John Deere Employs Contractor Model to Help Kenya’s Smallholder Farmers Mechanise
John Deere is introducing a new contractor model to enable smallholder farmers in Kenya to gain access to agricultural machinery such as tractors and tillage equipment, thereby allowing them to boost yields, enhance food security and add to the gross domestic product (GDP) of the country.
Instead of trying to sell tractors to every smallholder farmer in Kenya, John Deere is identifying specific farmers who are interested in not only ploughing their own fields but those of their neighbours as well. By contracting out their services to between 20 and 30 of their neighbours for an appropriate fee, John Deere believes they will be able to offer mechanised farming solutions to a greater number of smallholders in the country.
“Kenya is faced with a catch-22 situation in which it simply doesn’t have enough tractors at this point in time to meet the demand for mechanised agricultural services from the country’s smallholder farmers,” says Janalize van Buuren, Divisional Sales Manager – East and Central Africa at John Deere. “However, at the same time the typical smallholder doesn’t have the balance sheet to afford a tractor of their own, which in turn makes banks reluctant to provide financing. This lack of access to finance is probably the biggest obstacle to African smallholder farmers wanting to adopt mechanised farming solutions to boost production.”
According to the Food and Agriculture Organization (FAO) of the United Nations there are approximately 15.9m smallholder farmers in Kenya, which account for about 63% of the country’s food production. Maize makes up more than half this output in Kenya while other crops like sorghum, millet, cassava, potatoes, beans and vegetables are also grown. While the FAO says the average size of a small-scale farm in Kenya is just 0.47ha, the organisation uses the middle-sized farm as a threshold to distinguish farms in the countries it analyses. This is done by ordering farms from smallest to largest and choosing the farm size in the middle, which in Kenya’s case is 1.20ha (versus 1.8ha in Ethiopia and 2.2ha in Tanzania).
Van Buuren says the typical John Deere customer in Kenya usually farms on a piece of land of between 1ha and 7ha. Given that the profits earned on these plots of land are not usually enough to allow farmers to either buy tractors outright or purchase them with the help of bank financing, the prospect of selling tractors to the average smallholder working a plot of just 0.47ha in size is even less likely, particularly when one factors in the challenge of drought and crop damage caused by insects and wild animals.
“The contractor model allows smallholder farmers to solve the problem of access to expensive mechanisation equipment but also provides the potential for them to evolve into fully fledged micro enterprises, which can provide employment and add impetus to the economies of rural regions of Africa,” says Francois Marais, Director of Mascor, the John Deere dealer in Kenya. “To support the rollout of this contractor model we have established 11 remote service centres as the dedicated John Deere dealer in Kenya to assist smallholder farmers in isolated communities with servicing their vehicles, sourcing parts as well as backup services.”
John Deere’s rollout of the contractor model forms part of the company’s S.M.A.R.T. approach to agriculture which aims to provide farmers with a comprehensive suite of products, services and financing solutions.