By: Noxolo Majavu
More than 100 farmers in Pietermaritzburg have benefitted from a tech-supported agricultural value chain enabler, AgriKool, through market access and production support. AgriKool founders, former small-scale farmer Zamokuhle Thwala, and agricultural scientist, Palesa Motaung, started the business in 2018. This was after Thwala saw the plight of farmers who struggled to access financial markets and decided to set up a production crowd-funding aid for farmers on Facebook.
“To date, AgriKool has distributed over three million kilograms of fresh produce to a variety of South African retailers, including the Shoprite Group. Through this journey, we have paid out more than R12 million to farmers while achieving a total revenue of over R22 million in under five years,” Thwala told Vutivi News. AgriKool provides production market intelligence and distribution support to small-scale emerging farmers by leveraging the network of retailers, farmers, financiers, and in-house expertise in agricultural commercialisation.
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It has a network of over 100 refrigerated trucks fetching and delivering produce from farmers. “Farmer support is primarily provided through market access. We have supply agreements with various retailers and intimate knowledge of their supply requirements. This market access is passed on to farmers through direct procurement and training. We assist farmers with marketing and distribution by providing market intelligence as well as access to logistics,” Thwala said.
Besides winning other prestigious awards, AgriKool walked away with the SAB Social Innovation Award in 2021 and raised grant funding of over R2.4 million from the SAB Foundation, Alpha Code, as well as the Agtech Innovation Awards sponsored by the French Embassy in South Africa.
While Thwala’s journey didn’t start out easily, he was able to leverage his following on social media and the trust his community had in him. “Investors were promised a small return on their investments once the farmer had harvested and sold their produce. Unfortunately, the repayment rate was lower than 50%, mostly due to a lack of market access,” he said.
That was when he decided to help farmers sell their produce in the informal market. But COVID-19 then hit, and, hawkers were banned from operating. To assist the farmers in staying afloat, Thwala took the initiative to approach formal retailers, who were also struggling to source due to the chaos in the agricultural value chains. Thwala and the farmers have not looked back.
Since 2021, Thwala has leveraged this network and the position of farmers in the agricultural value chain and relationships with financiers (banks, venture capital, and angel investors) to provide production support to farmers. “We co-finance production and de-risk financing by guaranteeing market access. This co-production model has also allowed AgriKool to assist farmers with greater control of production through record keeping and financial management—all services provided by our organisation.
“One of our biggest achievements was becoming a supplier to the Shoprite Group in December 2021. We provide the group with some of their main lines, such as cabbage and spinach, locally, helping them create localised and inclusive value chains,” Thwala further said. Agri-Kool has worked with the Group to utilise back-hauling/reverse logistics. After delivery to stores, Shoprite’s trucks collect produce from our farms on their way back to the distribution centre. “This cuts our transport costs by up to 25% per trip while the retailer saves time and fuel by reducing the number of empty return loads to their distribution centres,” Thwala said.
