Agricultural economist and banker Maluta Netshaulu recently visited the CAN-Agri farm in Pretoria, an impressive facility which serves as a commercial research and development hub. His verdict? The farm has no equal in South Africa.
The agriculture sector is under immense pressure to maintain performance momentum regardless of the myriad of challenges it faces season after season – climate change, bio-security threats, escalating production costs, water scarcity, energy insecurity, etc.
All farmers – big and small – face these challenges, and have much to lose should anything go wrong. Success in farming, like in any business, therefore depends on the strategies the operator puts in place to mitigate risks. It is in everyone’s best interest that farmers succeed as the world depends on them for food security, amongst other things.
The expected growth in the global population to 9 billion people by 2050 will require that food production increase (by about 70%) to match the nutritional requirements of the future.
Given the challenges mentioned above, will conventional farming be able to produce the required food to feed double the number of people we have by 2050? Perhaps!
This will, however, require that additional high potential lands be cultivated and given the scarcity and inaccessibility of some of these lands, this strategy alone might not yield the desired results. Other resources such as water, which is a scarce resource in South Africa and worldwide, is also something to be considered when making these decisions.
Conventional farming methods
Agriculture takes many forms and shapes with the common form being the conventional farming on open land. Here production is often exposed to the elements, and to be successful a farmer needs to be productive and efficient in order to be resilient and achieve good margins/profits. At farm level the farmer must manage two things – costs and revenue.
This is very important because if the operation’s costs escalate more than revenue, the farming operation would run at a loss, which could spell disaster for the farmer as he/she could default on debt obligations or fail to pay labourers. Costs can also be managed through the adoption of technology and innovation which helps the farmer to reduce costs.
For example, a change from flood irrigation to drip irrigation will result in a drastic savings in water due to improved water use efficiency which also saves on costs associated with irrigation (water and energy). Meanwhile, switching from reliance on the grid for energy to a grid-tied or off-grid renewable energy solution could reduce energy costs and improve farm productivity as the farmer would no longer be a victim of grid inefficiencies such as load shedding, cable theft or faults.
If costs cannot be reduced, the other avenue to increase profits is to improve revenue through increasing yields or explore alternative markets or consider adding value to products to fetch higher prices.
That is the one part of agriculture – one that is done in open fields and producers are at the mercy of nature.
The other part of agriculture is one that protects the produce from the elements. Structures such as tunnels, greenhouses and vertical farmers are examples of this type of farming. These structures do provide some protection but not from everything.
The farmer still needs to understand the basic principles of business – the relationship between costs and revenue and how to optimise production. Farmers that go this route also need to understand the technical and scientific side of things like temperature control, pests and contamination, technology, and resource management.
Discovering the magic of CAN-Agri
Through my engagement on social media and LinkedIn, in particular, I stumbled across an article shared by one of my contacts. It celebrated a South African vertical farming company based in Pretoria that had secured a contract with Pick n Pay, as well as a partnership agreement with the retail giant to showcase its technology at some of their stores.
I was really fascinated by this because I have never heard of a vertical farming company in the country (or Africa). It was then that I reached out to CAN-Agri’s CEO via LinkedIn to ask for a visit at the farm as well as a tour, which he immediately agreed to.
So, on 7 September 2022 colleagues and I visited the farm. What an experience! We literally left with our jaws on the floor and our eyes dry in amazement. From his charm and eloquence in describing how the operation works, to his storytelling on how the operation came to be and the vision to his tour guide expertise taking us from one area to another methodically.
From the road, you can’t miss the place as it really stands out. A tall glass building which is transparent and draws you to stop to marvel as one can see the plants hanging from the roof all the way from the road.
The way the operation has evolved from its establishment to where it is now is nothing short of remarkable. Another fascinating aspect is the business-mindedness of the management team – not thinking short-term about the future – and how it acknowledges the importance of partnership.
On the production side, there is nothing that has been left to chance and all resources are optimized and waste is minimized. The operation has its own nursery, its own cold rooms, its own bio-security section and its own value adding facility. Some of the equipment used is designed in-house. In fact the owners/management team built the structure themselves ground up.
The other thing that amazed me was the fact that the facility is not trying too hard to be technologically advanced. What do I mean by this? They don’t have unnecessary systems to regulate temperature or disinfect the space. They use common sense and technology together, and in a beautiful way.
But that doesn’t just happen overnight. The management team spent years learning, researching, doing until they found a working model and recipe. Understanding science, art, the sector, engineering, and markets seems to be the blend that makes this operation thrive. In addition, the farm can also be remotely operated. The farm is also kitted with sensors that controls the temperature control systems and also trigger blinds to close when the plants are being overexposed to sunrays.
Does this mean all farmers should sell their machinery and properties so they can farm this way? The answer is no!
Indoor farming has a space in the agriculture sector and that space is on producing produce that is very sensitive to the elements – wind, birds, sunburn, etc – which negatively impacts the quality of the produce. And most of the produce that is suited for indoor farming thrives better in such spaces. The production cycle is also cut by over half which means production can continue throughout the year resulting in increased revenue.
We have seen that open-field farmers have also adopted other innovative solutions such as tunnels and shade/hail nets to protect their produce from the elements, especially high value cultivars like soft citrus, blueberries, and vineyards. There is thus value in all these innovations which all helps to guarantee food security for the country and generate foreign income through exports.
CAN-Agri is in a league of its own and in more ways than one it is ahead of its time, at least in South Africa. One of its challenges remains the education of the market on why its produce is better than the competition as it is produced in a pristine environment with no soil (meaning no need to wash the produce post-harvest), uses a fraction of the resources, uses no pesticides, has a shelf life of more than two weeks as compared to seven days by competition, and the farm produces very little waste compared to competition. So, the operation ticks the sustainability box.
In the end the world needs both open-field farming systems as well as closed farming systems to sustain life now and into the future – there will always be a space for both.
- Maluta Netshaulu is an agricultural economist, banker, thought leader, a husband and father.
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