It’s no longer news that despite its importance, the agriculture industry across sub-Saharan Africa (SSA) is among the least productive in the world. African farmers face some of the lowest rates of mechanization with statistics revealing that Africa only has twenty-seven (27) tractors per 100km2 of arable land while the global average is 200.
As a tractor owner, the implication of this data for you is that there is a huge gap between the number of farmers demanding tractor services and the number of tractors available to service their demand. As such, there is almost no reason why you should not be running a profitable tractor hiring business if you own a tractor within this region. However, the reality is that many tractor owners still struggle with making consistent revenue with their tractors due to factors such as a lack of proper maintenance of their equipment, not having relevant farm implements, poor understanding of where demand exists and how to cluster them for economies of scale, providing sub-par services to farmers, and the list goes on.
If you are a tractor owner looking to operate more efficiently and profitably in the 2022 farming season and beyond, we have outlined a few tips to help you reach more farmers and in turn, increase your revenue.
1. Purchase the right implements
With various kinds, sizes, and brands of tractor implements available, it may be difficult to know which tractor attachments you should prioritize purchasing, especially if you are just starting out. In order to ensure that you are spending money only on the most profitable and environmentally safe implements, you need to first carry out some research to understand the type of services farmers demand the most across the regions you intend to operate. Going by the data we collect through our mobile application, many smallholder farmers across Africa tend to request ploughing, harrowing, ridging, haulage, planting and harvesting services quite often. However, there are other services such as threshing and grading that might be requested more in certain regions than others. Hence the need to take some time to understand the need of the market you intend to service in order to invest in the right implements.
2. Understand where the demand is
Currently, many for-hire tractor owners crisscross geographies without a solid understanding of the location of service requests. Time spent driving past customers and off-the-farm working is time and money wasted. The ability to understand how demand moves throughout various farming cycles and how to adequately capture this demand is critical for success in the tractor hiring business. While many tractor owners try to do this through manual methods such as working through call centres to capture demand or depending on word of mouth from people within their network, it eventually becomes tiresome and consolidating data to make informed decisions for business growth becomes extremely difficult.
To address this pain point for tractor owners, we have incorporated within the Hello Tractor mobile app, a booking application that makes demand capturing and aggregation easier and more intuitive for equipment owners. We engage young men and women to serve as booking agents for farmers within their communities, aggregating demand for tractor services by capturing farm sizes, farm location, the service type required, as well as other important farmer details. Once a booking agent submits a request, the platform routes it directly to available tractor owners on our platform who are nearby with the applicable implement to service the job.
Farmer and agent on the field
3. Advertise your services both online and offline
Just like with any business, advertising your service is key to reaching more farmers and increasing your profitability. There are various options for advertising your business both online and offline to reach new markets. One of the tools that can be used for online advertising is your website or social media platform. Sharing pictures of work that you have previously completed and e-flyers highlighting the kind of services you can provide are great places to start. Also preparing physical flyers with similar information, including the contact details of your booking agent, and placing them in strategic locations where farmers tend to visit is another way to capture more demand for higher profits.
As an add-on to our suite of service offerings at Hello Tractor, we support tractor owners on our platform with online advertising to help them reach new customers. We recently ran a campaign for one of our tractor owners in Kenya that resulted in him capturing demand for an additional 600 acres of farmland while he worked in Bungoma County, ultimately resulting in an increase in revenue for him!
Hello Tractor customer testimonial
4. Be professional in service provision
While the tractor hiring business will never be as formal as a 9-5 office job, it is still very important that it is approached in a professional manner if consistent profit is your goal. Hiring well mannered and properly trained tractor operators is a critical first step here. Your tractor operator should ideally be a reflection of you and your business values. Hiring an operator that shows up late for scheduled jobs, provides a shabby service and is rude to farmers will only run your business down quickly. Many farmers would much rather go through the stress of doing farm work manually than pay for poorly executed tractor service.
Many tractor owners struggle in this area because they have no real insights into their operators’ activities on the field. They can only rely on the information they gather when they speak with them every couple of days. Our technology caters to this problem by providing an in-app rating feature that allows farmers and booking agents to rate the quality of work provided by an assigned tractor operator and leave feedback as relevant. This allows tractor owners to easily know which of their operators is performing well and which ones aren’t doing as well. They can then make decisions on fixing the issue as they see fit.
In conclusion, venturing into the tractor hiring business across African markets is a potentially fruitful and lucrative exercise. However, a strategic approach is required if it is to be profitable not only for tractor owners but also for the smallholder farmer-beneficiaries. Our technology was created to help address many of the issues faced by tractor owners in reaching smallholder farmers more effectively. If you are a tractor owner looking to increase your income while impacting the lives of more farmers, we’d like to help! You can reach us via our contact form or request a demo to learn more about our offering.