SWITZERLAND-based agribusiness Syngenta is planning to invest $500m in African agriculture over the next decade as it targets more than $1bn in sales of its seed and crop-protection products.
Mike Mack, CEO of Syngenta International, said in an interview in Johannesburg on Wednesday that the "cumulative investments" in Africa would include recruitment and training of more than "700 employees with a high level of agronomic specialisation".
The company was targeting more than 5-million African farmers as customers over the 10 years "to enable productivity gains of 50% or more while preserving the long-term potential of the land".
Africa has almost 50% of the world’s unused arable land and a potential for vastly increased productivity. These have caused it to be increasingly viewed as a breadbasket for a global population that is projected to reach more than 9-billion by 2050.
Productivity rises are expected from a modern technological revolution in Africa and genetic modification (GM) of seeds that enable greater crop yields. GM crops have been slow to gain acceptance in Africa but an increasing number of countries are conducting trials and growing limited amounts of crops.
South Africa is the continent’s leader in GM technology, cultivating by far the greatest amount of crops.
Syngenta’s move follows that of multinational agribusiness DuPont Pioneer that earlier this year bought 80% of South African seed company Pannar in what it described as its "biggest investment in Africa". Agricultural leaders then predicted that more investments by multinationals in Africa would follow.
Syngenta, the biggest agribusiness in the world and the third biggest in commercial seeds, employs 27,000 people in about 90 countries.
"The numbers are just compelling," Mr Mack said. "There will be 2-billion more people in the world by 2050, and half of those will be in Africa.
"Obviously we want to be where there’s growth and Africa is going to be well-positioned to grow agricultural productivity."
Mr Mack said there were many millions of "pre-commercial" smallholder farmers in Africa, but Syngenta did not view the consolidation of small farms into bigger entities as "either desirable or necessary".
"Countries like India, Vietnam. Indonesia and Bangladesh have shown that agriculture need not be scale dependant. I disagree that there is a need to be big."
The argument that only big commercial farms could employ economies of scale did not take into account the role that business could play in providing services for small farmers. "Private enterprise must respond to the needs of small farmers," Mr Mack said.
"Yes, a small farmer cannot buy an expensive tractor, for example, but businesses or co-ops can provide tractor services, as well as planters and harvesters. It’s done all over the world.
"Equipment is the biggest fixed cost for a farmer, but who has decreed that each one must have his own equipment kit? It can easily be collectively owned ."
AgriSA president Johannes Möller on Thursday welcomed Syngenta’s undertaking to invest in African agriculture. "I think it’s wonderful — it’s very positive.
"Africa has about 700-million of the one billion food-insecure people in the world, yet it has most of the production capacity in terms of unused arable land. The production of biofuel, for example, could provide a huge boost for African economies."
Mr Möller agreed with Mr Mack that smallholder farmers were important. "About 60% of agricultural products in the world are produced by smallholder farmers, using new technology," he said.
"We need a mix of small and commercial farmers, even in South Africa, as long as they are productive."
Omri van Zyl, agriculture industry leader at services company Deloitte, said helping small-scale farmers could advance food security on the continent. The help could be in form of provision of enhanced storage facilities and negotiating better terms of trade in Africa and with major trading partners.
"Typically, small-scale farmers do not have access to storage facilities and without these there is no point in producing a surplus," Mr van Zyl. "It means that such surplus products, which are usually at their lowest prices at regional harvest time, must be sold at the prevailing price."