Africa, a country known for its diverse flora and fauna, has so much untapped potential to increase the world’s agriculture production. Thus new tech entrepreneurs are trying to increase the efficiency of farming.
Implement new technologies to increase the production from the existing infrastructure. Young entrepreneurs are looking for ideas that can scale the operations to the next strata to reshape the African agricultural sector.
Fact time: Agriculture accounts for a 23% share in the GDP of Sub-Saharan Africa.
Smallholder farmers contribute to the majority of agricultural produce from Africa. According to Mckinsey, If the whole of Africa has the potential to produce two to three times more grains and cereals, it currently does.
If Africa collectively aims for it. This production goal can change the dynamics of the agricultural produce drastically for the whole world. Only Africa alone has the potential to increase the world’s total production of grains and cereals by 2 to 3 folds.
These 2-3 folds hike can increase the production of agriculture products can boost the world’s output by 20%. That’s just bonkers, let’s turn the whole sub-Saharan Africa into acres of arable land. This increase in production will ensure food security for generations to come.
However, it is not the easiest thing to do. Let’s contemplate this matter further ahead.
Tapping the untapped potential of Africa:
As mentioned above, if Africa intensifies its agriculture activities, it can have a massive impact on the world’s agriculture. But this is no easy task, according to the Mckinsey. This transformation needs loads of resources and capital.
That’s not it; additionally, they need tonnes of fertilizers, new technologically advanced seeds, and a close to $8 billion in investment to fulfill the basic infrastructure needs.
Basic infrastructure needs include cold storage, electricity, roads, and ports. After this, policies governing agriculture and trade policies need to be defined again to reach potential markets around the world.
Although it’s no easy task as there are lots of complications before continent-wide implementation.
One of the biggest hurdles on the way to achieve maximum efficiency is the capital requirement. According to Mckinsey, $100 billion is required to upgrade the current agricultural infrastructure. Actual figures can surpass the estimated $100 billion. Another big hurdle will be sporadic production differences between 54 African countries.
54 – 9 – 3:
According to the Mckinsey report, out of the total of 54 countries on the African continent. Only nine countries will account for a significant chunk of this untapped agriculture potential. Out of those nine countries, only three countries -Nigeria, Ethiopia, and Tanzania will lead the charge.
A continent divided by countries and policies:
Additionally, the variations in governing policies related to agricultural development in different countries will also curtail the development pace. As there are a total of 54 countries sharing the whole African continent.
Each country has a different set of rules and policies regarding agriculture. Thus, to unite the whole continent is no ordinary task and one of the biggest hurdles in the implementation of the Uber model for farming equipment.
Africa’s dependence on farming:
Food scarcity and shortages around the world can soon be a real problem due to the massive population growth in the future. Thus the world must be ready to face these dire situations. Alone on the African continent, 48% of the population socially and economically relies on agriculture.
Agricultural production needs to increase by 60% in the next ten years to feed the growing population. Thus in a country struck by famine, poverty, uneven resource distribution, and food scarcity.
The “Uber model for farming,” can be a ray of hope to increase productivity as well as the efficiency of contemporary farming techniques.
What’s the Uber model?
Uber is one of the most valuable modern-day companies with a global presence. Due to their unprecedented success, their business model has replicated in different industries all over the world.
Fact time: Even after ten years after it’s inception, Uber is yet to be profitable.
Uber’s business model of renting cabs on-demand has inspired countless businesses around the world. Entrepreneurs all around the world have embraced this on-demand service business. You’ll see the same business model applied to food delivery apps, rental bikes, laundry, etc.
Similar to a SaaS payroll software that lends the same package to multiple clients you can consider Uber model here as, Farming-as-a-Service (FaaS).
How can the Uber model overwhelm the African farming equipment needs?
one of the significant advantages of the application Uber model is the convenience. All you need an active internet connection and a supporting app. That’s all you need to rent farming equipment.
You don’t have to be tech-savvy to rent the equipment you want. It will take some time to get used to the process. It will save you money and, more importantly, time.
- No cost of ownership:
The majority of the farmers who will enjoy the Uber model in farming are smallholder farmers. Smallholder farms have less than two hectors of land. Thus for them, farming equipment and machinery is not a feasible option to own.
So the Uber model of farming suits them the best. Where you don’t own equipment, you just rent them according to your convenience. Additionally, you’re not responsible for the maintenance and ownership cost machinery sustains.
- A centralized renting place:
Adopting the Uber model for agriculture will organize the highly unorganized sector. The earlier renting industry for farm equipment was a difficult nut to crack. As there was a lot of bargaining and disagreement between farmers and equipment owners.
But with the interference of technology, these problems got eliminated. Now you can go to a centralized renting place to easily rent farming equipment.
- People at multiple strata can benefit from the “Uber model for farming”:
It’s not only the tractor owners who are making money from this Uber model for farming. There are so many beneficiaries to this Uber business model. If we site an example of “Hello Tractor,” for better understanding.
The startup, “Hello tractor,” benefits farmers, booking agents, tractor owners, and tractor dealers. They can uplift a whole community as well as everyone involved at different levels of businesses.
- Opportunity to make extra money:
Uber model provides an opportunity for people who already own farming equipment. As they get a chance to earn some extra cash. And everything happens via the app from booking to final payment.
Therefore the process is simple and convenient for both parties. As there is no human interaction face to face, no haggling is involved.
A tractor can work 40 times faster than humans. The sowing process, which used to take a whole day. Now with this Uber model can be done within hours. That’s a significant amount of time saved.
This time saved can be utilized in some other activities by farmers. Additionally, it saves a lot of grim, hard work hand sowing demands.
A ray of hope for Africa:
Jehiel Oliver, a young social entrepreneur, is trying to change the way Africans plow their fields.
His startup, “hello tractor,” let smallholder farmers rent equipment to make their work easy and less hard work. Until now, they have reached close to 250,000 farmers across the African continent.
As per a popular estimation, 350 million young Afrikans will join the formal wage employment. Therefore, Jahiel is trying to make agriculture an attractive sector for young people. So they get inspired to join the agriculture sector.
This new workforce will bring new ideas and competencies to solve the gap currently prevalent in the agriculture sector.
Economic Feasibility of this Uber Model in Farming:
Across Sub-Saharan Africa, there are a total of 220 million smallholder farmers. The majority of the smallholder farmers among these 220 million live on meager $2/day wages. That is not adequate to even feed their families.
These farmers still rely on rudimentary techniques to cultivate their lands as tractor and other agriculture equipment are way too expensive. Additionally, there are no finance options that make it impossible to own modern-day equipment.
Therefore, this shared or Uber model can be a revolution for the African agri-economy, where smallholder farmers can rent agriculture machinery on demand according to their needs. Plus, it can drastically change the way these smallholder farmers work.
Using machinery can radically decrease the planting time and reduces costs. This Uber model in farming is rewriting this primitive agriculture ecosystem in Africa.
Implementation of the Uber model for agriculture is not limited to Africa. Countries across the world are trying to implement the same agriculture model to improve final production efficiencies and convenience.
One such country in the forefront, “India.” Where the central government is trying to push the Uber model for agriculture nationwide, this model can benefit smallholder farmers across the country for a fraction of cost.
In some years will come to know if this Uber model is working or not. Additionally, problems faced, and success metrics will narrate the story of success or vice versa for this Uber model’s implementation in farming.
Divyang Metaliya is a Business Consultant at FactoHR, an India based HRMS Software solution provider. He is a creative business strategist with more than 8 years of experience.