• About one in ten rookie drone pilots are destroying their craft on the very first flight, numbers from a repair specialist suggest – and many are doing so in stupid and preventable ways, while not being covered by insurance.

    By current best estimates there are now between 40,000 and 50,000 drones in South Africa, as entry-level prices continue to drop. Almost all those drones are flown by amateurs; there are just 663 Remote Piloted Aircraft Systems in the country, according to the 2018 State of the Drone Report.

    It’s not a legal requirement for hobby drone pilots to obtain licenses, but it can help to reduce the number of costly crashes. And as Business Insider South Africa discovered in 2018, many insurance companies are unwilling to cover these.

    Unskilled part-time pilots, the high cost of repairs, the equipment’s relative fragility, the potential risk of injury and damage to property, and the complex legal framework surrounding the informal flying of drones, have lead many mainstream insurance companies to shut the door on policies - and the costs of repair, or liability, often rests solely with the hobby pilot.

    1,200 drone accidents in 2019 – so far – at one repair shop.
    According to Fixology, a drone repair company based in Cape Town, drones are falling out of the sky regularly. 

    In the first eight months of 2019, Fixology booked in around 1,200 damaged drones.

    The company’s Nathan Appel says as many as 75% of the accidents they see are due to pilot error.

    This includes owners testing out their drones indoors without a stable GPS signal, and not doing a proper preflight check before take off.

    “It’s not uncommon for hobbyists to forget to ensure propellers and batteries are properly fitted before flying off,” says Appel. 

    Although most hobby drones now come equipped with technology to avoid the most basic of accidents, amateur pilots often inadvertently override these, or fail to activate them correctly.

    One key feature built into most good quality consumer drones is a return to home functionality, that returns the device to its starting point in the event of low battery, loss of signal, or other difficulties. 

    But even this isn’t foolproof. Some drone pilots set the return GPS location to a moving object, such as a boat - which means that when the drone returns to home, the pilot has moved on.

    “Many accidents happen because pilots don’t wait for a full satellite signal on the drone before takeoff, resulting in no return to home location being logged on the device,” says Appel.

    And many rookie crashes are due to battery issues.

    “Some also fly a drone out with the wind, without taking into account the return time, given the force of the wind holding it back on the return home,” says Appel. “And some pilots simply forget to check their battery levels.”

    A high volume of cellphone network towers and satellite dishes will confuse their drones, which is another leading cause of accidents that Appel sees at Fixology. And some inadvertently deactivate object avoidance sensors by flying their drones in sport mode - causing them to crash unexpectedly into fixed objects.

    And being in the Cape, Fixology repairs drones used for more than just photography. “In-experienced fishermen flying with bait droppers sometimes cause the line to be tangled in the propellers,” says Appel, “causing the drone to crash in the ocean.”

    According to Fixology the number of accidents on the very first flight has dropped in recent years, thanks to the increase in accident avoidance technology. But even so, they estimate that as many as 10% of users crash their drones fresh out of the box.

    Not all drone accidents are the fault of the pilot, though.

    “Manufacturing faults, electronic parts malfunctioning, and faulty batteries can cause the props to stop in mid-air,” says Appel. “And using a non-recommended smart device to fly the drone, and getting a bad feed, can also result in blank screens and crashing”. 

    When drones do fall out of the sky, repairs aren’t cheap.

    The parts that Fixology repairs the most - things like gimbals, sensors, propellers, legs and arms - can cost thousands to fix or replace. And if the crash is directly into the ocean or a body of water, you can write the drone off altogether. 

    Basic repairs to gimbal ribbons, landing gear, and remotes on entry level drones like the DJI Mavic start at R1,500, says Appel. But if you manage to destroy the gimbal on your DJI Phantom - one of the most popular drones in South Africa - you’ll be at least R14,500 out of pocket.

    More insurers now cover drones – but it doesn’t come cheap.
    Insuring drones in South Africa is difficult, in part because of the high rate of accidents, cost of repairs, and potential liability to third parties.

    But according to Drone Covered’s Ryno Du Toit, the uptake for insurance from hobby pilots has also been slow. Drone Covered is one of the few companies in South Africa to insure non-commercial pilots and hobbyists, both on the ground and inflight.

    Given the expensive repairs, and potential liability, Du Toit is unsure why more drone hobbyists aren’t taking up insurance, but he suspects because many fly so occasionally, and just for fun, they’re willing to take the risk of not insuring.

    Drone Covered, like most insurers, are also particularly strict about claims - any breach of Civil Aviation Authority rules will lead to the claim being repudiated. And before any claim is processed, they will check the flight logs. Still, Du Toit says that about 10% of their current client base has logged claims, and of those, roughly 75% were successful.

    Some larger insurance companies are also starting to insure non-commercial drones, though somewhat reluctantly. Hollard and Santam Aviation now offer full and comprehensive cover for private and commercial operators. And AlexanderForbes has a similar policy - they’ll cover the drone for loss and damage, though premiums go up significantly if this occurs while the drone is in use.

    Most larger insurance companies require that pilots first attain official licenses to fly, though. This process, which runs through the Civil Aviation Authority, is arduous - particularly for the occasional weekend warrior.

    As a compromise, Drone Covered offers incentives to those hobby pilots who undergo private proficiency training - both online and in-person. They will halve excess, from 20% to 10%, and increase liability cover, from R500,000 to R2.5 million.

    But drone insurance isn’t cheap - it will likely cost around 12% of the retail cost of the drone.

    Insurance requirement or not, most experts recommend that users do some proficiency course, and are well versed in CAA laws. Flying a drone in South Africa is governed by several laws, and it’s a hobby that can have severe legal consequences, including fines and possible jail time for those who break them.

  • On September 25 and 26 I visited the Eastern Cape on the invitation of The Co-op – an agribusiness based In Humansdorp.

  • The global cotton-seed oil market revenue amounted to $8.2B in 2018, falling by -3.6% against the previous year.

  • The price of pears is currently normal in most European countries, but it is expected to rise in a few weeks.

  • Welcoming a new agricultural machine raises many questions – its management, its adaptation to a specific environment, its profitability, its long-term efficiency…

    • The policy agenda for growing South Africa’s agricultural sector has been clear as far back as 2012 when the National Development Plan (NDP) was released.
    • From today, crop spraying drones will be showing up to work in South African fields.

    • Beekeepers lose colonies of honeybees on a regular basis; a bee is a fragile creature with a short lifespan even in the best of times, and there are many, many issues that can cause the loss of a colony.

    • The Indian government has launched an Uber-like app for renting farm equipment.

    • It has been 25 years since the dawn of democracy and the general mood in the country is pessimistic owing to poor economic fortunes and elevated joblessness, among other long-standing challenges.

    • Although the past few months have been a struggle to secure grain supplies for Southern and East Africa, other parts of the world are in better shape and could help offset the shortfall.

    • Since Zimbabwe’s land reform of 2000 – when around 8 million hectares of formerly large-scale commercial farmland was distributed to about 175,000 households – debates about the consequences for food security have raged.

    • Do all cows’ faces look the same to you? They don’t to systems powered by artificial intelligence (AI).

    • This week, we will commemorate World Food Day on Wednesday, 16 October 2019. This event also presents an opportunity to review South Africa’s standing in the food security ladder. 

      Food security is achieved when three objectives are met: when food is available, accessible in the right quantities and at the appropriate nutritional levels for all citizens at all times. In 2018, South Africa was ranked 45th most food-secure country out of 133 countries measured in The Economist Global Food Security Index. This was relatively good, compared to other BRICS countries. For example, although South Africa’s average income was 25 spots behind Russia, 23 behind China and 19 behind Brazil, the county’s food security status was a relatively closer match-up, ranking just six spots behind Brazil, three spots behind Russia and one spot ahead of China (see Table 1 in the attached file).

      What is worth reiterating is the fact that despite South Africa’s relatively lower average income, the country still manages to punch above its weight in terms of food security. This is a testament to the country’s competitive agricultural sector, and its ability to supply food at a relatively low cost.

      Although the Food Security Index indicates South Africa is food-secure, there are pockets of food insecurity within the country when you consider a household-level perspective. This speaks to the general inequality in the country, where some households are food secure, and a sizable portion of other low-income households are not, primarily due to affordability. This scenario is more prevalent in Limpopo, KwaZulu-Natal and the Eastern Cape.

      While there are a number of interventions that can assist in supporting households’ access to nutritious food, one form of intervention that can boost rural households’ income is through job creation in the agricultural sector. There is anecdotal evidence that in areas where government and private sector have collaborated in agricultural development, some level of success in terms of job creation could be achieved.

      With agriculture having gained prominence as one of the sectors that could bring about rural economic development and job creation in South Africa, the government’s approach to realising this vision should be regionally focused. Meaning, the aforementioned provinces should be the key priority in resource allocation, as the frontiers of agricultural expansion. Such an approach not only makes sense in terms of reducing poverty but also in exploiting the potential of underutilised land. Limpopo, KwaZulu-Natal and the Eastern Cape arguably have about 1.6 million to 1.8 million hectares of underutilised land which can be sustainably farmed for increased food security over the long term. This is according to a 2015 study by McKinsey Global Institute.

      Admittedly, the current land governance system -- communal land -- has been cited as one of the hindrances in agricultural development in these provinces, as it limits investment. But, solving such matters can take a long time and land reform policy is still being debated across the country.

      The near-term practical approach that can make a difference is structuring an innovative agricultural finance instrument -- such as blended-finance -- which pulls in the capital and human capital from both private and public sectors. In parts of the Eastern Cape, agribusinesses such as The Co-op, are currently engaged in such arrangements with the provincial government and in areas where projects have been implemented there has been some level of success. These are some of the approaches that are needed for boosting households’ income so they can have access to nutritious foods in the near term, while broad development policies are yet to be operationalised or implemented.

      Large global grains supplies

      The United States Department of Agriculture (USDA) reaffirmed the view that the world has relatively large grains supplies this year. In its October 2019 update, the agency maintained its 2019/20 global wheat production estimate at 765 million tonnes, which is 5% higher than the previous season. As a consequence of this, the stocks could increase by 4% y/y to 287 million tonnes. This will essentially keep global wheat prices are relatively lower levels, which is beneficial for consumers in importing countries such as South Africa.

      Moreover, the USDA left its 2019/20 global maize production estimate roughly unchanged from September 2019, at 1.1 billion tonnes. Admittedly, this is 2% less than the previous season because of a poor harvest in parts of the US and Argentina amongst other countries, but these are still comfortable levels in covering the world’s maize needs. The reduction in production, while consumption is relatively strong, means that the stocks could fall by 7% y/y in 2019/20 season.

      Unlike the aforementioned grains, the 2019/20 global soybean production was revised down by 1% from levels seen in September 2019 to 324 million tonnes. This was largely on the back of anticipated poor yields in the US and Paraguay. The current estimate is now 6% less compared to 2018/19 production season. The poor harvest in the US because of wet weather conditions at the start of the season is central to this anticipated reduction in global soybean harvest.

      Another important factor that we continue to monitor in the soybeans space is its consumption, specifically because of fears that African swine fever could have a negative impact. So far, however, global soybean demand remains solid. The consumption trend and a decline in production could be supportive of soybeans and its by-products prices in the near term. Similar to wheat, South Africa is a net importer of soybeans and a notable importer of soybean oilcake (see Figure 1 in the attached file), then an uptick in global prices could influence the domestic market and business.

      Harvest activity picking up momentum in parts of the Western Cape winter crop regions Not much has changed in the Western Cape weather conditions since our previous note. But rainfall at this point would rather cause damage in some winter crop growing areas rather than help boost yields as we would have liked to see in the past couple of weeks. Farmers in parts of the Southern Cape and Overberg are in full swing with canola harvesting and at initial stages of wheat and barley harvesting. This means drier weather conditions will be ideal for the next couple of weeks, which is precisely what the forecasts for the next two weeks show – see Figure 2 in the attached file.

      With that said, the drier weather conditions and heat experienced over the past couple of weeks within the Western Cape has caused yield losses. As previously highlighted, the Western Cape is a major producer of winter crops, accounting for 61% of area plantings in winter wheat and nearly all canola, hence we placed greater emphasis on crop conditions within this province.

      Other major winter crop producing provinces -- Northern Cape, Free State and Limpopo, amongst others -- are mainly under irrigation and can, therefore, withstand harsh conditions as dams are at levels over 50% on average as of 07 October 2019. Farmers’ reports out of the Free State suggest that the wheat crop in the province generally appear very good. The same is true for the Northern Cape.

      South Africa’s Crop Estimates Committee (CEC) currently forecasts the 2019/20 wheat, barley and canola production at 1.81 million tonnes, 389 260 tonnes and 88 800 tonnes, which is 3%, 8% and 15% down from the previous season.

      Looking ahead, we see a risk that the CEC might revise down further its winter crop production estimates when the next update comes out on 24 October 2019 given that weather conditions have been harsh in parts of the Western Cape, and in turn, resulted into yield losses.

      From a data front

      The data calendar is quite light this week. On Monday, the US Department of Agriculture will release its weekly update of the US crop conditions data. This will give us a sense of the US crop-growing conditions, and thereafter the potential size of the harvest.

      On Wednesday, SAGIS will release the grain producer deliveries data for the week of 11 October 2019. This covers both summer and winter crops. In the coming weeks, the deliveries data will give us a sense of the pace of the winter crops harvest activity.

      On Thursday, we will get the weekly grain trade data (wheat and maize) for the week of 11 October 2019. In brief, maize exports for the 2019/20 marketing year have thus far amounted to 495 645 tonnes. Looking ahead, we expect South Africa to remain a net exporter of maize this marketing year, although the volume will most likely fall by half from 2018/19 to about 1.1 million tonnes. At the same time, we expect maize imports of about 450 000 tonnes, all yellow maize, mainly for the coastal provinces of the country. This is up from an estimated 171 500 tonnes in the 2018/19 marketing year. The country has thus far imported 251 708 tonnes of yellow maize, all from Argentina.

      In terms of wheat, South Africa remained a net importer in the 2018/19 marketing year, although the recovery in the country’s domestic wheat production led to a decline in the volume of imports. South Africa’s 2018/19 wheat imports fell by 36% from the previous season to about 1.4 million tonnes. Looking ahead, South Africa’s 2019/20 wheat imports could increase to 1.6 million tonnes because of expected lower harvest on the back of unfavourable weather conditions in the Western Cape. The first import consignment of the 2019/20 marketing year was 32 841 tonnes, from Germany, Russia and Poland. This week we will receive data for activity in the week of 11 October 2019, which is the second week of this marketing year.

    • Technology has brought about so many advances in agriculture. 

    • The basics of the global food system, which today feeds seven to eight billion people, were developed by the ancient Romans.

    • KPMG’s study of the agricultural sector in South Africa for the Small Enterprise Development Agency (Seda), Research on the Performance of the Agricultural Sector, includes a SWOT analysis of three main products:

    • Over 60% of all employed women in Sub-Saharan Africa work in agriculture.

    • A group of maize farmers stands huddled around an agronomist and his computer on the side of an irrigation pivot in central South Africa.

    • Conventional farming and food production practices in this country are creating serious environmental and public health problems.




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