Midwest Agribusiness: Big Market For Used Farm Equipment In Africa

Midwest Agribusiness: Big Market For Used Farm Equipment In Africa

The logistics of shipping tractors to Africa and dealing with government regulations can be a challenge, but Midwest agribusinesses see a potential big market there, particularly for used equipment, according to a report  in AgWeek.

There is an oversupply of used tractors and farm implements in the U.S., where farmers have done well in recent years, the report said.

Stacy Anthony, who manages export sales for Brandt Holdings, a Fargo, N.D. company that runs 25 John Deere equipment dealerships in five Midwestern states, sees a lot of opportunity to ship used equipment to Africa. Brandt Holdings already exports used equipment to 18 countries.

“I would say it’s very probable that we could see sales continue to grow to Africa over the next two or three years by 15 to 20 percent,” Anthony said. “The demand and the need is there and definitely the supply is here on this side. So all of the workings are in place to make that happen.”

A dozen African farmers and business owners recently met with farm equipment suppliers in Fargo to study technology that could help them produce more soybeans and corn.

The trip could also prove helpful to U.S. farm machinery manufacturers who want to make sales in growing African markets.

A farm in the Red River Valley, with its massive tractors and combines, is a far cry from the average farm in Uganda, where some farmers still use hoes.

Ugandan farmer Patrick Bitature sees the American Midwest as a model for the future of farming in Uganda, especially now that he’s felt the effects of climate change, such as persistent drought.

“We have been in a slumber for way too long and with global warming, now the reality has begun to hit hard,” he said. “We have to change what we’re doing if we are going to get different results.”

The African farmers were in the U.S. on a trade mission organized by the U.S. Trade and Development Agency.

Ken Peoples, a consultant who organizes trade missions for the agency, says in the next few decades most of the world’s new food production will occur in Africa, which has more undeveloped farmland than any continent on Earth. But Africa is also a rich source of potential customers, he said.

European, Chinese and South American companies are competing for African markets. But the visiting African farmers said they want U.S. technology because they think it’s the best in the world.

“From what I’ve seen in the U.S.A. — wow, I wish I could open my eyes and it is there in Africa,” said Yaw Adu Poku, who processes soybeans and corn for about 3,000 small farmers in Ghana.

“I went to these factories that do irrigated equipment and all my prayer was that when do I see this on the land back home,” he said. “Because immediately, I saw dollars clicking, and I saw creation of employment and I saw satisfaction on the weather-beaten faces of the farmers.”

Poku might get his wish and bring irrigation to farmers in Ghana, but it won’t be easy. Most banks in Africa won’t lend money to farmers.

Trade officials say African banks will only lend money for equipment if American banks guarantee the loans.