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Western Cape Business 2022

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OVERVIEW Agriculture

OVERVIEW Agriculture Rooibos is now a protected asset. The long battle for protected status for rooibos in the EU is over. The best-known products that are forever linked to their home regions are champagne and port, and France and Portugal have fought hard for those rights. Now the Western Cape’s herbal tea product (pictured) enjoys the same privileges, which is great news for the roughly 450 farmers working with rooibos (350 commercial plus 100 small-scale farmers). The sector produces about 15 00 tons of rooibos every year, about half of which is exported. Covid-19 increased the international demand for citrus, resulting in 146-million cartons being exported in 2020. In 2021, new records were set with more than 161-million cartons being shipped, mostly out of the Port of Cape Town. Assessed independently from the country, the Western Cape is the world’s fifth-largest exporter of citrus fruits. Oranges are the province’s number one citrus export (54% in 2017) and soft citrus (19%) is growing steadily. Europe remains the most important market but the Asia and Oceana markets are growing. Exporters were introduced to some digital innovation in 2020 in the form of the Cape Export Network. CEN, a joint initiative of the Western Cape Provincial Government, Wesgro and Wines of South Africa (WoSA), is a platform that connects wine producers, buyers and importers. Agribusiness and agro-processing are vital parts of the provincial economy with about 45% of South Africa’s agricultural exports moving through the province. The value-add in the sector amounts to more than R14-billion per annum (Invest Cape Town). Berries are a growing subsector and two-thirds of production occurs in the Western Cape. More than 70% of the crop is exported and the major production companies are Berryworld South Africa, United Exports and Haygrove SA. Berries thrive between George and Swellendam and sales of chippers have grown because blueberries have to be vigorously pruned. There is plenty of scope for exports to grow. Current annual exports are 13 500t compared to over 200 000t for table grapes and about 300 000t for apples (South African Berry Producers’ Association). Once producers pass muster with Chinese import authorities, volumes can be expected to grow. ONLINE RESOURCES Citrus Growers’ Association: www.cga.co.za South African Rooibos Council: www.sarooibos.co.za Western Cape Department of Agriculture: www.elsenburg.com SECTOR INSIGHT Citrus was exported in record quantities. Credit: SA Rooibos Council The Covid-19 lockdown had a big impact on wine exports and not only because a liquorexport ban was in place for five weeks. Logistics at the Port of Cape Town were reduced to a crawl and with fresh fruit and vital supplies taking priority, wine exporters were at the back of the queue. South Africa produces about 4% of the world’s wine. The wine industry contributes R36-billion to the country’s gross domestic product (GDP) and employs nearly 290 000 people. ■ WESTERN CAPE BUSINESS 2022 24

The future of smart farming in South Africa Standard Bank is looking at how data can better inform financing options. Fredox Carvalho from Pexels Technology has completely transformed agriculture over the last few decades. These days, farmers are integrating everything from drones and satellite sensing to genetic modification and, more recently, Artificial Intelligence into their operations to reduce costs and enhance yield. In the South African context, a dualistic agricultural economy exists with highly-developed commercial players on the one side and those that practice farming for subsistence purposes on the other. This differs from other regions across the continent where there is a greater focus on small-scale producers. Therefore, a fair amount of technology has already been successfully applied in South Africa, specifically within the commercial sector. The implementation of smart farming technologies over the years has helped farmers and growers to achieve the highest potential in whichever farming activity they choose to undertake. South African farmers now apply everything from regenerative agriculture – which relates to the use of smart technologies to improve efficiency – right through to gene technology. The use of the latter has showed great results in increasing yields with genetically modified maize production now making up about 80% to 90% of the total. The more recent introduction of AI is also significantly increasing not just the quantity but the quality of produce that we see on our supermarket shelves. Standard Bank recently financed a citrus producer that is now using robotics in its packhouse. This has greatly reduced the time that is used to pack the oranges. The use of robotics and camera technologies has also been applied in the packing and producing of eggs to identify “bad eggs” in the process. The role of technology and data in finance In the old days, a farmer’s banking partner would be one of the institutions that sat at the end of information chain regarding the crop, while the supplier of pesticides might be closer to what is happening at any given time. It was only when the client started repaying loan facilities that there would be some indication of a shortfall, or any indication of a problem of some sort. Standard Bank is currently assessing the extent to which we can better track and trace the development of a crop over a period. We could then identify a possible early intervention or a requirement to do something differently where something might be going wrong with a crop. It might be that some additional treatment was needed for that crop. If that was the case, the bank would know about it and would be in a position to finance the remedial treatment when it’s needed. ■

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