HARARE – The smallholder farmer who uses the smart farming-as-a-service model must pay a monthly or per-use fee in order to use an asset. The smallholder farmer does not own the asset, as is the case with the pay as you go (PAYG) model. People have the option to pay for what they use when they need it and can afford it thanks to pay-as-you-go business models.
For smallholder farmers to use an asset or service, the PAYG model is most frequently utilized to minimize entry barriers. However, it can also be utilized to distribute additional assets to cooperatives or small business owners, who can then lease them to smallholders. This is what the Nigerian company Hello Tractor is doing to increase the variety of tractors that smallholder farmers may use through the Hello Tractor app.
An initial down payment can be made to reserve a tractor by cooperatives or tractor
owners. Every time a tractor owner books a new work on the Hello Tractor app, $17 is removed from their fees as payment for their outstanding amount with the company. Following that, the Hello Tractor app makes these tractors accessible to users in Kenya or Nigeria. Using the app, farmers may reserve a tractor, which becomes available in 72 hours.
Instead, it is owned by the tractor manufacturer, the solution provider, or a third party in the shared asset "uber" model. The "tractor-as-a-service" or "shared-tractor" model is the most well-known variation of this paradigm, nd it is now used by firms like Hello Tractor, Vaya Tractor, and TROTRO Tractor, among others.
Nevertheless, there are other iterations of this concept, such as drone-as-a-service, smart irrigation-as- a-service (such as Seabex), cold storage-as-a-service, smart greenhouse-as-a-service, fish feeding-as-a- service (such as e-Fishery), and smart livestock management-as-a-service.
Although some Digitalisation for Agriculture (D4Ag) providers choose to include the cost of the asset along with the cost of ongoing monitoring, advisory, and/or automation in the monthly fee, some have chosen to bear the cost of the sensor's initial purchase themselves, charging the farmer only for the ongoing service. Skylo, which is now in the pre-launch phase, is debating paying the initial $50 cost of their sensor powered by a satellite and charging Indian farmers $10 per month for continuing monitoring and advice instead.
The success of a smart farming-as-a-service model depends on the monthly rent set by the
D4Ag provider.Smallholders would be prepared to invest up to 4% of the total cost of irrigation in a smart irrigation platform, according to end user study conducted by Tunisia's Seabex, a provider of smart irrigation platforms. The business is currently experimenting with a number of pricing schemes that account for 4% of the entire cost of irrigation.
Various variations, such as per-production-cycle costs, per-hectare fees, per-farm fees, monthly fees, or annual fees, are being considered by Seabex. The same adjustments are being made by numerous D4Ag providers employing the smart farming-as-a-service model in order to find a workable pricing strategy that will allow them to scale.
