Technological innovations a catalyst in boosting agribusinesses
Advancement in technology and innovation are the key to the future of agriculture as agribusinesses strive to feed an increasing population against a background of climate change, scarcity of water and a host of environmental concerns in Africa.
This was according to Frans Weilbach, Agribusiness Industry leader for PwC Africa, speaking at a PwC Agribusinesses Insights Survey 2016 media briefing in Rosebank, Johannesburg yesterday.
Weilbach said the biggest hindrances to business growth in the agricultural sector around the African continent were lack of access to innovative technology, the scarcity of natural resources and supply-side uncertainties. African agribusinesses, he pointed out, also feel there is a long way to go toward better support from government in the sector.
PwC's Agribusinesses Insights Survey 2016 report, which was carried out among a group of 25 African agribusinesses from 20 countries across the continent, focuses on the strategic challenges that agribusiness leaders face in their businesses. It also highlights areas where technological innovations are already taking place and where they can make a difference in the future.
PwC says the agricultural sector is regarded as one of the most critical industries for the African continent due to economic potential and is projected to become a $1trillion industry in Sub-Saharan Africa by 2030.
Among other findings, the report reveals around 35.3% of respondents said they would consider investing in the development of artificial intelligence farming capabilities for primary production and 11.3% of them said they have already invested in such technology.
Weilbach noted innovative technology and advancements in agricultural productivity are becoming increasingly important as pressure mounts on food systems in light of the rapid growth of global population and the ever-changing climate.
"Agribusinesses are making changes to go high-tech. From data-gathering drones to artificial intelligence farming, technology is making the agricultural sector more precise and efficient as agribusinesses push for increased profits," he elaborated.
Eben Gerryts, PwC industry leader for consumer, industrial products and services in Africa, discussed the increase in technological adaptation in the SA agricultural sector. He pointed out that it is not new techniques, but rather new technologies that would play an important role in increasing productivity where all stakeholders may benefit, including business organisations, farmers and governments.
"Drones offer a typical example of the new technologies that are giving rise to second green revolution as they offer an alternative to satellite imagery that is more precise and more cost effective.
"Drones are popular in SA among sugarcane and maize farmers, where they are used for crop spraying, health assessments, soil and field analysis," he explained.
A focus on technological innovation using real-time data will contribute to effective farming practices which will ensure social and environmental sustainability, added Gerryts.
The use of irrigation mobile apps is also on the increase among farmers. These are used as irrigation tools, he explained.
"Sensors are placed in the ground and are connected to the mobile app which will detect dry and wet land. Farmers would receive regular updates on their mobile phone, informing them which patch of land still requires irrigation. If there is a problem with irrigation machinery, the farmer would also receive a notification informing them of this," he continued.
The survey further finds human resources models and processes are beginning to evolve, with more emphasis being placed on technology to improve networks and data in Africa.
PwC said more than half (58.8%) of survey respondents consider investment in Africa as an opportunity for their businesses to expand. The top four countries they are planning to invest in are Zambia, Botswana, Tanzania and South Africa.
The majority of agribusinesses (46.2%), according to the report, were also less optimistic about revenue growth over the next 12 months compared with their expectations a year ago.