Original article can be found here.

Never before have policymakers been faced with the complex conundrum of balancing between saving the lives of thousands of South Africans and the complete devastation of their livelihoods. Yet, here we are in the 8th week of lockdown and over 15, 000 people infected with the novel Coronavirus, with grim prospects of an increasing number of infections and fatalities, as well as an economy projected to shrink to the tune of at least 5% in this fiscal year.

All aspects of our lives have been impacted in one way or the other by the Coronavirus scourge. The agrifood ecosystem is no different. It goes without saying that in any pandemic, the provision of food is of paramount importance, right alongside the provision of health care. Governments have made attempts to disrupt the ecosystem as little as possible in their efforts to flatten the curve of infections and manage the Covid-19 pandemic.

 

South Africa’s local food system

South Africa sits in the fortunate position of having a world-class national food system, thus is largely self-sufficient in terms of food production, and will in all likelihood remain so in this pandemic and beyond. While highly productive, the food system is characterized by high levels of concentration, with 96% of farming units (Census 2011) falling in the SMME category as per the Department of Trade and Industry’s definition (agricultural operations with a turnover of R35 million and below). This positions South Africa as a nation of relatively small-scale family farms, with over 3 million farming units considered subsistence in nature.

Although it isn’t necessarily production that has been negatively impacted by Covid-19, farmers have and still do experience the repercussions of the pandemic. This is the experience reported by Mbali Nwoko of Green Terrace (PTY) Ltd, who notes that “At the start of the lockdown, Market Agents from Fresh Produce Markets across South Africa confirmed a reduction in sales and market activity because of restrictions in movement.” This is compounded by the sudden and total closure of the hospitality industry.  She shares the sentiment that this, as well as closure of restaurants and school feeding programmes, has resulted in a marked reduction in demand for produce.

The ensuing price pressures and oversupply of produce will put farmers’ financial situation in a precarious position, risking discontinuation of operations due to questionable financial viability. This may be exacerbated by other factors including a decline in the economy thus reducing buying power, difficulty accessing farming inputs due to logistics challenges, as well as potential Coronavirus infection of essential staff on farms.

 

An opportunity in the making

Despite the uncertainty that has been created by the Covid-19 pandemic, there are some positive takeaways for the agrifood ecosystem. Coenraad Fraenkel of Agrimotion Consulting shares that it is in this time where introspection is necessary so that producers can build resilience into their operations to be prepared not just for pandemics, but also other shocks since we never know when natural disasters will strike. Starting from the choice of produce we invest in, that can be tolerant to our climate, efficient with the natural resources at hand and strategic in terms of international markets.

Coenraad shares a story of his childhood in a history class where he was in a group that needed to outline the positive effects of war. It was in his distress at this oxymoron that he realised that it is in times of crisis when we learn to be resilient. That when we are not pushed, we become complacent with systems that work, but are inherently broken. He shares that this is an opportunity for us to leverage our strength as a country and continent, and secure a better future for the agrifood ecosystem going forward.

 

In relation to global food systems

It is perhaps South Africa’s participation in the global agrifood ecosystems that has experienced a more marked impact, ironically both positive and negative. Most notably as a direct result of the system’s reliance on the logistics sector, which has been extremely hard hit by the Covid-19 pandemic.

South Africa is a net exporter of agricultural produce to the tune of close to R80 billion. The highest earner among all agrifood exports is citrus, making South Africa the second largest exporter of citrus after Spain. Driving through Marble Hall and Groblersdal, in the South of the Limpopo province, one can see even in the midst of Level 4 lockdown, hundreds of farm workers tending to orchards in peak harvesting and exporting season.

According to the Citrus Growers Association of Southern Africa reported in the May 8 issue of Farmer’s Weekly, there has been an incredible increase in global demand for South Africa’s citrus, with double the amount of lemons shipped compared to the same period in 2019. Besides increased demand due to health benefits, this is partly due labour challenges experienced by major producers such as Spain and Italy as a result of travel restrictions in the face of an enormous infection and fatality burden in both countries.

On the other hand, South Africa is also an important exporter of wine. Although export restrictions have been lifted in Level 4 lockdown, the risk of loss of market share in global markets, as well as, local restrictions in the sale of alcohol remain a concern for the sector. Other “non-essential” agri produce like wool, cotton and hides have experienced similar challenges.

 

The role of agritech in the pandemic

Of course the impact of Covid-19 on primary production as the main driver of the agrifood ecosystem, will invariably have follow-on effects on innovation and technology in the sector. Most notable in more developed countries, is an apparent over-reliance on migrant farm labour, which has posed a significant risk for producers, who now suddenly find themselves without the necessary means to tend to fields and harvest.

This has brought into sharp focus the need for in-field robotics and farm automation at a far greater pace than was previously necessary.

South Africa being a net importer of agritech, will invariably be affected by global trends in technology adoption. However, unlike more developed countries, South Africa has an abundant local labour force. Firms such as Agrimotion Consulting believe that solutions must be customised to our context such that alongside bringing efficiencies and building resilience in production, producers are also able to meet their obligation and desire to provide much needed employment for the masses.

This nuanced approach, plus building relationships of trust with producers, has resolved challenges with agritech adoption among clients, helping them recognise potential they themselves didn’t know they have and realising the incredible opportunities that are inherent in highly labour intensive, and globally strategic sectors such as citrus.

The Coronavirus has fast tracked local agritech innovations as well. During lock-down, restrictions on public gatherings have meant that livestock auctions and fruit markets now have a limited number of buyers who can attend. According to Russel Luck, CEO of SwiftVEE, “One of the major ways to remediate this is by using online channels to enable buyers to participate remotely, where real-time internet auctions allow buyers situated anywhere in South Africa (or abroad) to bid for and buy livestock or fruit without breaching restrictions.

SwiftVEE, which is a livestock online auction and sales platform, has seen an incredible surge in uptake since the Covid-19 pandemic hit South Africa. They grew from 12 auctions in Q1 2020, to bookings of 160 auctions for Q2. Russel added that “buyers and sellers have been forced into the digital world due to COVID, but having experienced the benefits of technology they are bound to continue transacting digitally in the future. All business sectors will continue to migrate towards digital channels. The global Pandemic has merely accelerated this opportunity by 10 – 15 years.”

 

Innovation support and investment

The Covid-19 pandemic is a real opportunity for ecosystem developers and investors to adopt more proactive approaches by focusing on innovations that enhance several areas of concern in food systems, including production of more nutritious foods, improved inclusivity, more sustainable use of natural resources, increased economic efficiency and enhanced incomes for smallholder family farms.

This will not only serve to leapfrog agrifood into the next industrial revolution, but will also support the poverty alleviation and global food security aspirations of the agrifood ecosystem. Moreover, these approaches will ensure more resilient and sustainable operations, meaning that assets will be more prepared and secure against inevitable global shocks including climate change.

In South Africa, several financing measures have been put in place to shore up agribusinesses in these difficult times. These include government funding schemes for smallholder farmers, philanthropic interventions, bank guarantees, unemployment insurance, and tax relief measures.

Where we must be vigilant is to not over-focus on protecting businesses that are bucking under the pressure, at the expense of supporting and investing in new businesses that are innovating and bucking the status quo. What is clear is that financing and investment models need to be more “flexible” in Mbali’s words, to help agripreneurs not only swim in these choppy waters, but also ride the wave of the new normal.

In the end…

There is no doubt that Covid-19 will leave an indelible mark on how industries operate. Agriculture and food production are not in the least immune. What is obvious is that in a world where industries are defined as either essential or non-essential, AgriFood sits right at the top among the most essential of them all, beyond the function of feeding the population.  It is no longer business as usual, and Coenraad reminds us that in all this, we must never forget to remain compassionate and bring humanity back into innovation.

My take is that South Africa, even with the many challenges plaguing food value chains, has struck a nice balance with a locally oriented food system coupled with significant participation in the global food system, or what is now referred to as a “glocal” approach. Many other countries will need to seriously evaluate their balance in this area sooner than later, if they are to remain food secure in all manner of global shocks.

On a side note: Business Insider South Africa reports that Pineapple sales have doubled between March 2020 and April 2020 and have gone up 200% in price compared to the same time in 2019. Thanks to the national lockdown, the sale and transportation of alcohol is prohibited, thus the popular Pineapple home brew has skyrocketed demand for the fruit.

It seems even when all else fails, the farmer remains once again the trusted and reliable friend.

Useful links

• Want to learn more about SwiftVee?

• Watch a live webcast auction.

• Get in touch - Email us.

• Download the Swiftvee App