Saving South Africa’s Nascent Agritech Sector (The Government)
The term “agritech” refers to technological advancements and innovations used in agricultural processes to boost output while requiring fewer inputs and improve agricultural practices. Agritech’s tangible applications include faster agricultural equipment, better crops, and digital supply chain monitoring. Africa’s changing environment and expanding population may benefit from these ground-breaking technical advancements that level the playing field.
An increase in investor interest in agritech businesses has coincided with a significant increase in the amount of venture funding moving into Africa. AgFunder’s first Africa Agrifoodtech Investment Report, created in collaboration with the Dutch development bank FMO and British International Investment (BII), states that in 2021, the agritech sector received $482.3 million in investments, a 250% increase from 2020.
Since 2017, the agritech startup scene in Africa has received more than $1 billion in funding. When it comes to agritech funding, South Africa appears to be losing its edge. Kenya, Nigeria, Egypt, and South Africa, collectively known as Africa’s “Big Four” markets, secured 92.2% of the capital. Nigeria and Kenya each received $147.8 million, while Egypt received $186.1 million and Kenya $88.5 million. The smallest percentage of the four was claimed by South Africa.
The South African economy’s primary growth driver is agriculture. Notwithstanding the sector’s recent poor performance, it is clear that much ground has been lost over the years. Agritech has not been receiving the necessary attention.
Damning agritech statistics in South Africa
Urbanization and rising population density in South Africa are driving up demand for food, particularly protein-rich meals (and the feed to nourish them). A growing number of consumers who are more concerned about their health also want greater transparency and traceability of the produce they consume, something the agriculture industry currently cannot give.
The tenacity and ingenuity of South Africa’s agritech entrepreneurs make the country an intriguing and alluring environment to do business. SwiftVee, Nile, Khula, Inseco, and Aerobotics are a few companies that have used data and AI to increase production and control yields over time. Although entrepreneurs and innovators have proposed solutions to ensure seamless operation in the agritech sector, a number of structural problems have served as barriers.
In terms of deal values, or 3.4% market share, the agritech sector only ranked 12th out of 20 industries in 2019. For the agriculture industry in 2019, this equates to meager VC agreements totalling R42 million. South Africa is undoubtedly not doing enough to achieve the Sustainable Development Goals, which include “zero hunger” as one of its top priorities.
The South African agricultural industry can use a variety of digital solutions to tackle these five primary issues. But, a calculated response is required to lay the groundwork for the development of a modern, sustainable, and productive agritech industry.
What can the government do?
Agritech in South Africa has a promising future. But, the nation’s agritech founders can do better if they take advantage of current non-existent support from the government. Regulation is crucial because creating the economic environment and infrastructure required for agritech growth is highly difficult.
Locally, competent South Africans have amazing prospects, and it would be unfortunate if skilled individuals left the country because they are so sorely needed. It is crucial to remember that South Africa has always had difficulty finding enough qualified workers of any race to fill positions in the agritech sector, even though the employment metric in the country has been high up until recently when the country has struggled to find solutions to unemployment.
As it takes a while to develop skills like those of agricultural engineers and agricultural engineering technologists, they ought to be included on the government’s list of important talents that will permit the development of agritech.
Morestill, South Africa’s aspirations, as expressed in a number of regulations, have not actually translated into a workable national strategy to assist the sector’s digitalization. Authorities in South Africa have largely ignored the sector’s digitalization and failed to offer the necessary incentives and protections for its growth, which has in turn been mostly pushed by the private sector.
The 2017 National e-Strategy outlines a nine-point sectoral intervention plan, which includes the revitalisation of the agricultural sector through the deployment of ‘smart farming’ initiatives throughout the agriculture value chain, with an emphasis on emerging and smallholder farmers. However, to truly achieve its aims, credible sector experts must be involved from planning to implementation.