MULTINATIONAL DuPont’s acquisition on Wednesday of a majority stake in South Africa’s Pannar Seed signals the increasing pace of the new race for Africa as the continent’s role in feeding a global population of more than 9-billion by 2050 becomes clear.
Africa has by far most of the world’s unused land available for agriculture. In addition, as DuPont Pioneer president Paul Schickler put it this week: “Africa represents a significant opportunity for improved productivity. Africa is the new frontier, with 1-billion people to be added to its population by 2050, an expanding middle class and natural assets such as soil and climate.”
African average grain yields are less than two tonnes a hectare, “about one third of what is achieved in other developing regions and only one fifth of yields in developed countries. With 35-million hectares available for maize production, Africa represents a significant opportunity for improved productivity.”
DuPont Pioneer is a subsidiary of DuPont and the world’s leading developer and supplier of plant genetics. It provides agronomic support and services to farmers seeking to raise productivity and profitability.
Greytown-based Pannar Seed is one of Africa’s largest seed breeders, producers and suppliers with operations in nine countries on the continent. The cost of the acquisition has not been disclosed but Mr Schickler said it was “one of the biggest transactions in DuPont’s history and the biggest” it has made in Africa.
The deal follows on a joint venture announced in September 2011 between leading South African agribusiness Senwes and Bunge Europe, one of the world’s “big four” food companies, to develop grain and oilseed operations in South Africa for the domestic market and export to the rest of Africa.
In a joint statement Pioneer and Pannar said they “are partnering to increase the scope of research and innovation in the African seed industry, bringing farmers in South Africa and throughout the continent more product choices and better products, faster and more efficiently than either … could do on its own.”
To this end Mr Schickler announced Pioneer’s investment of R62m in a “world-class” technology hub to serve the region. It is similar to the company’s facilities in Brazil, India and China and will consist of a network of research and testing facilities across the continent, with its centre at Delmas.
It is just the seventh centre of this kind in the world — three are in the US. Mr Schickler said he saw South Africa as a “significant contributor to food security in Africa and other export markets”. He was excited about merging the “unique and distinct germplasms” and characteristics of “subtropical” South African and “temperate” North American maize. “The two germplasm pools together can develop more than either on its own. The breeding systems are advanced and can only be brought to market with a global partner,” Mr Schickler said.
Pannar’s small and unprofitable but important wheat-breeding programme will be continued. “Pioneer has a similar programme and we see this as a great opportunity to make a more successful business out of wheat,” he said.
South Africa is a net importer of wheat and local farmers struggle to make wheat growing profitable. Last year South African farmers planted the smallest area of wheat in more than 100 years.
Mr Schickler said although the increasing use of technology will lead to job loses on farms — sub-Saharan African countries employ vast numbers in agriculture, in contrast to modern agricultural economies such as the US and Brazil — he is confident that “a whole set of new employment opportunities” will be created in a plethora of related industries, including banks, transport and all sorts of agribusinesses.
“These jobs are admittedly not for unskilled labour, but we are also looking forward to playing a role in improving education through partnerships with NGOs, governments and academic institutions.”
He pointed to a $20m agreement with the Limpopo provincial agriculture department to improve smallholder maize productivity.
“We believe the South African smallholder farmer will play an increasingly crucial role in the nation’s food security and we aim to give them the tools and skills to do that through this effort,” DuPont Pioneer director for Africa Pamela Chitenhe said.
(Source – http://www.blackseagrain.net/about-ukragroconsult/news-bsg/dupont-bets-on-africa2019s-global-food-role-with-pannar-seed-deal)