Africa is not a breadbasket, but it could be. Better yields require investment

Africa is not realising its massive potential for agricultural production.

This despite the positive knock-on effect agriculture has on a huge number of other industries.

Agricultural yields in Southern Africa are currently only 4.2 tons per hectare, compared to the global average of 6.1.

To substantially increase these yields will require greater investments in quality inputs and better farming practices.

Farming in Africa has long been seen as coming from an individual sustainable basis, but to be successful… we have to industrialise the greater agriculture industry which rests on the pillars of infrastructure, education and mechanisation.

Chris Potgieter, Old Mutual Wealth Private Client Securities

Investments in infrastructure and education, while not direct investment into agriculture, are two enablers for improving the industry.

The average age of farmers in Africa is 60.

Early education and inclusion of young skilled people into the value chain are needed, considering 60% of Africans are younger than 24.

Infrastructure investment is crucial for effective irrigation, mechanised production processes and reliable transport routes, but education goes hand-in-hand with job creation within these evolving industries.

Chris Potgieter, Old Mutual Wealth Private Client Securities

Technology is the catalyst for evolution in the agricultural industry.

Innovations in science cannot just focus on one aspect of farming; the entire value chain needs to be mechanised. The drought in the Western Cape has highlighted the importance of having climate-resilient crops, but we also need to employ smart irrigation techniques and ensure we have proper storage facilities for times like these.

Chris Potgieter, Old Mutual Wealth Private Client Securities

Geo-mapping, a technology that helps farmers gather essential data using satellite technology combined with soil condition sensors, will help farmers make better decisions and increase farming efficiency.

Chris Potgieter, Old Mutual Wealth Private Client Securities

While a lack of infrastructure remains one of Africa’s largest obstacles, improvements are taking shape in this regard.

This is evident in the number of listed companies – both local and international – who are at the forefront of exciting innovations that address water scarcity, climate change and its unintentional consequences.

John Deere and Company comes to mind in this respect, as they are so much more than just a tractor company. They invest heavily in smart farming for future growth along with the GPS technologies that increase efficiency and targeted biological research which contributes to global sustainable farming practices.

Chris Potgieter, Old Mutual Wealth Private Client Securities

An interesting agriculture holding is Alphabet, Google’s investment arm which encompasses the Farmers Business Network – a service that connects farmers with each other, giving them the opportunity to share data on their farms’ inputs and practices, thus empowering farmers to make better decisions. Farmers can source and sell collectively and smartly, by capitalising on big data in a smart and practical way.

Chris Potgieter, Old Mutual Wealth Private Client Securities

South Africa has also seen a rise in technology companies that are exploring large-scale data collecting systems that could potentially change the farming landscape in South Africa.

The Internet of Things (IoT) has changed how we live. And through large-scale data collection specific to farmers, Smart Farming in South Africa will be the norm. Through the use of data sensors, farmers will be better equipped to deal with unpredictable climate patterns, exposure to new pests, diseases and alien vegetation.

Chris Potgieter, Old Mutual Wealth Private Client Securities

Enjoy The Money Show, but miss it sometimes?

Get the best bits emailed to you daily, right after it ends:

Subscribe to our mailing list

* indicates required

This article first appeared on 702 : Africa is not a breadbasket, but it could be. Better yields require investment


Recommended

by NEWSROOM AI

CapeTalk welcomes all comments that are constructive, contribute to discussions in a meaningful manner and take stories forward.

However, we will NOT condone the following:

  • Racism (including offensive comments based on ethnicity and nationality)
  • Sexism
  • Homophobia
  • Religious intolerance
  • Cyber bullying
  • Hate speech
  • Derogatory language
  • Comments inciting violence.

We ask that your comments remain relevant to the articles they appear on and do not include general banter or conversation as this dilutes the effectiveness of the comments section.

We strive to make the CapeTalk community a safe and welcoming space for all.

CapeTalk reserves the right to: 1) remove any comments that do not follow the above guidelines; and, 2) ban users who repeatedly infringe the rules.

Should you find any comments upsetting or offensive you can also flag them and we will assess it against our guidelines.

CapeTalk is constantly reviewing its comments policy in order to create an environment conducive to constructive conversations.

Read More
Venezuela inflation rate expected to top 1 000 000% by year-end

Venezuela inflation rate expected to top 1 000 000% by year-end

Venezuela – once as rich as Norway – is suffering an apocalyptic collapse without precedent.

What is a hedge fund?

What is a hedge fund?

The Money Show’s Bruce Whitfield interviews Fairtree Capital Portfolio Manager Jean-Pierre Verster.

100-year-old Truworths reports fewer sales and a 7.3% decline in earnings

100-year-old Truworths reports fewer sales and a 7.3% decline in earnings

The Money Show’s Bruce Whitfield interviews Truworths CEO, Michael Mark.

We have made progress in delivering on our promises to Marikana – Lonmin CEO

We have made progress in delivering on our promises to Marikana – Lonmin CEO

The Money Show’s Bruce Whitfield interviews Lonmin CEO Ben Magara.

4 tips for safely investing right now when everything is so hectic

4 tips for safely investing right now when everything is so hectic

Bruce Whitfield asks Personal Financial Advisor Warren Ingram for advice on how investors can safely navigate this hectic time.

Transnet CEO Siyabonga Gama served with suspension notice

Transnet CEO Siyabonga Gama served with suspension notice

The Money Show’s Bruce Whitfield interviews Pieter du Toit, the assistant editor at News24.

Popular articles
Survivor winner Tom Swartz vows to buy his wife 'new boobies and a family house'

Survivor winner Tom Swartz vows to buy his wife 'new boobies and a family house'

Swartz says he would have done anything to get the R1 million prize money.

'There is no way Magnus Malan could've done the things he is accused of'

'There is no way Magnus Malan could've done the things he is accused of'

Former police minister Adriaan Vlok has rejected accusations that former minister Malan was at the centre of a paedophile ring.

'He told me people would want to keep him quiet at any cost'

'He told me people would want to keep him quiet at any cost'

Journalist Gavin Evans says the late Mark Minnie spoke to him about his fears that those he exposed in his book might harm him.

How businessman Max Lichaba struck gold with his jewellery company

How businessman Max Lichaba struck gold with his jewellery company

Entrepreneur Max Lichaba built his own empire and is the CEO of Lichaba Creations and several other businesses. This is his story.

3 emergency numbers you should have on speed dial and how they work

3 emergency numbers you should have on speed dial and how they work

These are the emergency numbers you should have on your cellphone and this is what you must understand about how they work.