If you do what you’ve always done, you’ll get what you’ve always gotten. This catchphrase from well-known life coach Tony Robbins seemed to be a central theme – and motivator for change – at the annual Agri Wes-Cape Conference held in Rawsonville recently.
More change will have to happen in agriculture over the next 15 years than the changes that occurred in the sector during the past 50 years,” said Cornie Swart, president of Agri Wes-Cape.
The agricultural sector is entering a new cycle of change characterised by two shifts – from efficiency to profitability, and from specialisation to integration. Farmers will manage input costs more precisely to counter substantial cost hikes, and follow a value-chain approach towards production, processing, marketing and risk management, with closer collaboration between all role-players.
According to Tinashe Kapuya, manager of international trade and investment intelligence at the Agricultural Business Chamber (Agbiz), greater vertical integration and a closed value-chain are some of the ways in which agribusinesses are adapting to change. Drivers of transformation include an increase in demand for land resources, as well as rapid urbanisation and growth in per capita income in Africa, which leads to dietary changes – while 40% of food requirements are supported by imports from outside Africa.
“There has been significant investment in Southern African agriculture and agribusinesses through innovative business models. However only 1.7% of these investments have been successful, due to uncertain institutional environments, a lack of markets and financial services, high transaction costs and the exclusion of smallholder farmers,” said Kapuya. Governments are therefore advocating more inclusive business models.
Kapuya emphasised the importance of participating in a network for knowledge transfer such as the Agribusiness Virtual Network in Africa. Agbiz facilitates access to networks which includes the United Nations Development Programme (UNDP), Nepad Business Foundation, Comprehensive African Agriculture Development Programme (CAADP), Bureau for Food and Agricultural Policy (BFAP) and the US Agency for International Development (USAID).
Apart from a lack of participation in these networks, chairman of Agbiz, Schalk Pienaar, said only about a third of farmers are members of agricultural organisations. “We need critical mass in order for Government to take us seriously. Use organised agriculture as a vehicle for dialogue and lobby proactively,” he said.
Swart agreed with Pienaar, stressing Government’s role in facilitating an environment for growth and fostering trust in the agricultural sector. Issues that need to be addressed include an increase in unemployment as minimum wage hikes lead to a shift towards less labour intensive industries; a lack of capacity for agricultural research; and uncertainty surrounding the reopening of the land restitution claiming process and legislation regarding land tenure.
However, according to Justice Malala, political commentator, farmers should prepare themselves for a long and difficult five years as the emotive land reform debate will rule political dialogue. “Key questions include who will pay the R179 bn restitution bill, and why, if foreigners only own 5% – 7% of South African land, this is a priority now?” he asked.
According to Pienaar, there is no one-size-fits-all solution to land reform; each province and sector should set up and present its own plan to Government. “Land should also sometimes be viewed only as a factor of production – a cold, clinical money-making machine, taking sentiment out of the equation,” he added.
“There have always been a number of doomsday profits saying that the world will end in South Africa. However, we’ve managed to overcome many challenges – and will keep on doing so,” Malala encouraged producers, adding that the agricultural sector should use the 2016 elections to its benefit by lobbying in a smart manner.
On the political side, he stated that declining support from specifically the urban black middle class was a key issue for the ANC, and predicted that Nkosazana Dlamini-Zuma would follow up President Jacob Zuma as the new ANC leader when his term ends in 2017.