South African farmers are leading agribusiness changes through tech savvy, and climate-friendly transformation

The first is the technological revolution that is challenging traditional farming practices. For our farmers, investing in technology is subtly changing their businesses. Their success is now as dependent on data, digital tools, and the ability to use information as are their time-honoured skills in producing food for the nation.

The second revolution, driven by the urgent and harsh reality of climate change, is not a distant threat but a pressing concern. The future of agriculture, sustainable farming operations, and the challenges of food security are now immediate and pressing issues for farmers, regardless of their scale of operation.

In addition to these issues, farmers are also grappling with the twin challenges of load shedding and intensifying droughts while being further burdened by soaring electricity and input costs. These are not just complex realities, but significant hurdles shaping the landscape of South African agriculture.

Technology is, however, helping change the overall picture as digital and other tools benefit the entire agricultural value chain. All parties, from financiers to exporters to retailers, are involved in managing digital data. This collaborative approach allows for analysing market dynamics, monitoring real-time operations, and forecasting prices, enabling proactive planning and beneficial decision-making that can optimise profits and unlock growth opportunities.

This ongoing transition is seeing farmers becoming increasingly aware of the benefits of intelligent irrigation systems, alternative energy-securing methods, drone technology, and genetic engineering of crops, which are boosting food production on a continent where about 140 million people face acute food insecurity.

As farmers adopt new technologies and enhance farming methods and operations, they become more aware of the advantages and benefits of partnerships with financial institutions. Standard Bank, for example, as part of its commitment to driving Africa’s growth, has dedicated industry specialists that offer expertise and financial solutions devised solely for the agricultural sector.

Standard Bank’s approach is built around several initiatives focused on helping agribusiness achieve its ambitions and enhancing its contributions to the GDP of R 41.8 billion already earned by agriculture. Included in the drive to improve the business of agriculture are:

• Supporting and encouraging innovation and digitisation in the agribusiness value chain by introducing platform business models. This includes considering the growing use of artificial intelligence (AI) to assist with tasks that range from exploring soil health to recommending fertiliser and pesticide applications and other functions that enable agile responses to production needs.
  
  The practical benefits of digital platforms assisting the agricultural sector are best illustrated by the well-established OneFarm initiative, which harnesses digital technology to promote and support sustainable farming practices.
  
  Focused on reducing food waste, accelerating farmer development, and alleviating food security, OneFarm provides solutions for farmers, buyers, and off-takers, using out-grower programmes, service providers, and financial donors to improve efficiencies, giving access to valuable data, and finding new opportunities to gain experience and build meaningful partnerships.
• Addressing climate change and production issues through defined financial solutions that enable farmers, regardless of scale, to access new practices and technologies- a matter of national importance in South Africa, where the population could top 82 million by 2035.
• Assessing ways of including small-scale farmers as recipients of the benefits offered by modern, technical advances.

Of course, setting out objectives is one thing. Acting and delivering tangible results is another. An example of what can be achieved is illustrated through our involvement with Lomaquzu Investments, an established family agribusiness operating in Eswatini.

Lomaquzu Investments faced daunting challenges presented by the twin threats of climate change in the form of intense drought and soaring electricity costs, which placed the yields from their sugarcane fields under pressure.

To assist Lomaquzu, our agribusiness team concentrated on developing climate-smart agriculture solutions.

Assistance involved providing SZL 25 million in development finance and introducing them to Simply Swazi, a key supplier of renewable energy and irrigation solutions.

The result was the introduction of efficient irrigation technologies, which included a solar-powered system. This mitigated the impact of climate change and significantly reduced operational costs, ensuring operational sustainability.

The benefits were immediate as the productive capacity of the fields recovered. The partnership also realised several other significant benefits. These included:

• Substantially reduced cost of irrigation, which will see costs drop by 30% this year.  
• An anticipated 30% increase in the sucrose yield of the crop.
• In 2023, profitability climbing by 20% and further growth of an additional 3.5% anticipated in 2024.

The benefits have spread beyond the farming operation. Lomaquzu has extended its operations and is employing 150 more people, 20% of whom are women, from the surrounding communities, a significant boost for the economically disadvantaged people.

As the technology and practices have changed, the company has adopted green sugarcane harvesting technology, which reduces the carbon footprint as ‘burnt-cane harvesting ‘is no longer part of the farming methodology. Soil cover has improved, and the use of inorganic fertilisers has reduced.

On a broader scale, the changes have contributed to meeting the objectives of nine of the UN’s Sustainable Development Goals. These range from reducing poverty, ending hunger, increasing health and well-being, providing decent work, and using affordable and clean energy.

The lessons learned from agribusiness technology and a considered approach to climate change are that partnerships and joint action are instrumental in introducing sustainable change.

Concerted action can lead to innovative solutions and widespread gains- benefits in Swaziland are now being extended to 150 small-scale sugar farmers identified by Standard Bank.

Providing US $ 5 million to finance the change will be USAID, who, through our ‘matchmaking’ role, will be part of a multi-faceted team dedicated to delivering climate-smart solutions to help build a vibrant African agribusiness economy.

ENDS

For more information, please contact:
Nkosinathi Msiza
Head of Coverage Marketing & External Communications | Business & Commercial Banking | Standard Bank
083 577 7585
Nkosinathi.Msiza@standardbank.co.za