Thinking Outside the Plot: Insights on Small-Scale Mechanisation from Case Studies in East Africa

Abstract

The changing agricultural sector and the challenges faced by smallholders call for the need for farm mechanisation suited to smallholder farming. Conventional four-wheeled tractors (4WTs) are not feasible for many smallholders owing to their high capital costs, unsuitability for fragmented holdings as well as topography and slope. More appropriate technologies are needed such as two-wheeled tractors (2WTs) and their requisite accessories. Our findings show that opportunities exist for the introduction of 2WTs in maize based systems through service provider models combining a number of operations that can be offered throughout the year and targeted to niche areas where 4WT access is unlikely. The paper also suggests that attention needs to be given concurrently to development of the 2WT supply chain to ensure that its profitability is sustainable.

Disclosure statement

No potential conflict of interest was reported by the authors.

Notes

1. The project is entitled ‘Farm Mechanization & Conservation Agriculture for Sustainable Intensification (FACASI)’ and is funded by the Australian Center for International Agriculture (ACIAR). The project is implemented by CIMMYT and has a four-year duration, 2013–2017. See http://facasi.act-africa.org/

2. In conducting the financial analysis a number of assumptions were made: i) Gross margins of the predominant farm type in the maize based system were calculated for with and without mechanisation. Detailed input and cost estimations were made showing a reduction in labour and energy use on a per hectare basis as a result of mechanisation; ii) constant prices were used as of November 2014, the prices prevailing during the data collection period (separate input and output prices were not considered in the ‘with-project’ and ‘without-project’ situations, as it was assumed that any additional crop yield is unlikely to substantially influence prices locally); iii) a time horizon of 10 years was taken for the analysis to capture the full benefits and costs of 2WT mechanisation and its accessories; iv) varying discount rates were taken for the financial analysis reflecting the opportunity cost of capital in the case study countries, that is, the average interest rates of public sector lending institutions.

3. Mechanization Department of the Ministry of Agriculture, Food Security and Cooperatives (MAFC).

4. The vast majority of the operators fell into the second category. For category 3, individual hire service providers were identified in Kenya and Tanzania and the findings are based on case study analyses.

5. Three indicators were used for measuring the profitability of 2WT mechanisation investments over time: The Net Present Value (NPV), the Cost-Benefit Ratio and the Internal Rate of Return (IRR). The analysis covers a ten-year period taking into account the incremental net benefits and investment schedules. The mechanisation investments were phased in over a period of three years in line with the capacity of the farmer/service provider to pay. As such the combined implement of the ripper/seeder was introduced in year three.

6. Data on typical catchment areas for the various operations (ploughing, transportation and shelling) was collected from surveys of hire mechanisation service providers in the different locations.

7. The findings do not imply that each customer has to demand a full package of services but rather the service provider has to find a minimum of 20 customers for ploughing, 20 for shelling and 20 for transportation. Some of these customers may demand more than a single service.