Deere taps tractor-hailing technology in bid to break ground in Africa

A mobile phone app can show movements of a John Deere tractor, using Hello Tractor technology to connect farmers with vehicle owners. (Reuters)
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Updated 26 February 2020

Deere taps tractor-hailing technology in bid to break ground in Africa

  • Uber-style technology could help overcome agricultural finance barrier

NANYUKI, Kenya: It’s ride-hailing, farm style. Deere & Co. is teaming up with the “Uber of tractors” in Africa and betting on a future where farmers summon machines with the touch of a button.

The world’s leading farm equipment maker is outfitting its tractors with startup 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 US company boost sales of it famous green and yellow John Deere tractors, a tough task in a continent with the world’s highest poverty rate and the least mechanized 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 would like to see that every farmer has access to mechanization,” he told Reuters. “The gap that we’ve identified is, how do we connect small farmers with tractor owners?“

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 mechanization.

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.

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.”

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.

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 big barriers to mechanization 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.

“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 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.

But Antois van der Westhuizen, John Deere Financial’s 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.”


China says it has sold nearly four billion masks abroad

Updated 05 April 2020

China says it has sold nearly four billion masks abroad

  • Beijing has encouraged factories to increase production of medical supplies
  • China has also exported 37.5 million pieces of protective clothing, 16,000 ventilators and 2.84 million COVID-19 testing kits since March 1
BEIJING: China has sold nearly four billion masks to foreign countries since March, officials said Sunday, as they tried to stem widespread fears over the quality of medical exports.
Despite Chinese cases dwindling, Beijing has encouraged factories to increase production of medical supplies as the pandemic kills over 60,000 globally and parts of the world face a protective equipment shortage.
China has exported 3.86 billion masks, 37.5 million pieces of protective clothing, 16,000 ventilators and 2.84 million COVID-19 testing kits since March 1, customs official Jin Hai said, with orders to more than 50 countries.
She added the country’s medical supply exports were valued at $1.4 billion.
However numerous nations — including the Netherlands, the Philippines, Croatia, Turkey and Spain — have complained about substandard or faulty medical products shipped from China.
Last week, the Dutch government recalled 600,000 masks out of a Chinese shipment of 1.3 million that did not meet quality standards.
China said the manufacturer “stated clearly that (the masks) are non-surgical.”
Spain also rejected thousands of rapid test kits sent by an unauthorized Chinese company after it found that they were unreliable last week.
Chinese officials hit back on Sunday at media reports over defective medical supplies, saying that they “did not reflect the full facts.”
“In reality there are various factors, such as China having different standards and different usage habits to other countries. Even improper use can lead to doubts over quality,” said Jiang Fan, an official with the Ministry of Commerce.
The comments echoed remarks from Foreign Ministry spokeswoman Hua Chunying, who over the past week has repeatedly urged Western media not to “politicize” or “hype up” the issue.
Earlier this week, Beijing tightened regulations for exported coronavirus medical equipment, requiring products to fulfil both domestic licensing standards and that of their destination countries.
China has also increased its production capacity of COVID-19 testing kits to over 4 million a day, said Zhang Qi, an official with the National Medical Products Administration.