John Deere and TIL sign potentially groundbreaking deal in Nigeria
May 05, 2018
John Deere has paired up with Alluvial, a Nigerian company that works with smallholder farmers. This could be a groundbreaking scheme, turning subsistence farming into a commercial business.
Under the agreement, John Deere, through its distributor Tata International, will lease up to 300 tractors through Alluvial to as many as 100,000 farmers in the Niger Delta region. Mr Dimieari Von Kemedi, the founder of Alluvial, estimated that at current prices, farmers could produce more than US$ 300 million worth of rice a year.
As a smallholder, he said “working on tiny plots of land, farmers had no access to mechanisation or high-quality seeds or fertiliser and were barely making ends meet”. Alluvial’s business model is to aggregate thousands of smallholder farmers in order to put them on a commercial footing and supply them with necessary inputs. Since they work on contiguous plots of land in Cross River and Delta states, whose wet conditions Mr Von Kemedi says are ideally suited to rice, farmers will be able to rent tractors for small amounts of time, paying just over US$ 100 to plough, harrow and harvest one acre of land. Farmers can rent tractors for as little as 20 minutes.
“This deal is providing mechanisation to smallholders without them having to invest in tractors themselves,” said Mr Von Kemedi. “This could be an example not just for Nigeria, but for all of Africa,” he said. Some of the farmers working with Alluvial are ex-militants who had been fighting with oil companies, such as Shell, over revenue-sharing agreements in the impoverished Delta region where most of Nigeria’s oil is found.
Mr Chijioke Okole, Country Head, Nigeria, described Alluvial’s model as “one of the most innovative solutions to food security that we have seen in the developing world”. Alluvial, which has been operating in the Delta region for seven years, intends to supply tractor leasing to farms spanning 120,000 hectares, or more than 460 square miles.
Mr Von Kemedi said his company would help farmers get a better price for rice, as well as maize and cassava, by aggregating production and selling to domestic buyers, including breweries. The government of Muhammadu Buhari has made a big push to make Nigeria self-sufficient in rice, but Mr Von Kemedi said this could only be achieved by raising yields and turning farming into a modern business. “If you do agriculture on a subsistence basis, you will never be able to rise above poverty,” he said. “Agriculture must become a full-time business, utilising all the modern techniques otherwise, we will have too many African farmers producing too little.”