About Agrista
Agrista provides a trusted platform that connects investors in agricultural production
projects with farmers in need of working capital. By reducing the risk of investing
in agriculture, we increase the funds available to farmers for financing their production.
This is a vital component in increasing agricultural production to meet a growing
global demand for agricultural commodities.
By providing a platform for the management of multiple investment projects we are
uniquely able to aggregate insurance portfolios, bulk input purchases, financing
volumes and marketing pools. This provides us with a market-leading opportunity
of optimising portfolios for increased investment returns and reduced financing
costs for the farmer.
Background
Food security, or food self-sufficiency, has been placed high on the global political
agenda. Key issues that have been identified:
- 1.02 Billion people currently suffer from hunger.
- Grain reserve levels have reduced by 40% over the last 10 years.
- To feed a growing world population - expected to surpass 9 billion in 2050 - agricultural
output will have to increase by 70 percent between now and then.
- To increase agricultural production globally, access to finance and markets has
to be improved in emerging markets that have the capacity to produce more agricultural
commodities. Global leaders have committed significant funds to support this objective.
The capacity to increase agricultural production to address the food crisis lies
in middle-income countries with large agricultural potential. In these economies,
however, farmers generally do not own sufficient assets to offer as securities for
production loans at banks. Farmers are also exposed to several market-changing
forces:
- Market prices are increasingly volatile due to current macro-economic conditions.
- Commercial banks, under pressure of new financial regulation and a need to increase
profits, are closing rural branches.
- Traditional co-operatives are focusing on value chain activities and are reducing
their allocation of capital to production finance.
- Government and public lending institutions are focusing on developing smallholder
farmers. Commercial farming activities are therefore receiving less government
support.
- Existing contract growing schemes are able to pass high administration costs to
farmers due to a high market demand for production credit, especially in emerging markets. This increases the moral
risk exposure to financiers and insurers and results in the adverse selection of
poorer farmers.
Agrista's Solution
Agrista provides a fund management service that provides a platform for equity investors
and financiers to invest funds in agricultural production projects.
We offer a fund investment platform that makes structured input finance widely available
to farmers. We provide a transparent and standardised system that reduces risks
and costs of investing in agricultural production by:
- controlling operational risks,
- building up a trusted database on farmer performance,
- leveraging geospatial technologies to scale the ability to monitor projects globally,
- centralising workflows and data to improve process efficiencies and reduce counter-party
risk, and
- standardising the funding structure to increase investor confidence and farmer acceptance.
Agrista has a motivated team that has been active in the agrifinace market in South
Africa for over 10 years. Agrista has pioneered the use of software technologies
for the management of production finance projects in South Africa. Its solutions
are implemented with market leaders in agrifinance.