Rent your Tractor – A Platform for digital Services in Agriculture

The majority of Ghana's agriculture sector is made up of smallholders who oftentimes cannot afford to acquire farming machines for the cultivation of their fields. An estimated 60% of the land used for agriculture is made up of this type of small farms. The limited use of agricultural machinery poses a serious problem in terms of the productivity of the individual farms and also when it comes to realizing the potential of the overall areas under cultivation: There is only a small number of service providers that rent out equipment to the smallholders. Government-run centers for mechanization turned out to be unsustainable and cooperative forms of ownership are underdeveloped. At the same time, the market for brokering services (contacting and payments) is relatively inefficient. Therefore, the Green Innovation Center Ghana that got created as part of the special initiative “ONE WORLD – No Hunger” partnered with a local startup that works on improving the process of renting out tractors and farming machinery: “Tro-Tro”, that's how shared cabs are called in Ghana that pick up passengers who hail them from the side of the road. By allowing farmers to order and pay for rented equipment with a simple cellphone, TROTRO Tractor is mimicking this cultural practice and make use of it for the brokering of various mechanization services in the agriculture sector.

An efficient System with low technical requirements

Customers can specify data like the type of equipment needed, the location of their farm and the size of the land in question in a simple text message. The TROTRO Tractor Platform then aggregates the different orders and forwards them to the closest provider. A system based on GPS allows for a precise tracking of services rendered. The payment can even be submitted instantaneously together with the order using so-called “Mobile Money” (a payment method widely used in Africa) on the cellphone. TROTRO Tractor receives a commission for the order matching and the handling of the payment transaction. This way, TROTRO manages to reduce the costs of brokering mechanization services significantly. Now smallholders for whom purchasing equipment would not be economically viable in terms of the size of their operations can utilize advanced agricultural technology to increase the productivity of their acreage too. The service supply agency, however, benefits from a simplified customer acquisition as well as an automated and efficient aggregation and settlement of the orders. Since TROTRO Tractor operates on an advance payment basis, the agencies avoid risk of payment default almost entirely. In addition, they can monitor their machines' operation in real-time and plan ahead for maintenance thanks to the aforementioned GPS functionality of the TROTRO Tractor platform.

Satisfied Users

“Before”, the farmer Grace Antwi from the Amantin-Bono region explains, “I was only able to work two of my five acres. I only had a machete and a hand hoe. But since there is TROTRO Tractor, I can cultivate the full five acres and that helps me feed my family.” Actually 95% of the current users of the platform intend to continue to use the service. This is the case both for farmers like Grace Antwi and for the 90 registered tractor rental companies. Over the course of the first years, the national demand for on-demand tractors rose by 6.8%. Further growth of TROTRO Tractor is going to be vital to guarantee sustainability of the business long term.

A Growing Harvest and a Growing Industry

The low degree of mechanization of the small farms is one of the main factors that's hindering a growth in productivity for the Ghanaian agricultural sector. The platform solution developed by TROTRO not only increases the availability of tractors and machines, it also reduces the costs for the smallholders at the same time. The positive effect is noticeable for rice and corn farming. This contributes directly to improving the livelihoods of small-scale farmer and helps securing the supply of food for the population. Simultaneously, farmers and rental companies are able to utilize their machine pools more efficiently which leads to a higher return on investments in machinery and a flourishing rental business sector.

TROTRO Tractor's success is evident: The platform currently has 20.000 registered users and 9.600 of them have already made use of a tractor service. Furthermore, the business model is scalable by adding other agricultural machines or transport vehicles to the program. A weak infrastructure and the limited amount of specialized machine rental companies that are able to provide a sufficient amount of equipment are limiting factors for the further expansion of the TROTRO Tractor business in Ghana. The conditions in the country are exemplary for the situation in the Global South, so other states exhibiting a low degree of mechanization in their agricultural sector could benefit from the matching service too. TRTRO Tractor established a platform in Togo in 2020 that helps manage and facilitate the lending of state-owned tractors and machinery to agricultural businesses. Partnerships in Benin and other countries are currently in the initiation stage.

Sector: Agriculture
Region: Ghana, Africa
Technology: Platform / Mobile Money
Project status: Ongoing