Technology

How smart tech is supporting smallholders in South Africa

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By Elna Schutz

Business reporter, South Africa

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“The further you are from the market the more you’re going to bleed,” says Siphiwe Sithole

Siphiwe Sithole grows indigenous crops like amadumbe – coco yams – and bitter greens, on her small farm just outside Johannesburg.

It can be very tough farming a smallholding in South Africa. She has to deal with crime, including robberies and farm workers being attacked, and has struggled to get access to fertile land and water.

Such challenges are not uncommon in sub-Saharan Africa, where smallholder farms, those less than 10 hectares, or 25 acres, in size, account for around 80% of farmland.

However, Ms Sithole’s secret to success has been to firmly focus on a niche market: organic and indigenous produce. She also trades under her own brand, African Marmalade.

This strategy means she does not have to compete with the big commercial farms, who can easily buy things like fertiliser and have broader access to multiple markets.

She knows though that her fellow smallholders have to constantly battle to keep their running costs down.

“We’ve seen with the escalating prices of oil, the further you are from the market, the more you’re going to bleed and you’re not going to be able to sell some of the stuff [produce],” she explains.

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Large farms have easier access to funding and cheaper supplies in South Africa

In South Africa, large farms tend to have greater access to more resources – knowledge and funding – while small farmers generally struggle to even sustain, or grow their businesses.

But one firm is hoping to use technology to level the playing field a little for small farms and create a thriving business for itself.

Agri-tech startup, Khula! – which means ‘to grow’ in the local language isiZulu – is based in Johannesburg.

It launched in 2018 and already works with a network of around 7,500 farmers, as well as hundreds of third party suppliers and agriculture advisers.

It has an online store for selling raw materials like seeds, chemicals, and fertilisers; and also supplies information and technical support (a particularly useful service for farmers based in more remote locations).

“If you’re a first-generation farmer, for instance, you only know what your neighbour knows,” says chief operating officer, Ayanda Vana.

Image source, Khula!

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Securing funding can be the biggest challenge for small farms, says Khula!’s Ayanda Vana

Another resource is the Khula! app, which is undergoing testing. Once up and running it should allow farmers to sell their crops directly on to retailers and other buyers.

This could potentially reduce a lot of uncertainty for smallholders – prices fluctuate constantly at wholesale marketplaces, and the agents handling those deals, typically take a cut of around 15%.

The company also has a dashboard that brings together small farmers and potential investors.

“The biggest cry, or problem, within this space was funding,” says Mrs Vana. “As a farmer, if you want to scale-up, and if you want to grow, you’ll need funding. “

The Khula! platform has its competitors, particularly when it comes to selling produce – Ms Sithole, for instance, uses a rival, HelloChoice.

But Maluta Netshaulu, senior manager for agriculture at Nedbank, thinks that Khula!’s proposition has potential to do well.

“There’s a lot of platforms [around] at the moment, in terms of supplying your produce, but there isn’t one that assists farmers to source the inputs and that gives them that freedom to choose.”

Image source, Khula!

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“You can plant all you want but if you don’t have markets, it’s a really big problem,” says Patricia Seaba

Mr Netshaulu’s primary concern about apps like Khula! is whether they can gain enough market share to be viable i.e. reach enough small farmers and be useful for a wide range of farms.

“This start-up is proposing to disrupt the market and offer this solution to everyone across the board,” he says. “How are you going to make sure that people are finding value in your proposition?”

Patricia Seaba of TC Women in Action Farming, grows vegetables like lettuce, peppers and cucumbers on 17.5 hectares (43 acres) outside Pretoria.

She used to travel more than 100km (60 miles) every six weeks to her nearest supplier before switching to using an app.

“We like shopping online,” she laughs. But “access to private markets is a very big challenge,” she adds, “because you can plant all you want, but if you don’t have markets, it’s a really big problem.”

Meanwhile, Ms Sithole wishes there were more services out there catering specifically for the organic market. She would also like to see a central source of information and support, for issues like choosing crops and identifying pests.

“Somebody needs to just have a simple, consolidated South African platform that becomes the go-to, even if one had to subscribe.”

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