Food Production involves a wide range of complex procedures such as land clearing, planting and weeding, harvesting, transportation, processing, storage and consumption. This process requires mechanization and technological inventions to improve and facilitate production as well as increase productivity. According to a study published by the International Conference of the West African Society of Agricultural Engineering, 90% of farmers in Nigeria conduct farm operations using hand tool technologies and traditional agricultural methods. This is the case because many farmers lack the resources to acquire agricultural machinery like tractors and ploughs. This article explains why agricultural mechanization is essential and the influence of startups like Tractrac.

What is Agricultural Mechanization?

According to the FAO, it is the process of improving farm labour productivity through the use of agricultural machinery, implements, and tools. It also involves the provision and use of all forms of power sources and mechanical assistance to agriculture, from simple hand tools to animal draught power (DAP), and mechanical power technologies. Agricultural mechanization is often associated solely with tractors and sophisticated agricultural machinery
According to FAO (Clarke, 1997), the term “Agricultural mechanization” generally refers to the application of tools, implements, and powered machinery as inputs to achieve agricultural production.

A sustainable agricultural mechanization strategy is a planning strategy that contributes to the goal of sustainable agriculture, and at the same time accepts food self-sufficiency and generates economic and inclusive growth as well as social benefits. Over the years the Nigerian agricultural sector has been lagging behind in terms of agricultural mechanization. Food production increases have not kept pace with population growth, resulting in rising food imports and declining levels of national food self-sufficiency (FMARD, 2008). It is estimated that Nigeria has lost USD 10 billion in annual export opportunity.

Furthermore, there are less than 5,000 tractors in Nigeria hence making it onerous to access tractors by smallholder farmers in Nigeria. These issues have made it tough to access mechanization services in Nigeria hence affecting productivity, livelihood and in turn Food security.

Financing tractors for smallholder farmers has been a daunting challenge. From the rise in exchange rate to the hurdles of meeting banks’ requirements, small holder farmers across Nigeria and Africa at large are unable to own tractors. Owning one is out of their league, yet they constitute 70% of farmers in Sub Saharan Africa.

Another key issue limiting market growth is tractor under-utilisation, attributable to disconnects in the market between tractor owners with idle assets and service providers able to maximise the productivity of those assets, and between supply and demand for tractor services across the country. There are pockets of tractors spread across the country predominantly owned by governments which are left fallow in yards, and others owned by individuals who are left with excess capacity after use of their tractors for their individual farmlands. The disconnect between demand and supply is attributable to location and communication challenges with service providers in one location being unable to effectively connect to demand in other locations given the current system for connecting to demand which relies on extensive on-ground infrastructural capabilities and investments in a wide-reaching agency network

Why Agricultural Mechanization is Important

The utilization of Agricultural mechanization can engender the growth and development for the following reasons:

  • It has the ability to Increase the food production capacity of farmers leading to reduced poverty and improved livelihoods. The process of agricultural production poses not to be extraneous alone but very slow. This can affect the level of production and profit leading to little returns.  Agricultural mechanization could hasten the process. For example, D. R. Bomford explained that, “The ploughman with his three-horse am controlled three- horse; power, when given a medium-sized crawler tractor controlled between 20 to 30 horse power. His output, there-fore, went up in the ratio of about 8: 1.” With an effective mechanized agricultural system, the foreign exchange earning potential would improve. Progression from subsistence to commercial farming promotes the exportation of food products to other countries.
  • Agricultural mechanization increases the participation of the youth and the educated in farming activities. This is because it reduces the stress and drudgery involved in farming. Many youths derail from agriculture as a result of the strenuous efforts and energy it demands. Also, it improves the profitability of farming ventures which increases the interest of the masses.

It is found that the cost of production can be adjusted properly if mechanization is resorted. It will also ensure that income is multiplied and the farmers economic condition is improved. Therefore, there is a need for the government and private organisations to devise strategies that can spur agricultural development. Collaboration with private institutions is encouraged as well for the utilisation of expertise and other useful resources.

To this end, Tractrac created a platform that allows all value chain actors in mechanization to participate in improving access to affordable Mechanization services for smallholder farmers across Nigeria.
See how TracTrac is using its digital platform to reach two million farmers across Nigeria. The end goal is to enhance food security, productivity and livelihood of these farmers.

This is a guest post from TracTrac

I had a chat with a friend a few weeks ago and somehow the discussion veered into personal finance a la money saving apps and investments etc.

Now I’m the first to raise my hands and say I suck at saving/investing. I feel like I save too little and too irregularly. But I’m deciding to do something about it like learning tricks to save money on things like electricity.

Back to the story I asked, out of curiousity, whether she has somewhere she puts away money. She mentioned a certain bank/insurance saving product that pays, wait for it! 5% per annum. I was surprised and then upset. Then I realised there was likely a lot of people like her – putting money into savings or investment plans that paid too little and below the inflation rate. Save N1 million that way and after one year the N1 million plus the interest will be worth less than it is today.

So what are the ways you can save/invest your money to yield the highest possible annual interest while being sure your money is relatively save? Note that an investment/savings product should have a high level of security and return decent interest.

Let’s look at a few we dug up from research;

Money Saving Apps: Over the past few years several fin-tech companies with focus on helping people save and earn decent interest on their saved money have become even more popular. It is easy to see why. Before now you could leave N1 million in your bank savings account without withdrawing/touching it and you will be lucky to get a paltry 1 or 2% interest annually on it.

Enter Savings app that encourage people to save their money and earn anywhere between 10 – 15% interest on it. So basically in one way they promise much higher interest if you save your money with them than with a traditional bank. And for some of them is the beauty of monitoring your accumulating interests via the digital app. 

The more popular ones include; 

  • Piggyvest: Piggyvest started as Piggybank in 2016 as a savings only platform. It offers customers/users between 10 – 15% interest on saved amount per annum. Users can transfer money they intend to save or fund their savings account with a credit/debit card. The app lets you save in Naira and also in US dollar with the dollar savings paying 6% interest annually. There is also the Safelock feature which allows you lock away money you don’t want to be tempted to touch in return for up to 15% interest.
  • Cowrywise: Cowrywise is yet another savings app launched in 2017. It offers users the opportunity to save their money and earn interest. The app allows you choose different savings options to meet your goals. On Cowrywise you can earn up to 15% annual interest on the amount you save.
  • ALAT (by Wema Bank): ALAT is a digital only bank set up by Wema Bank. Launched in 2017 ALAT lets you set savings goals. You receive a physical debit card which lets you withdraw money from anywhere. You can earn up to 10% annual interest when you save money on ALAT.

NOTE: This article does not constitute financial advice. Nairabrains will not be responsible for any decisions taken as a result of reading this article. Kindly consult your financial advisor or seek professional financial advice.

Unless you are living under a rock you already know the world is currently under siege from Covid-19 – that causes respiratory issues and has killed quite a few people (over 100,000 actually as we write this). This is by far the biggest health challenge and scare the world has seen in centuries. What are some of the Covid-19 changes that will happen with businesses and individuals. More things will change even after the pandemic ends.

As countries battle to contain the virus, certain strong measures are being taken. Governments all over the world have announced lock-downs forcing people to stay at home and many companies to basically shut down physical operations and move remote.

With drastic changes like this come a lot of pain. People have lost and are still losing jobs. For businesses – some are dead already, more are dying (travel, tourism sectors, lounges, clubs etc are hit badly), while a lot more have had to take drastic actions in the face of increasing cashflow challenges.

Some of the things we always thought didn’t matter no suddenly matter and some stuff we took too seriously no longer matters. We are now like ‘ How the hell did I think we couldn’t do without this or that?’

So basically people now see business trips (flying all over the place in the name of meetings) weren’t that much important after all!

So some of the things we observe (Covid-19 changes) won’t remain the same for both individuals and businesses;

  1. Businesses are realising they spend way too much money on offices/rent: So remote work works? Damn! Bet top management of companies and business owners alike are now realising remote work isn’t actually that bad and can actually save them a shit ton of money. 2 weeks into quarantine and work from home (WFH) I and my business partner decided we weren’t going to spend shit on renting space for office anymore. Everyone is gonna work from home probably forever! The introverts will love this.
  2. Businesses are taking social media more seriously: With the pandemic we notice businesses that had invested in building strong online presence and brand equity are reaping the benefits while some others are now beginning to labour to build theirs. Businesses that hitherto basically depended on huge offline distribution are now realising social media is very important. Well this throws up opportunities for anyone who has or can quickly learn social media skills to make a decent living helping many of these businesses build up their presence online quickly.
  3. One source of Income is Dangerous; the pandemic now makes it very Obvious: If before people ignored this very important advice – to have more than one source or stream of income, now it has hit home. For a lot of people who had just one, job that is gone. They are back to square zero. Now is the time to become strategic about building resilient and different sources of income. Even if you are among those lucky to still have a job, you should start thinking seriously about getting an additional stream of income.
  4. Some people will be forced to make the leap to self employment or starting their own business: Lots of people dream of starting their own thing but then keep shifting the goal post. As Covid-19 hits and some lose their job or start to get owed they realise, ‘maybe I should really become serious about starting my own business’. Starting your own business is hard, yes. So of course it is not for everyone. First you have to have a good idea. Then test/validate it to be sure there is a sustainable market before going all in.
  5. Travel is Affected and May Never be the Same For Years: This pandemic showed us how unnecessary most business travel was. Business meetings, conferences etc were they all important? With the tools available today board meetings can easily be done remotely for instance. Interviews too. So maybe post Covid-19 most people will realise – oh we can do this without getting on the plane. Less flights. Well, don’t know if that is a good or a bad thing. Travel (especially for business) will be one of the areas with Covid-19 induced changes.

Years back I had this need for a small sum of money to start a small business and searched in vain for anyone to loan me the money. The banks are usually useless in Nigeria for these sort of things.

If you’ve been in a similar situation you know how difficult it can be to raise just N200,000 (less than $1,000) to start that business idea you’ve always had.

So a friend then gave me this very simple but effective and creative advice. This idea is so simple that you may even dismiss it the first time you come across it. It may be useless for raising significant startup capital so I advise you use it if only you want to raise anywhere between N100,000 to N500,000 or even a million naira. So imagine you need to raise $1,500 to start that hustle you have been thinking about.

Instead of asking a couple of friends and family to cough out the money why not take this approach.

  1. Make a list of everyone you know (family, friends, work colleague etc) who can ‘dash’ (gift) you a small sum of money without too much persuasion or breaking sweat. Say you needed N250,000 and you divide it by 25. This means you’ll need 25 acquaintances who can give you N10,000 for free and you have your N250,000. If you have a large circle of people to ask you could even make it N5,000 per head and get it from 50 people you know.

The idea behind this approach is it is easier to ask people for painless, negligible amounts of money than ask for loans of sizeable sums. So from taking a piece here and there from many people you have your small startup capital.

If you are in a position where you need this sort of money try this approach out. Get out a piece of paper and list down every single person you know who can afford to part with N5,000 or N10,000 without too much resistance. You’d be surprised how long your list will be. Then reach out to them one by one. Be simple and straightforward and ask for that amount. Not as a loan but as a gift. By the time you make the rounds you have your small seed capital.

Don’t underestimate the little ideas. Go on, try it. And maybe let me know in the comments what you think.

There is a reason even large corporations commit significant resources in research and development of new products/services. Relevance. The moment you stop innovating and creating, your gradual slope down the relevance valley begins. You may not know it then but you would be in similar situation to that of someone threading against the escalator. 

Apple was winning with Macs, iPods, iPads. They didn’t stop there. Today they have the Apple Watch. Every year improved itineration of the iPhone gets released. There is Apply Pay. Also a cloud storage and computing service is in full force. What do we say about Amazon? They started selling just books. Now they sell almost everything one would need in a home. And they didn’t stop there. They are now a major player in the cloud business with Amazon Web Services.

These are just two of the biggest companies in the world right now. Coming back home to Nigeria we have a problem where many companies do not just do enough in committing to product development (or re-development). However there are still examples of companies here who get the need to remain super competitive. The FMCG and beverage sector probably understand this more than most others. Every few years we get new beers, drinks, detergents etc each claiming to provide the value and satisfaction that others don’t. They do this to stay in the game.

Coca Cola leads the soft drinks industry but they get challenged all round. New entrants will chip away at your market share. Rite Foods are there with Bigi Cola. RC Cola just came in. Coca Cola does this well as over the last 10 years they have tried to maintain overall market share by tickling the fancy of consumers with new products. CWAY Foods was not content with having products like Nutri Milk. They added Nutri-yo a yoghurt drink and also recently moved to launch mixed spirit drinks. Chi Ltd expanded its Chivita juice brand with new additions – Chapman Happy Hour and Frooty Happy Hour. In technology to stay relevant you must constantly reinvent, look to tap new market opportunities.

In another post I’ll stir the hornet’s nest on how ambitious companies can create their own winning product development approach and ensure they tap into evolving market opportunities.I