One of the debate topics at this year’s Nation in Conversation is around the importance of economies of scale, and the benefits of having an economy of scale in business, and specifically in South African agriculture.

 

From a business perspective, there is none closer to this subject than AFGRI itself. Now a leading agricultural services company, the group had a humble beginning. Back in 1923, 150 people attended a meeting called to establish the Oos-Transvaalse Landboukoöperasie, with 29 people signing the list of original members.

 

By 1930, 5,400 tons of maize was being handled by AFGRI – then considered a record, this in fact was hardly enough to fill the tube of one modern silo today. And 42 years later, in 1972 the total business silo capacity was 587,700 metric tons. Today AFGRI’s handling and storage capacity is more than five million tons!

 

Over the 95 years it has been in business, AFGRI has grown its offerings to encompass a wide variety of services and products, geared to support farmers no matter what their size.

 

“Constant innovation and in-depth knowledge of the agricultural sector means that we have also kept pace with the changing needs of our customers. We now offer grain management services, financial services, including insurance solutions and a financial transacting platform, agricultural equipment, animal feeds, retail outlets, commodity and currency trading, and commodity hedging amongst others,” says CEO of AFGRI, Tinus Prinsloo.

 

“This all-encompassing approach that means that farmers need look no further than AFGRI for all their requirements. For us, economy of scale means the ability to offer total support for our customers.”

 

Inherent to this approach are the lessons learnt from supporting generations of farmers – many of whom also started off small. “As their needs have grown and changed, we’ve been able to map our own growth. Because of our size, we’re also able to invest in the latest farming innovations through our division, AFGRI Technology Services, which is focused on mobilising AgTech to the benefit of South African farmers.”

 

In partnership with John Deere, AFGRI is the largest John Deere dealer outside of North America, and nothing says “efficiency” better than the equipment, technology and support that is provided through this long-standing partnership. “Here’s a fun fact – in 1963, the year following AFGRI entering into an agreement with John Deere, we sold only 28 tractors, compared to 1972 when we sold 519 John Deere tractors. Now our equipment technology leads the market with innovative solutions and products.”

 

According to Prinsloo, South African farmers are also world leaders in adopting technology to enhance and economise farming.

 

To ensure farmers have ground-breaking technology to hand to best manage their equipment, the AFGRI Equipment and John Deere partnership are currently implementing JD Link, a near real-time telematics system connecting most makes and models of agricultural machinery in the field with the farmer’s office and mobile devices.

 

“The JD Link system, which AFGRI Equipment has already started rolling out to farmers, helps collate telematics and a wide range of data from all machines. Vital information to prevent downtime as an example, is available at any time to the farmer, and this, in our opinion, will improve efficiencies even further,” says Prinsloo, adding that AFGRI Equipment would be making more information available on this system in the next few weeks.

 

He adds that another logical progression of economy of scale, and the experience gained over more than nine decades of working side by side with South Africa’s farming community, is AFGRI’s involvement in assisting emerging farmers, where the goal is to support their growth path of becoming the commercial farmers of the future.

 

“By passing on this information and knowledge and offering insight that comes from many years of experience, combined with mentorship where our teams work directly with emerging farmers throughout the process, are able to assist the individual to enhance his/her yields. This puts the farmer in a good position to increase yields and grow more crops, ultimately helping him or her to become the successful commercial farmer of tomorrow.”

 

Prinsloo concludes that at AFGRI it is not one divisional approach that supports the success of the farmer, no matter whether large or small, but the total offering of AFGRI, which has been moulded over nine decades and which continues to be enhanced upon as requirements and economic challenges change.

 

With the lead up to this year’s Nation in Conversation debates taking place at NAMPO – from the 15^th to the 18^th of May – one of the sessions will focus on the role of women in the agricultural sector. While it’s a well-known fact that the number of women participating in the South African agricultural labour market amounts to some 278,000 individuals, roughly a third of the sector’s total labour force, with the World Bank putting women’s share of labour in crop production at an average 40% across the rest of Africa, a perhaps more important issue is how female leadership in the sector is shaping up.

 

Some progress has been made in the past few years in increasing the number of women in management positions within the sector, with several national agricultural associations and organisations having prominent women at the helm.

 

For AFGRI, South Africa’s leading agribusiness, now in its 95^th year of doing business, the issue of female participation, particularly at a leadership level, has been a firm priority for several years. Testament to this is the fact that Marion Shikwinya has for several years been the Managing Director of the group’s Harvest Time Investments, an initiative focused on the development of the country’s small-scale farmers, many of whom are themselves women.

 

With the recent appointment of Rivasha Maharaj as CFO, and Thabi Nkosi as Head of Business Development, the agricultural group has taken another stride forward in ensuring more female participation at a senior level.

 

According to Chris Venter, the CEO of AFGRI Group Holdings, this is an important development for the group: “We need diversity in all key positions of the agricultural sector, particularly because the sector is viewed as one of the mainstays of growth and development in this country. As such, it is important that diversity is prioritised without compromising on the qualifications, skills and experience needed to take the sector – and AFGRI – forward.”

 

As the new CFO of AFGRI Group Holdings, Maharaj sees her role as an exciting challenge, allowing her the opportunity to drive change and strategy within the business, and in so doing, impact both the financial and social aspects of the group positively.

 

For Nkosi, an agricultural economist by training and background, the issue of gender parity remains critical. “My inspiration comes from all the women who have beaten the odds to achieve success in various areas. I would like to empower others through my example.”

 

She views the two most important challenges for the country in terms of agriculture in the next five years as being setting clear policy on the land question, and how South Africa will adapt to the increasing occurrence of extreme weather events brought on by climate change.

 

According to Harvest Time Investment’s Shikwinya, the issue is a complex one: “The future of agriculture will be impacted by many things, including climate change, consumer demands, availability of arable land, water scarcity, etcetera, and so I believe it’s difficult to determine exactly what the greatest of these challenges will be. And I would say that unless we are as a country able to embrace innovative solutions to ensure sustainable agriculture, we will continue to see challenges. The ability of the sector to thrive in South Africa, particularly in food production, will depend on the ability of producers to adapt to and implement solutions that will be brought about by what could be termed the ‘agri-technovation’ era.”

 

On the question of the role of women in agriculture, Shikwinya believes women have always been involved in the sector, in one way or another. “Historically, women helped to grow food for their families. They certainly have a proven ability in primary production, although we need to focus more and more on leading female primary producers in our country. The important thing to recognise though, is that primary production is not the only area in which women can contribute to the sector. Women can play a leadership role in terms of driving innovation, influencing decisions in large agricultural services companies, and in policy making in government, as examples. It is, therefore, important that the sector focuses on creating an environment in which women can thrive, no matter the area they chose to be involved in.”