Across developing economies, the supply of farm equipment is not only sparse but also spatially distributed. Sharing of farm equipment has emerged as a critical way to make farm equipment accessible to vulnerable farmers. However, there are several barriers to realizing the full potential of equipment sharing. What route should be followed by the tractor to maximize profit and socio-economic outcomes? How should farmer demand, land size, weather information, and agroecological data be combined to optimize routes? What role does information (supplied by local booking agents) play in matching supply and demand?
Unlocking value for tractor entrepreneurs as they address the needs of vulnerable smallholder farm communities, through data science, has the potential to not only build resilience to withstand current disruptions but also position the region for sustained growth.
Tractor owners on the Hello Tractor platform, criss-cross broad geographies in search of farm plots to service. Currently, there is no successful model that identifies optimal tractor service routes for them. Our innovative route optimization tool uses the wealth of information that is available in the form of demand patterns, Hello Tractor GPS monitoring device data, supply locations and attributes, weather forecast, and regional characteristics, to recommend the optimal and feasible route that should be followed annually. We estimate that this will not only reduce tractor owners’ operating costs by 25%, but also increase their revenues by up to 300%.
To utilize the tool, tractor owners input the geographical location they would want to travel, the type of mechanization service they would provide, the mode and cost of travel, and the number of hectares they can service. The tool then generates a monthly plan of activities to be carried out in the recommended zones, the top agents in those zones, the expected revenue and costs, and the projected profit.
One of the key data points we track on the demand side at Hello Tractor is the service efficiency ratio, which takes into account the tractor size, the distance between booked farms, and the size of farms clustered. Booking agents at Hello Tractor are encouraged to cluster 50-acre (20 hectare) farms around a 20 km radius within a community and are subsequently ranked based on their service efficiency ratio. The insights we gain from the booking data are integrated back into the route planning tool.
We have begun piloting this route optimization tool in our markets with a few tractor owners to help improve their bottom line. If improving your profits is as important to you as it is to us, contact us and let’s partner together to build a more sustainable business for you!