Farm Machine Distributors (FMD) East Africa is best known for being a one-stop-shop for Massey Ferguson tractors and harvesters, as well as Baldan, Jacto, Grimme, Nogueira and Enorossi implements. But Covid-19 has seen the demand for tractors go down.
The Financial Standard spoke to FMD East Africa Managing Director Fergus Robley on how the virus has affected the agricultural supply chain.
What are some of the implications of Covid-19 on food production, agricultural and machinery supply chains in the short and long term?
Domestic food production is key in getting through the Covid-19 challenges, so the food sustainability goal is more important now than ever before for Kenya.
Farmers have to embrace mechanised farming along with good farming practices to achieve this goal. For the agricultural machinery supply chain, Covid-19 has presented production challenges internationally.
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Covid 19 Time Series
It is important that as suppliers we allow for this when ordering the necessary tractors and seasonal implements.
As predictions show across many industries, what was considered normal in 2019 will only return in 2023/24, and this is if a vaccine is found, so the focus on increasing domestic food production will remain for the foreseeable future.
What is the impact of the pandemic on local and global food security?
Local food security already has natural challenges from rainfall. Global warming also contributes to another ongoing challenge with the less predictable weather patterns and sometimes concentrated excessive rainfall.
We now have another huge challenge beyond our control from the pandemic, which has affected every corner of the globe and so world food surpluses will not be as freely released, which again emphasises the need for greater focus on food production from our farmers.
This global situation underpins how we all rely on farmers for our daily food, which I believe makes them the most important contributors to our daily lives.
What opportunities are there post-Covid-19 to re-orient food systems, and what are the lessons learnt from the pandemic?
When we exit the Covid-19 era, the world will be leaner, fitter, more efficient and will return to recognising need rather than greed.
What is the demand for agricultural machinery at the moment?
The demand for tractors is on a downward trend, which we see as a result of the banking industry being risk averse during these uncertain times. We also see the retail finance that was traditionally channelled towards agriculture being moved towards other sectors. We have seen less of a downturn in implement sales as farmers have embraced the need to improve yield through embracing good farming practices.
The Kenyan farmer has, however, been given another challenge as VAT has been recently added to implements, which will impact food production as most farmers are not VAT registered. This equates to an increase in production costs, so farmers have to factor this in when they are considering the returns from investing in improving yields with new implements.
With lost income, a huge number of Kenyans have gone back to the basics – agriculture. This ranges from farming to buying and selling food produce. Do you think this is a moment for an agricultural 'rebirth' as service jobs diminish?
We are all seeing movement from our towns and cities to the rural areas, which is directly from the challenges Covid-19 brings. Nearly two-thirds of the Kenyan economy comes from agriculture and its related industries.
While I would like to see the agricultural sector grow, I do recognise that the hospitality industry has been severely affected by the pandemic, so we are seeing more people trying to earn a living from the agricultural supply chain space. I am, therefore, not sure we can say this is a rebirth of agriculture until we return to what we considered was normal in 2019.
What progress has been made towards self-sufficiency in food production in Kenya?
Huge progress in food production has taken place since the millennium and as a machinery supplier, we have seen a consistent upward trend in the uptake of implements for mechanised farming that embrace good farming practices with increased yields.
Does the minimum tillage technique help to boost arable crop production? Yes, but we must recognise that one method does not fit all situations and conditions.
What are the areas of opportunity for those going into agriculture?
The opportunities are there, especially in domestic food production, and the younger generation does need opportunity from the agricultural sector and related industries.