Global agricultural equipment manufacturer and distributor Agco is to ?expand its business into Africa, which it sees as having significant potential for growth in the agricultural sector, Agco chairperson, president and CEO Martin Richenhagen told media at the end of August.
“Large areas across Africa have suitable soils and climate for successful agriculture, but many areas are not yet cultivated or are not productive enough,” Richenhagen said. “We believe that increases in agricultural productivity can be achieved through mechanisation.”
About 11% of the world’s arable land is in Africa, of which about 86% remains uncultivated. Agco believes that this low proportion of cultivated land can be attributed to a lack of complementary inputs. For example, only 10% of African farms’ power comes from engines, while only 5% of the land is properly irrigated.
Agco senior vice-president and GM for Africa, Europe, the Middle East, Australia and New Zealand Gary Collar believes that Africa would benefit from modern, mechanised farming techniques, as the productivity and efficiency would be much higher than is the case with traditional labour-intensive farming.
“The high productivity provided through mechanised farming could help African countries become more independent of imported crops, creating better food security,” Collar said, emphasising the rising demand for food around the world, which will require more food to be produced in the next 50 years than has been required for the past 10,000 years. “This is the only way that the African continent can feed itself and not rely on food aid.”
While some farm labourers would lose their jobs to machines, many more jobs would be created in the mechanical market as it grows, Collar added.
These jobs would be of a higher technical ?nature, requiring skilled personnel to fix, maintain and operate the machinery. This would raise the level of skilled people in African countries, which would contribute to better job opportunities and higher incomes. Jobs would also be created indirectly, in fields such as logistics, through the growth of the agricultural industries in these countries.
According to Agco’s market research, the African agricultural market currently has about 24 000 tractors and has shown a growth rate of about 14% a year since 2000. Agco ?expects this growth rate to continue over the next few years.
Taking advantage of this developing market forms part of Agco’s overarching growth strategy, which entails four stages, includ-?ing the development of new products, research-?ing and developing advanced technologies, enhancing productivity, and growing in ?developing markets, such as Africa.