Minister of State for agriculture and Heifer International Uganda – Country Director William Matovu launching the Pay and You Go tractor fund (PHOTO/Courtesy).
KAMPALA – Access to agri-finance remains one of the biggest challenges facing African farmers; especially women and youth entrepreneurs aspiring to start and maintain agribusinesses. This was confirmed in a report by Heifer Project International conducted among 30,000 youth across the continent last year.
To overcome this challenge, Heifer International is leveraging technology to stimulate disruptive innovations that will impact the Agricultural food systems to ensure food security and create jobs for youth at different nodes of the value chain.
As such, Heifer International announced an investment of $4.5 million USD over the next ten (10) years in the tractor booking platform- Hello Tractor. This was during a function held at Kati-Kati restaurant in Lugogo, Kampala. During this function eleven (11) tractors were handed over to local youth entrepreneurs drawn from across the country.
The “Pay-As-You-Go (PAYG) Tractor Financing model has already attracted the participation of youth in the districts of Dokolo, Lira, Gulu, Kole and Mubende, Abim, districts who were supported with five (16) tractors over the last three months. The youth testified to how the tractor assets are transforming their lives during the event:
“Alito Joint farmer’s cooperative was among the tractor recipients in June 2022 under the PAYG financing model. The timing was perfect as the tractor was placed at the beginning of the second planting season in 2022. Since then, we have been able to plough an additional 140 acres and deposited Ushs 3,510,200 in the Hello Tractor account to finance our loan,” Emmanuel Obedigum, the manager Alito Joint Multipurpose cooperative society Ltd, Kole district.
Heifer International Uganda believes that this model will make tractors accessible to thousands of smallholder farmers via the increasingly popular Hello Tractor leasing platform; sometimes referred to as Uber for tractors.
Hello Tractor offers software and tracking devices that allow farmers to book tractor services from local tractor owners via a mobile phone app; enabling owners to match the increasing demand for tractor services in Uganda.
The company (Hello Tractor) benefited from a Heifer International Commissioned Innovation challenge- AYuTe (Agriculture Youth and Technology) in 2021 where it was rewarded with over one Million US dollars (USD 1M) to expand its business to close the financing gap and increase farmer’s access to tractors.
Globally, the African continent has the least number of tractors deployed per 1000 Ha of Arable land (Less than 2 per 1000 Ha, compared to 10 per 1000 Ha in Asia). Perennial dependence on the hand hoe (80%), and animal traction (15%) has characterized our farming systems for decades, with its associated drudgery. Consequently, only 40% of Africa’s arable land is being utilized due to lack of the necessary equipment to open it for production. In his remarks, the Country Director William Matovu remarked:
“The mechanization gap in Uganda has put the country at the back-peddle of achieving sector objectives, with potential to affect the country’s aspiration to achieve the Vision 2040. It is not surprising that Uganda imports USD 35M worth of food annually to meet its production deficit. This is despite the opportunities such as its relatively fertile soils, good climate, cheap labor and a ready regional export market among others.”
The tractor handover event attracted several private and public industry players including heads of government parastatals, food exporters, agri-tech startups, agri-insurers among others. The event was officiated by the state minister for Agriculture- Honorable Fred Bwino. In his remarks, he acknowledged the threat of climate change to food security and the need to mechanize farming to address the looming food security threats.
“Government came up with agriculture mechanization as a strategy of restructuring the sector. We have established regional mechanization centres in Buwama – Mpigi district (Central Region), Agwata – Dokolo district (Northern Region), Kiryandongo district and Mbale districts. This is geared towards increasing access to cost-effective farm tools for over 70% of the country’s labour force. In the Parish Development model, farm mechanization is a priority to accelerate production, processing and value addition. This will ensure food security and increased family household incomes,” Fred Bwiino, state minister for Agriculture.