HomeAGRIBUSINESSHow To Run A Very Successful Tractor Service Business And Challenges

How To Run A Very Successful Tractor Service Business And Challenges

With the advent of mechanized agriculture in a bid to increase returns and save on time, most farmers nowadays use tractors for various farm activities. These projects include ploughing, harrowing, ridging, planting, spraying and carrying of farm produce.

Cost of a brand new tractor & Implements

Several brands in the Kenyan market include New Holland, Zetor, Sonalika, Solis, Ford, Mahindra Case, John Deere, Massey Ferguson, Landini, Kubotand Zoomlion.
With that said, this article will concentrate on one specific brand – The New Holland TT75 tractor because it is the most famous tractor in the Kenyan market.

New Holland TT75 is equivalent to Case JX75T with the only distinctions being the color & the latter has two side mirrors while the previous has only one. These tractors command ksh 2.6 million for 2WD & 2.8 million for 4WD. Nowadays, the CMC group that sells New Holland tractors gives its customers free motorcycle and front protection for every purchase.
New Holland TT75 is ploughing a piece of land in Kanyarkwat, West Pokot

Implements

After buying the tractor, you will need various tools including a disc plough, ridger & a trailer for a start.
The most famous disc ploughs are Baldan from Brazil & Nardi from Italy. Both of these plows have their advantages and disadvantages and presently cost approximately ksh 400k.

Baldan plough isn’t costly to sustain and doesn’t need reinforcements. A 3 disc Baldan plough is fairly heavy (weighs 398kg) and for this basis, can even plough on a hard surface. Nevertheless, it has its limitations in that it is believed heavy and could occasion hydraulic hitches.

The Nardi plow is best for commercial use, given its multiple settings and lighter than the Baldan plough. Nev, you will have to reinforce it with heavy steel plates immediately you buy it. Moreover, it needs regular greasing to qualify for frictionless rotation of the discs.

Another tractor tool is the ridger that is used to make planting rows. This is considerably the most affordable of all the implements and can be locally manufactured for a cost of less than ksh 50k.
The New Holland TT75 tractor can comfortably carry a loaded 7 tonnes trailer. Moreover, this trailer can be locally made at a cost of between ksh 250k – 300k.

Secrets of success in tractor investment

I have managed a tractor for over one year, and I’m pretty sure of the challenges and how to shift this venture into a success. Because many Kenyans buy tractors to hire to other farmers essentially during ploughing seasons across the country, the observing are my tips on how to manage this investment:-
It would help if you accompanied your driver and always be around your tractor during plowing seasons. In doing so, you will acquire the cash and pay for various expenses. If you can’t manage to be around, you will need a dedicated person to manage your machine. A big blunder many investors make is giving the driver complete freedom and with this comes a myriad of challenges. To start with, your driver may resort to purchasing fuel that has been purchased through shady contracts and more often than not it is always adulterated. Moreover, not watching your driver may lead to loses as he may rob some of your profits.
As an owner, learn how to use your tractor because it is a well known fact that most tractor motorists are drunkards. During prime season, drivers suffer exhaustion and you may ease him if you have the know-how of farm operations.
Have yourself a number of agents across the country who get in touch with agriculturalists and market your business. However, don’t appear desperate for them because you can do without them during peak season.
Use the returns you get to lease a few acres of land via which you will at least diversify your revenue inflows.
You can always start with second-hand implements, make a few restorations and save money that would have been otherwise used to buy brand fresh ones.

Expenses Involved

The main expenditures in this venture are fairly affordable unless your machine suffers a automatic breakdown. Tractor owners pay an insurance compensation of only ksh 8000 yearly. Your tractor will require to be serviced after not more than 250 hours and for this you will require 9 litres of motor oil (ksh 4600), an oil filter (ksh 1400)& 2 fuel filters for ksh 2000.

Expected Profits

A good tractor should sip 7 litres of diesel in ploughing an acre of land but this relies on the type of soil, the landscape erthelessand the driver. The operators are paid ksh 250 for every acre of land plowed. Using a formal charge of ksh 2500 per acre, one can get a profit 1400 shillings per acre. In a fine day, a TT75 tractor can plow up to 10 acres of land in places where large lots of lands exist.
Ambitious investors are pushed to pack their belongings as they chase the rainy seasons across the country. In January & February, tractor owners roll to Bungoma, Kakamega & Busia counties where they demand ksh 3000 per acre of land plowed.
In March, a caravan of tractors land in Trans-Nzoia & Uasin Gishu where they levy ksh 2300-2500 in plowing an acre of land.
April and May is another rush to West Pokot county where tractors land in Chepareria, Kacheliba & Kitale Kapel. They levy ksh 2500 per acre.

Around July & August, it is another trip to Homa Bay, Siaya & Western Kenya (ksh 3000 per acre). In October and November tractor proprietors pitch tent in Ukambani & charge ksh 2000 per acre.
According to a 2016 information by nation, investors used to rake in from ksh 700,000- kes1,000,000 annually as they relocated throughout the country during plowing seasons.

Challenges

Presently, tractor owners lament that the business is unreliable and suffering contracted returns.
The sharp change of fortunes can be pinpointed to raised fuel prices and increased number of tractor proprietors, leading to a decline in plowing prices. Some 4 years ago, it was a sure bargain for instance that plowing an acre of land in West Pokot county would be apprehended a minimum of ksh 3000. Nevertheless, tractor owners have been pushed to reduce the cost to ksh 2500 even as the fuel cost escalates.
Secondly, due to residents increase, there is a decrease of land that is available for agriculture. Many Kenyans have subdivided their lands and this has hit the acquisition hard.
One should consult widely before venturing into this field.

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