In agriculture, new technologies are constantly being introduced and processes improved. These don’t just make growers’ lives easier.
Through technologies such as Remote Frequency Identification (RFID), self-help facilities, mobile apps and the Internet, fraud and theft have been drastically reduced and consumer convenience increased.
While technology is prevalent – and even essential in more urban spaces – its accessibility and use can vary greatly in the agricultural context. This article takes a look at what we’re seeing in the SA farming sector overall.
Defining tech in agriculture
When it comes to technology in agriculture, it’s important to define what the term is. In order to explore challenges and the gap between small and large-scale farmers, the definition must include factors such as agronomic advances in soil and plants and pre-and post-harvest activities, as well as specialised technologies in logistics, storage, marketing and operations.
Information and communication technology (ICT) has the potential to support small-scale farmers in multiple areas, including management, planning and marketing. However, it’s no silver bullet – especially since the ability to use digital resources varies so widely.
What technology does
In the SA fresh produce space, we’re fortunate to have some mature technological solutions. Our markets have systems with transparent sales and payment facilities. Further investment in these existing platforms is set to unlock value as the technologies reach a suitable cost/benefit ratio.
ICT also reduces the costs and risk of interacting with markets, making it easier to enter the industry. In fact, the SA commission model as a whole (read part one of this series for a definition) makes it easy for a grower to enter the sales portion of their marketing effort, thanks to the following combination of factors:
* Institutional: Through a combination of regulations and laws, the markets provide a transparent and open facility for growers to market produce.
* Commercial: The business model offers a competitive trading environment where growers face low switching costs and transparent price discovery.
* Technological: Low-cost access to transparent sales and payment information underpins high levels of trust.
Together, these factors lower some of the barriers to entry and reduce the marketing risks. Further, SA’s growers can sell their produce to any market without ever visiting the market itself. All document and information flows are electronic.
Small versus large growers
Commercial farming is a highly specialised, scientific and knowledge-intensive activity. Because of this, larger commercial farming enterprises regularly invest in research and development across a broad range of functions.
Smaller growers, on the other hand, don’t have these resources, and rely heavily on commercial partnerships and government subsidies.
Also out of their reach are investments in cold storage, sorting and packing technologies, as well as seed technology and advanced planting, watering and harvesting techniques.
Add to this the inability to respond and plan for diverse ecological conditions, and a lack of infrastructure, and it’s clear how challenging it can be for a small farming enterprise to leverage technology at the same rate as larger growers.
So, while the technology available at the markets offers great support, getting a good quality product to the market is where many smaller growers require investment.
Getting grower funding in SA
For growers with sound and well-researched business plans, start-up capital and operational finance are readily available through commercial and government lending institutions.
These institutions are, however, less likely to support high-risk ventures, placing a greater emphasis on the skills and experience of those involved.
The private sector, on the other hand, is making great efforts to support the funding needs of small growers.
A recent Pick n Pay and Land Bank initiative, for example, provides mentorship, food technology training, supplier and business development and market access to small and medium-sized black growers – support that can help their businesses become commercially viable and sustainable.
Grower development programmes
Because agriculture – particularly small-scale agriculture – is a key driver of socio-economic upliftment, food security, job creation and skills development, there are many farming-development initiatives in Africa.
These programmes tend to be closely aligned and supported by local and regional government, with institutions like Nepad initiating pan-African programmes under the mandate of the African Union.
Some of these programmes focus on harvest and post-harvest logistics, contract farming, value adding and supply chain integration. The more successful ones also involve local communities and include financial, operational, logistics and marketing support over a prolonged period.
Global experience shows that the key to successful inclusion of small-scale producers is through management and co-ordination systems.
The most successful of these are built from the bottom-up, with local producers collaborating and external parties providing technical support. A one-size-fits-all governance system often does not consider these local dynamics.
Ultimately, issues like food security, job creation and skills development in African agriculture can be addressed by the use and development of technology.
But even with easy access to information, it’s important to remember that education isn’t sufficient without targeted support throughout the rest of the supply chain.
Dr Justy Range is a Business Development Manager for Freshmark Systems, a subsidiary of MICROmega Holdings Ltd.