Precision agriculture gives SA farmers an edge in a changing world

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JIMMY MOYAHA: The edge in agriculture comes from being precise and deliberate in how it is that you farm and render your agricultural services, and that’s exactly what we’re going to be taking a look at with the team at Nedbank Agriculture.

We’re going to be diving into the world of precision agriculture and trying to make sense of how that can give our farmers an edge in South Africa.

I’m joined on the line by head of sales at Nedbank Agriculture, Daneel Rossouw, to take a look at this and see what we make of it. Daneel, lovely having you on the show, as always. Thanks so much for taking the time.

What is precision agriculture in the context of agriculture and farming, and why is it becoming so important in South Africa?

DANEEL ROSSOUW: Yeah, I think let’s start with the why, and you remember we had the discussion around regenerative agriculture a few weeks ago. So just to follow on, if you look at our farmers, they operate in a very, very challenging business environment impacted by global trade, climate change – very important – as well as geopolitics.

So most of our farmers and primary producers are actually price takers with very low margin, and they rely on increased yields and lower input costs to remain profitable over the long term; to remain sustainable.

Then if you look at precision agriculture, what it is, we can talk around precision farming or even smart farming, but it is a modern agricultural management strategy that collects, processes and analyses data.

So it’s very much data-driven, from crops, soil and even environmental conditions to make informed decisions for farming operations.

The main goal is to maximise crop yields, to look at improving efficiencies, also reducing waste, and promote environmental sustainability by tailoring farming practices to the specific need of different areas within a field. So it is very specific farming practices.

JIMMY MOYAHA: Daneel, I suppose that’s where technology lends itself to being quite a useful aid in the agricultural process.

You and I have spoken in the past around regenerative agriculture and the use of technologies there, but I’m guessing from a precision agriculture perspective, if you’re looking to be absolutely precise and very deliberate in your farming approach, technology plays a critical part here.

DANEEL ROSSOUW: Yes, definitely, and we’ve seen that adoption of technology, over the last 10 years specifically, growing exponentially and very much in the GPS space, the global positioning systems, and even geographic information systems [GIS].

So they make use of satellites as well as drone technology, as an example, to enable very accurate mapping of fields – it’s very interesting, actually – and in tracking machinery and monitoring spatial variability in soil and crops.

But that’s only one part. They look a lot on sensors as well, and I’ve mentioned the drones and satellite imaging.

But everything comes down to data analytics. Everything revolves around data and machine learning; so to analyse that collected data to generate actionable insights on a farm, such as very important optimal irrigation schedules, as an example, very important in our country, and fertiliser application.

We are a net importer. I think we import more than 80% of our fertilisers and also pest management. So yeah, we see multiple advantages of precision agriculture on farm level.

JIMMY MOYAHA: Daneel, how then do you start to approach that from a banking perspective? The banking and the financial aspects of agriculture form a critical part in supporting our farmers and our agricultural landscape.

A lot of these technological advancements and maintaining a competitive edge in the market do require a capital effort. Part of that means making sure that financing houses like Nedbank Agri are able to support the farmers.

From your perspective, how then do you come into the conversation and say the use of technology is great, but we understand that it’s not a cheap exercise and we’re here to support that.

DANEEL ROSSOUW: Yeah, I think we must remember that for us as a bank and financier and partner, it is really important from a partnership perspective to partner with our clients, through this whole process.

Because ultimately we are also impacted as a financier, because we hold collateral and as much as we can, we want to de-risk our investment, our lending to our client base.

So yeah, are from our side we fully understand that adoption of technology can be expensive. We’ve seen that with significant upfront investment, as you’ve alluded to.

So from our side, banks as a whole will definitely become – and we see that process already – will become technology enablers through better credit decisions that we make, the de-risking, as I’ve mentioned, of our investment or lending book with very much tailor-made solutions, on a per-client level, to assist our clients.

So we need to look at the long-term investment, as well as the long-term profitability that we will see of the investment being made. So yeah, it’s very much data-focused to futureproof the industry, but that’s the role that we can play.

We can direct, I believe, the future in terms of how and where we lend.

So there’s a huge responsibility on us as lenders to be involved and to be on top of what’s happening currently in the market in terms of technology, because we can also benefit from it.

JIMMY MOYAHA: Ensuring that the world of agriculture benefits from precision agriculture practices. But more than that, benefits from having the right partnerships in place to ensure that a competitive advantage is maintained.

The world certainly is changing, and every bit of competitive advantage is what we need for our local producers, especially when they enter the global markets. We’ll have to leave the conversation on that note.

Head of sales at Nedbank Agriculture Daneel Rossouw, joining us to take a look at precision agriculture and how it is that the bank is supporting our farmers to achieve that.

Brought to you by Nedbank Agriculture.

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