Heifer International and Hello Tractor have released another bunch of 11 tractors to young agricultural entrepreneurs in order to increase productivity and promote the commercialization of agriculture in Uganda.
Despite the presence of fertile arable land in Uganda, only 30 per cent of it has been utilized due to perennial dependence on the hand hoe and other rudimentary tools. As a way of increasing the percentage of land use, Heifer Uganda and Hello tractor recently came up with a collateral-free financial model dubbed ‘Pay As You Go (PAYG) to help farmers increase productivity.
Under this project, young agricultural entrepreneurs are only required to pay Shs6m and start using the tractor.
In the first phase, five tractors were given out to districts; Dokolo, Lira, Gulu, Mubende and Abim. So far 60 per cent of the tractors that have been given out both in the first and second phase have gone to the Northern region, the 40 percent have gone to central and Mid-South west of Uganda.
Speaking during the handover ceremony of the 11 tractors at Kati-Kati Restaurant on Wednesday, Heifer International Country Director, William Matovu, said the project is to improve the on-farm productivity of smallholder farmers and enable them achieve food security and decent income through the distribution of 50,000 tractors across the continent over the coming 10 years.
“Ladies and gentlemen, globally the African continent has the least number of tractors deployed per thousand hectares of arable land. On average we have about 2 tractors per thousand hectares compared to 10 tractors and 1000 hectares in Asia so that tells you a story of food security on our continent. So perennial dependency on the hand hoe which accounts for about 80 per cent has characterized our farming systems for decades with a short-sighted drudgery consequently, all the 40 per cent of Africa’s arable land is being utilized due to lack of necessary equipment to open for production,” Mr. Matovu said.
He added that despite the opportunity of its arable relatively fertile source, good climate and the cheap labour that Uganda has and the ready regional export markets among others, one of the major challenges that farmers are facing especially women and youth is limited access to finance, often due to lack of the necessary collateral.
Due to such challenges, they are not able to get access to equipment like tractors so that they can be able to mechanize their production system.
“So to solve this and other challenges Heifer international is leveraging technology to stimulate disruptive innovations that will impact the agricultural food system to ensure food security and that we can create employment at different nodes of the value chains for which then we have an opportunity to engage. One such innovation we have is the Pay As You Go tractor service that is being deployed by Hello Tractor an Agtech company using a tractor sharing mobile application to connect tractor owners to farmers and vice versa,” Mr Matovu noted.
He further revealed that the project is complementing and supplementing government efforts of mechanization of the farmland to ensure that farmers in Uganda can produce for export and for meeting their domestic needs, which is very much in alignment with the national agricultural policy as it has been articulated by the government of Uganda.
According to Mr Matovu, Heifer International has invested U.S. dollars 4.5 million to scale up this innovation across the continent however they look forward to Claudin as other investor donors, and development partners to invest in this project so that they can achieve a target of 50,000 tractors in the coming 10 years across the African continent.
The Minister of State for Agriculture Bwino Fred Kyakulaga welcomed the initiative and alluded that Heifer International is helping the government to see that smallholder farmers can also have access to the technology of mechanization.
“They are helping in the financing of acquiring technology for mechanization as you’re aware these machines are very expensive and our people are unable, they cannot afford to buy them. So is using the pay-as-you-go facility financing model to enable entrepreneurs to acquire tractors. Secondly, they have helped farmers to access mechanization which to some is just a dream,” Hon. Kyakulaga said.
“We are ready to give you the necessary support to ensure that this initiative succeeds because if it succeeds it’s a win for all of us.”
Meanwhile, each tractor with full equipment costs over Shs140m (USD40,000). However, the owners paid only Shs6m and they will pay the balance as the tractor works under Pay As You Go program.
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