The use of technology in agriculture is gaining momentum and listed firms are investing in start-ups that have created platforms for farmers.
From drones to monitoring and controlling crop irrigation systems via smartphones, the agricultural industry, like many others, is adopting technology to increase productivity and cut costs.
Last month, Standard Bank bought a 25% stake in online farm-produce marketplace HelloChoice, and chemicals and fertiliser group AECI invested in Khula!, a start-up that connects farmers to potential investors. Old Mutual Insure has teamed up with SwiftVee AgriTech to launch VeeSure, a digital operation that allows users to buy animals via a live-streaming virtual auction and access insurance.
HelloChoice was founded in 2018 by Grant Jacobs and Graeme Jarvie to modernise the traditional way of buying and selling agricultural produce such as vegetables, fruits, meat, dried beans and grains.
In its three years of operation, 2,300 users have joined the HelloChoice platform and traded more than R150m worth of agricultural goods, ensuring better market access and prices for farmers, and faster product access and lower prices for buyers, said Jacobs.
Providing digital access is a powerful tool for small-scale farmers
— HelloChoice CEO Grant Jacobs
The platform is also giving exposure to new farmers, many of whom face challenges in accessing markets as they do not have commercial networks, he said.
“Providing digital access is a powerful tool for small-scale farmers,” Jacobs said.
Jarvie's background is as an agricultural investor, and Jacobs has an IT and financial services background. The pair ran a pilot operation on Jarvie’s farm in KwaZulu-Natal “to test our business model before taking it nationally”, said Jacobs.
Wendy Pienaar, head of ecosystems at Standard Bank, said the investment in HelloChoice is part of the bank's strategy to expand into non-financial services industries such as agriculture in order to become a platform bank using digital tools for clients and services.
Pienaar said part of the bank’s involvement in HelloChoice is to introduce it to some of their clients. “We have access to commercial and emerging farmers that we would like to bring on board,” she said.
According to HelloChoice, there are an estimated 38,000 commercial farmers and 300,000 small-scale farmers in SA.
Asked about the growth prospects of the company, Jacobs said, “I will be disappointed if we don't at least double [our business] year on year. But the real target is the actual degree to which we are significant and relevant in the agricultural and food supply sector ... our real satisfaction comes from adding value.”
Khula! founders Karidas Tshintsholo, Matthew Piper and Jackson Dyora have built three platforms aimed at making the agricultural value chain more efficient.
The company's Inputs app, which was launched three months ago, allows farmers to access agricultural inputs and services from local and international suppliers. Currently in the pilot stage is Fresh Produce Marketplace, which will enable farmers to sell products directly to bulk buyers. Khula! also has a funding platform to connect institutional investors with farmers, and so far 100 farmers have received funding.
“We have learnt over time that the problems facing the agricultural sector are very interconnected,” said Tshintsholo, the company’s CEO. “Quite often when you are trying to solve one problem, you get undone by another.”
Last year in June, Khula! raised R20m in a funding led by AECI. Tshintsholo said AECI's footprint elsewhere in Africa puts Khula! in a good position to scale up its business.
Quintin Cross, MD of AECI Plant Health, said in a statement that Khula! was identified as a partner due to its app-development capabilities, agribusiness networks and management team.
Agriculture is an industry built on trust and relationships, and initially there was scepticism, said Tshintsholo, but the industry is receptive to technology that provides tangible results. “Covid also played a key role in fast-tracking the adoption of technology across the agri value chain,” he said.
A report released last year by Research ICT Africa, titled “Paving the way towards digitalising agriculture in South Africa”, said tech companies in SA had mostly targeted digital applications in agriculture at large-scale farms that could afford their services. But the report said technology can help small farmers develop a larger footprint in the value chain by making them more visible to providers, customers, distributors and financial service providers.
