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Innovative solutions to help mitigate effects of climate change on agrisector

While not yet a full-blown crisis, South Africa’s ongoing drought conditions demand urgent action to mitigate the increasing effects of climate change, especially in the agrisector.

The country needs a coordinated response led by government to ensure that, in partnership with business and civil society, South Africans adopt a proactive approach in dealing with another drought.

Just four years ago, the country experienced its worst drought in 30 years, affecting not only the agrisector, but also food security and production. Given the importance of agriculture to the economy – the sector contributed 2,2% to the gross domestic product (GDP) in the second quarter 2019 – we cannot afford to act when it’s too late.

The warning signs are there, and the national agricultural organisation AgriSA has called for more to be done to safeguard the farming community from the effects of climate change. On 30 October 2019 Cabinet highlighted water challenges imploring South Africans to conserve this precious resource following the recent drop in the country’s dam levels. But the statistic that ought to trigger alarm bells is that South Africa is amongst 30 of the driest countries in the world. This, along with the prolonged lower-than-normal rainfall in some parts of the country and the recent heatwave, have made life difficult for farmers throughout the country.

Notably, the Department of Water and Sanitation has implemented contingency measures, but Cabinet ought to have done more than merely urging people to work together to ensure sustainable use of water. A much stronger, coordinated response is needed. In addition to climate change, farmers could be hurt by water restrictions, as we experienced four years ago.

Without wishing to be alarmist about the drought – we are not at the same levels of 2015 – but the situation is a concern. According to AgriSA's drought report in November 2019, areas such as KwaZulu-Natal, Mpumalanga, the Eastern Cape and Eastern Free State have not had enough rain for large-scale planting, while farmers in areas such as the Western Free State, Limpopo, the Eastern Cape and Northern Cape can't plant due to over-indebtedness (carryover debt from the three-year rolling drought conditions). This gloomy outlook by AgriSA falls short of declaring the current drought a crisis, but it is real – and the repercussions are serious.

According to AgriSA’ s report, farmers faced challenges in three main sectors, namely animal production, horticulture (fruit production) and agronomy (crop production). Inevitably, it falls on government through its multidisciplinary axis comprised of agriculture, water and sanitation and environment to provide a holistic response. While efforts are ongoing, government should not allow the situation to escalate.

As with the drought four years ago, the private sector came to the fore in a variety of ways. AgriSA’ s Drought and Disaster Fund has helped more than 14 000 farmers to stay in business. The shock statistic in the AgriSA report that 37,44% of rural communities are affected by the drought highlights the need for urgent intervention to ensure farmers do not go out of business, resulting in job losses or a decline in exports of their produce.

The need to increase global agricultural production by 70% by 2050 to meet the food demand of the population that is expected to increase to 9 billion people, is overwhelming. That is why the global agritech industry is spending billions of dollars (about $7bn in 2017 according to the Pitchbook platform) on research and development to come up with new solutions and technologies to address and build resistance to the challenges brought about by climate change and resource scarcity, while at the same time increasing production without additional resources such as land and water. Some of the solutions are affordable and easy to implement. Some, however, are expensive, such as shade netting. That is why Nedbank Agriculture saw the need to help farmers finance the installation of shade netting for their orchards in a sustainable way.

Shade netting is a sustainable cover protecting horticultural crops from hazardous elements. The use of shade netting improves the performance of underperforming orchards, acts as protection against natural hazards such as hail, high windspeed, frost, sunburn and birds, prevents cross-pollination (seedless cultivars remain seedless) and improves water use efficiency, resulting in better handling of droughts and water restrictions.

The shade netting finance solution is in line with our bigger-picture approach to business banking, which brings a new perspective to the banking needs of agribusinesses, providing an integrated solution that incorporates lending, transactional and value-added offerings, innovative industry solutions and partnerships, while aligning with the United Nations Sustainable Development Goals (SDGs) to help create a better and more sustainable future for the planet. Nedbank's shade-netting finance solution helps achieve SDG 6 (clean water and sanitation), SDG 12 (responsible production and consumption) and SDG 15 (life on land) directly, with ripple effects that address SDG 8 (job security and economic growth) and SDG 10 (inequality).

As a bank committed to using our money expertise to grow the economy and create jobs, Nedbank Agriculture's shade netting finance solution is in line with the bank's purpose of helping clients 'see money differently'. It is really an opportunity to use financial expertise for the benefit of farmers in a sustainable way and to contribute towards a better planet by meeting key SDGs. Beyond shade netting, we are ready and willing to join initiatives to help the agrisector with meaningful solutions during the drought and urge key stakeholders to act before the situation worsens.


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