The new agriculture and developing emerging farmers: Harnessing the Fourth Industrial Revolution
DAILY MAVERICK / 09 DECEMBER 2018 - 12.57 / NAUDE MALAN
The Fourth Industrial Revolution creates new opportunities that have some affinity to the challenges emerging and small farmers have in South Africa. It proposes a sea change in the way we manufacture things, grow food, market and distribute it, and waste it. It decentralises manufacturing capacity so we can build ‘a factory in every village’. This creates new opportunities to develop emergent and small farmers in South Africa — this article illustrates how we can seize them for transformation in South Africa.
In any process of change there will be forces that push change in radical and truly transformative directions, and there will be forces that do change things but are in fact regressive, and inadvertently or covertly reaffirm current patterns and processes. To develop small and other emerging farmers in South Africa, we have to take seriously their position in a modern economy, the inequities in society, and the need for truly transformative structural change to the economy and systemic change to the food system.
Photo by Ryan Searle on Unsplash
Emerging and small farmers often lack economies of scale. Their production prospects are negatively influenced by insufficient access to land, which in turn affects their access to credit, technology and other resources. Lower production volumes translate to lower bargaining power with large buyers, and the ability to compete for a better price.
Because there are few emerging small farmers in the commercial sector, research and development often overlooks them, not only due to low production volumes, but also because their needs and capabilities are unclear. We simply do not know what would be good for such farmers as there has been no systematic large-scale attempt to organise them. Is it a good idea, as many have said, to allow them to compete on par with large producers in a food system that was built around the needs of large commercial producers producing for large urban working-class populations?
To “develop” emerging small farmers in South Africa is a complicated task. There are indications that the producer price share of food in South Africa, certainly in the mainstream food market, is not enough to enable a small farmer (and many larger farmers) to make a decent livelihood. However, small farms are potentially much more productive than large farms, and could be more innovative than a large farming enterprise in responding to niche products and to local demand. They have a great potential for innovation, but to achieve this a change in the food system is necessary.
Hence, we should embark from the premise that small and emerging African farmers in South Africa can produce significant volumes and quality, but that the current market structure, which has developed in response to the rise of large commercial agriculture in the last three centuries, is inappropriate and often hostile to them.
It is simply a bad business decision for a small farmer to deliver to supermarkets or fresh produce markets as they obtain very low prices from them for their produce. New strategies for enterprise development need to be developed to enable emergent and small farmers to gain a foothold in the food market.
The Fourth Industrial Revolution creates a different “complex” of activities, and demands a different skills “set” from entrepreneurs than we presently see. Historically, we have become used to expert design and innovation, capital-intensive tooling, elite and expert-driven ownership, and large-scale marketing and distribution that make up the broad contours of how we produce almost everything including food.
The Fourth Industrial Revolution – mainly through new technology that in turn creates new social relations – promises in-situ and grassroots design and innovation, allows decentralised and local marketing and distribution (often through electric mobility which is very easy to manufacture and operate) and appropriate technologies that can process waste.
We can enable our youth, as the Makers Village in Irene and “Fab Labs” across the world show, to design and manufacture technology in small spaces and with meagre resources. Fourth Industrial Revolution technology can enable a farmer to command a greater share of the value chain and distribute and market food in the local area, and thus cut out the middlemen and their profits. It can enable a small farmer to process waste in harmless ways.
To grow and sell food in local areas will build the social capital that we need to create cohesive communities. It is this new “set” of skills and capabilities in the means of production that is the Fourth Industrial Revolution’s greatest innovation and it is this “set” of technology and social relations that hold the promise of radical and productive change for small and emergent farmers in South Africa.
Small farmers in South Africa need to be developed by reference to the ideas of a new sustainable and circular economy and this can be realised by Fourth Industrial Revolution strategies. Such locally-based enterprises will exhibit a networked character that serve immediate and local communities.
Such an enterprise will be able to use the most productive agro-ecological methods – mainly to harvest waste (now a resource) from local areas (including food waste and other biowaste), but also use new farming technologies such as aeroponics, aquaponics and hydroponics. These technologies are immensely productive and enable solvent enterprises to be built around them and thus the creation of decent livelihoods.
It is also possible to organise and design processes of mass adoption of and innovation for these technologies. Such systems can pay themselves off in a matter of months and be transported and modified by the user herself. These can be installed almost anywhere and if blended with say, solar power, can produce food competitively anywhere.
Such a small-farmer-centric and local-food system approach will also build significant capacity in communities. Local farmers can sell locally produced produce at lower than retail value to immediate communities. This will be possible as the very long supply chain that supermarkets engender will be completely avoided by the use of appropriate technology.
Communities will benefit not only from the price, but also because they themselves will be able to avoid transport and time costs of trekking to a mall. Supermarkets make very little profit selling fresh kitchen vegetables and this opportunity will not affect their bottom line in any significant way and in fact will make available more disposable cash for manufactured goods.
We also need to take serious the efficiencies that can be achieved in a locally integrated and networked food enterprise. Not only is vertical farming technology available to enable sustainable livelihoods from about 100m2 and upwards, such enterprises can boost competitiveness of local retailers.
Food waste (from households and spaza shops) is readily available and the technology is there to process this into harmless form of compost that will boost soil-based organic food production. Waste turns into value. This will also lead to savings for local government and our landfill account.
These relationships between food producers, processors and communities is also a society-wide business education opportunity. Farmers who serve local communities can be conduits for nutrition education (as they have a compelling and material interest in increasing demand for fresh food), and for waste management. This could also engender a waste reclamation system for complex and high value waste, such as batteries, and for new retail strategies that can make fresh food locally produced available to low income communities.
We also need to take seriously the financial opportunities created when local capital circulates repeatedly in local communities. The local circulation of capital is the bedrock of value and wealth creation in communities.
The relationship between emergent, township, peri-urban and small farmers and the informal and semi-formal spaza shop industry is a case in point. Here we can achieve significant gains for small emerging farmers, nutrition, economic redistribution and social cohesion. It would be simple to allow spaza shops to accept consumers’ Sassa cards for fresh produce from BBBEE-certified township-based and other rural emergent and small farmers.
We can also add a further incentive here that will build township economies, at almost no cost to the consumer or retailer. In the USA, local farmers’ markets offer fresh locally produced food at 50% discount to consumers who pay with “food stamps” a social assistance programme of the US Department of Agriculture. This is done by a subsidy which compensates farmers for this reduction in price, while retailers see an increase in volumes.
The multiplier effect of this local cash injection into the local economy compensates easily for the cost of the 50% discount. This enables a poor consumer in a township to buy double the retail amount of fresh foods from a local retailer. We will see a surge in small and emergent farmer viability and in the solvency of local spaza shops. This will build a class of emergent, African and local food producers, and a class of emergent African retailers, both key socio-economic targets in South Africa. This will build a market for locally produced fresh food, build the capacity of local retailers and increase the consumption of nutritious food.
All the elements of this opportunity is already available in South Africa and we can implement this almost immediately. Sassa cards and payments will immediately influence enterprise development, instead of being an inadvertent subsidy to the bottom line of large retailers as is currently the case.
Such a locally based enterprise will be open to innovation. As this enterprise builds its marketing and distribution networks on local social capital, it will be open to further relationships with knowledge institutions, upmarket retailers, and state agencies and others. This density of relationships around such a small farmer will improve further the innovation and technology adoption of such farms, and facilitate learning and adoption of new measures (which could include food safety, nutrition, niche products and opportunities such as tourism) in the broader community, as we see with the Participatory Guarantee Scheme for organic produce.
Embedding this further in a digital system will allow ancillary interventions to take place, such as education, finance and waste processing, to name only a few. This could also make a big difference to the informality of many of our enterprises.
The adoption of ICTs is a case in point. Many current small farmer apps, like the Khula! Appautomatically creates an income and expenditure history for participating farmers. Farmers who participate in the 50% Sassa Card discount scheme could see them developing credit and expenditure histories in lieu of property as collateral for finance.
If integrated with bigger networks like aparate.co, or Fedgroup’s Impact Farming, and even Facebook, it will allow a farmer to develop a public profile or page to bridge the gap between formality and invisibility in the informal sector. This all allows the creation of a virtual identity that is as good as setting up shop and premises.
These apps are real and efficient conduits for learning, marketing, food safety, research, and so on. This could enable a real presence for small farmers in a real market, and would make aggregation and bulk selling possible and will be less prone to trouble than the failed attempt to get all emerging farmers organised into co-operatives.
Such a technologically embedded small farmer development strategy will make significant impacts in the local community. Communities can now start moving into the digital age and produce would be more easily available than in the nearest supermarket.
Electric delivery systems are being developed at the University of Johannesburg’s Process, Energy, Environment and Technology Station that will be able to make such local deliveries at extremely low cost, on a digital platform, in the local community. This local circulation of capital will enable local communities and townships which currently “lose value” to become accumulators of value.
A new township economy and culture will emerge around the local production and distribution of food. All this can be based-on economic incentives and not government largesse.
This approach is being pioneered by researchers and practitioners at the UJ. The iZindaba Zokudla’s Farmers’ Lab sits at the heart of this and it integrates the Process, Energy, Environment and Technology Station, the UJ’s Centre for Entrepreneurship and various other academics and centres at the UJ.
The Farmers’ Lab also integrates with local and upmarket retailers, students doing applied and action research and non-government organisations such as Slow Food. It is also linked to the newly created Agricultural Cluster at the Johannesburg Chamber of Commerce and Industry.
We need to think about our social problems if we develop efficient, but equally complex solutions for them. The adoption of appropriate technology for emerging farmers, within a broader digital ecosystem, that delivers food to immediate and low-income communities, through a system of state support for retailers and producers (as the Sassa cards make possible) that aims at comprehensive social, environmental and economic outcomes will allow multiple changes in our society at the same time.
When we do many things at once, there are better chances for desirable outcomes. New opportunities need to be seized, even if outcomes are uncertain. The failure to innovate will lead to a repeat of history.
Naudé Malan, senior lecturer in Development Studies, University of Johannesburg. Convener: iZindaba Zokudla
Disclaimer - The views expressed here are not necessarily those of the BEE CHAMBER