Mechanising farming in Africa

Global agricultural equipment company, AGCO, recently announced plans to restructure its Asia- Pacific region to include Africa and increase its operations in Africa. Gary Collar, senior vice-president and general manager (GM) for Asia-Pacific and Africa and Nuradin Osman, GM for AGCO Africa, spoke to Denene Erasmus about AGCO’s plans for expansion in Africa that will be driven from the company’s new regional headquarters in Johannesburg.

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What spurred AGCO’s decision to restructure its Asia-Pacific region to include Africa?

Gary Collar (GC): We believe that with this move, the region will be strongly positioned to leverage the synergies of similar market dynamics in the two territories. These are the emergence of a growing smallholder farmer segment, product and application similarities, shared consumer finance patterns and growing trade between the two regions.

Nuradin Osman (NO): Other similarities between Asia-Pacific and Africa are a growing need for micro-financing for smallholder farmers because of an absence of direct farm subsidies, and the fact that productivity can benefit a great deal from mechanisation. These markets also face the challenge of ensuring food security for fast-growing populations, so there’s a lot that Africa and Asia-Pacific can learn from each other.

How does doing business in Africa and Asia-Pacific differ from doing business in Europe, for example?

NO: In Europe, farm subsidies play a big role while in Africa a large share of financing needs has to come from the private sector. This is why in the African and Asia-Pacific region we cannot expand our business without looking at developing micro-financing solutions.

Market linkages in Europe are also more formal than in parts of Africa and Asia-Pacific. Many countries in Africa are still developing their supply chains to link farmers to consumers.