Agriculture has always been an important player in the development and growth of economies all over the world.
This is so as it plays an important role in rural development by providing food, income and employment for the majority of the rural dwellers.
In Botswana, agriculture remains amongst the largest economic sectors after diamonds and tourism, employing the largest number of people.
However, despite its economic contribution, agriculture has been neglected in most development policies in Africa.
In Botswana, the sector is not performing optimally due to recurring droughts and endemic animal diseases such as Foot and Mouth Disease (FMD), which lead us to not be self-sufficient with food and thus, mainly depend on South Africa to import.
The impact of the coronavirus (COVID-19) pandemic on global economies has resulted in the rest of Africa re-evaluating its economies. In Botswana, we are having recurring conversations around reducing the dependency on diamonds and shifting our focus on growing the agriculture industry.
There is no denying that the outbreak of the pandemic has impacted Botswana’s economy and we will continue to feel its ripple effects in the months to come. It is therefore important for Botswana to strategically relook into key focus areas such as agriculture. COVID-19 has brought with it a lesson that the time is now for Botswana to improve on its commitment to growing the agricultural sector and for us to become self-sufficient with food.
The impact of COVID-19 on agriculture
As we continue to navigate the impacts of the pandemic, there is no denying that COVID-19 continues to affect all parts of our lives. The pandemic outbreak has disrupted food supply chains. We continue to experience logistic disruptions with transport restrictions and border controls delaying goods crossing the borders. Additionally, we continue to experience reduction in food and purchasing power. The increase in food prices has also been a challenge during this unprecedented time. At the level of individual consumers, ‘panic-buying’ has prompted significant inflation effects and food has become more expensive. In regards to our local exports, Botswana has experienced a reduction in supply exposure to European BMC exports.
The question now becomes, what can be done to cushion the impact of COVID-19 on agribusinesses? Firstly we have to acknowledge and appreciate the socio-economic value of agri-business. There is a need for the government and commercial banks to offer robust support systems to agribusinesses.
If farmers are to increase food production and food security, it is important that farmers have better access to agricultural support systems, such as credit, technology, extension services and agricultural education.
Market excess for farmers is critical and Absa also has a role to bring off takers and farmers into contact. Absa also realises the value locked in moving down the value chain and encourage agro-processing.
Furthermore, food production should be supported to ensure food security as many African countries continue to experience famine. To support the current state of agriculture in Botswana, there is need for;
Agricultural research and technology – The adoption of technologies has the potential to
Providing suitable finance solutions and loan terms to address the financial needs of farmers to be sustainable.
Absa Agribusiness is also involved in financing secondary agricultural businesses to process local produce that will make the country less dependent on imports from neighbouring countries.
Absa Agribusiness supplies specialist knowledge and information to farmers to encourage diversification of their businesses.
Storage or marketing facilities – Storage facilities will ensure the availability of seeds for the next crop cycle. It will also guarantee regular and continuous supplies of raw materials. Furthermore, this will balance the supply and demand of agricultural produce, thereby stabilising market prices.
Absa to support farmers, and entrepreneurs – There is a need to invest in agriculture due to the rise in demand for agricultural produce. Larger agriculture investments and agriculture-related infrastructure require long-term funding. For the farm to produce it needs long-term finance for property finance, development finance and short-term finance for working capital for seeds, fertiliser, herbicides, pesticides and fuel.
Agricultural education and extension – Traditionally, farming has been known as a man’s job. In this regard, there is a need to challenge the status quo and promote and increase women participation in the field of agriculture.
To sustainably feed a growing population, Botswana and the rest of Africa must close the yield gap and build a robust agribusiness sector. It is important for the rest of Africa to appreciate the invaluable contribution of agriculture as we continue to find means of controlling the impact of COVID-19. As a bank, we acknowledge our role in bringing our agribusiness’ possibilities to life.
*Thomas Harvey is the head of Agribusiness at Absa Bank Botswana
Thomas Harvey was born and schooled in South Africa in the North West province. He studied plant and animal production at the University of the Free State. He started his banking career 35 years ago in the Land Bank of South Africa where he was involved with commercial farmers and emerging farmers and served on the Land Reform Committee in the North West.
He moved to Absa 16 years ago as an Agricultural Economist and also held the positions of National Agricultural Frontline Enablement Manager for South Africa where he got exposure to all industries in the sector and several Regional Agricultural Manager positions. He was part of the Agricultural Credit Policy annual review and chaired annual valuation forums on farm values.
Thomas Harvey completed a Master’s degree in Sustainable Agriculture with Agricultural Economics in 2007. He joined Absa Botswana as Head of Agribusiness in August 2019. He recently was involved to draft an in-country Agriculture Credit Policy. During the year Thomas Harvey published an article in the Farmers Weekly that gets distributed in South Africa and Botswana, he has also written 13 Production condition and Risk Reports and industry specific reports on Botswana agriculture.