patterns of ownership and use of agricultural machines in ghana: implications for agricultural...

Patterns of Ownership and Use of Agricultural Machines in Ghana: Implications for

agricultural mechanization policy

Nazaire Houssou

Xinshen Diao

Frances Cossar

June 18, 2014

National School of Development,

Peking University, China

INTERNATIONAL FOOD POLICY RESEARCH INSTITUTE 2

• Recent Trends in Ghanaian Economy

• Mechanization in Ghana: Historical Perspective

• Current Agricultural Mechanization Policy

• Specialized Mechanization Service Provision

• Private Sector-Led Mechanization

• Prospects for Scaling up Agricultural Mechanization in Ghana

Outline

INTERNATIONAL FOOD POLICY RESEARCH INSTITUTE

Source: www.wpmap.org397


Recent Trends in Ghanaian Agriculture

• Middle-income country with 24 million people

• Transformed economy Increasing share of service sector : 50.6% of GDP (2013) Decreasing agriculture share : 21.3% of GDP (2013)

• But low agric. productivity and growing food needs

• Increasing rural-urban migration and land/labor ratio

• Rising demand for mechanization (Diao et al., 2014)

• Focus on land preparation similar as earlier in South Asia (Binswanger, 1978)


Mechanization in Ghana: Historical Perspective

• Large state involvement in mechanization after independence (1957)

• Mechanization as means for increasing power supply and 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


Current Agricultural Mechanization Policy

• Since 2007 GoG. renewed support for mechanization

• Attempts to partner with private sector

• GoG. seeks low interest loans to import tractors and other agricultural machines

• Sells tractors to individual farmers & AMSECs at subsidized prices with lenient repayment schedules

• Loan origin dictates tractor importing country


Current Agricultural Mechanization Policy

2003 2004 2005 2006 2007 2008 2009 2010 2011 20120

200

400

600

800

1000

1200Figure 1: Agricultural Machinery Imports

Government

Private market

Source: Diao et al. (2012). NB: Data for 2012 is up to July 2012


State-sponsored specialized service provision not viable

Figure 2. Net profit of tractor investment — actual (South)

Source: Houssou et al. (2013)


State-sponsored specialized service provision not viable

Specialized service provision: AMSEC Weaknesses

• Provide only plowing services

• Low operational scale: 60 ha per tractor, 1:40 farmers (Benin et al., 2012, Houssou et al., 2013)

• No regional migration across rainfall zones

• Frequent machine breakdowns

• Lack of spare parts

• Poor maintenance and lack of skilled operators


Straight line plowing saves time and fuel (Upper East, Ghana)

Source: Courtesy from the University of Hohenheim (Germany), 2014

Irregular plowing

Straight line plowing


Medium-Large Scale Farmers and

Mechanization Survey (2013)

Conducted in collaboration with Savanna Agricultural Research

Institute (SARI) Category Sample size

Tractor owners

Small 768 29

Medium 850 213

Large 225 160

Total 1,843 402

What Are Farmers Doing about Mechanization?

11

Source: IFPRI/SARI Survey (2013).


Tractor and Animal Traction are Both Relevant

12Source: IFPRI/SARI Survey (2013).

Use tractor

plowingUse animal

plowing Do not plow

DistrictNon-tractor

ownersTractor owners

Non-bullock owners

Bullock owners

Ejura 108 119 0 0 26

Techiman 14 1 0 0 202

Kintampo North 58 9 0 0 154

Yendi 135 112 1 0 21

Gushiegu 172 91 5 1 31

Kasena Nankana East

99 10 31 11 9

Bawku Municipal 36 5 79 54 21

Sissala East 131 45 17 19 16

Total 753 392 133 85 480

Table 1: Distribution of mechanized plowing in the sample


Emerging Private Sector-Led Mechanization

13

Gov.11%

Private89%

Source of Tractor Acqui-

sition

Number of tractors: 487.

New21%

Used79%

New or Used Tractor?

M. Fergu-

son59%

Farmtrac

13%

J. Deere9%

Ford7%

Others12%

Dominant Brands

Increase private ownership of used tractors, mostly M. Ferguson

Source: IFPRI/SARI Survey (2013). J. Deere = John Deere, M. Ferguson=Massey Ferguson

Figure 3: Sources, state, and tractor brands in the survey districts


Refurbished Massey FergusonTractor (Ejura, Ghana)


Tillage on rice field (Asutsuare, Ghana)



16

Tractor owners started small

Small85%

Medium11%

Large4%

Initial

Figure 4: Farm size dynamics among tractor owners

Source: IFPRI/SARI Survey (2013). Small (< 5 ha), Medium (5- 20 ha), Large (>20 ha)

Small4%

Medium25%

Large71%

Current

Number of tractor owners: 402.



17

Table 4: From tractor user to tractor ownership

Overall

Terciles of cultivated land

Lowest Middle Highest

How many years hired-in tractor services before owning? (n=339) 9.7 8.8 10.3 10.2

Less than five years (%) 18.3 38.9 23.0 15.8 Five to ten years (%) 30.7 33.3 31.1 30.4 More than ten years (%) 51.0 27.8 45.9 53.8How many years since owning a tractor? (n=397) 3.6 3.1 3.4 4.2

Less than five years (%) 77.8 78.8 82.1 72.5 Five to ten years (%) 15.4 16.7 11.2 18.3 More than ten years (%) 6.8 4.5 6.7 9.2Mean tractors owned per farmer (n=402) 1.2 1.1 1.1 1.4Source: IFPRI/SARI Survey (2013).



18

Figure 5: Motivation and tractor financing

Farm expansion50%

Timeliness22%

Service provision22%

Others5%

Why do owners acquire tractors?


Own savings (only)87%

Loans2%

Remit-tances4%

Others7%

Financing with own savings

Number of tractor owners: 402.



19

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 1:60 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

Table 5: Hiring-out mechanization services




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Table 6: Hiring-in tractor servicesSmall Medium Large

Number of non-tractor owners (n=1,441) 739 637 65

Percentage of farmers who hired services

Plowing (n=750) 45.3 58.9 61.5

Shelling (n=338) 17.3 30.5 24.6Carting (n=375) 20.0 32.3 32.3

Experience with service rental (years)

Plowing 7.7 9.5 12.5Shelling 5.6 6.3 6.6Carting 6.3 7.0 11.8


Developing tractor service rental market


Prospects for Scaling up Agricultural Mechanization in Ghana

• Mechanization unlikely to scale up without development of private channels

• Support ownership among farmers who are providers

• Transfer ownership decision and choice to farmers

• Policies to overcome credit market failures

• Seek flexible machinery loan sources

• Develop appropriate machines import channels for an easy exit in the medium and long terms


THANK YOU !

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