Farmers Review Africa March/April 2020 Farmers Review Africa March - April 2020 digital ( | Page 23

FEATURE
OPPORTUNITY KNOCKS?
In central Kenya, a Deere tractor zig-zagged
across a sun-drenched field, raking up dry
grass and dropping bales of hay. The black box
monitored its every move.
The tractor belongs to Agrimech Africa, a Nairobi-
based agricultural services firm that has taken
up the offer to have the devices installed on its
Deere machinery.
“They do the technology. We do the management,”
said Pascal Kaumbutho, who heads the company.
Agrimech, which is paid by farmers to work
their land, hopes the new tech will help optimize
its Deere tractors and connect them to new
customers, allowing it to expand.
Kaumbutho, whose company manages a dozen
tractors, envisions a future in which Agrimech
runs a 1,000-strong fleet. “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.”
FINANCE FRUSTRATION
Outside South Africa, the continent’s most
developed economy, around 80% of African
cropland is still cultivated by hand. Yields are
half the global average. With its population set
to double by 2050, increasing productivity is a
necessity.
One of the biggest barriers to mechanization is
finance; though agriculture accounts for around
a quarter of Africa’s economic output and some
70% of jobs, banks often view farmers as high-
risk because of the lack of credit histories.
“It’s one thing to go to a bank and say ‘You know.
Hey, I work very hard.’ It’s another thing to be able
to show it,” Kaumbutho said.
Deere said the data from the Hello Tractor
platform shows how often equipment is in use,
how much land it’s working, and whether it’s
tilling, planting or harvesting. That information
can be used to create financial statements, it
added. Tshepo Maeko, vice-president and head
of agri-sales at South African-based lender Absa,
sees potential to unlock more lending in this kind
of technology which gives banks a fuller picture.
“We will be able to see how big the risk is or how
big the opportunity is,” he said.
Deere is working with Hello Tractor and the banks
to format the data to create easily digestible
automated reports. No loan decisions have yet
been made based on the information.
But Antois van der Westhuizen, John Deere
Financials managing director for sub-Saharan
Africa, said that should be possible by the time
the scheme is rolled out across Africa.
“The banking systems are trying to adapt,” he
said. “It’s a journey for us to really get them to
understand it.”
Such opportunities exist in markets across
Africa, said Hello Tractor founder Jehiel Oliver,
but companies like Deere have lacked the tools
to develop them.
“Nigeria alone needs 750,000 (more) tractors to be
on the global average,” he said. “Our technology
is a market-maker for tractor manufacturers who
want to sell into those markets.”
Deere’s annual revenue of about $40 billion
is dominated by the Americas and Europe.
It doesn’t break out numbers for Africa, but
combined revenue from Africa, Asia, Australia,
New Zealand and the Middle East was $3.9 billion
last year.
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