American Agribusiness Company aiding Kenyan farmers to boost Productivity

An American corporation that manufactures farming equipment has introduced a new contractor model to enable smallholder farmers in Kenya to gain access to agricultural machinery.

The firm, John Deere has made this move in a bid to enable farmers to boost yields, enhance food security and add to the gross domestic product (GDP) of the country.

According to a statement from the firm, instead of trying to sell tractors to every smallholder farmer in Kenya, John Deere is identifying specific farmers who are interested in not only ploughing their own fields, but those of their neighbours as well.

“By contracting out their services to between 20 and 30 of their neighbours for an appropriate fee, John Deere believes they will be able to offer mechanised farming solutions to a greater number of smallholders in the country”. John Deere statement reads in part.

“Kenya is faced with a catch-22 situation in which it simply doesn’t have enough tractors at this point in time to meet the demand for mechanised agricultural services from the country’s smallholder farmers,” says Janalize van Buuren, Divisional Sales Manager – East & Central Africa, at John Deere.

“However, at the same time the typical smallholder doesn’t have the balance sheet to afford a tractor of their own, which in turn makes banks reluctant to provide financing. This lack of access to finance is probably the biggest obstacle to African smallholder farmers wanting to adopt mechanised farming solutions to boost production.”

Data from FAO on Farming in Kenya

According to the UN’s Food and Agriculture Organisation (FAO), there are approximately 15.9 million smallholder farmers in Kenya, which accounts for about 63% of the country’s food production. Maize makes up more than half this output in Kenya, while other crops like sorghum, millet, cassava, potatoes, beans and vegetables are also cultivated.

While FAO says the average size of a small-scale farm in Kenya is just 0.47 ha., the organisation uses the middle-sized farms as a threshold to distinguish farms in the countries it analyses. This is done by the classification of farms from the smallest to largest, and choosing the farm size in the middle, which in Kenya’s case, is 1.20 ha. (versus 1.8 ha. in Ethiopia and 2.2 ha. in Tanzania).

Van Buuren says the typical John Deere customer in Kenya usually farms on a piece of land of between 1ha and 7 ha. The profits earned on these plots of land are not usually enough to allow farmers to either buy tractors outright or purchase them with the help of bank financing. The prospect of selling tractors to the average smallholder working a plot of just 0.47 ha. in size is therefore even less likely, particularly when one main factor concerns the challenge of drought and crop damage, caused by insects and wild animals.

“The contractor model allows smallholder farmers to solve the problem of access to expensive mechanisation equipment, but also provides the potential for them to evolve into fully-fledged micro enterprises, which can provide employment and add impetus to the economies of rural regions of Africa,” says Francois Marais, Director of Mascor, the John Deere dealer in Kenya.

“To support the rollout of this contractor model, we have established 11 remote service centres as the dedicated John Deere dealer in Kenya to assist smallholder farmers in isolated communities with servicing their vehicles, sourcing parts, as well as backup services,” added Marais.

John Deere’s roll-out of the contractor model forms part of the company’s S.M.A.R.T. approach to agriculture, which aims to provide farmers with a comprehensive suite of products, services and financing solutions.

How Kenyan Farmers stand to benefit from S.M.A.R.T.

The S.M.A.R.T. acronym stands for Solutions for small farmers; Mechanising for higher yields; Access to finance; Reliability for lower costs; and Technology & education. This can be further broken down as follows:

Solutions: John Deere prides itself on being able to provide a complete range of tractors and agricultural machinery that cater to a wide segment of the market, including smaller African customers for whom affordability is a critical factor.

Mechanising: By adopting mechanisation, smallholder farmers can increase the agricultural output of a given piece of land, which can boost their income and enhance food security, thereby promoting the long-term sustainability of agriculture on the continent.

Access: The ability to access financing solutions is critical to ensure the success of both smallholder farmers and contractors alike. Without the lifeblood of financial support, farmers cannot purchase seed, fertiliser or irrigation equipment, as well as the more expensive machinery like tractors and related machines. John Deere continues to actively partner with local banks across Africa to pioneer financing solutions, specifically designed to cater to the needs of the continent’s farmers.

Reliability: All John Deere tractors are designed with reliability in mind and come with a 2,000 hour/two year warranty. Expert servicing and spare parts are provided through dealer networks, which enhance the life cycle of machines, and thereby help to reduce their cost of ownership over time.

Technology: John Deere is continuously innovating to find new ways to not only enable smallholder farmers to access its own technology, but also how to employ other technological advancements to boost output. By utilising telematics and the Internet of Things (IoT), John Deere has been able to install tracking devices in tractors, which allows for data to be uploaded to the cloud for further analysis by financiers, insurance providers and other stakeholders. This enables improved risk models to be built, which increases the likelihood of financial access for inputs across the entire agricultural value chain.

Source: ASV & The Exchange.

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