Can the private sector lead agricultural mechanization in Ghana?


Book Description

Increasing agricultural mechanization has long been of interest to many African countries. Constrained by the limited area that can be cultivated through the use of the hand hoe and its association with perceptions of primitiveness and drudgery, agricultural mechanization and large-scale farming have long been a part of the vision of modernizing agriculture in many African countries, including Ghana.




Agricultural Mechanization in Ghana


Book Description

Since 2007, the government of Ghana has been providing subsidized agricultural machines to private enterprises established as Agricultural Mechanization Services Enterprise Centers (AMSEC) to scale up tractor-hire services to smallholder farmers. Although farmer’s demand for mechanization has increased in recent years, most of this demand concentrates on land preparation (plowing) service. Using the firm investment model and recent data, this paper quantitatively assesses whether AMSEC as a private enterprise is a viable business model attractive to private investors. Even though the intention of the government is to promote private sector-led mechanization, findings suggest that the AMSEC model is unlikely to be a profitable business model attractive to private investors even with the current level of subsidy. The low tractor utilization rate as a result of low operational scale is the most important constraint to the intertemporal profitability of tractor-hire services. Our findings further support the argument of Pingali, Bigot, and Binswanger (1987), who indicated that mechanization service centers supported through government’s heavy subsidy are not a policy option anywhere in the world, even in the current situation in Ghana. Although the tractor rental service market is a proper way of mechanizing agriculture in a smallholder-dominated agricultural economy such as Ghana, this paper concludes that the development of such a market depends crucially on a number of factors, including increased tractor use through migration across the two very different rainfall zones (north and south), increased tractor use through multiple tasks, and use of low-cost tractors. The government can play an important role in facilitating the development of a tractor service market; however, the successful development of such a market depends on the incentive and innovation of the private sector, including farmers who want to own tractors as part of their business portfolio, traders who know how to bring in affordable tractors and expand the market, and manufacturers in exporting countries who want to seek a long-term potential market opportunity in Ghana and in other west African countries.




Impact of Ghana’s agricultural mechanization services center program


Book Description

Use of mechanization in African agriculture has returned strongly to the development agenda, particularly following the recent high food prices crisis. Many developing country governments—including Ghana, the case study of this paper—have resumed support for agricultural mechanization, typically in the form of providing subsidies for tractor purchase and establishment of private-sector-run agricultural mechanization service centers (AMSECs). The aim of this paper is to assess the impact of Ghana’s AMSEC program on various outcomes, using data from household surveys that were conducted with 270 farmers, some of them located in areas with the AMSEC program (treatment) and others located in areas without the program (control).




Sustainable Agricultural Mechanization: A Framework for Africa


Book Description

This framework presents ten interrelated principles/elements to guide Sustainable Agricultural Mechanization in Africa (SAMA). Further, it presents the technical issues to be considered under SAMA and the options to be analysed at the country and sub regional levels. The ten key elements required in a framework for SAMA are as follows: The analysis in the framework calls for a specific approach, involving learning from other parts of the world where significant transformation of the agricultural mechanization sector has already occurred within a three-to-four decade time frame, and developing policies and programmes to realize Africa’s aspirations of Zero Hunger by 2025. This approach entails the identification and prioritization of relevant and interrelated elements to help countries develop strategies and practical development plans that create synergies in line with their agricultural transformation plans. Given the unique characteristics of each country and the diverse needs of Africa due to the ecological heterogeneity and the wide range of farm sizes, the framework avoids being prescriptive.




Agricultural mechanization and agricultural transformation


Book Description

A renewed focus on agriculture’s potential contribution to economic transformation in Africa has resulted in increased attention paid to agricultural mechanization. African agriculture still relies predominantly on human muscle power despite anecdotal evidence on urbanization and rising rural wages, in contrast to other developing regions that have experienced rapid increases in agricultural mechanization during the past few decades. Past state-led mechanization pushes in Africa often failed due to insufficient understanding of the nature of demand for mechanization technologies among farmers and insufficient knowledge of private-sector functions. This background paper reviews the factors likely to influence farmer demand for mechanization in Africa and details different existing and potential mechanization supply models. Although an empirical analysis of mechanization demand and the effectiveness of supply chains is beyond the scope of this paper, in part due to data limitations, this paper suggests that demand for mechanization may be emerging in some parts of Africa. It also suggests that private-sector-driven supply models are better positioned to meet this demand than direct government involvement and certain types of subsidized programs. The paper then identifies possible areas for government support to complement private-sector leadership in developing mechanization supply chains. Nevertheless, significant further research is required to better understand the changing nature of mechanization demand in Africa and the extent and effectiveness of different supply models in meeting it.




Mechanization in Ghana


Book Description

Little has been written in recent literature regarding the role of mechanization in agricultural transformation in Africa. Government-led mechanization schemes in the 1970s and 1980s proved unsustainable after structural adjustment policies removed government support. However, demand for mechanized services by smallholder farmers has grown recently, with urbanization and agricultural intensification creating a power bottleneck for land preparation, especially in some regions. Against this background, the government of Ghana has increased its support for mechanization by establishing subsidized mechanization service centers since 2007. This paper assesses the sustainability of the current supply network for mechanization, given government policy. Stylized models of mechanization supply are developed based on experience in Bangladesh, China, and India during similar stages of agricultural transformation. Ghana's supply network is then analyzed in light of key lessons from the Asian experience. The analysis focuses on two policy issues: (1) whether the current model promoted by the government has left enough room for the private sector to develop the supply chain, including machinery imports and trade, and (2) whether this model can better link smallholders' demand for mechanized services to its supply, such that supply can further induce demand and mechanization can broaden its role in agricultural transformation. By addressing these questions, this paper aims not only to fill the knowledge gap in academic literature but also to contribute to policymaking by identifying an appropriate and sustainable model tailored to the current needs of smallholder farmers in Ghana. The study concludes that the government-subsidized mechanization service center model is neither appropriate nor sustainable at the current stage of agricultural transformation in Ghana, and hence government policy should focus on the private-sector leadership along the mechanization supply chain, in the mechanized service market, in the machinery market (including imports and domestic trade), and in the repair service market.




Development of agricultural mechanization in Ghana


Book Description

This paper characterizes the network of tractor service providers in Ghana. Using the case of Ejura-Sekye-dumase district, this research examines the implications of the adoption of mechanical technology in agriculture for farmers and institutions based on perspectives that go beyond the suppliers and users of mechanization ser-vices alone. The results suggest that, in addition to rising population density and favorable access to local and regional markets, the current pattern of use of tractors by farmers in Ejura district emerged from favorable histori-cal and institutional factors. The current arrangement involving a network of private tractor owners providing trac-tor hire services to a broad set of farmers draws upon the legacy of an earlier institutional intervention and is sus-tained organizationally through kinship and other existing social relationships within and outside the district. More-over, the expansion of tractor use has created a set of new roles and relationships within the network. Participa-tion in the network is affected by various factors, including farmer’s access to capital and knowledge, experience, and contacts. This privately operated network is significantly more efficient and provides small-scale farmers with considerably better access to plowing service than did previous government-managed systems. Further develop-ment of the tractor service sector is likely to improve the quality of mechanization offered to smallholder farmers, enhance bargaining power for farmers seeking such services, and reduce structural weaknesses within the net-work.




Ghana's Economic and Agricultural Transformation


Book Description

Using Ghana as a case study, this work integrates economic and political analysis to explore the challenges and opportunities of Africa's growth and transformation.




Agricultural Mechanization in Sub-Saharan Africa


Book Description

The manual work carried out by farmers and their families is often both arduous and time consuming and in many countries this is a major constraint to increasing agricultural production. Such day-to-day drudgery is a major contributoring factor in the migration of people, particularly the young, from the rural countryside to seek the prospect of a better life in the towns and cities. Farm production can be substantially increased through the use of mechanical technologies which both are labor-saving and directly increase yields and production. This document provides guidelines on the development and formulation of an agricultural mechanization strategy and forms part of FAO's approach on sustainable production intensification.




Economics of Tractor Ownership Under Rainfed Agriculture with Applications in Ghana


Book Description

This paper assesses whether tractor investment is a rational and profitable decision for farmers using firm investment theory and tractor owner survey data collected in 2013. Under erratic rainfalls, timeliness of farming operations is critical for farmers. Based on the hypothesis that owning a tractor and hiring tractor services are not necessarily perfect substitutes for farmers with relatively large farm sizes, this paper assesses whether mechanization services can be profitable for the private sector in Ghana. It particularly addresses whether farmer-to-farmer service provision is a viable alternative to current programs, which should be promoted by policymakers for scaling up agricultural mechanization in the country.