‘Before credible business farming in Kenya and Africa can commence, small and medium-scale farmers need ready access to farm power, agronomic inputs, financial services and organized access to mar- kets. This can happen sustainably if farmers have a hub in proximi- ty, where information, training, aggregation, value addition, market links, technology-transfer and financial services are available.’Agrimech Africa Ltd. Five Year Strategic Plan, 2018
Agrimech Africa operates on the realizations that:
- Smallholders cannot afford to own and manage modern agricultural machinery economically for their small pieces of land; mechanization is best provided as a service to improve land, labor and otherproductivity.
- Smallholder farmers need present, accountable MSPs who operate whole-chain mechanization services and who know effective and quality operations that can save energy and protect the soil and the environment.
- MSPs need to operate trackable and accountable services that are profitable and have minimal downtime.
- The Hub is a “one-stop shop” for mechanization needs.It aggregates farmers and brings together other needed value chain partners around a structured business exchange platform, providing dependable, affordable and accountable mechanization services that save farmers from buying equipment or using less reliable service providers.
- The Hub will grow into a farmers’ center and ultimately an agribusiness center, offering multiple services including logistics, produce storage, value-adding facilities and financial service providers.
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The Hub offers the following:
- A training program for service providers, a model farm and equipment to fit the entire value chain.
- A digital tracking and data management platform that identifies efficiencies to be gained within valuechains
- A mechanism for attracting young people to farming by engaging them as small and large mechanization operators, work aggregators and booking agents on smartphone apps
- A degree of mechanization that frees up women to engage in faster income-generating activities, such as poultry and fish farming
- An agri-business center of excellence where value chain players from farm to plate congregate and conduct trustworthy business
Kenya, Ethiopia, Nigeria, Ghana, Rwanda, Tanzania, and Uganda
Hello-Tractor, Trotro Tractor, GIZ, AGRA, SNV, IFDC and Techno- serve, and several private-sector partners. - Agrimech also partners with institutions of higher learning, as well as County and National Government projects. - Agrimech has upcoming projects supported by United States Af- rica Development Foundation and BMZ of Germany, though GIZ Kenya
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Agrimech has identified a pressing need for an innovative business model that offers whole-value-chain mechanization services that are available, accessible, affordable, and accountable. The Agricultural Mechanization Services Hub enables farmers to access and hire holistic professional mechanization services in order to increase their production.
In Africa, half of the gap between actual and potential agricultural yields can be attributed to smallholder farmers’ lack of access to mechanization services. Currently, farmers rely on for-hire tractor drivers to plough their fields, often using a simple disc plough that results in sub-optimal depth of tillage. The results are typically rushed and of low quality, and because the farmers usually do not know the itinerant tractor drivers, there is little accountability. This limits both production and incomes along the value chain. Some food processing factories record using as little as 10 per cent of their full capacity and even close during the off-season.
However, it is not economical for smallholder farmers to own and operate their own agricultural machinery on their small pieces of land. Further, smallholders tend to think of tractors as useful just for ploughing, unaware that they can also plant, spray, harvest, thresh and transport.
Mechanization services are more effectively delivered by centralized providers, who own, maintain and lease out the appropriate tools that farmers need at any given time. Establishing centralized mechanization service hubs presents a scalable solution.
Developed by Agrimech, the Agricultural Mechanization Services Hub business model makes available to farmers the full range of machinery needed by a particular crop or livestock value chain. From the Hub, farmers can hire mechanization service providers (MSPs) and contract machinery to improve their land and labour productivity. This reduces drudgery while also saving them from needing to buy, operate and manage equipment. The Hub is meant to provide dependable, affordable and accountable mechanization services, around which other services can be added. It is essentially a “one-stop-shop” for mechanization needs, and it is designed to develop into a farmers’ centre and eventually into an agribusiness centre that can engage other value chain partners and service providers.
The company has received programme support from GIZ, Technoserve and the International Fertilizer Development Center (IFDC), and also partners with institutions of higher learning and research bodies like the International Maize and Wheat Improvement Center (CIMMYT) and World Agroforestry (ICRAF). Extensive support from the Alliance for a Green Revolution in Africa (AGRA) has enabled Agrimech’s directors to travel to several countries in Africa to speak on mechanization business models. Agrimech also has robust partnerships with farmer groups across Kenya, and has effectively supported over 30,000 farmers. Agrimech’s model emphasizes the critical role played by the buyers of farmers’ produce in the crop and livestock value chains. Without market pull, farmers are not economically viable customers and are unable to afford mechanization services.
Mechanization services allow farmers to undertake their work at a fraction of the time and cost they otherwise would. For an acre of land, the cost of manual labour – ten men working with hand hoes for three days, a pair of oxen harrowing for a day and ten women planting for two days – reaches 20,500 Kenyan shillings. The same piece of land could be sprayed with herbicide for an hour and planted with a no-till seeder in under 1.5 hours at the cost of 2,900 Kenyan shillings. Additionally, a motorized thresher can winnow and bag as much sorghum in seven minutes as ten workers can in an eight-hour day.
Using mechanization services while practicing conservation agriculture, a farmer would need only 6 per cent of the usual time to establish an acre of crop. The resulting harvest would also be two to three times more than typical smallholder yields.
As an additional benefit, Agrimech attracts young people by integrating them as mechanization operators, work aggregators and booking agents on smartphone apps. Young people tend to opt for more technically enhanced agricultural jobs as opposed to basic farming production.
Beyond providing the benefits of mechanization, Agrimech also identifies efficiencies within value chains through its digital tracking and data management platform, a benefit derived through its partnership with tractor companies Hello Tractor and Trotro Tractor who have robust digital platforms.
In the six years since the company’s founding, Agrimech’s Hubs have quickly grown into agribusiness centres that not only provide mechanization services but also gather information, support deal-making and develop businesses. This demonstrates farmers’ demand for holistic services that meet their varied needs.
Going forward, Agrimech will transition to training and managing MSPs (as opposed to serving as an MSP itself). Its goals include:
• Establishing equipment banks at Agrimech model farms for MSPs to access for a fee
• Creating a central digitized database of MSPs, booking agents and the farmers and cooperatives they serve
• Supporting business development and youth training
• Working with county governments to encourage market-linked community engagement and growth of public-private partnerships
• Partnering with asset-leasing companies to strengthen financing models for machinery and equipment
• Establishing a sales department for agricultural machinery
• Developing capacity for applied research and consulting
Solution Additional ResourcesAgrimech Africa Ltd
Last update: 17/05/2021