The mounting importance of not only sustainable but regenerative farming in SA

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This interview was originally aired on RSG Geldsake in Afrikaans. The transcript below has been translated into English.

RYK VAN NIEKERK: Sustainable farming and regenerative agriculture are new concepts increasingly coming to the fore in terms of climate change and risks for agriculture.

Nedbank Commercial Banking Services says that these agricultural practices are becoming ever more important and no longer optional, but essential. They are essential because there are so many environmental risks threatening the agricultural industry.

Global trade is on the increase [and] this movement focusing on agricultural regeneration and conservation reportedly has over 1 100 organisations in 50 countries openly aligned with sustainable agricultural principles: five times the number in 2019.

Daneel Rossouw is head of sales for agriculture at Nedbank Commercial Banking. Daneel, welcome. We have frequently chatted about this, but it is a huge subject. Regenerative agriculture and sustainable agriculture – how do you explain these important concepts?

DANEEL ROSSOUW: You are right, it is becoming even more important from a banking viewpoint, as we look at it. What was once a sustainability conversation has now become a commercial necessity.

Why we say that is if we look at changes, especially over the past 10 years, there has been a dramatic increase in climate volatility. We have droughts, floods and soil erosion.

Then what is important is the loss of biodiversity and, together with the economic side, especially rising input costs which created a the new business environment.

Production has long depended on profitability and of course restoration and improvement, and that is where we get to the conservation and regeneration component through regeneration and improvement of the natural systems that support farming.

When we look at regenerative agriculture, we see it not only as a way to remediate damage in terms of the commercial aspect of agriculture and conventional practices, but also about the building of agricultural systems which are firstly much more productive, and then also more resilient and more goal-oriented – and ultimately more profitable.

So what I see in practice is minimum soil disturbance in terms of practices, more permanent soil coverings, biodiversity and rotation.

We want to keep more roots in the soil and then, if at all possible, maintain strategic integration of livestock within this farming system.

RYK VAN NIEKERK: I know many farmers, and all of them – I’d say 99.9% of farmers in South Africa – are committed to protecting their environment and their soil.

It is of course in their interest to do so, but if you now hear that you have to change your farming practices to introduce those regenerative principles, you might say ‘Listen, this will cost me money and it will take ages before I get a return on that investment’.

So how should farmers now see the financial implications of a greater focus on regenerative agriculture?

DANEEL ROSSOUW: Yes, I always ask whether it is sustainable agriculture or regenerative agriculture, because we only consider the current costs, especially costs in terms of our fertiliser – and of course fuel – which exert tremendous pressure on the cost of farming. Our margins are already quite small, making it difficult to maintain conventional practices.

So we have to do a few things. We have to try to boost our income and lower out costs, never mind survive. So we see conventional farming practices over time becoming more difficult to maintain because of these profit margins.

And Ryk, a very important component is the risk reduction that we can expect over time, of course, especially in terms of insurance against climate change – the fact that you can retain more water in your soil and release over longer periods with much slower evapotranspiration, that part is becoming ever more important.

But I think from a financial perspective we are focusing particularly on lower energy costs, the reduction of chemical inputs and a more reasonable yield increase over time. I think these all contribute to the long-term financial sustainability of these types of practices.

RYK VAN NIEKERK: They also have to do with the use of new technology. You have a reference to solar power systems to reduce the dependence on expensive electricity, but is there also a big focus on other technologies?

DANEEL ROSSOUW: One talks about technology also in terms of available data, and particularly climatic data which is available today and directly linked to the technology we use on implements, for example, as well as the much more direct and more accurate application of fertiliser in particular but seeds as well.

In my view the two work in concert.

And of course, from our financial point of view the more data available, the more we can measure, the more we can know and incorporate into our credit processes, for example, as well.

That is something that we see as increasingly important.

But data, together with technology, has been one of the big catalysts we have seen in terms of regenerative agriculture.

RYK VAN NIEKERK: What is the attitude of farmers when you stand before them and say ‘Listen, it’s no longer an option; you have to give this your attention’? What is their attitude and how well do they accept the responsibility of adopting these principles?

DANEEL ROSSOUW: Yes, that is interesting because when we talk we don’t talk only about grain. We also see it where irrigation takes place – and even more in the horticulture environment, as in vineyards, orchards.

That is incredibly important, but it is something that started a few years ago as a consequence of the normal necessity for more effective uses of water to get more out of the soil and farm more sustainably.

So to answer your question, I don’t know of a single farmer who is not prepared to chat about regenerative farming or sustainable agriculture.

Because that is an entire process in protecting one’s profitability, but also to improve one’s resources over time – also where land succession is involved to give something back that will be sustainable.

So this is a process. Great research has already been done in all industries in this respect, and it is I think something that we increasing have to understand.

From a consumer point of view there will be more and more questions raised as to ‘How is the product I am eating being produced’? So we definitely see that increasing in importance.

And of course, from a corporate perspective, there is mounting regard for ESG [environmental, social and governance) aspects – let’s call it the conservation component of our business together with the social side – and then of course management.

These two components are also big drivers for farmers in starting to switch to regenerative farming, together with the pure financial perspective.

RYK VAN NIEKERK: Thank you very much, Daneel. That was Daneel Rossouw, head of Sales: Agriculture at Netbank Commercial Banking Services.

Brought to you by Nedbank Agriculture.

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