5 of the best agribusiness opportunities in Gauteng
We take a look at some of the most viable agricultural opportunities for SMEs in the province
The Gauteng Province is the most populated region in the country with more than 12 million people (23% of national), and it's also the country's smallest province in land size, made up of just 16, 548 square kilometres.
According to Brand South Africa, a research organisation which markets and promotes South Africa, the most important economic sectors in Gauteng are financial and business services, logistics and communications, and mining whilst agriculture is a relatively small sector as it only contributes about 1% to the provincial GDP.
With a R602.8 million budget for 2014/15, the Gauteng Department of Agriculture and Rural Development (GDARD) has since drafted an agribusiness support programme, the Gauteng Agriculture Potential Atlas, which identified areas of high potential agribusiness in the province.
The Atlas found that the western areas of Gauteng, (Krugersdorp, Carletonville, Magaliesburg and surrounds)are ideal for high value commodities such as flowers and vegetables, ranging from turnips and cucumbers to lettuce and cherry tomatoes. Similarly, the southern areas (which includes Vereeniging, Vanderbijlpark, Sebokeng and surrounds) are more focused on grain, while the northern areas are good for livestock .
KPMG conducted research titled Performance of the Agricultural Sector, which is an extensive desktop research study of the agriculture sector in South Africa, done on behald of the Small Enterprise Development Agency. According to the research, the province's agricultural sector targets the local urban population and tends to be direct suppliers to local produce markets and retailers.
We take a look at the high potential agribusinesses that SMEs can consider venturing into in Gauteng.
This is the most widely cultivated crop in Gauteng and is grown over 105 000 hectares of land, according to KPMG. This is because a large part of the province falls within South Africa’s Maize Triangle (Sedibeng, Metsweding and West Rand District Municipalities). The Maize Triangle project activities included maize planting, distribution of crop inputs like seeds, fertilisers, pest control and diesel, and the distribution of tractors to local communities. KPMG says there are business opportunities in milling services.
2. Livestock farming
Livestock is one of the agricultural cornerstones in Gauteng. Livestock farming presents a greater success opportunity since it comprises 40% of the country’s agricultural output, with approximately 80% of agricultural farm land that can be used for the farming of livestock, according to KPMGs research.
3. Food processing
According to Brand South Africa, food processing and beverages make up a significant part of the province's economy, with half of South Africa's agroprocessing companies operating in Gauteng. New and competitive niche products under development include organic food, essential oils, packaging, floriculture, medicinal plants, natural remedies and health foods. Agroprocessing deals with packaging facilities, grain silos, milking parlous, milling plants and abattoirs.
4. Veterinary services
This is defined as primary animal health and clinical services to small holder livestock farmers. According to GDARD, opportunities exist to offer mobile veterinary services especially in previously underserviced areas. Veterinary services help with improving public health by combating foodborne disease and diseases spread from animals to man, disease surveillance and outbreak control capacity.
5. Biotechnology is a major futuristic industry. It will help with the creation of biodiesels and will improve demand for oil seeds. KPMG says biodiesels has the potential to lower farmer’s input costs by using it to meet their energy requirements. Sugarcane-based renewable energy could assist Eskom with cogeneration of power.
There are a myriad of challenges in agricultural and rural development in Gauteng.
The KPMG research on the Performance of the Agricultural Sector indicates that challenges in the Gauteng province in the field crop sub-sector include increasing food insecurity at a household level, risk of animal diseases, loss of high potential agricultural land, increased cost of food and food production compared to the profitability of farming, and reduction in farm size among others.