By Tennille Bell, General Manager: Sales at Programmed Process Outsourcing (PPO)
South Africa boasts one of the world’s most diverse agricultural sectors, encompassing both corporate and private intensive and extensive crop farming systems, spanning the production of vegetables, fruits, nuts, and grains. In 2020, the sector contributed $10.4 billion to global exports, with citrus, grapes, wine, apples, pears, maize, nuts, sugar, wool, and fruit juices being the primary exports into Africa and Europe. To enter the export market, farmers must meet rigorous inspections and product quality tests, which are costly and time intensive. Even after obtaining certification, standards must be maintained, requiring extensive staff training. Fortunately, partnering with the right Business Process Outsourcing (BPO) provider can simplify the exporting process for farmers. By working with a trusted BPO partner, farmers can augment their staff capabilities, increase production, and ensure that their output meets export standards. For farming enterprises seeking to enter the export market, partnering with a reliable BPO provider can prove invaluable.
The current reality of agriculture
Other trends influencing the Agri-sector include rising demand for food crops, proportional to the continual growth in population size. Additionally, there has been a mindset shift for consumers, moving away from processed products to purchasing raw fruits and vegetables and healthier grains. While this increase in demand is positive for the Agri-sector, it faces several challenges, such as livestock diseases and climate change. Rising prices in fuel, animal feed and fertiliser prices, as well as increases in the sugar tax and national minimum wage, are all taking their toll on the sector. Further setbacks include poorly functioning network industries – roads, rail, ports, water, and electricity – and service delivery problems in municipalities, all of which increase business costs.
Despite this challenging reality, there is a strong need to expand South Africa’s export markets beyond traditional markets. The priority countries need to be China, South Korea, Japan, the USA, Vietnam, Taiwan, India, Saudi Arabia, Mexico, the Philippines, and Bangladesh. These countries have a sizable population and large imports of agricultural products, specifically fruits, wine, beef, and grains.
Outsourcing meets export agriculture
Preparing to enter the export industry means that farming businesses must ensure they can meet the demand and the legislative expectations of international trade. This requires businesses to always work efficiently and effectively. The most practical way to streamline processes and increase operational effectiveness while remaining agile in a highly seasonal industry is to use a compliant and reputable BPO provider. A BPO partner in export agriculture can be particularly useful in navigating the complex export regulatory environment, ensuring compliance with export standards, and accessing new export markets.
Flexibility and compliance
In terms of human resources and productivity, outsourcing business functions can give farmers the flexibility they need to scale up and down with seasonal work demands, enhancing resources and capacity utilisation. Businesses in the sector using a BPO solution will see an increase in output within shorter timeframes. This is because BPO providers have made it their core business to increase productivity while operating within the legislative constraints of compliance specified for the industry. By outsourcing to a BPO provider, an agriculture business can hand over all aspects of risk and compliance management to its chosen partner. This gives the Agri-client confidence that their provider of choice is abiding by compliance and transparency requirements on their behalf. This is likely to be a huge relief for agricultural businesses that have always found compliance requirements cumbersome.
To be successful, profitable and gain a competitive edge in the international Agri-trade, businesses must operate optimally under pressure. The international market is more demanding and requires businesses to run leaner and smarter. Here, a BPO provider becomes an extension of the business, providing the skills and support to drive innovation through efficiency.
Bringing in a BPO provider is essential to boosting productivity in a sustainable but flexible manner. Such a provider will perform their due diligence, leveraging specialist skills such as industrial or process engineers to optimise processes achieving work at accurate capacity through resource planning. Fundamentally, the BPO provider’s focus is to drive efficiency and effectiveness through a structured solution that hinges on a remuneration model that is incentivised. This builds a culture that drives resources toward fulfilling agri-business targets, because the higher their output, the higher their earnings.
Entering the international export market can be a daunting prospect for agricultural businesses, and it will be necessary for them to adapt rapidly to enhance their competitiveness. By joining forces with a compliant BPO provider that has extensive knowledge of the industry, the Agri-business will have the right kind of support and drive from a partner whose sole purpose is to help their business achieve efficiency, effectiveness, and optimal productivity.