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Biotech crops impact economy positively

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The Department of Science and Technology Director General, Dr Phil Mjwara, says biotechnology or genetically modified (GM) crops have had a positive economic impact on South Africa.

He said this when he briefed journalists upon releasing the second survey on the Public Perceptions of Biotechnology in South Africa on Tuesday. The survey was conducted by the Human Sciences Research Council (HSRC).

“It is estimated that the economic gains from biotech crops for South Africa for the period 1998 to 2013 was $1.6bn and $313m for 2013 alone.

“In 2014, South Africa was growing more than 2.7-million hectares of GM crops. About 86% and 90% of maize and soya produced, respectively, are GM. Cotton is 100% genetically modified,” he said.

More than half of SA familiar with biotechnology

Dr Michael Gastrow, from the Human Sciences Research Council, said one of his observations from the survey, which was conducted amongst 2,900 adults in 500 areas across the country, was that there was a better understanding of how much people know about biotechnology from the younger generation, and that attitudes tend to get more positive with the young ones.

Dr Gastrow also said that the privileged – from the level of education, to those with a better living standard – have a better understanding or knowledge about biotechnology.

“When you look at attitudes towards biotechnology in terms of health, safety, environment and economic contribution… there are significant proportions that are in favour of a particular attitude, a significant proportion [that are] against, and a significant third… that just doesn’t know enough about biotechnology,” he said.

He said most South Africans are aware they are consuming genetically modified food.

The survey revealed that 48% were aware that they were eating genetically modified organisms, while 49% believed it was safe to do so.

The first survey conducted in 2004 revealed that public familiarity with the term ‘biotechnology’, stood at only 21%, while public awareness of GM consumption was at 13%. The latest survey commissioned by the department last year showed that the figures have tripled, 53% and 48% respectively.

Dr Gastrow said there had also been a major increase in attitudes that favour the purchasing of GM foods.

The proportion of the public that would purchase GM foods on basis of health considerations increased from 59% to 77%, while that of cost considerations increased from 51% to 73%, and environmental considerations from 50% to 68%.

GM forms of maize, soybean and cotton have been approved for commercial production in South Africa and these crops have become established in some parts of the country.

Public awareness to enhance biotechnology understanding

Dr Mjwara said, meanwhile, that while genetically modified crops have been approved and adopted in South Africa and worldwide by science-based regulatory systems and farmers, they still remain a source of apparent public controversy. While it is entirely appropriate for the public to have varying opinions on the technologies and their applications, where misinformation or deliberate misinformation is offered, it needs to be countered with scientific evidence, he said.

“This controversy contributes to extreme precautionary approaches by some countries, resulting in increased regulatory burdens and delays, with associated development costs, timelines and risks that have limited the number of countries adopting the technology – including countries in Africa.

“[This has] limited the application of the technology to relatively few crops, with limited traits, and only a handful of developers – usually multinational companies – have the capability and the resources to commercialise GM crops,” Dr Mjwara said.

To counter this perception, the Department of Science and Technology established the Public Understanding of Biotechnology (PUB) Programme, which sought to promote awareness and understanding of biotechnology to the broader public.

The PUB Programme was broadly successful in a number of interventions, including developing media roundtables; critical thinker sessions; exhibitions; training of media on science and technology issues, and the development of biotechnology in school curricula. However, it had very limited ability to respond to inaccurate, misleading or vague media (newspaper, television and radio) reports.

Source: bizcommunity.com

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Agriculture

AFEX Raises $50Million for Agri-SMEs, Africa’s First Warehouse Receipt Backed Commercial Paper

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AFEX CEO, Ayodeji Balogun (Source: AFEX)

AFEX Commodities Exchange Limited (AFEX), Nigeria’s leading private commodities exchange company, has announced the first Warehouse Receipt Backed Commercial Paper in Africa, with tech-enabled operations and a 24-hour fast cash turnaround for borrowers. With over $50 million raised for Agri-SMEs, this bridges the funding gap between lenders and borrowers in the Nigerian agricultural sector with a commodity-backed instrument – for the first time.

The AFEX financing deal will help eradicate the high cost of procurement incurred by processors by deploying a discounted value of a warehouse receipt distributed among five leading players in the Food and Beverage, Trading Poultry and Animal Feed segments in Nigeria. The receiving companies are top 10 players in their respective segments. They have now been enabled access to a tool for managing price volatility, enabling up to 30% direct savings on prices.

“With our vision to reach a cumulative total of over $5 Billion in investment to the agriculture sector over the next five years, this financing deal is right on track to achieve this goal’’ – said Ayodeji Balogun, CEO, AFEX Commodities Exchange. “As we move towards building a derivatives market in Africa, we want to be able to reduce exposure to price risk for stakeholders, by enabling them to hedge their positions and trade in commodity derivatives.”

The warehouse receipts, which can then be transferred from commodities to a financial asset and listed under the borrower’s portfolio on the AFEX trading platform, will create a sustainable funding structure and address underfunding in the Nigerian agricultural sector. With the warehouse receipt system linked to financiers, the system allows financiers value and marks the commodities’ price to market on a real-time basis.

“Our mission is to provide low-risk working capital facility for stakeholders in the Agro sector, in a way that is transparent and has a very high viable investment return’’ – said Akinyinka Akintunde, VP Financial Markets at AFEX. “As a licensed commodities exchange and warehouse receipt system operator, we deploy a warehouse receipt system and collateral management infrastructure to increase market confidence for both lenders and borrower.”With AFEX’s goal to support Africa’s food security while promoting a fair exchange of value among players in commodity value chains, this deal’s social impact is delivered through market access for farmers and reduced post-harvest losses. AFEX continues to contribute to the United Nations Sustainable Development Goals 1, 2, 5 and 8; no
poverty, zero hunger, gender equality, decent work, and economic growth.

Also Read Cocoa Pricing: Why Public-Private Sector Partnerships are Key to Sustaining the Livelihood of Smallholders Farmers in Africa

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SunCulture secures $11m debt facility from SunFunder syndicate to expand solar irrigation in Africa

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SunCulture CEO and co-Founder, Samir Ibrahim (Source: YouTube)

SunCulture, a solar irrigation company headquartered in Nairobi, Kenya, today received the first disbursement from a new $11m syndicated debt facility to expand its operations in sub-Saharan Africa.

The new loan is groundbreaking for the “productive use” solar sector due to its size and its innovative combination of working capital and end-user financing.

Arranged by SunFunder, the co-investors in the facility are Nordic Development Fund; Triodos Investment Management, through its Hivos-Triodos Fund; SunFunder through its Solar Energy Transformation Fund; AlphaMundi through both its SocialAlpha and AlphaJiri Investment Funds; and the AfDB’s FEI OGEF managed by Lion’s Head.

This will enable SunCulture to scale up renewable energy installations at smallholder farms and households that will mitigate over 20,000 tons of CO2 annually – as farmers replace diesel pumps with solar ones – whilst facilitating income growth and job opportunities in rural communities.

SunCulture has pioneered a “Pay-As-You-Grow” business model to make solar-powered irrigation affordable for smallholder farmers in sub-Saharan Africa, combining end-user finance, value-added services, modern climate technology, and access to improve productivity. A recent report developed by Dalberg Research shows that irrigation systems and solar-powered water pumps can increase farmers’ production between 2 and 4 times, and their income between 2 and 6 times.

Samir Ibrahim, Chief Executive Officer at SunCulture, said, “The past year was devastating for the millions of smallholder farmers in Kenya; 87% are in a worse financial position due to the pandemic. 81% of SunCulture farmers, however, were able to increase their revenue from farming in 2020. Solar irrigation helps create food security and sovereignty, and it also helps lift people out of poverty. This facility further enables our efforts to support farmers by
providing them with more of our solar solutions, and faster.”

Jemimah Kwakye-Fosu, Investment Officer, who led the transaction for SunFunder, said: “We are delighted to have led this syndicate of proactive lenders who worked well together for a common goal: to help SunCulture reach many more farmers. It shows how working capital can be combined with end user financing, which is essential for making productive use technologies affordable.”

Surabhi Mathur Visser, Head of Investments at SunFunder, said: “This is a pioneering transaction that demonstrates how productive use technologies like solar irrigation can be scaled up. SunFunder arranged this facility with a similar-minded group of lenders to support an innovative product and business model. We look forward to seeing SunCulture grow in Kenya and new markets.”

Karin Isaksson, Managing Director at NDF, said: “This loan to SunCulture is the second e[tended to a company graduating from the EEP Trust Fund managed by NDF. It is a clear demonstration that we can deliver on the new NDF Strategy and its commitment to provide flexible and scalable financing as well as catalytic impact. It has all the ingredients that define NDF’s added value in the climate financing landscape. It demonstrates our capability to convene and mobilise additional financing, as well as our unique mix of financing instruments to match the needs of our partners, public or private. We are proud to be standing with our partners and supporting the emergence of a greener economy, precisely at this time of COVID-19.”

“Since our first investment in 2019, SunCulture has made huge strides to unlock the potential of smallholder agriculture through innovative products and consumer credit. FEI-OGEF is happy to be able to refinance our inventory loan into this new working capital facility and continue that growth alongside a committed and constructive group of lenders,´ noted Harry Guinness from Lion’s Head.

Judith Santbergen, Senior Investment Manager at AlphaMundi, said: “Since 2018, AlphaMundi has successively provided support to SunCulture through a combination of technical assistance and debt investment. We are e[cited to continue and increase our investment in the company via this new, innovative working capital facility.”

Sjoerd Melsert, Senior Investment Manager at Triodos Investment Management, said: “SunCulture is a great e[ample of an innovative company that is active on the nexus of renewable energy and agriculture, using solar energy to increase farmers’ incomes. Our facility supports the further growth of SunCulture’s pay-as-you-go solar portfolio, leading to a more sustainable and higher production for smallholder farmers, which is fully aligned with the
mission, ambition and activities of Hivos-Triodos Fund.”

SunCulture

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Cocoa Pricing: Why Public-Private Sector Partnerships are Key to Sustaining the Livelihood of Smallholders Farmers in Africa

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AFEX Commodities Exchange Limited (AFEX) CEO, Ayodeji Balogun (Source: AFEX)

Pricing is a debating point in the cocoa sector, dominating contemporary stakeholder conversations; especially African cocoa producers. This is a result of the historically low cocoa prices that do not provide a fair income to farmers involved in cocoa production. Despite the announcement of the Living Income Differential (LID) by both Cote d’Ivoire and the Ghana Cocoa Boards, there still exist questions on the sustainability of this intervention – to take farmers out of poverty. Stakeholders in the African Cocoa industry need to rethink its strategy to improving farmers’ livelihood, by increasing their earning potential through value chain efficiency, facilitated by public-private sector partnership.

Interventions aimed at income enhancement and lifting farmers out of poverty are often based on the assumption that the said interventions, alone, are enough for the solution being pursued. On the surface, the decision to increase the farmgate price of cocoa and LID by an additional $400 a tonne on all cocoa contracts, appear to be a solution to lifting farmers out of poverty. However, even if farmers’ incomes were to increase – through increased farm gate prices – other structural issues like small farm sizes and low productivity levels will still keep these farmers below the poverty line.

For Cocoa farmers to earn a fair wage from their input, issues like ageing plantations, lack of adequate training and financing as well as direct access to the market, need to be addressed. These structural issues pose a more significant threat on the livelihood of cocoa producers in Africa.  Price increases on their own are not enough to lift the poorest farmers out of poverty. Price interventions like the LID must go hand in hand with other policies and programme, implemented to increase the volume and quality of beans produced. Achieving this will require a multi-stakeholder collaboration involving both the private and public sector aimed at not only improving the quality of lives of farmers but ensuring that the cocoa value chain is optimized.

To enable smallholder farmers benefit in an egalitarian way from the cocoa industry, the focus should be towards improving value chain efficiency while addressing structural challenges in the sector. This is achievable through a public-private collaboration that will drive private sector operations to deepen financial markets, scale-up infrastructure investments and enhance productivity and quality through training and input supply.

Through collaborating with Cocoa Cooperative Societies –providing training, input financing and market access, AFEX has enabled smallholder farmers to increase their productivity, while producing to international standards. With technology like AFEX Workbench – a value chain management platform which facilitates input sourcing, loan administration, sales, a transparent and efficiently executed cocoa process is achieved.

A public-private sector-driven model will create a sustainable approach which will revitalize and boost cocoa production in Africa – creating jobs and improving the living standard of the farmers. While the government takes the driver seat to develop policies and the infrastructure to catalyze this growth across the cocoa ecosystem, private sector organizations will ensure value chain efficiency – increasing the benefits stakeholders gain from the industry.

AFEX is committed to providing the support and technology to improve the quality of life for African cocoa farmers and their communities.

Author: Ayodeji Balogun is the CEO of AFEX Commodities Exchange Limited (AFEX)

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