The future of farming relies on smart agriculture
Over the last few decades, technology has completely transformed agriculture, with farmers integrating everything from drones and satellite sensing to genetic modification and artificial intelligence (AI) into their operations to reduce costs and enhance yield.
In South Africa, the agricultural economy is divided between highly developed commercial farmers and those that practise subsistence farming, with a fair amount of technology already being used successfully within the commercial farming sector. However, the implementation of farming and agriculture technology has the potential to help farmers and growers regardless of the scale and nature of their operations.
How technology is improving farming
Currently, South African farmers make use of everything from regenerative agriculture, which relates to the use of smart technologies to improve efficiency, to gene technology and AI and robotics.
Genetically modified maize, for example, currently accounts for 80–90% of South Africa’s total yield. This, in turn, has more than doubled the country’s total maize output, from an average of 2 tons of maize per hectare in the 1970s to more than 4 tons per hectare today.
Along with improved yields, genetic engineering has also led to significant improvements in the ability of farmers to store delicate crops such as apples, which in turn allows for longer production and export seasons.
In terms of production for export, one of the most significant developments has been the use of technology to ensure that the quality and quantity of produce meets specific market requirements. The use of climate monitoring technology in South African winemaking, for example, allows producers to remotely monitor their plants and detect and correct temperature or chemical changes that may affect the quality of the overall crop.
Meanwhile, GPS technology is making an impact on livestock farming by making it possible to identify, track and trace an animal right through the value chain.
The recent introduction of AI is also increasing the quantity and quality of produce that we see on our local supermarket shelves. Standard Bank recently financed a citrus producer that uses robotics in its packhouse to improve the speed of packing. The use of robotics and camera technology has also been applied to ensure quality control during the production and packaging of eggs.
Away from the production line, the emergence of online marketplaces accelerated by the COVID-19 pandemic is supporting farming operations by making it easier for farmers to market their produce and access distribution channels outside of their typical areas.
With the examples mentioned so far just being a few of the ways in which technology has and continues to improve farming in South Africa, it can be said that the application of technology across South Africa’s agriculture sector is at significant levels.
The challenge now is to extract the data generated and integrate it successfully into other areas of the economy such as the financial services that support agriculture.
How technology can play a role in financing agriculture
The most significant impact of technology on financing for agribusiness is the data it generates, which in turn provides financial partners with a holistic view of the production process and allows them to provide specific, relevant solutions as they are required. Standard Bank is currently assessing the extent to which we can better track and trace the development of a crop throughout the production cycle and provide financing for interventions or requirements as they are identified.
While technology is being broadly used throughout the agricultural sector, affordability can be a barrier for smaller or emerging farmers. The solution to this, once again, lies in the data generated by the technology and its value to service providers across the value chain, from financial partners to insurance providers to suppliers. This encourages collaboration between service providers to make the implementation of technology more affordable for farmers.
Collaboration is also essential to provide smaller-scale farmers with the skills and knowledge needed to successfully implement technological improvements. Standard Bank is currently providing financing for appropriate farming technologies while working with its enterprise development unit to make specialists available to our clients, ensuring the accurate and effective implementation of agricultural technology within their businesses.