Africa Offers Crop Input Companies New Opportunities
Companies are looking at novel ways to marry their current product portfolio to meet these requirements and to support smart technology and precision agriculture. Customer preferences and carbon neutrality of product manufacturing are also crucial as these companies look to expand. Africa is a region embracing innovation and presenting businesses opportunities for growth.
Biological Innovation
Africa is seen as a key area for innovative growth. According to Ben Schoonwinkel, Marketing Manager/Eastern and Southern Africa at Food Machinery and Chemical (FMC) Corporation, Kenya is an attractive market for the introduction of biological products.
“FMC is focused on delivering differentiated biological products to provide distinctive solutions either individually or through the integrated use with synthetics and crop nutrition,” said Schoonwinkel. “The regulatory environment, adoption rate of technology, consumer demand, cultivation practices, and growth opportunities will, however, drive investments.”
Countries, such as South Africa and Kenya, that are focusing on export markets especially to the European Union, are forced to adapt and change in terms of greener chemical products used in export crops, especially citrus, due to the maximum residue limit (MRL) requirement changes.
“The criteria necessitate that companies take stock of current product ranges and liaise with farmers, industry, and regulatory authorities to ensure that our products meet the set requirements,” Schoonwinkel says.
As progressively more pesticides and other crop protection productions are withdrawn by regulatory bodies, especially in the EU, biological products including biostimulants are gaining popularity especially with the growing popularity of organic food and beverage products across the globe.
“As the EU tightens the reigns, it is vital for inputs suppliers to support countries that export to the EU to introduce measures that will enable farmers to produce for exports,” says Tyla Rogers, Digital Lead for Syngenta in South Africa.
Donvae Hooker, Business Communications Lead at Andermatt Madumbi in South Africa, says the Andermatt Group have subsidiaries in several African countries, “in South Africa, we are looking at biologicals, biostimulants, biotechnology, and cultivation practices focused on the local and export markets. In Kenya, we are incorporating biologicals and technology to boost production.”
Kenya has a strong mix of small, medium, and large farmers, each segment with their own set of unique challenges. Farming practices are progressive with technology and biological products being in demand.
The use of softer chemical products and new formulations slots into biological and integrated pest management systems. Karlien Muller, an entomologist at the Komati Group in South Africa, says that farmers are facing increased scrutiny when exporting produce to the EU.
“They want to know what our strategy is to reduce chemical usage, while still insisting on zero pest incidence. The solution is to combine biological solutions with softer chemicals.”
Ag Tech Expansion
Precision agriculture, including drone application technology is gaining momentum and necessitates the need for new product formulations. Using drones, farmers can collect vital information to direct their crop protection purchases and applications. Drones can also be used to address specific problems within a field or orchard and do applications to specific areas.
Companies are also becoming data partners. Bayer launched Field View in South Africa that allowed farmers to collect, store, and visualize critical field data, monitor, and measure the impact of their agronomic decisions on crop performance. It also manages their fields variability by building customized fertility, crop protection, and seeding plans to optimize yield and maximize profit.
Mobile phone apps are especially useful where extension services lack. Using these apps, farmers can diagnose problems on their crops by capturing and recording field data to determine if they need crop protection product, what the best treatment is, and application methods. Recently Corteva Agriscience launched a new mobile application to help growers protect their crops by providing information on the safe use of insecticides.
Modification
New Breeding Techniques (NBTs) that involve DNA modification in plants to introduce new traits and properties in crops are on the radar in many African countries and will be used to increase and accelerate the development of new traits in plant breeding.
This will have an impact on crop protection use in the future as certain traits may prevent pests and diseases from destroying crops.
Five Important Points to Consider Before Doing Business in Africa
In Africa, the agrochemical industry must contend with regulatory matters, small farmers, subsistence farmers or those just entering commercial value chains. This means small packs to multi-channels and many outlets.
John Barnes, founder of Bancella and a veteran in the agrochemical industry and go-to person for doing sustainable and successful business on the African continent, shares five points to consider before expanding your business in Africa.
- Financing of inputs is one of the biggest challenges. It is hard to assess the smallholder risk, so the cost of financing can be very high, and in the end, production does not go up. There are good examples of corporations doing outgrower schemes that can get the necessary inputs to the smallholder, to produce higher quality outputs. But in general, this needs to be considered before doing business.
- Education and good stewardship on how to produce and protect crops. This is another bottleneck. National extension services used to play this role, but today it is a widening technology gap. There needs to be contemplation and strategies on how to close it.
- Long-term investment and capacity issues. The bigger companies think a bit too much from the inside out. For example, what can we sell more of what we produce in Europe or elsewhere? Local entrepreneurs go the other way around, from outside in. What can we profitably produce locally that can solve the issues of the grower? The conundrum is we need the long-term investment of the large companies and the capacity of the locals to spend more on market development, but the scale, returns, and risk are conflicting. This is something to consider in your business strategy.
- Collaborative technologies. With digital ag tech, a large percentage of startups are in
Africa or India. Farmers benefit from integrated programs covering crop programs with top seed genetics, nutrition, biological solutions, and low-residue chemistries. What is needed to advance ag tech in African countries are collaborative technologies across the value chain. - Working with government leaders. We only have to look at the progress African countries have made from the leaders of the 50s and 60s to the leaders of today. While they are not perfect, astounding progress has been made, nonetheless. I think good business can be done by linking with like-minded, changemakers in your industry.
Want more information on Africa? Watch Steve Pearce’s Advice on Doing Business in Africa.
Get The Newsletter Today!
