Gary Col­lar ‘We’re putting to­gether both the ca­pa­bil­ity and mech­a­ni­sa­tion’

AGCO’S se­nior vice-pres­i­dent for Asia-pa­cific and Africa out­lines an all-in-one solution for small­holder farm­ers that the trac­tor man­u­fac­turer is tri­alling in Zam­bia

The Africa Report - - AGRIBUSINE­SS DOSSIER - In­ter­view by MAR­SHALL VAN VALEN

Every­one agrees that African small­holder farm­ers do not have enough ac­cess to train­ing, in­puts, fi­nance and tech­nol­ogy; what people dis­agree on is what to do about it. In terms of mech­a­ni­sa­tion, some gov­ern­ments are push­ing for set­ting up trac­tor assem­bly plants with lit­tle con­cern about fi­nanc­ing and up­keep. Start-ups like Nigeria’s Hello Trac­tor want to be the Uber of agri­cul­ture by match­ing up trac­tor own­ers with farm­ers who need their ser­vices. Us-based equip­ment man­u­fac­turer AGCO – which recorded $9.4bn in net sales in 2018 and in­cludes the brands Chal­lenger and Massey Ferguson – is now pi­lot­ing its Farm In A Box (FIAB) ini­tia­tive in Zam­bia. De­liv­ered in a ship­ping con­tainer, it is a pack­age com­bin­ing es­sen­tial farm ma­chin­ery, up­keep tools, train­ing and sup­port.

Gary Col­lar, AGCO’S se­nior vice-pres­i­dent for Asia-pa­cific and Africa, says: “How does Africa feed itself, with the pro­jected dou­bling in pop­u­la­tion by 2050? [...] It’s our obli­ga­tion at this point in time to fig­ure out a way to feed them. It is not just mech­a­ni­sa­tion, but mech­a­ni­sa­tion can be an im­por­tant part of it.” He con­tin­ues: “There are lots of ex­am­ples of people that go out and pro­vide a trac­tor. But un­less the farmer knows how to use it, he’s not go­ing to get the value out of it.”

Fran­chise model

Col­lar says: “Farm in a Box is more than just a con­tainer where we slam a trac­tor in there as parts and a desk area and that kind of thing, tools. It re­ally is a sys­tem where we’re putting to­gether both the ca­pa­bil­ity and mech­a­ni­sa­tion. This is go­ing to the prod­uct part of it, but also train­ing – with a fran­chise sort of model.” De­pend­ing on the power of the trac­tor, which is its pri­mary com­po­nent, Farm in a Box will cost from around $80,000 to $100,000.

As of early 2019, AGCO had three FIAB units in Zam­bia to test them out be­fore rolling them out more widely across the con­ti­nent. In Zam­bia, AGCO also has a part­ner­ship with dis­trib­u­tor BHBW Zam­bia and the Zam­bia National Com­mer­cial Bank to help en­trepreneur­s to fi­nance their pur­chases.

AGCO cur­rently takes in about $100m per year from its Africa oper­a­tions. “It’s a good busi­ness, but it’s not as good as it can be. [...] We think that the over­all busi­ness should be $100bn and our por­tion of that ought to be $1bn in Africa.”

The man­u­fac­turer has plans to in­vest $100m in Africa over a five-year time pe­riod. That in­cludes the set­ting up of AGCO’S Africa team in Jo­han­nes­burg, cre­at­ing a sales of­fice in Casablanca and putting more money into its model farm in Lusaka and its production oper­a­tions in Al­ge­ria.

Col­lar also wants to see AGCO run­ning agro-in­dus­trial parks, which have a patchy record in terms of success on the con­ti­nent. “As good as the idea is, it’s still pretty slow to catch on and pos­si­bly ex­actly be­cause of the fact that there are some risks. [...] We are in the process of iden­ti­fy­ing ac­tual projects or ac­tual land that could be de­vel­oped. We’re prob­a­bly look­ing at 10 different projects around Africa at this point in time, re­ally from West Africa, way to north and east.”

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