Pretoria - Food security is expected to be more challenging in the next 100 years, chief executive officer of the Land Bank, Phakamani Hadebe, said on Wednesday.
"I wish to highlight that the next 100 years will be more challenging than the previous 100 years regarding food security. As the world moves into the 22nd century, food security will demand new thinking and a new approach," he said at the signing of an agreement between the bank and AFGRI, South Africa's leading agricultural services company.
The two bodies on Wednesday announced that the bank had acquired the corporate lending book belonging to AFGRI's wholly owned subsidiary, GroCapital, for R1.1 billion. The amount is part of a R6 billion deal, spanning a five-year period.
He said there was a need to review the way business was done, with global population growth set to reach 9 billion by 2050 according to the UN.
For the world to be able to produce enough food, technology needed to be improved.
"We need new systems to enhance our productivity, we need to be innovative and we need to get the best return for each rand spent," said Hadebe.
Other challenges that lay ahead included environmental changes, water shortages and human migration that will affect many countries, especially in Africa.
The sale will see the Land Bank owning and funding the existing corporate lending book while GroCapital will continue performing the administration functions.
According to the Land Bank, AFGRI's corporate clients will benefit from greater access to funding while the bank's assets were expected to grow by 10% due to the transaction.
Chris Venter, chief executive of AFGRI, said there would be more pressure on food reserves in the coming years, adding that it was important to have a "strong understanding" of a farmer's life. He expressed satisfaction with the transaction.
Meanwhile, Hadebe added that the transaction marked the continuation of a long-term relationship between the Land Bank and AFGRI.
"Our ability to raise finance in the market and AFGRI's infrastructure, business acumen and customer relations positions us to service our sector more efficiently," said Hadebe.
AFGRI is the country's leading foods business and offers agricultural services, with a wide range of physical and intellectual inputs to farmers, producers and users of agricultural products.
AFGRI supports farmers in Zimbabwe and Congo among other countries.
The Land Bank celebrates its 100 birthday this year.
