🚜 Saving SA's R300bn BreadBasket…

Hi there,

Macaque trouble? After almost a week of failed attempts, Scottish animal authorities hired a specialist mountain rescue team using thermal imaging drones to recapture an escaped Japanese monkey that terrorised the Highlands with cuteness for days on end.

Pssst Founders… we want to follow your journey, let us know what you are building.

In this Open Letter:

• Fair game: Saving SA’s R300bn agri sector.

• Brain implanted, “struggling” TikTok artists and kissing the millionaires goodbye.

• Press play: Supercharging SA’s economy overnight.

• Where you like to buy: The results are in.

TRENDING NOW

Saving our R300bn Breadbasket

Agriculture is big. HUGE, actually.

The South African agriculture market will be worth R303bn this year – almost double that by 2029.

Over all of Africa, it was R5.2 trillion in 2023, accounting for 35% of Africa’s GDP – and could be around R19 trillion by 2030.

So why then are 78% of SA’s farmers not seeing any profit?

A clue comes from the DA’s Shadow Minister of Agriculture, Land Reform and Rural Development who told parliament in May 2023 that farmers are “facing a cost-price squeeze” and most are battling to service their debts.

See, most of us assume that, with official-seeming indexes like SAFEX, there must be some form of universally accepted pricing for agricultural goods. But due to supply chain costs, timing and quality, the farmers often end up taking whatever price is offered – inevitably putting them in a compromised position.

The Wild West of SA’s Agri Pricing

A grossly simplified way this works is:

• A broker engages the farmer and offers a fixed price for goods — effectively a future.

• He then works relationships to sell the produce at a higher margin, before actually having to take ownership of the goods.

• The difference between the buying price and selling price is then the agent's margin – he is selling contracts (with little risk to himself).

A major issue with this model is the misalignment between the broker’s incentive and that of the farmer. The broker is trying to pay the farmer as little as possible and sell it for as high as possible – not a win-win.

And what’s more, as a farmer, you don’t have any way of doing proper price discovery.

The stuff you just sold could be worth 10 times what you got paid. 

You would never know, until now…

Fair Prices and Agri Markets

Some local players have pounced on this pain and have gotten good traction.

• The Match Exchange is a tech-enabled marketplace that connects farmers and buyers directly (i.e. cut out the middleman). Which is great for price discovery and managing supply and demand, while still ensuring the farmer gets what his goods are truly worth.

• Nile.ag is another marketplace that connects farmers and buyers, but they are taking it one step further, providing a marketplace for farming inputs (think fertilizers etc.). This is another part of the process that suffers greatly due to the limited distribution of sales reps and price discovery — smaller or better-priced input providers simply cannot get to some farmers.

By connecting the farmer directly to the source of his feed, materials etc. the farmer gets to run his business more cost-effectively while finding great prices for their outputs on the same platform… Noice.

With prices rising and consumers feeling the pinch, there are still a lot more opportunities for innovative tech to solve real problems in the agri space – which we are, as always, watching pretty closely.

IN SHORT

⛷It’s here. The Apple Vision Pro officially launches today with over 600 apps and games optimised specifically for it. If you paid the $3500 to get it, let us know how it goes.

👋 Millionaire Exits. South Africa has lost over 9’000 US-dollar millionaires in the last 10 years with many having moved to a “safe haven country” including Australia, Switzerland, Monaco, Singapore, the UAE, New Zealand, Malta, and Mauritius.

🔇 Muted Tok. The Universal Music Group (UMG) has pulled its music from TikTok. It would appear that struggling artists like Taylor Swift, Billie Eilish and Ariana Grande are receiving royalties only at “a fraction of the rate that similarly situated major social platforms pay” from TikTok.

🚙 Unbundled Cars. Transaction Capital’s share price surged this week at the announcement that the board has resolved to unbundle its mega second-hand vehicle trading platform WeBuyCars, with all WBC shares to be listed on the JSE at the same time.

🧠 Implanted BrainTech. Elon Musk has announced that his BrainTech company Neurallink has successfully implanted its first wireless brain chip in a human and that the patient is recovering well, with promising brain activity detected.

⛑️ Aerial Rescue. Ellies Holdings, one of the JSE’s longest-surviving tech companies has been placed into voluntary business rescue after its planned acquisition of Bundu Power fell through.

🌌 Orbital Tours. SpaceX has been contracted to launch Starlab, the ISS’s replacement, in six years — the world’s first privately owned space station (Airbus), whose own website describes it as a “science park” in space.

HOW WOULD YOU BUILD IT?

How to Supercharge Your Economy Overnight

If our reports on regulating crypto asset service providers in SA got you excited, this week’s podcast is for you. We chat with Tobie van der Spuy, co-founder of Block Markets Africa about how this can potentially fast-track fintech projects in SA.

The highlights…

1. Who’s getting in on the FSP licensing bandwagon?

An interesting insight shared here is around the 20-odd applications that were withdrawn from the Financial Sector Conduct Authority’s Financial Services Provider (FSP) licencing process. The first reason was that existing FSPs wanted to also get licenses to trade crypto - but one of the criteria is to have a key individual who not only bears the responsibility but also understands the complexities and risks that exist in the crypto space.

2. SA’s best-kept Crypto Secrets!

One of South Africa’s best-kept secrets is that we have a really mature and highly innovative space. Arguably one of the best in the world, actually, Tobie says. He shares that he often has international customers come and visit them in Cape Town, and can introduce them to 20 different really serious players in the crypto space (in a 3.5km radius) – all doing things of global significance.

3. The FinTech opportunities in SA and the rest of the continent

One of the challenges with trading crypto as a South African is that we have to do it using other currencies. Tobie and his team have been working on the EZAR, it’s a standard for any licensed financial service provider to issue their own stablecoin. Listen in here.

So if you want to understand how blockchain will affect all of our lives check out the entire episode for these and more gold nuggets.

You can grab the Spotify and Apple Podcast links on our website here.

THE RESULTS

We asked if you buy on social media, and most have yet to explore it…

🟨⬜️⬜️⬜️⬜️⬜️ 📱All the time (15%)

🟨⬜️⬜️⬜️⬜️⬜️ 🙅 Don’t trust it (13%)

⬜️⬜️⬜️⬜️⬜️⬜️ 😤 Can’t seem to pay without issues (5%)

🟩🟩🟩🟩🟩🟩 💳 Only normal e-commerce for me (64%)

⬜️⬜️⬜️⬜️⬜️⬜️ 🛒 I only buy in physical stores (0)

⬜️⬜️⬜️⬜️⬜️⬜️ 🧔🏾‍♀️ I live a self-sufficient life living off the land (3%)