By Pertunia Setumo, Agricultural Economist for FNB Agribusiness.
Climate change has presented additional risks to agricultural production and to farming enterprises. Increased weather variability has changed the production norms in agriculture, as a result it has had an impact on production plans and outcomes.
We are faced with erratic rains, hail, unpredictable disease outbreaks and dry spells that affect the general performance of the sector. Farmers must be able to adjust in order to survive in this volatile environment as several studies forecast climate change to remain a reality for decades to come.
Key insights that will help:
- Farmers need to understand the vulnerability of their farming enterprise to these extreme weather conditions by observing weather-related challenges most likely to impact their farms. How exposed are you to these changes in weather patterns and to what extent would they impact your operations?
- Develop an adaptation strategy to minimise the impact and possibly take advantage of the opportunities presented. This could mean the farmer has to change their entire production system, moving away from crops that require more water to drought tolerant crops or making use of seed technology (drought tolerant seed varieties). Some farmers will even have to move from planting crops to having livestock or vice versa depending on the conditions. A classic example of adaptation is the increasing trend in the use of nets in hail prone areas as well as windy areas.
- Diversifying your business either through mixed farming systems or investing in other sectors provides an opportunity for one enterprise to absorb losses from the other; putting your eggs in different baskets. It might also include geographical diversification, by producing the same or other products in different areas across the country to minimize your risk.
- Being hit by several dry spells, hail damage, floods, disease outbreaks amongst others, one should always have a disaster management plan in place to guard against natural disasters and minimise impact on the business cashflow. Model your best- and worst-case scenarios to see how your business will perform in both cases and plan accordingly. Put tools and infrastructure in place to assist in such situations; drainage systems, covered structures to put your animals under during hail, severe cold and heat as an example etc.
- Insurance – This includes products such as hedging against price loss, hail damage, crop and livestock insurance to guard against failure or losses due to diseases and unfavourable weather conditions.
- Be prepared for unusual occurrences of pests and diseases – With climate change, incidents of disease outbreaks and pest infestation are becoming increasingly unpredictable. One should make sure that they have a prevention method in place to minimise losses and impact. This includes strict biosecurity measures, frequent monitoring of crops and orchards to spot early onset of pests and diseases. Whilst, learning as much as you can from other people/regions and even countries that had to deal with similar outbreaks on an industry level.
- Adopt sustainable technologies – Although agriculture has been on the receiving end of climate change, it is viewed to have contributed much to greenhouse gases. Therefore, more can be done within the agricultural space to stabilise climate change and reduce its impact. Start by reviewing your irrigation systems; investigate water saving techniques such as low flow irrigation systems which in some instances, have proven to boost yields. Precision farming is not only driving efficiency but could also minimise the use of inputs that contribute to the carbon footprint; such as some fertilizers and pesticides.
- Cashflow management – it is increasingly important to align all your strategies with what your business can be able to accommodate. Considering economic challenges, it is advisable to speak to your financial advisors about expansion plans and changes in production systems to help you manage your farm costs.
- Finally align your marketing strategies to suit the changing consumer profile – Consumers are becoming not only conscious about what they consume but also on how the product was produced. There is more pressure to hold companies accountable on a social level, to save the planet and preserve natural resources for the next generation.