Block Chain – The ultimate tool to unlock value for communal wool farmers

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The financial industry is in the middle of what is perhaps the most disruptive and revolutionary paradigm shift in modern history since the transition from gold to bank notes as a medium of exchange. This piece of technology seeks not only to disrupt the functioning of the banking system and inherent institutions, but above all to render the status quo obsolete. The innovation in question of course is block chain technology. Investopedia defines block chain technology as “… a digitized, decentralized, public ledger of all cryptocurrency transactions.” The block chain digitally records transactions and stores them in an encrypted bundle of data, which is then linked to another block containing data from a previous transaction. The amalgamation of these blocks forms an impenetrable but transparent network of interconnected data commonly referred as block chain.

The inception of block chain is something of an urban legend, often shrouded in a thick veil of mystery and speculation. What we do know, however, is that it emerged after the 2008 global financial meltdown, and is thought to have been a direct response to the growing mistrust of banks and other financial institutions that had ushered the world into the worst fiscal crisis since the Great Depression. The most famous use of block chain is Bitcoin – the decentralized cryptocurrency whose value has arithmetically increased to staggering heights over the past five years, having recently surpassed the value of gold in real terms. Fortunately, the incredible capacity of block chain is not only confined to Bitcoin. The technology has a wide array of uses, many of which have a great potential to solve fundamental global issues like social inequality and equitable wealth distribution.

The Eastern Cape is home to 7 605 248 sheep, accounting for 39% of all sheep in South Africa, higher than any other province. This means that, for every 10 sheep in the country, 4 are in the Eastern Cape. Naturally, this also makes the province the largest producer of wool and mohair. In 1999, an estimated 100 000 wool farmers in the Eastern Cape produced approximately 220 000 kg of wool valued at R1,5 million with a total stock of about 3 million sheep. However, through various intervention initiatives – thanks to a collaboration between the National Wool Growers Association and the Department of Agriculture, Forestry and Fisheries – this figure had  increased to 3.8 million kg of wool produced, valued at R137 million by the end of 2016. At the same time, average rural household income had risen to unprecedented levels, whether or not this is correlated with a similar surge in wool revenue, is debatable. Needless to say, it falls short of realizing the full potential of wool production in the Eastern Cape. This deficit is due to a host of constraining factors which include but not limited to:

  • Lack of private land tenure, restraining private incentive for development, such as infrastructure for production, management, and marketing.
  • Lack of individual financial means for development (including lack of collateral for loans).
  • Poor genetic quality of sheep.
  • Poor nutrition of sheep, mainly resulting from continued overgrazing of communal land (read: tragedy of the commons).
  • Lack of business knowledge and technical skills amongst communal farmers required for wool sheep farming.
  • Low wool production per sheep and per unit of rangeland area.
  • Inferior wool quality.
  • Inefficient shearing process, poor wool classing, and unacceptable packing of wool.
  • Unsatisfactory market access.
  • Very low income from wool, resulting in little incentive to invest in wool farming.

 

The last point in particular is of critical importance, and dare I say arguably the most constraining and value-inhibiting factor in the production and subsequently marketing of wool by communal farmers. Unlike their commercial counterparts, communal wool farmers sell their produce at the farm gate to individual traders who, because of market information asymmetry, are the main price setters, often subjecting farmers to humiliatingly below-market prices. The individual wool brokers then transport the wool to the auction site in Port Elizabeth where it is classed, baled, and eventually sold at inflated prices. The brokers, although incurring no significant costs, are winners in the wool production value chain, while communal wool farmers merely pick what is left of the crumbs.

Thankfully, I have discovered the solution that would put an end to this systematic exploitation of communal wool farmers – block chain technology. You might be scratching your head and wondering how a decentralized cryptocurrency ledger could be used to balance the scales and unlock value for farmers. Well, the following is just a few ways in which digital transactions through the block chain network may advance the wool supply chain and finally unlock value for communal wool farmers.

  • Transparency – The block chain will allow wool farmers to keep track of their transactions and contractual obligations with buyers, suppliers, as well as other stakeholders in the value chain in order to enhance accountability. The immediate benefit of this is that it minimises fraud, maximizes transparency, and ensures that each link in the supply chain is satisfied, and distribution channels streamlined further.
  • Smart contracts – Smart contracts are self-adjusting digital contracts stored in each block along the block chain network. They define all the conditions upon which contractual agreements are met. One such contract is the Ethereum block chain. Through Ethereum smart contracts, wool transactions will only be processed when all the terms and conditions stipulated in the contract are met. For example, if the contract specifies that the final price received by farmers is flexible and reflects current global wool prices, brokers will not be able to undercut farmers because, for the transaction to be successful, this condition must be strictly met.
  • Data Analysis – The most important use of block chain technology is data monitoring. An opportunity exists for wool farmers to store data relating to total wool yield, fibre diameter, wool class category, age, gender, as well as well weight of sheep shorn, and finally, sheep breeding cycles on the block chain network. This information, when stored and locked in the block chain, will be of enormous value when making strategic farming decisions in the future.
  • Products Tracing – Block chain will make it possible for wool farmers to trace the journey of their produce along the supply chain through the shared ledger, in turn it will also makes it possible for consumers to precisely locate the origin of the wool, essentially strengthening supplier-consumer relations. Furthermore,  through block chain, manufacturers in China (where a significant proportion of SA wool is exported) can skip all the bureaucracy in the supply chain to directly communicate with farmers within seconds, whether they are in a small village in Cofimvaba or the outskirts of Barkly East.

The most pivotal principle underlying the competitiveness of any commodity is the inherent opportunity cost of producing that commodity. In turn, opportunity cost is a function of the level of technology used in production. The assumption here is that if a commodity takes more time (due to, say, inadequate technology) to be produced, then the opportunity cost of this commodity will be much higher, therefore diminish its position along the competitiveness hierarchy. However, I am of the view that competitiveness should not be entirely restricted to the production link along the supply chain. It should also take into consideration the degree of transparency in the transaction process, flow of information, as well as the time it takes for the commodity to travel from farm gate to the final consumer. There are very few, if any, tools in the world that can achieve all these simultaneously while unlocking enormous value for the most important players in supply chain. Block chain technology is by far the most effecient.

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Pick’n’Pay Later – Debt On A Silver Platter

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Pick’n’Pay made headlines earlier this week after announcing plans to grant its customers the right to buy food on credit through its ‘smart-shopper’ card. The company argued that its proposed program was a means to an end in a country where citizens were finding it increasingly hard to purchase food at certain times of the month. The precarious and often volatile nature of the economy as well as an unemployment rate hovering above 30% were some of the reasons the company put forth to justify why it had chosen to sail these barely chartered waters.

The design of the scheme is fairly simple and quite straight forward. If you qualify for the ‘smart-shopper’ card, you will be able to buy food for up to R40 000, depending on your credit score, after which you will be liable to pay it back within 55 days from the day of purchase. The monthly service fee is set at R10. However, if you fail to settle your bill on time, you will be liable to pay an additional interest cost to the tune of 21% annually. On any other day, this wouldn’t be a cause for concern, except that more than half of all South Africans are three months or more behind on all their payments. According to the National Credit Regulator, the collective bill of this payment default is a staggering R1.7 trillion. This means that for every R100 earned by a South African, R70 goes toward servicing debt. Incidentally, the overwhelming majority of people in this bracket are Pick’n’Pay customers, who make up the lower and middle income groups. Pick’n’Pay knows this, which is why it is endeavouring to pocket a huge chunk of the R1.7 trillion debt pie. You might be tempted to point out that other retailers, Woolworths comes to mind in this regard, are already providing food on credit to their customers. However, to compare Woolworths with Pick’n’Pay customers is to be oblivious of the achingly obvious – that the two are in completely different income brackets, with the former being in a better position to settle its payments while the latter may likely slip further into the abyss of debt. So, what happens if you run into arrears? Well, according to Business Tech, the following is a likely scenario:

  • You will be charged default administration costs and any other costs and fees relating to debt collection activities;
  • Default information will be submitted to the credit bureaus, which may affect your ability to obtain further credit;
  • The company may suspend your credit facility and give you 10 days’ notice before closing your account, in which event you must immediately pay your account in full;
  • Your account may be handed over to debt collection agencies for the recovery of arrear amount, the costs of which you will be responsible for; and
  • If it has to institute legal action against you in court, you will be liable for all costs incurred, including but not limited to legal costs, as well as collection charges, tracing fees and taxes.

It certainly doesn’t take a credit law professor to deduce that nothing good could ever come out of this initiative. It is not, as Pick’n’Pay claims, about meeting the poor half way. If anything, nothing could be further from it. It is quite simply manicured predatory lending, the oldest trick of preying on the vulnerable.

Die Boer Sal ‘n Plan Maak

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The current drought in the Western Cape – the worst in a 100 years – has nudged the agricultural sector into a great state of jeopardy, setting in motion unprecedented levels of risk and uncertainty in an industry which already had an oversupply of these. Low rain-fall, erratic climate patterns, and increasingly declining water dam levels have resulted in lower than expected yields, which, in turn, have tremendously increased farm-debt accumulation. According to Agbiz, farm debt is at an all-time high at a staggering R130 billion, much of which can be credited to the drought. Needless to say, this has not deterred the Western Cape farmer who, through a combination of hard work and strategy, has become the ultimate embodiment of the age-old Afrikaner saying: Die Boer Sal ‘n Plan Maak.

The most positive ramification of the drought was the mass adoption of resource-optimizing innovations by farmers who would have otherwise never given much thought to the idea of using cutting edge technology to make strategic farming decisions. To this end, the Western Cape Department of Agriculture in collaboration with Hortgrow – the deciduous fruit research institute – had developed an online application, aptly named FruitLook. FruitLook is an open access digital platform that allows farmers to monitor orchards and vineyards with satellite imagery and weather information. The database consists of information related to leaf area index, vegetation index, evapotranspiration deficit,  biomass water use efficiency, as well as leaf nitrogen content, and covers approximately 200 000 hectares of fruit crop area. The portal instantly attracted 450 users who accessed a total of 35 000 hectares of satellite based information on a field to field basis. FruitLook was so successful, farmers recorded additional earnings of R7  036 from wine grapes, R25 630  from deciduous fruit, as well as R33 850 from table grapes per hectare with 10% input savings and yield increase. Furthermore, water use efficiency on farms had increased by up to 10-30%, essentially mitigating the water shortage crisis in the province. The precarious and uncertain nature of agriculture had met its match in the dynamic Western Cape farmer.  And the end result, of course, is that the agricultural industry in the province still remains the most competitive in both real and nominal terms. This was recently validated by the contribution of agriculture to South Africa’s 2.5% growth ascension out of recession. The agricultural sector’s growth in the second quarter of 2017 was a staggering 33.6%, the biggest growth rate of all industries combined. This was primarily due to record output levels in field crops such as maize and wheat. Maize in particular is currently experiencing a historical output growth with yield forecasts estimating that the country will produce an incredible 16, 4 million tonnes by the end of the year, a huge leap to the current record of 14, 7 million tonnes produced in 1981.  This is of course great news for consumers, precisely the poor, as that amicable law of demand and supply decrees that the price of maize and wheat drop, thereby depressing the price of such staple foods as mealie meal and bread, essentially curbing food insecurity and malnutrition. It’s important to note this would have never been possible without the resilience and strategic planning of farmers.

Agriculture is the mainstay of any economy, and this is no less evident than in the South African context. It is the only industry whose spill-over effects, both in terms of input provision and per capita income, are felt by all the industries across the economic spectrum. And since the primary drivers of agriculture are farmers, many of whom work tirelessly to ensure all of us enjoy a decent meal three times a day, credit for the economic prosperity of the country ought to be granted to them.

The Bull Apocalypse – Climate Change and the Burped Methane

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In the wake of America’s exit from the Paris Agreement, many wonder what this callous move means for the war on carbon gas emissions and climate change.  More importantly, many wonder what it means for the future of our planet and its ancient biodiversity, much of which is in the pipeline to extinction. While blame has been broadly hurled in the direction of the coal and fossil fuel industries, not much attention unfortunately has been paid to the agricultural industry, particularly livestock farming, whose contribution to the detoriating state of our planet has been subtle yet incredibly more hazardous at the molecular level than the perceived footprint of the former two.

You might be picking your brain and debating the idea of how agriculture, which is primarily practised in rural areas with less cars and factories, could possible exert any major influence on climate change. Well, I’m afraid it does, and the data shows a steadily upward-moving (dare I say, alarming) trend. What is it then that’s causing agriculture’s newly found interest among climate scientists? The answer might shock you, but it’s worth mentioning anyway: cattle. That’s correct, next to burning fossil fuels and deforestation, cattle are the greatest threat to the survival of the planet. You see, cattle are ruminants and by that virtue whatever they ingest is fermented by microbes in their rumen, setting off a toxic reaction the product of which is CH4, aptly nicknamed methane gas. The cattle then burp (or fart, depending on their mood) this methane into the atmosphere where it joins an alliance with carbon dioxide in the depletion of the ozone layer. I don’t need to take you through the details of what goes on after that. On any other day this wouldn’t be a cause for concern, except that methane is a dangerously lethal gas. One molecule of methane equals 23 molecules of carbon dioxide, and nearly all the methane in the atmosphere is due to cattle. Although there is more carbon dioxide in the atmosphere than methane, the presence of this gas is nonetheless far more impactful. Expectedly, the U.S is among the world’s leading emitters of methane, and it’s not hard to see why. According to environmental physicist, Professor Gidon Eshel, the U.S. uses 47% of its land for food production, and of that, a lion’s share of approximately 71% is used to grow feed for cattle. This means only roughly 1% is used for fruit and vegetable production. It’s quite shocking then that the United States, in a futile effort to resuscitate its “greatness,” would slip back into the abyss of ignorance with regard to climate change as well as the detrimental impact its vast cattle stock is having on the atmosphere.

So, is there anything the rest of the world can do now that the biggest emitter has signed out of the most important climate change resolution in the world? Perhaps there is. While it would be unrealistic to ask people to think of methane emissions every time they consume beef, it is however important to note that a slight change in diet would make a significant difference. We on the African continent have a particular comparative advantage in this respect since our beef consumption is quite moderate compared to the rest of the world. A simple shift in diet, say, from beef to chicken would be a great place to start because then resources would be diverted from cattle to chicken. For starters, chicken requires much less land cleared to grow feed, while in comparison beef requires almost 60% more, almost two-thirds of the calories produced per acre, enough food to feed a staggering one billion people. Beef, as you can  clearly see, is one of the most incredibly inefficient uses of resources in the world. The opportunity cost, both in terms of food security and environmental impact, is far too high. Alternatively, we could cut down on our beef consumption, and if this doesn’t work, the government could increase the tax levied on all beef products as a measure to force those who don’t think this is a serious enough problem to curb their consumption. Whatever it may be, if we do not act on the looming atmospheric threat posed by cattle, then we only have ourselves to blame when they, through their constant burping of methane, unleash Pandora’s box upon the environment.

The world will not end in a catastrophic flood or storm of celestial meteors as many would have you believe. If anything, these are mere figments of man’s imagination – more closer to fiction than fact. The world, believe it or not, will end in a cumulous cloud of methane burped (or farted) by cattle. In short, the next apocalypse shall be rendered by the four-legged members of the genus Bovinae we have decorated the contents of our burgers with for as long as we’ve had McDonald’s. A pathetic way to go out, if you ask me.

 

The Melitz Model – A Darwinian Commerce

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When Charles Darwin sat in his study in 1838 to write one of the most fascinating scientific cornerstones in the history of mankind, little did he know the repercussions of his findings would transcend the realm of natural science to exert a tremendous influence in the functioning of unrelated fields, most notably the study of international economics. In his classical volume, aptly titled – On the Origin of Species – Darwin argues that the process of evolution is devoid of any randomness as nature possesses a rather strange proclivity to mechanically purge itself of undesirable species through a sadistic procedure commonly known as ‘natural selection.’ Darwin believed that species less suited to an environment are less likely to survive and thus less likely to reproduce as well. On the other end, species more suited to an environment are more likely to survive and more likely to reproduce, thus transferring their heritable traits to future generations. Over time, the surviving species adapt to the environment and accumulate, while the less suited are wiped out of the biological map through natural selection. Darwin had stirred quite a rapturous debate over his postulations, which in turn had caused tidal ripples that provided the framework upon which economists came to understand the intrinsic behaviour of firms participating in intra-industry trade at the export market.

It wasn’t until recently that the connection between Darwinism and international economics was inadvertently established by Marc Melitz – a Harvard professor of economics as well as one of the pioneering contributors to a contemporary branch of international economics formally referred to as New Trade Theory, alongside Paul Krugman and Avinash Dixit. Melitz devised an ingenious model to explain the impact of trade on intra-industry reallocations and aggregate productivity in domestic firms. Melitz explained that a competitive fringe of potential firms can enter an industry by paying a fixed sunk cost. Once the sunk cost is paid, firms draw productivity from a fixed distribution. Productivity remains fixed thereafter but firms face a constant exogenous probability of death or exit. Needless to say, firms produce horizontally differentiated varieties within the industry under conditions of monopolistic competition. The existence of fixed productivity costs imply that firms drawing a productivity level below the zero-productivity threshold would make negative profits if they produced, therefore these firms choose to exit the industry. Fixed and variable costs of exporting ensure that, of the active firms in the industry, only those drawing productivity above a higher threshold, the export productivity cut-off, find it profitable to export in equilibrium. The demand of labour within the industry rises, with it the price of labour (wages), due both to expansion by existing firms and new firms beginning to export. The increase in labour demand bids up factor prices and drastically reduces the profits of non-exporters. This reduction in profits of firms in the domestic market induces some low-productivity firms who were previously marginal to exit the industry. As low-productivity firms exit, and as output and employment are reallocated towards higher-productivity firms, average industry productivity and efficiency rises. In other words – if I may borrow a phrase from Darwin’s lexicon – it’s the survival of the fittest, the incentive for natural selection; cruel but necessary for the greater good.

The Melitz model’s applicability is not only confined to multinational conglomerates, of course. It can be applied to a vast array of fields, most importantly the agricultural industry. The competitiveness of South Africa’s agricultural exports can be enhanced by pruning low productivity domestic farms, restricting their activities to the domestic market, while increasing subsidies and other aids to high productivity farms so they may expand and amass considerate profits in international trade. The expansion of farms exporting their produce to overseas markets will increase aggregate employment and production efficiency as they adapt to the exceedingly competitive international market. In the end, average agricultural productivity, efficiency, and employment will rise as inefficient farms exit the industry and are replaced by emerging production efficient farms. Thus the aggregate agricultural industry, through natural selection, is made better off.

The international market, quite like nature, is ferocious to firms not suited to its volatile environment. For the most part, it has been known to render entire countries’ industries obsolete, not because all the participating firms in those countries were operating below the zero-productivity threshold, but because policy makers failed to heed the Melitz model in ensuring the survival of such industries by reallocating resources to high productivity firms, and banishing average productivity firms back to the domestic market or as I like to call it, ‘the commercial naughty corner,’ until they got their output act together.

Perhaps the Melitz model is indeed quite harsh, but then again if there is anything we have learned from Charles Darwin’s natural selection, it is that sometimes things need to get messy to make room for the perfection, or in our context – immense revenue – that lies beyond.

 

Vertical Roots

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Vertical farming, loosely defined as, “…the practise of producing food in vertically stacked layers, such as in skyscrapers, used warehouses, or shipping containers…” has substantially revolutionized farming; ousting conventional, primitive practices which had over the years become obsolete and tremendously risky in a world inundated with climate change, increasing input costs, and diminishing resources such as arable land and water. The control of environmental conditions and light with augmented artificial lighting and metal reflectors has completely curbed the most crucial threat to agriculture, climate uncertainty, while simultaneously doubling yields and quality of output. These and many more other fantastic features of vertical farming have marshalled in a new dawn of era in agriculture, one which seeks to harvest the matrimony of farming with sustainable science and technology.

Primarily, there are two types of vertical farming, namely: skyscrapers and old shipping containers. The skyscrapers version of vertical farming was first propounded by academics, most notably Professor Dickson Despommier. Despommier, an ecologist by profession, argued that the cultivation of plant life within skyscrapers in urban areas will require less embodied energy and produce less pollution than some methods of producing plant life on landscapes. He further solidified his claim by asserting, “natural landscapes are too toxic for agricultural production…” and the opportunity cost too severe. Despommier believed these skyscrapers could be built anywhere since plants life is mass produced within hermetically sealed artificial environments that have no contact with the outside elements, with the aid of wind turbines, water capture systems, solar panels, and other forms of clean renewable energy. Stackable shipping containers, on the other hand, are fairly new (though quite old in physical condition) urban farming facilities fitted with vertical hydroponics, LED lighting as well as intuitive climate controls. Everything is grown within these typically 320-square foot containers, each producing about 50 000 mini heads of lettuce per year, as in Kimbal Musk’s (brother to Elon Musk) Square Roots shipping containers in New York City.

The level of production efficiency inherent to vertical farming is none like anything we’ve seen since the discovery of high yield varieties. On average, vertical farms produce up to 80% more per harvest than most conventional farming techniques. The sovereignty to produce whatever you want, whenever you see fit, is an added bonus that allows farmers to not only tune production to optimal levels, but also enjoy equally prime returns on yields as well. Environmental control has relieved nature of the duties of determining (often with devastating results) the quality of cash crops; a pivotal factor in the commercialization of these agricultural goods. Environmental control completely eliminates the probability of pest and disease outbreaks which may compromise the quality of the crop, thus diminishing its value both in physical and monetary terms.

While it is true that the costs of running vertical farms outweigh the benefits, it can be argued however that with clean renewable energy sources gaining ground across the globe, this is posed to be the thing of the past. Every industry experiences decreasing returns to scales at its infancy, and vertical farming is no exception in this regard. Through extensive research and development, as well as new sustainable energy sources, vertical farming will soon be an industry characterized by unparalleled increasing returns to scale.

The world population is growing at alarmingly exponential rates. According to the UN’s global population index report, global population grows by a staggering 83 million new individuals annually, while the aggregate population doubles every 25 years. Rapid urbanisation, a function of the population boom, is placing tremendous pressure on global food systems, setting off a potential food crisis the likes of which threatens the food security status of many, primarily the poor in both developed and less developed countries. This, for the modern farmer, especially in South Africa – an emerging global agricultural powerhouse – is both a cause for concern and wonderful opportunity to innovate and hoist  our otherwise stagnant industry to the forefront of food security by embracing smart, eco-friendly food production techniques.  And vertical farming, I’m sure you’ll agree, is a  great place to start.

Farming Systems Research – Untying the Gordian Knot

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The legend of how Alexander of Macedonia acquired his famous sobriquet, “Alexander the Great” is a tale of enormous fascination and, more than anything, a perfect epitome of the conqueror’s incredible pragmatism. According to legend, Alexander the Great had ridden to the ancient city of Phrygia to winter there before his next campaign. As was customary, Alexander had made his first stop at the city’s pagan temple where upon arrival the priests guarding the temple had presented him with a nearly impossible task – untying the famed Gordian knot.  A thousand men had attempted to untie the Gordian knot before Alexander, and a thousand men had failed miserably. According to Phrygian legend, it was said whoever untied the Gordian knot would rule the world over. Alexander the Great had stared at the knot for a while, and then, almost instinctively, swung his sword and sliced the knot in half, exposing its ends while around him men stood in astonishment at the peculiarity of his solution of the Gordian Knot. The Phrygian myth indeed lived to its promise as Alexander the Great conquered and subsequently ruled all of Asia after that fateful day. Thus, the Alexandrian Solution – or the notion of quite simply ‘thinking outside the box’ – was born; problems previously thought to be without solutions suddenly had a million possibilities. Alexander the Great’s skewed way of solving problems had set precedence for a new school of thought, one which sought to cut the problem in half and nip the cause in the bud. The most notable of these is farming systems research (FSR). The FAO defines farming systems research as, “a diagnostic process, providing a collection of methods for researchers to understand farm households and their decision-making. Its applications use this understanding to increase efficiency in the use of human and budgetary resources for agricultural development, including research, extension and policy formulation.”

Earlier in the week we were privileged to host Professor Hans Schiere from Wageningen University in the Netherlands; a remarkable scholar whose brilliance is matched only by his Alexander the Great-esque approach to complex agricultural problems. Professor Schiere’s message was clear and succinct: Problems are not always as complicated as they may appear. Sometimes the solution calls for stepping outside the conventional belt and slicing the problem in half. He also cautioned that, because of the complex nature of agriculture, this radical method to problem-solving would certainly be impossible without looking at the problem as a whole in lieu of separate individual components. One simply cannot study the human anatomy by looking at individual cells at a time, Professor Schiere argued. A more practical example is ’13.’ Alone, it’s difficult to determine whether it’s the number ‘13’ or the letter ‘B’ (presumably drawn by a toddler). When it is written in the sequence: 12, 13, 14 – we can say with absolution that it is indeed the number 13.  However, substituting the sequence to the following: A13S – the context suddenly changes, spelling out that fantastic braking system inherent in most modern cars (read: ABS). Coming back to my Alexander the Great illustration. It would’ve been incredibly difficult, if not impossible, for Alexander the Great to untie the Gordian knot had he narrowed his attention down to the individual threads that kept the knot together. However, through a holistic and not reductionist approach, it had been much easier for Alexander to find a solution and put an end to the Gordian riddle.

The intricate nature of the agricultural industry is a feature that not only sets it apart from other industries, but also means it is saturated with technical, financial, institutional, socio-political, as well as cultural problems that often leave managers and policy makers in the dark with regard to formulating intelligent solutions. The risk and uncertainty that come as standard terms and conditions of endeavouring in agriculture certainly need farmers to be flexible in their decision-making; quickly adapting to unforeseen circumstances by taking their minds out of the barn to ensure the sustainable growth and development of agricultural systems.

Houston, I think we’ve got a drone

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Drones, otherwise known as unmanned aerial vehicles (UAVs), have been commercially available since the 1980s, though their presence was strictly restricted to certain industries such as film and geographical information systems. The past five years have witnessed the drone industry transform from a relatively insignificant niche in the toy section of many retail stores to a multi-billion dollar one with revenue sales rivaling those of computer manufacturers. The almost sudden popularity of drones can be credited to their vast array of uses, including film, construction, science, household espionage, the military, package delivery, and more recently – and might I add importantly – agriculture. Drone technology has flown right into agriculture, essentially improving crop health, water efficiency, fertilizer application, field irrigation, as well as crop field monitoring.

The following is just a few ways drones could substantially improve farming while advancing South Africa’s competitive edge in the international trade of agricultural commodities.

  • Crop Health – Crop quality is the most pivotal determinant of competitiveness next to retail price. The value of any crop is a function of its health and quality. According to the Environmental Defence Fund, drone technology is very useful in this regard in that drones equipped with sensors can collect plant height measurements by gathering range information from the plant canopy and the ground below. This in turn aids in creating vegetation index images, indicating which plants are healthy and absorbing maximum sunlight by measuring near infrared wavelengths through a multispectral sensor.
  • Fertilizer application – High-tech drones with satellite mapping and sensors that absorb near-infrared wavelengths have the capacity to show where phosphorous and nitrogen are needed, or where there is an excess of such nutrients. This means nutrients can be applied where they are needed the most with absolute precision, helping to increase production efficiency and ultimately yield.
  • Natural resource preservation – Agricultural drones have thermal cameras that are able to distinguish well-irrigated regions from dry patches. This could help farmers with adjusting field irrigation accordingly while saving a fortune on water costs, particularly in South Africa where water is a tremendously scarce resource.
  • Crop field monitoring – Crop field monitoring can be quite costly and time-consuming, especially when done the primitive way, which is to say on foot or by a tractor. Drones are a relief in this regard because of their ability to survey fields and immediately provide feedback which helps farmers to take quick decisions about potential hazards such as disease outbreaks. In addition, drones also help in identifying areas of the farm, such as fencing, that need maintenance.

Agriculture is a dynamic and enormously uncertain industry with resources, both natural and man-made, at a bare minimum. Drones however limit the inherent risks associated with agriculture by instantly providing farmers with aerial vegetation index images that aid in curbing wasteful resource administration while simultaneously increasing efficiency and aggregate yield.