Digitisation set to transform the agricultural value chain in Africa

Along with many business processes in organisations, value chains are undergoing a digital transformation. In Africa, the digitisation of agricultural value chains is expected to make the greatest impact in the area of financial services, making these more accessible to farmers, especially small-scale and rural farmers. It will also help to connect buyers and sellers more efficiently.


To give you some background, generally agriculture value chains consist of the following players, although these can vary depending on the type of crops being produced, as well as the location:


  • Input providers supplying raw materials such as seeds, fertilizer and pesticides
  • Farmers who manage the production of the agricultural product
  • Associations and cooperatives who organise many individual small-scale farmers into groups to negotiate better prices with buyers and provide extension services
  • Buyers who purchase the agriculture product and sometimes undertake the processing, packaging and marketing of the final products
  • Customers who ultimately consume the products


In reality, agricultural value chains are often quite multifaceted, and perhaps more so in Africa where role-players often perform more than one role. For example, buyers can also be input providers when the farmers they work with don’t have a reliable supply of inputs. In many cases, buyers also supply loans for these inputs. Middlemen can also confuse the issues by buying directly from individual small-scale farmers and then selling in bulk to more established companies.


However, the focus of this article is on how digitisation will assist small-scale and rural farmers who currently find it difficult to get access to financial services. There are several successful examples of this throughout Africa: for example, Colombia Coffee Growers Federation in Ghana issued ATM cards to 82% of its outgrowers (farmers who are contracted to produce for a specific buyer), helping it reduce disbursement costs by up to 79% compared to cash, a saving of $15.5 million.


In Tanzania, Multiflower, a seed and cuttings exporter, embarked on pilot programme in 2013 where they issued loans totaling $6,000 to 200 farmers and paid $67,000 to 300 farmers via M-Pesa. Apart from affording each farmer an additional and simple method for accessing credit, the switch from cash to digital payment resulted in an average saving of $10.75 in transport costs and 8 hours per payment per farmer. Over the duration of the pilot, participating farmers saved a total of approximately 6,000 hours because they didn’t have to travel to collect their payments.


Another group who stand to benefit from digitised value chains are buyers of agricultural products. This will considerably lower the costs of withdrawing, transporting, and distributing payments – either to farmers directly or via associations or cooperatives. This is particularly true in Africa, where agriculture value chains are often characterised by a small number of buyers paying many farmers spread out over a vast geographic are working through a complex network of middlemen and traders.


Here an example is MasterCard which worked with its partners to develop and implement a range of financial tools to digitise the agricultural value chain in East Africa: 2KUZE in Kenya, and eKilimo in Tanzania. 2KUZE, which means ‘let’s grow together’ in Swahili, is effectively a digital agricultural marketplace targeting Africa’s small-scale farmers, agents, large-scale buyers and financial service providers; eKilimo means ‘eAgriculture’ in Swahili and serves the same function in Tanzania.


Streamlining the value chain in the agricultural sector will undoubtedly impact not just the industry, but the entire economy meaningfully – ultimately enabling small-scale farmers to access formal financial services that they previously may have been excluded from. This will go a long way towards driving financial inclusion and food security.


A value chain is the range of steps and related actors necessary for an agriculture product to move from the farm to the final customers. Value-chain finance includes any or all the financial services that flow to and/or through the chain to address the needs and constraints of its participants in accessing finance or procuring products.

Agtech to bring about the second “Green Revolution”

As the issue of food security takes grip around the world, agricultural technology (Agtech) is set to become one of the most impactful uses of modern technology, in that it is changing how we grow food. Fundamentally, it has introduced the second “Green Revolution”, putting to use real-time data and innovative technology to ensure effective farming practices and improved yields.


The post-war transformation of agriculture, known as the first “Green Revolution”, was led by American agronomist Norman Borlaug, who developed high-yielding varieties of cereal grains and the distribution of hybridised seeds, synthetic fertilisers, and pesticides to farmers. Borlaug’s contributions, as well as the widespread buildout of irrigation infrastructure and the adoption of modern management techniques, greatly increased yields without requiring an expansion in agricultural land, saving more than a billion people from starvation. Now, a second revolution, built largely on technologies that comprise precision agriculture, promises to make the farm of the future more productive and efficient.


With precision agriculture, farmers and soils work better, not harder. Think about precision agriculture as being ‘site-specific’ and ‘information-specific’, as in the most precise way of informing farming decisions. That is, farmers can take large fields and manage them as if they are a group of small fields through gathering information from the fields in real-time by observation and measurement, then responding to inter and intra-field variability in crops. This reduces the misapplication of inputs and increases crop and farm efficiency.


Why is this so important? In South Africa alone, we face a massive challenge to feed our population. In 2009, the population was 49 million and is expected to grow to 82 million in 26 years. Food production must intensify and more than double to feed the expanding population using the same or fewer natural resources. The result, there is shifting trend towards intensified agriculture, which can only be brought about using Agtech. This is a global phenomenon as each country looks at innovative ways to deal with the problem – not only in production, but across the value chain.


Agtech innovations include satellite mapping, drones, Internet of Things (IoT) and robotics. In 2014 alone, investment in agricultural technology surpassed investment in Fintech; $2.36 billion and $2.1 billion respectively. The growth potential is monumental particularly because Agtech will seek to find solutions to mitigate against climate change, increasing population growth and land scarcity. An example of this level of investment is with John Deere – the company has recently made an acquisition of an agtech startup, Blue River for $305 million. Reason being that Blue River’s has created technology that uses computer vision and machine learning to help growers reduce the use of herbicides; while conducting analysis on each plant to determine if it is a weed.


The eight main categories of Agtech include:


  • Farm management software;
  • Precision agriculture and predictive data analytics;
  • Sensors that help farmers to collect data and to monitor crop health, weather and soil quality;
  • Animal data – software and hardware specifically aimed at better understanding livestock, from breeding patterns to genomics;
  • Robotics and drones;
  • Smart irrigation;
  • Next gen farms, where technology is used to provide alternative farming methods to enable farming in locations and settings that previously couldn’t support traditional farming; and marketplaces (technological platforms that connect farmers directly to suppliers or consumers without any middlemen).


Some of the most significant technological advances that are already revolutionising the agricultural sector in Africa include:


  • Water-saving sensors comprising networks of wireless sensors and smart water management systems;
  • Precision drones used for crop spraying in unmanned helicopters, precise aerial photography, soil and water surveys and spraying and watering assistance;
  • Chemical-free pest control – including systems that can trap, count and monitor pests, systems that trigger the release of EPA-approved pheromones that disrupt pests’ mating cycles, and real-time field monitoring and targeted, automated responses; and
  • Farming automation and management systems including interconnected machinery, machines that can inject fertiliser at precise depths, automated seed-spacing based on soil fertility and machines that measure harvest data in real-time.


Technology that increases the efficiency of farms has come a long way since the days when tractors and ploughs were the most important agricultural machines. More importantly though, it’s about food security and feeding the world’s burgeoning population. It’s also about sustaining profitable production – producers need to use the latest technology available, from seed to chemicals and mechanisation to training, including precision agriculture. It’s a case of maintaining a competitive advantage in a competitive global agricultural market; it’s not just a ‘nice-to-have’. And finally, it’s about reducing our impact on the environment too.











Climate-smart Agriculture: A new approach for a new reality

As the world’s population continues to surge, there are mounting concerns about how agricultural production will cope with feeding everyone. The Food and Agriculture Organisation of the United Nations (FAO) estimates that food production must increase by at least 60% to respond to the demands of the nine billion people that are expected to inhabit the planet by 2050. This has become a food security issue globally.


With many of the resources needed for food security already stretched, the challenges are huge – and are being intensified by the fact that the world’s climate is changing fast. For agriculture, change will be significant, as temperatures rise, rainfall patterns change, and pests and diseases find new areas to inhabit or spread to, all of which pose significant new risks to food and farming.


There is also a growing recognition of agriculture’s contribution to climate change, and of the means by which farming systems can adapt to cope with the changes, as well as the potential of agriculture to mitigate climate impact. This recognition has led to the concept of ‘climate-smart agriculture’ (CSA).


Just what is CSA?

CSA is defined by the FAO as “agriculture that sustainably increases productivity, enhances resilience, reduces/removes greenhouse gas emissions where possible, and enhances achievement of national food security and development goals”.


Therefore, CSA is an integrated approach that aims to deliver food security in the face of climate change by:


  • Sustainably increasing agricultural productivity
  • Building the resilience of food systems
  • Reducing greenhouse gas emissions from agriculture


While there are several other sustainable agricultural models in place already, what is new about CSA is that it includes climate change and risks, which are happening more rapidly and with greater intensity than in the past.


CSA is more comprehensive as it strives to adopt a perspective including various other systems at play, such as landscapes, ecosystems and value chains. It also goes beyond new technologies and practices like drought-resistant varieties or precision farming. Identified CSA practices include the following, along with some examples of actions that contribute to CSA:


  • Soil management: Nitrogen and other nutrients are essential to increased yields – this can be done through composting manure, precise matching of nutrients with plant needs, or using legumes for natural fixation.
  • Crop production: Crop productivity can be increased through breeding higher-yielding crop varieties, though crop and crop nutrient management, and through choosing crop species that have higher yield potentials under given environmental conditions.
  • Water management: For rain-fed agriculture, improved water management can be done through water harvesting, soil management practices that result in the capture and retention of rainfall, as well as through soil fertility and crop management innovations that enhance crop growth and yield, thus using water more effectively.
  • Livestock management: Sustainable interventions that target improved feed resources directly increase productivity. For cattle, examples include improved grazing management, using improved pasture and agroforestry species, as well as nutritious diet supplements. Similarly, interventions aimed at improving animal health, such as vaccination programmes, will also improve animal productivity.
  • Forestry & Agroforestry: Examples here include planting trees to act as windbreaks to protect adjacent field crops, reduce wind erosion, and store carbon, or as shelter for grazing livestock.
  • Fisheries & Aquaculture: For aquaculture, the emphasis is on intensifying production, improving stocks, making feeding more efficient and reducing losses from disease. More broadly across the sector, efforts should be made in reducing losses and wastes, increasing yields and productivity in fish and aquatic food processing and other areas where value can be added, and enhancing efficiencies in product distribution.
  • Energy management: Agricultural production can be increased by improving energy efficiency, and implementing the use of renewable energy sources.


What are the benefits for farmers?

For farmers, weather variability brings both lucky breaks and difficult challenges that must be managed. This is especially true for resource-poor small-scale farmers in developing countries, like many in Africa. CSA gives farmers a framework for achieving increases in agricultural production despite the increasing climate variability being caused by climate change. This helps to secure both individual livelihoods and global food security.


CSA is gaining ground in South Africa – it was the topic of a workshop at the PMA Fresh Connections Conference hosted in Cape Town recently, which investigated the needs of South African agriculture. The needs identified for farmers, particularly small-scale farmers, were:


  • more resilient seed varieties;
  • the importance of business planning and inclusion of youth in agriculture;
  • market access and logistics; and
  • scaling up or growing a farming enterprise, within an enabling policy environment.


The Government is currently working on a national strategic framework on climate smart agriculture for 2018.


For more information on innovation in agriculture, contact AFGRI Technology Services on [email protected]


Climate Smart Agriculture – Introduction

Climate Smart Agriculture workshop at PMA Conference, Cape Town

Precision Agriculture

You may have heard soft rumblings of the next best thing in agriculture, of the future of agriculture, the new face, new way of doing things? If you have not heard yet, let us be the first to tell you that this is called Precision Agriculture!

Whatever your knowledge about precision agriculture – a little, very little or, if you’re tech-savvy and ahead of the curve, perhaps a lot – let us invite you to read all you need to know about it here.! Enjoy, share and get excited about the future of our industry!


Why do we need to produce more precisely?

The postwar transformation of agriculture, known as the first “Green Revolution”, saved more than a billion people from starvation with serious unintended environmental costs. Now, a second revolution, built largely on technologies that comprise precision agriculture amongst others, promises to make the farm of the future more productive and efficient.

Precision agriculture is one of many modern farming practices that make production more efficient. With precision agriculture, farmers and soils work better, not harder.

Think about precision as being ‘site-specific’ and ‘information-specific’, as in the most precise way of informing farming decisions. That is, farmers are able to take large fields and manage them as if they are a group of small fields through gathering information from the fields in real-time by observation and measurement, then responding to inter- and intra-field variability in crops. This reduces the misapplication of inputs and increases crop and farm efficiency.


Farmers use precision agriculture practices to apply nutrients, water, seeds, and other agricultural inputs to grow more crops in a wide range of soil environments. Precision ag can help farmers know how much and when to apply these inputs.

In South Africa, the grain sector (a traditional crop for AFGRI) faces undue pressure to produce maize profitably at export parity prices. In an effort to sustain profitable production, producers need to use the latest technology available – from seed to chemicals and mechanisation to training, including precision agriculture. It’s a case of maintaining a competitive advantage in a competitive global agricultural market; it’s not just a ‘nice-to-have’.


What is enabling us to produce more precisely?

With swarms of satellites, drones and sensors in our cadre, we are well equipped to engage in precision agriculture, aka satellite farming or site specific crop management (SSCM).

What I mean is that a wave of innovations – from satellite geomapping developed by the US’s NASA to drones used to collect aerial data, to sensors used to collect moisture, temperature and other weather data on the land – provide insight into the health of the land on a real-time basis. Technologies such as advanced sensors and monitoring equipment now enable farmers to monitor crops more precisely and continuously, thereby enabling more strategic decision-making to increase productivity, with a reduced impact on the environment.


What can we do now that we could not do before, you ask?

From manipulating the growing environment to producing low-potassium lettuce to attaching sensors to cows to identify potentially sick animals, there is little question that the second green revolution holds the potential for remarkable results. Beyond increasing agricultural productivity, there are proven examples of increasing the nutritional value of food. For example, Fujitsu has produced a raw lettuce with less than 80 percent of the potassium content of traditionally grown lettuce; high potassium is unhealthy for people on dialysis or suffering from chronic kidney disease.

Summary of field-level management optimisation and information gains through precision agriculture:

Crop science Precise matching of farming practices closely to crop needs (eg. Fertiliser inputs)
  • Build up a record of their farm;
  • Improve decision-making;
  • Foster greater traceability;
  • Enhance marketing of farm products;
  • Improve lease arrangements;
  • Enhance crop or livestock quality
Environmental protection Precise identification of environmental risk reduction eg. Limiting nitrogen leaching
Economics Precise and efficient practise that will boost competitiveness (eg. Improves management of input usage)



Key takeaways and tags

Management zones; farming efficiency; precise decisions; site specific crop management; smart farming.


About The first “Green Revolution”

was led by Norman Borlaug, an American agronomist who is considered to have “saved more lives than anyone who has ever lived” through his contributions These included the development of high-yielding varieties of cereal grains and the distribution of hybridized seeds, synthetic fertilizers, and pesticides to farmers. Borlaug’s contributions, as well as the widespread buildout of irrigation infrastructure and the adoption of modern management techniques, greatly increased yields without requiring an expansion in agricultural land.









Vertical Farming: What this new production technology is and what does it mean for AFGRI/Food Security?

Vertical farming: the pros and cons

Vertical farming is set to become a new buzzword and already there are pros and cons.

Simply put, this relatively new production technology allows for more food to be grown throughout the year in smaller spaces, without soil or natural light.

As an alternative farming technique, vertical farming offers the promise of meeting the challenges posed by increasing urbanisation, climate change, the declining availability of arable land and fresh water whilst still providing enough food for the growing global population.

Vertical farming is usually situated in large buildings, using techniques called hydroponics and aeroponics. Hydroponics is a plant growing method without soil, using a nutrient rich liquid feeding the plants. Aeroponics refers to the use of special UV lights and a misting system to grow plants, usually with their roots exposed.

Supporters of vertical farming are eager to point out the many advantages of converting concrete buildings into farms where crops can be grown year-round in a controlled environment. The most obvious one is that you don’t need a multi-hectare farm and the crops are protected from severe weather conditions minimising crops lost to hail, drought and cold snaps. Vertical farms are also more efficient as the crops mature much quicker and all produce are grown organically, with no pesticides and insecticides. Inner city farms also reduce the carbon footprint of transportation and use 95% less water than conventional farming.

Even though vertical farming presents an innovative alternative to ensure food security, there are disadvantages. First and foremost is the initial capital outlay that can vary between R7 million and R8 million depending on location, the building and overall infrastructure. Electricity usage is also higher as the plants require specialised lights. This also means that vertical farming is not entirely environmentally friendly. Whilst great success has been achieved with the vertical growing of most plants, grain variants have proven to be especially tricky to grow under hydroponic circumstances.

At this stage vertical farming is still labour intensive as the technology to propagate the plants are not yet available and workers will need specialised training in the process and technologies.

Sources: Countryfarm Lifestyles, Carte Blanche and Humanosphere



Global market research company Research and Markets predicts that the global vertical farming market is poised to grow at a compound annual growth rate of around 25.4% over the next decade to reach approximately $12.5 billion by 2025.



A rooftop garden using hydroponic technology was launched in Kotze Street in Hillbrow in October 2016. The building is owned by the City of Johannesburg and the space was offered to the Kotze Rooftop Garden Co-operative as part of a programme to counter food insecurity.

The garden is made up of two dozen rows of metal tunnels covered with shade cloth, which are raised slightly above the concrete roof.