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US Firm Deere To Partner With Tractor-Hailing Tech To Create Headway In Africa


02/26/2020


US Firm Deere To Partner With Tractor-Hailing Tech To Create Headway In Africa
In Africa, where farmers are able to hire a tractor with the touch of a button, United States firm Deere & Co. is partnering with the "Uber of tractors" in the continent to drive up sale for its tractors.
 
The ride hailing like service for tractors in Africa is offered by startup Hello Tractor that offers its services through an app which also allows the service provider to monitor the movements of the vehicles and have information on usage such as levels of fuel in the tractors. This technology well now be fitted in the tractors that will be manufactured for the African market by the world's leading farm equipment maker.
 
The company hopes that this will help it to increase sale revenues in the region for its iconic green and yellow John Deere tractors given that the continent has the highest poverty rates in the world and its agricultural sector is under mechanized.
 
The company said that about 400 tractors in Ghana and Kenya have been fitted with the technology in a small black box fitted beneath dashboards and test run of the technology is currently be carried out. The company said that it aims to launch the tractors throughout Africa by the second half of the current year and will offer them to all contractors who buy its equipment on the continent.
 
Africa desperately requires more machinery to develop its farming industry but most of the farmers are poor and do not have large land to justify investments made in technology and mechanization, said Jacques Taylor, who heads John Deere's sub-Saharan Africa business.
 
"We would like to see that every farmer has access to mechanisation," he said in an interview top Reuters. "The gap that we've identified is, how do we connect small farmers with tractor owners?"
 
No information was provided about the costs of the project by Deere. The risks for this venture however are pretty clear. There is no certainty about any form of measure of success in Africa as the continent accounts for a very small portion of the global sales of the company currently.
 
The number of tractors available in Africa has not gone up for a long time because of low incomes, very small landholdings as well as a lack of access to bank financing. In comparison, the largest section of the developing world have been able to scale up and get mechanized in its agriculture sector.
 
Deere however is confident of providing a solution to the issue of financing for tractors for farmers and companies. Data from the Hello Tractor platform could allow the company to know precise details about the usage of the tractors by the farmers. Such information can help marginal farmers to secure bank loans even as most do not have credit histories.
 
Access to such financing sources can also help in the purchasing of tractors by more farmers of Africa.
 
The Americas and Europe account for much of the $40 billion of annual revenues for Deere. It does not provide any break up of its business in Africa. However it showed that last year, the company generated revenues of $3.9 billion from the markets of Africa, Asia, Australia, New Zealand and the Middle East.
 
(Source:www.nasdaq.com)


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