Small farmers in rural Nigeria typically can’t afford tractors. But a quickly expanding Uber-like program makes it possible for farmers to get temporary access to tractors on demand.
Over the next five years, through a public-private partnership, John Deere plans to deploy 10,000 tractors in Nigeria, selling them to contractors who then rent them out to small farmers using a platform from a company called Hello Tractor. Farmers can request a tractor via a text message to an agent, who aggregates requests. A tech platform pairs available tractors with jobs, and then tracks each piece of equipment as it’s used.
“It makes it much easier for small farmers to find a contractor in the area and schedule the service, and it makes it much easier for the contractor to aggregate his business so that he can do it in the most efficient way,” says Jason Brantley, managing director in sub-Saharan Africa for John Deere.
With a tractor, a field that might take 40 days to prepare for planting by hand can be prepped in eight hours. It’s also cheaper to rent a tractor than to hire farm workers. “It seems counterintuitive in these markets with relatively low cost of labor, but paying a human being to do this is still much more expensive than a tractor,” says Jehiel Oliver, founder of Hello Tractor. Labor is also increasingly hard to find as more Nigerians move to cities and existing farmers get older. Using a tractor can help farmers plant fields in time for rain. Because planting with a tractor is also more consistent than planting by hand, it can also improve yields.
“It’s not unusual to see a quadruple or more increase in yield on the same parcel of land if you apply mechanized practices and modern seeds to it,” says Brantley.
When Oliver, an American former investment banker-turned-social entrepreneur, first launched Hello Tractor in 2014, the company initially planned to manufacture low-cost tractors itself. But it now plans to sell just the technology that can be added to other tractors like John Deere’s. Over the last few years, it has added its technology to more than 1,000 tractors; John Deere’s work will dramatically scale that up.
Using tech integrated from partners like the IoT companies Aeris and CalAmp, the platform can tell when a tractor is turned on and how far it travels. Because it’s possible to track usage, it was easier for John Deere to work with banks to put together low-cost loans for the entrepreneurs buying the tractors.
“You can sit down with the bank and say, look, you’ll know that the tractor’s being used to generate revenue, you’ll know that people have the ability to pay you, you’ll know where the tractor is, and you’ll also know that it’s been maintained correctly, so that the asset is having the up time necessary,” says Brantley. “That gives a lot of confidence to the partners involved to be able to manage something on this scale.” The company also partnered with the Nigerian government, which is providing a subsidy that will keep interest rates low.
In the past, some African governments have attempted to donate tractors, but Oliver believes programs haven’t worked well. “[This] was an intentional move to try to change the dominant model for mechanization in Africa,” he says. “The dominant model for the last 20 years has been governments buy tractors and give them to people, and it’s really failed miserably.” He thinks having entrepreneurs involved, with a financial interest to make the most use of the equipment and to make sure the equipment is well-maintained, will help. The company is also helping train contractors both in how to use the tractors and in business management and will provide support for parts and service.
As Nigeria’s population quickly grows, adding tractors can help increase the local food supply. The initial deployment will bring an estimated 9 million hectares of land into production, and produce 37 million metric tons of additional food. “[Nigeria is] not self-sufficient in food today, but they could be,” says Brantley. The company’s goal is not to sell as many tractors as possible, but to bring tractors to as many hectares of land as possible. “Ultimately, that’s what drives sustainable food security,” he says.
Hello Tractor, which is also working in Kenya, Mozambique, Senegal, Tanzania, and Bangladesh, hopes to work with John Deere and other manufacturers to scale up in other countries. “We’ve developed a track record–albeit a short track record–and we’re seeing more investors move to the market,” says Oliver. “So we want to amplify that across Africa and Asia.”
Original Source: FAST COMPANY