- Title: Deere taps tractor-hailing tech in bid to break ground in Africa
- Date: 25th February 2020
- Summary: Jose Maria de Vasconcelos, popularly known as Taur Matan Ruak - which means "two sharp eyes" in Tetum - was a guerrilla fighter in East Timor from the mid-1970s until 1999, just before the country gained independence from Indonesia. He was the last commander of East Timor's National Liberation Army, Falintil, which was the military wing of the Fretilin party. UNIDENTIFIED
- Embargoed: 10th March 2020 07:00
- Keywords: 'Uber of tractors" Hello Tractor John Deere tractor farm loans farm machinery farmers
- Location: NAIROBI AND NANYUKI, KENYA/ JOHANNESBURG, SOUTH AFRICA
- City: NAIROBI AND NANYUKI, KENYA/ JOHANNESBURG, SOUTH AFRICA
- Country: Kenya
- Topics: Information Technologies / Computer Sciences,Science
- Reuters ID: LVA005C241FFB
- Aspect Ratio: 16:9
- Story Text: The John Deere tractor kicks up a cloud of dust as it zig-zagged across a sun-drenched field, raking up dry grass and dropping bales of hay in its wake, at a farm in Nayuki, central Kenya.
The world's leading farm equipment maker is outfitting its tractors with start-up Hello Tractor's technology, which allows farmers to hail the machines via an app, monitors the vehicles' movements and transmits usage information such as fuel levels.
The aim is to help the U.S. company boost sales of its famous green and yellow John Deere tractors, a tough task in a continent with the world's highest poverty rate and the least mechanised agricultural sector.
Deere is currently testing the technology - a small black box fitted beneath dashboards - on around 400 tractors in Ghana and Kenya. It told Reuters it 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.
Jacques Taylor, who heads John Deere's sub-Saharan Africa business, said 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.
"We do like to see that every farmer has access to mechanization. Hello Tractor, came in with affordable telematic solution that allows us to connect people," Taylor said.
Deere declined to comment on the investment costs for the rollout. The risks are clear; there is no certainty of any measure of success in Africa, which accounts for a tiny fraction of its global sales at present.
Held back by low incomes, tiny landholdings as well as a lack of bank financing, tractor numbers have long been stagnant on the continent, even as much of the developing world has experienced a boom in mechanisation.
Deere thinks it can help on the financing front: it told Reuters it could pull data from the Hello Tractor platform that showed in precise detail how farmers were using its equipment. That information, it said, could be used by the farmers - who typically lack credit histories - to help secure bank loans.
This would mean they could buy more tractors.
David Kayi is a hardware engineer at Hello Tractor. He is fitting the device on a client's tractor today.
"This device has an in-built GPS system that allows him to see where his tractor is at any given time, and also allows him to see whether the tractor is active or it is moving or whether it has stopped and the amount of work it has done at the end of the day, for every job it does," said Kayi.
Outside South Africa, the continent's most developed economy, around 80 percent 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 mechanisation is finance; though agriculture accounts for around a quarter of Africa's economic output and some 70 percent of jobs, banks often view farmers as high-risk because of the lack of credit histories.
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 agrisales 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.
"The global average is 200 hundred tractors per 100 square kilometers of arable farmland. Africa averages about eight tractors per 100 square kilometers, Nigeria alone needs 750,000 tractors to be on the global average. So where the world is right now in terms of tractors sales, there is a huge opportunity for Hello Tractor to support that customer base," said Hello Tractor founder, Jehiel Oliver.
In central Kenya, Pascal Kaumbutho is testing the app on a tractor that 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 Kaumbutho, who heads the company.
Agrimech, which is paid by farmers to work their land, hopes the new tech will help optimise 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 are reaching about 1,500 farmers, within the next two-three years I would like to reach 20,000 you know. It is not impossible, we have been let down by lack of capacity," he said.
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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