The 2023 theme for Nation in Conversation panel discussions – adapt or die – focuses on issues that revolve around a changing mindset in order to survive. This discussion focused on financing models. Panellists in this discussion were: Antois van der Westhuizen (John Deere), John Hudson (Nedbank), Wikus Grobler (Grainlink), Werina Griffiths (Adams & Adams) and Abrie Rautenbach (Absa).
Hudson made it clear that as much as farmers have adopted technology, so have banks. “Nedbank engages with its client. It no longer is a one size fits all approach. Access to data can assist with business risk. Financial risk is an issue that still is discussed with government. Blended finance schemes are most probably going to be a reality in the future.”
Rautenbach from Absa highlighted that the key value chain actor first needs to be identified, and then the value chain needs to be de-risked. “On top of that you can add technology. If you cannot manage risk, you cannot price it.”
In the past agri businesses have acted as a bank to the client to finance its purchases. Grobler explained that this no longer is the case: “Capital has become very scarce and expensive, especially during the past two years. In the future companies and banks will be working together more and more to finance certain purchases from clients. This will most definitely be the case with agricultural companies as well.”
Technology is playing a much bigger role than a few years ago, and it will play an even bigger role in the future. Van der Westhuizen mentioned that technology removes human error. “A huge amount of data is gathered with John Deere technology. High-technology equipment is used together with a platform where operations are monitored. The machine can now adjust according to specific needs as well. Fifty years ago John Deere was seen as a manufacturer of agricultural equipment. These days John Deere is seen as a technology company. We can make available valuable data to different parties where risk can be reduced.”
Werina Griffiths said that data can be protected in various ways. “When data are made available, the question is who benefits from it. Data can be beneficial to different parties, but all parties need to agree to this.”
As time goes by, technology is getting more and more advanced. Financing models need to adjust and improve as well.
Watch this discussion here if you have missed it. Book your seat for upcoming Nation in Conversation sessions here.
Issued by Nation in Conversation: 17 May 2023
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Elmarie Joynt
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