesses and grow their business foundations from a centralised space that’s cohesive, connected and organic.

*John Hudson is Nedbank’s National Head of Agriculture.

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