The future of smart farming in South Africa

Nico Groenewald, head of agriculture, Standard Bank PBBSA
Published: 11 August 2021

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Technology has completely transformed agriculture over the last few decades. These days, producers are integrating everything from drones and satellite sensing to genetic modification and, more recently, artificial intelligence (AI) into their operations to reduce costs and enhance yield.

In the South African context, a dualistic agricultural economy exists with highly developed commercial players on the one side and those that practise farming for subsistence purposes on the other. This differs from various other regions across the continent where there is greater focus on small-scale producers.

Therefore, a fair amount of technology has already been successfully applied in the country – specifically within the commercial sector. The implementation of smart farming technologies over the years has helped producers and growers to achieve the highest potential in whichever farming activity they choose to undertake.

Currently, South African producers apply everything from regenerative agriculture, which relates to the use of smart technologies to improve efficiency, right through to gene technology. The use of the latter has showed great results in increasing yields, with genetically modified maize production now making up about 80% to 90% of the total.

The more recent introduction of AI is also significantly increasing not just the quantity, but the quality of produce that we see on our supermarket shelves. Standard Bank recently financed a citrus producer that is now using robotics in its packhouse, which has greatly reduced the time used to pack those oranges. The use of robotics and camera technologies has also been applied in the packing and producing of eggs to identify ‘bad eggs’ in the process.

There are also technologies being applied to make sure the quality and quantity of what is to be produced for a specific market are at the correct standards.

Climate monitoring technology is being used to ensure that produce for export markets meets the relevant standards. South African vineyards place these monitors – that are almost invisible to the naked eye –onto the leaves to monitor the temperatures and chemicals in the plants to detect changes or problems early in the process.

This allows producers to take corrective action, which is critical for crops such as grapes. If the look and feel of the product are damaged as a result of either climate or any chemical disruption, producers stand to lose an entire crop for export.

Furthermore, the emergence of online marketplaces, now accelerated by the pandemic, is supporting the marketing of farming operations by making it easier for producers to get themselves and their produce out there and to access distribution channels outside of their typical areas.

It can be said that the application of technology across South Africa’s agriculture sector is at significant levels. The challenge, however, is to extract the data generated and integrate it successfully into other areas of the economy, such as financial services.

How technology and data can play a role in determining finance for agribusinesses
In the old days, a producer’s banking partner would be at the end of the information chain regarding the crop, while the supplier of inputs (such as pesticides) might be closer to what was happening at any given time. It was only when the client started repaying loan facilities that there would be some indication of a problem, due to a shortfall or whatever the case may be.

However, these days technology and the data it generates can allow a bank, for example, to be part of that whole process and to be aware of possible changes in the crop that are taking place at a biological or a climatic level. The bank can then overlay that from a financial point of view to see what could be done to support the process.

Nico Groenewald

Standard Bank is currently assessing the extent to which we can better track and trace the development of a crop over a period of time. The aim is to identify early intervention nodes or requirements where something might be going wrong. If some additional treatment, for instance, needs to be given to that crop, the bank will be aware and could finance it at that point in time.

Certainly, when we talk about technologies like drones or satellites, affordability acts as a barrier for smaller or emerging producers. But the cost factor could be addressed with greater collaboration. As a bank, for instance, we can find some value in terms of what data can be generated out of satellite technology. The same would be the case for an insurance provider as well as a pesticide provider. Joining forces with other parties in the value chain can make those technologies more affordable.

This collaboration must extend to other specialists within the value chain that can assist smaller scale producers with skills and knowledge transfer. Standard Bank is currently enabling financing for appropriate farming technologies, while working with our enterprise development unit to make specialists available to small-scale producers to ensure the right technical application is taking place and to better prepare producers for a digital future.