Rising Mechanization: Zambia and Ghana by Antony Chapoto, Nazaire Houssou and Chewe Nkonde Presentation at 3rd Annual ReNAPRI Stakeholders Conference Radisson Blu, Hotel Nairobi Kenya November 10th, 2016

Refurbished Massey Ferguson Outline Rising mechanization: Zambia’s Trends in agricultural mechanization Why the rise in mechanization initiatives? Factors facilitating the rise in ag. mechanization Rising mechanization: Ghana Mechanization in Ghana: Historical perspective Agricultural mechanization policy Specialized Service Provision Private sector-led mechanization Refurbished Massey Ferguson 2

Zambia’s Experience Rising Mechanization

Trends in agricultural mechanization Mechanization use by province Mechanization use has remained low but increasing Tractor use per thousand hectares cultivated is about 1.3 tractors Availability of tractor hiring services is relatively high (>60% HHs leave nearby these services) High cost of tractor services is the main constraining factor RALS, 2012 and 2015

Why the rise in mechanization initiatives Change in factor price ratios Rise in mechanization initiatives has mainly been driven by supply side actors Number of Tractor Service Providers has increased from 58 to 448 in three years Labor constraints Increasing number of farmers are taking farming as a business (emergent farmers)

Facilitating Access to Mechanization Mainly focused on emergent farmers E.g. AFGRI/John Deere/ZANACO program giving farmers credit to acquire tractors and attachments. (Interest rates high ??? 14% and 30%) The emergent farmers in turn provide mechanization services to smallholder farmers Private sector initiatives to promote access to mechanization No known government programme promoting mechanization BUT…. recently announced a credit program for civil servants to access tractors So, likely going to see more government involvement in promoting mechanization Government & Mechanization

Ghana’s Experience Mechanization

Farm Size by Cultivated area Medium-Large Scale Farmers and Mechanization Survey Conducted by IFPRI in collaboration with Savanna Agricultural Research Institute (SARI) Category Farm Size by Cultivated area Sample size Small < 5 ha 768 Medium 5-20 ha 850 Large >20 ha 225 Total 1,843

Mechanization in Ghana: Historical Perspective Large state involvement in mechanization after independence (1957) Mechanization as means for increasing power supply & freeing labor Failures in Ghana and elsewhere in SSA Lack of demand - low farming systems intensification (Pingali et al., 2007) SAP/1990s led to withdrawal from direct service provision 9

Current Agricultural Mechanization Policy Attempts to partner with private sector GoG. seeks low interest loans & grants to import tractors Sells tractors to individual farmers & AMSECs at subsidized prices with lenient repayment schedules Loan origin dictates tractor importing country Since 2007 GoG. renewed support for mechanization 10

Use tractor plowing (%) Tractor & Animal Traction Both Relevant Distribution of mechanized plowing across surveyed districts District Number of farmers Use tractor plowing (%) Use animal plowing (%) Do not plow Ejura 253 89.7 0.0 10.3 Techiman 217 6.9 93.1 Kintampo North 221 30.3 69.7 Yendi 269 91.8 0.4 7.8 Gushiegu 300 87.7 2.0 Kasena Nankana East 160 68.1 26.3 5.6 Bawku Municipal 195 21.0 68.2 10.8 Sissala East 228 77.2 15.8 7.0 Total 1843 62.1 11.8 26.0 Source: IFPRI/SARI Survey (2013).

State-sponsored specialized service Specialized service provision: AMSEC Weaknesses Low operational scale: 60 ha per tractor, 1:40 farmers (Benin et al., 2012, Houssou et al., 2013) Frequent breakdowns Poor maintenance and lack of skilled operators Weak operators’ incentives Lack of incentives to explore market across regions Lack of spare parts Source: MoFA 12

Emerging Private Sector-Led Mechanization Tractor ownership and farm size Farm size (ha) Number of owners Percent owning Cumulative percent Less than 2 ha 3 0.8 2-5 ha 26 6 7 5-30 ha 287 71 79 >30 ha 86 21 100 Total 402 Looking at the distribution of farm size among these owners: owners are not typically small farmers as we know them The majority - 70% cultivate 5-30 ha of lands, only 20% more than 30 ha Source: IFPRI/SARI Survey (2013).

…………Emerging Private Sector-Led Mechanization Hiring-out mechanization services among tractor owners   Overall Terciles of cultivated land Lowest Middle Highest Percentage of farmers who hire-out services First plowing (%) 83.2 82.0 81.7 85.8 Maize shelling (%) 19.5 17.2 18.3 22.8 Carting farm products and inputs (%) 35.5 38.5 38.1 29.9 Ratio of tractor owner to farmers served (median) 1:60 1:51 1:67 Number of hectares plowed per tractor (2012) 182.4 171.4 162.0 211.4 Years providing plowing services (n=302) 5.0 4.1 4.8 6.1 Source: IFPRI/SARI Survey (2013).

…………Emerging Private Sector-Led Mechanization Source: IFPRI/SARI Survey (2013). J. Deere = John Deere, M. Ferguson=Massey Ferguson

Emerging Private Sector-Led Mechanization Motivation and tractor financing Number of tractor owners: 402. Source: IFPRI/SARI Survey (2013).

Tillage on rice field (Asutsuare, Ghana) THANK YOU Tillage on rice field (Asutsuare, Ghana)