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Boosting agricultural production: Heifer Uganda gives out collateral-free tractors

BY DAVID MAFABI
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.

In a bid to help farmers in Uganda 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.

Accordingly Heifer International has announced an investment of $4.5 million USD over the next ten (10) years in the tractor booking platform- ‘Hello Tractor’ under a collateral-free ‘pay as you go’ financing model.

This was announced during a function held at Kati-Kati restaurant in Lugogo, Kampala and 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, and Abim, districts that 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,” Mr Emmanuel Obedigum, the manager of 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 a 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 the 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.”

Mr Fred Bwino, the state minister for agriculture while handing over the tractors at a function that attracted several private and public industry players including heads of government parastatals, food exporters, agri-tech startups, and agri-insurers among others urged the youth to put the tractors to maximum use in order to produce enough food for the country.

Mr Bwino in his remarks 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 and we have established regional mechanization centres in Buwama – Mpigi district (Central Region), Agwata – Dokolo district (Northern Region), Kiryandongo district, and Mbale districts,” added Mr Bwino.

He explained that all this is geared towards increasing access to cost-effective farm tools for over 70% of the country’s labour force.

“Under the Parish Development model, farm mechanization is a priority to accelerate production, processing, and value addition and this will ensure food security and increased family household incomes,” Mr Bwino said. Ends

 

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