John Deere, the giant in American agricultural machinery, has made an investment in Hello Tractor, a Nigerian-based marketplace and fleet management technology designed to enable African farmers to easily rent tractors.
As one of the inaugural participants in John Deere’s Startup Collaborator program, this startup was among the first to benefit from the initiative launched in 2019. The program was designed to facilitate John Deere’s interaction with technology startups and enable them to test their innovations with customers, all without entering into a formal partnership. Another early participant in the program was Bear Flag Robotics, which was acquired by John Deere earlier 2022 year.
According to Jason Brantley, the Director of Ag & Turf Sales & Marketing in Africa and Asia at John Deere, the partnership with Hello Tractor is in line with the company’s “Leaps Ambition” to achieve 100% connectivity for small agricultural equipment by 2026. He expressed that the collaboration also provides an opportunity for John Deere to gain insights from Hello Tractor regarding customer engagement and problem-solving in the company’s African and Asian markets.
“Addressing persistent challenges in agriculture within these regions and achieving sustainable food security will necessitate innovative solutions that are both scalable and cost-effective, aligning with the market and the mechanization levels of farmers’ production systems. It is truly exciting to witness the enthusiasm and dedication that emerging startups are channeling towards agricultural production. We believe that as connectivity continues to expand, this trend will further accelerate.”
Furthermore, he emphasized that the collaboration with Hello Tractor has a clear objective: to enhance the accessibility of affordable mechanization for small-scale farmers while also improving the operational efficiency and profitability of mechanization contractors.
“As contractors and customers embrace greater connectivity, our primary focus lies in exploring innovative methods to assist small farmers in maximizing yields and minimizing input requirements within their production systems. This task presents challenges since most small-scale farmers have yet to mechanize every aspect of their production process, rendering many existing precision agriculture approaches unsuitable.”
Brantley added:
“Meeting this objective will necessitate the development of novel technologies and approaches, which is precisely what we aim to inspire through our commitment to connectivity.”
Closing the mechanization gap in African agriculture
Farmers experience two significant impacts from agricultural mechanization.
- Firstly, it allows them to reduce costs associated with hiring laborers, resulting in time savings and increased output.
- Secondly, it promotes higher crop yields and improved efficiency, ultimately leading to increased income for farmers.
However, the cost of machinery poses a significant challenge for smallholder farmers, and there is a lack of access to platforms or contractors that cater specifically to this segment. Africa, in particular, faces a significant deficit in terms of mechanization compared to other continents. For example, a comparison between India and South Africa reveals that while India has 128 tractors per square kilometer, South Africa has only 43 tractors for the same area.
In 2014, Hello Tractor was established with the mission of addressing this challenge by making mechanization accessible to smallholder farmers. The startup initially focused on the Nigerian market as its starting point.
Jehiel Oliver, the founder and CEO of Hello Tractor, explained:
“Farmers recognize the importance of mechanization, but their land size is often too small to justify owning their own tractor.”
To address this challenge, Hello Tractor devised a solution in the form of a marketplace where tractor owners could lease their equipment to farmers seeking mechanization. Additionally, the company introduced internet-of-things-based fleet management services that allowed fleet owners to track, monitor, and manage their fleets. These services encompassed monitoring the tractor’s operational data, fuel consumption, tracking the performance of the tractor operator, and identifying any maintenance requirements. According to Oliver, such a comprehensive service was previously unavailable.
Recognizing the need for scalability, Oliver observed that further efficiency enhancements were required for fleet owners within the marketplace. To address this, he developed a booking application specifically for Hello Tractor sales agents. This application allowed agents to consolidate the demands of multiple farmers and group them together, thereby aggregating their tractor requirements. As a result, fleet owners could lease their machinery for longer durations, avoiding the logistical challenges associated with engaging multiple smallholder farmers individually.
Currently, the platform boasts a network of 3,000 fleet owners who utilize mobile and web applications to lease and manage their tractors to groups of farmers. In a recent development, Hello Tractor introduced a financing program aimed at assisting agents who demonstrate strong performance and have sufficient demand. Through this program, these agents can acquire and lease their own tractors, further expanding their operations.
Employing a Pay As You Go financing model, the program has successfully allocated $4 million in funding thus far. Hello Tractor has set an ambitious target to disburse $15 million in loans by the year’s end.
Hello Tractor’s Impact
According to Oliver, Hello Tractor has effectively delivered tractor services to approximately half a million farmers, with an impressive 55% of them accessing mechanization services for the first time through Hello Tractor.
Mechanization access has resulted in a noteworthy 87% of these farmers reporting an increase in their income. Hello Tractor has gone a step further by introducing innovative agricultural practices to its farmers, with a strong focus on responsible land management. Among these practices, conservation agriculture stands out as a prominent approach. In collaboration with esteemed organizations such as the World Food Program and Farm to Market Alliance, Hello Tractor facilitates education programs aimed at instructing farmers about the principles and techniques of conservation agriculture.
Additionally, the startup has devised a credit-scoring methodology that rewards fleet owners with a higher rating in their financing program when the pre-booked farmers they serve adopt conservation agriculture practices. This innovative approach encourages and incentivizes the implementation of sustainable farming techniques, promoting the preservation of the environment and responsible agricultural practices.