The time is ripe to invest in the South African Agriculture space

COVID-19 and the subsequent pandemic, economic instabilities, geopolitics induced by the Russia-Ukraine war and climate changes have all contributed to the concern for food security evoked headlines. The most vulnerable to this crisis were smallholder farmers and small- to medium-sized enterprises (SMEs), many of whom already lacked the necessary resources to reach their full potential.

Amidst the increasing levels of poverty and dire warnings of growing food insecurity, the need to support agricultural value chains, which are key employment and income generators in most developing countries, is greater than ever before.

According to the recent Agriculture survey published by Stats SA, large enterprises contributed 60,2% or R211,3 billion of the total income in 2019, followed by small enterprises with a contribution of 22,4% or R78,8 billion. Micro enterprises and medium enterprises contributed 9,1% and 8,3% respectively. The increased global demand for agricultural commodities during this period indicated that South Africa exported $10.3 billion of agricultural products in 2020 and a record of $12.4 billion in 2021. These favourable agricultural production conditions were also reflected through increased employment conditions in the sector with the expected harvest reflecting well above the long-term average levels.

While agriculture accounts for about 70% of all employment and more than 40% of GDP in Africa, less than 5% of commercial bank lending goes to the sector as further explained in the ABC Fund Impact Report. Smallholder farmers and rural SMEs are in fact the backbone of agricultural value chains in most developing countries. Farms of two hectares or less collectively produce some 31% of the world’s food on less than 11% of its farmland. They are also vital employment and income generators and have the potential to drive inclusive social development within their communities.

Dr Danie Jordaan, a senior lecturer at the Department of Agricultural Economics of the University of Pretoria, is one of those who stress the criticality and complexity of the process that ensures the produce from a farm is placed on the table of the consumer. This process, when fully cultivated, provides an enormous value offering for the economy, as well as all the role players. It includes the provision of a safe, affordable variety of food.

Through enhancing market accessibility to smaller farmers and adopting vertical integrations by the farmer, major benefits are unlocked – such as the availability of good and healthy wholesome foods – and the farmers receive their fair share of the income generated along the value chain.

There of course exists no lack of expertise, with South African experts at the forefront of agricultural advancements in the world.

Implementing intelligent tracking and tracing systems through RFID (Radio frequency identification systems) which allows the tracking of genetics, health history and the growth performance of livestock. The integration of biostimulants that boost immunity, overall health, and growth of crops, reduce the reliance on chemical alternatives and their harmful side effects. The biostimulant increases crop yield by 25% – 100% and ROI’s of 300% – 7000%. Vertical Farming units designed to facilitate scalability and flexibility in production volume are utilized. Hydroponic Farming results in increased growth rates; 80% less water; no weeds; nutrient efficiency and fewer pesticides.

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