You know how ride-hailing platforms like Uber and Bolt have made it possible for just about anyone to have a cab pick them up from wherever they are? Well, it turns out some people are building something similar, but for farmers and tractors only.
Deere & Co., the world’s leading farm equipment maker, is joining forces with the “Uber of tractors” in Africa to bring to life a future where farmers summon any machine of their choice at the touch of a button from wherever they are.
Deere is outfitting its tractors with technology developed by Nigeria-based agritech startup, Hello Tractor, which also has offices in Kenya. The technology allows farmers to hail the machines via an app, monitors the vehicles’ movements and transmits usage information such as fuel levels.
As reported by Reuters Africa, Deere is currently testing the technology – a small black box fitted beneath dashboards – on around 400 tractors in Ghana and Kenya.
The company also revealed plans to roll out the devices across Africa in the second half of this year, offering it to all contractors who buy its equipment on the continent.
This move is targeted at helping the U.S. company boost sales of its tractors in Africa; a continent with the world’s highest poverty rate and the least mechanised agricultural sector.
Barring South Africa, the continent’s most developed economy, as much as 80 percent of cropland in Africa is still cultivated by hand. Yields are not up to half the global average. With the African population projected to grow two-times its current size by 2050, increasing productivity is a necessity.
Jacques Taylor, who runs the sub-Saharan African business of John Deere, told Reuters Africa that the continent badly needs more machinery to develop its farming industry but most farmers don’t have the scale to justify a large investment.
And this has informed the need to connect tractor owners (or those who can afford it) with those who need it but can’t afford it through an “Uber-like” model.
“We would like to see that every farmer has access to mechanisation,” said Taylor. “The gap that we’ve identified is, how do we connect small farmers with tractor owners?”
Hampered by low incomes, tiny landholdings, and the absence of suitable financial frameworks, tractor numbers have long suffered malaise on the continent, even as much of the developing world has embraced mechanisation.
Deere now hopes to fix this somewhat and boost its business despite the obvious risk in doling out huge investments in a market that accounts for only a tiny fraction of its global sales at present and where there is no certainty of success.
Much of Deere’s annual revenue of about USD 40 Bn is accounted for by the Americas and Europe. While the company refrains from publicising numbers for Africa, combined revenue from Africa, Asia, Australia, New Zealand, and the Middle East is known to have hit just under USD 4 Bn in 2019.
In Kenya, Agrimech Africa — a Nairobi-based agricultural services firm which manages a dozen tractors-for-hire and is paid by farmers to work on their lands — has taken up the offer to have the devices installed on its Deere machinery.
Agrimech hopes the new tech will help to optimise its Deere tractors and connect them to new customers, enabling the company to expand.
“They do the technology. We do the management,” said Pascal Kaumbutho, who heads Agrimech.
“Right now, we’re reaching about 1,500 farmers,” he said. “Within the next two or three years, I’d like to reach 20,000,” said the Kaumbutho who yearns for a future where Agrimech can lay claim to a fleet of 1,000 tractors.
And the opportunity is certainly there for the taking. According to Jehiel Oliver, the founder of Hello Tractor, Nigeria alone needs 750,000 (or more) tractors to be on the global average. He also talked up Hello Tractor’s technology as “a market-maker for tractor manufacturers who want to sell into those markets.”
Besides all that, Deere also thinks it can come in on the financing front, hinting at data from the Hello Tractor platform that shows in precise detail how farmers are using its equipment, which could be used by farmers in Africa – who typically lack credit histories – to help secure bank loans.
This could translate into a more mechanised agriculture sector on the African continent.
Featured Image Courtesy: Flickr