Agricultural mechanization in Nigeria: Demand characteristics and nature of tractor service provisions

Transcription

1 Agricultural mechanization in Nigeria: Demand characteristics and nature of tractor service provisions Hiroyuki Takeshima (IFPRI) NSD-IFPRI Workshop June 18, 2014 Beijing, China

2 Nigeria at a glance Indicator Value Number of State 37 Number of Local Government Area (LGA) 775 GDP per capita (Real 2005 USD PPP) 2689 GDP per capita growth rate (%) 7.4 Agricultural value added to GDP (%) 22 Contribution to employment (%) 68 Poverty rate (% living on $1.25/day) 70 % of cultivated area irrigated 2 % of rice area irrigated 4 Average farm size (ha) 1.8 Median farm size (ha) 0.5 Farm wages (Nominal, USD / day) North 4 Farm wages (Nominal, USD / day) South 6 Tractor hp per cultivated area (hp / ha) 0.03 ~ 0.04 Sources: LSMS (2010/2012); NBS Rebasing Report 2014; Presents based on various others.

3 Farming system in Nigeria Pastoral Agro-pastoral millet / sorghum Cereal root crop mixed Root crop Tree crop State boundary Coastal artisanal Source: Dixon et al. (2001)

4 Tractor policies in Nigeria Past Government tractor-hiring service (THS) xpanded in 1970s W tractors in 250 Units across the country in 1983 (Akinola 1987) Often less efficient than private sector THS (Kolawole 1972; Akinola 1987) Subsidized distribution of tractors federal / state Federal Government tractorization program (Jabbar 1995) - substantial though still small compared to fertilizer subsidy : 85 million / 5 year (converted to 2010 USD) : 310 million / 5 year : 775 million / 5 year 1986 ~: SAP started 2000s: Currency devaluation => 8-fold increase in imported tractor prices Reduced tractor subsidy Obasanjo administration 1000 tractors and implements 25% subsidy (Federal Government)(Ladeinde et al. 2009) in 2003, 2005 State governments subsidized distribution

5 Annual tractors imports in Nigeria (period average) NA Mostly 4 wheel tractor Power tiller = only 100 / year ( ) Source: FAOSTAT for Figures for are authors estimation based on information from National Bureau of Statistics. Notes: The National Bureau of Statistics reported net weight of agricultural tractors and tractors other fully built agric. Assuming that each tractor weighs 5 tons, the approximate number of imported tractors is derived. Some of the earlier figures are consistent with other studies. For example, figures for are generally consistent with IBRD (1978), as cited in Bates (1981). Figures for are excluded due to unusually large importation recorded in 2006.

6 State tractor distribution programs: xample: Kaduna state At least 10 ~ 20% of state agricultural spending (Takeshima et al. 2014) Tractor brand recommended by ngineering Department in the State Ministry of Agriculture Competitive bidding (due process) to select contractors for tractor procurement Package - tractor, plough, harrow + ridger beneficiary must buy all of them Subsidy - 60% total = 25% by the Federal + 35% by the State In tractors distributed 129 units of 50 HP (Individuals - 50, Cooperatives - 79) 57 units of 75 HP (Individuals) 6

7 Tractor policies in Nigeria New focus of Federal Government Promotion of private sector tractor hiring services Mechanization Implementation Program (MIP) stablish Agricultural quipment Hiring nterprise (AH) - privatesector managed tractor hiring enterprises 80 AHs within key industrial clusters, each with 5 tractors + implements, 5 two-wheel tractors, and a few other harvesters / threshers, operated by private sectors including farmers, cooperatives or investors Subsidized tractor hiring services for small-scale farmers (0.5 ~ 4ha) Part of the -wallet based subsidies (for seed, fertilizer) Agriculture Machinery Data Tracking Center (Agro-Mach DTC) - electronically monitor various information of tractors (tracking the locations, uses, storing of records) Source: FMARD (2014) State governments may continue tractor distribution programs

8 Private sector tractor supply network emerging as well Several large importers / retailers serve institutional clients (states, sugarcane estates, large scale foreign farmers in certain states)(ajibola & Zalla 2007, Author s fieldwork in 2014). Small / medium retailers Medium sell 100 tractors / year Small 10 ~ 30 tractors / year (new, refurbished) Refurbishing is the main, retail is side business, individual farmers Several of these types in major cities within each state Major sources of used tractors for individual buyers

9 Areas (%) plowed by tractors and draft animal (2010 Jan Aug) Tractor Animal National = 8% National = 30% Source: Author s calculations based on LSMS-ISA. The denominator is all the households that report at least one plot. The percentages are calculated using the sample-weights. Animal tractors owned or rented are based on those who reported the actual number of days using animal traction. 9

10 Tractorization in Nigeria is mostly for rice Tractorized area Total area Rice Maize Sorghum Millet Cowpea G nuts Cassava Yam Veg Area (total, tractorized) by crops for 2010/12 January - August Source: LSMS-ISA Data 2010/12 Million ha 10

11 Tractor services mostly provided by private tractor owners Majority are by tractor service providers, instead of own tractor Area (million ha) cultivated by own and rented tractors service providers own tractors Private markets 42 Government 28 Friends/neighbors 14 Relatives 10 Other 7 Sources of tractor services in 2010 rainy seasons (%) Source: Author s calculations based on LSMS-ISA. The denominator is all the households that report at least one plot. The percentages are calculated using the sampleweights. Animal tractors owned or rented are based on those who reported the actual number of days using animal traction. % 11

12 Farm household types and mechanization Takeshima et al. (2013) Living Standard Measurement Survey (LSMS) 2010 Modified cluster analysis Household simulation Key findings: Northern Nigeria A fraction of tractor users in many farm household types Animal traction + irrigation seems substituting tractors Tractor use in the North => less defining of farm household types Southern Nigeria Mostly used by medium scale rice farmers with distinctive characteristics (input intensive, asset wealthy) Household model simulation Given the labor requirement, price and wage levels, demand for mechanized plowing is potentially large among small-holder staple crop farmers in Nigeria 12

13 IFPRI/Ahmadu-Bello University survey Tractor owners / operators (2013) Small survey on tractor owners Sept ~ Oct 2013 (Takeshima et al. 2014) 111 respondents 64 (Kaduna), 47 (Nasarawa) Initial sampling frame list of recipients in 2009, 2010, 2011 Purposively selected, snowballing Kaduna Abuja Nasarawa 13

14 Two types of tractor owners identified based on the sources of tractors Government-sourced (GS) owners Market-sourced (MS) owners Obtained tractors only through government scheme Obtained tractors through privat emarket, private individuals Tend to be more efficient H 0 : MS owners = GS owners Non-parametrically test differences in average / median 14

15 MS owners use tractors more than GS owners 692 Hours operated, per tractor, year 977* Areas served (ha), per tractor per year * Mean GS MS Median Source: Presenter s calculation based on survey. MS owners operate longer hours, serve more areas than GS owners 74 GS (mean) MS (mean) GS (median) MS (median) Hired out farming Own farming 15

16 MS owners earn more revenues than GS owners Benefits from tractor use in the last 12 months (current USD 1,000) GS MS Median Mean Median Mean Total gross revenues per year * 13* Monetary values of own-farm use Gross earnings from hiring out Payment for operators and fuels Operators Fuels Repairing Source: Presenters. MS owners earn significantly more than GS owners Revenues are much greater while operators / fuels costs are similar 16

17 MS owners spend less on operators / fuels Charges for service, payments for operators / fuels (USD / ha - farming, USD / day - non-farm service) Charges Payment for operator Payment for fuel GS MS GS MS GS MS Farming (USD / ha) Harrowing *10 25 *17 Plowing / tilling *21 Ridge making *12 Non-farming (USD / day) Transporting farm products *21 Transporting non-farm *22 goods Firewood transport * Source: Presenters. Cost of bringing tractors (USD per hour of move) Fuel Driver Total GS MS GS MS Mean * Median * 11 9* Source: Presenters. 17

18 Tractor use highly seasonal but MS owners are more active all-year around Mean 63* 55 59* * 119* 104* Hours of operation per tractor Median 147* * 66*72* 44* 43 GS MS Month 34* 23* 12* 82* 103* * 89* * * 63* 68* 73 58* 59* 56* * 5 51** 44* % operating by month * = statistically significant difference between MS and GS Substantial seasonality But MS owners mitigate seasonality; still find some work in off-season

19 Tractor services limited to local area similar to Asia in the past Average distance away from home district in each month (uclidean distance from home district) Month 20* 15* 45* 39* Travel alone (N = 79) Travel in group (N = 11) 32* 39* * Travel on tractor (N = 83) Travel on truck (N = 6) 95 84* 73* 62* 53* Travel is generally confined within 25 km radius (uclidean distance) Group traveler - travel further away in off-season Truck traveller (10% of sample) - travel further away in peak-season 19

20 MS owners may have knowledge of soil types and appropriate horsepower Figure 4. Bulk density of soils in Kaduna and Nasarawa (darker = heavier soils) Source: ISRIC (International Soil Reference and Information Centre) (2013). Correlation between the tractor horsepower and bulk density of soil MS owners (conditional on operating outside the home LGA) Could select from a range of horsepower Kaduna Nasarawa Both Corr. N of Corr. N of Coeffic obs Coeffic obs ient ient 20 N of obs Corr. Coeffic ient * ** ** All Source: Presenters. MS owners who could select from a range of horsepower travel more to heavy soil area if they have higher horsepower tractor Some indication: MS owners can use tractor efficiently based on soil type (no such patterns among GS owners)

21 Other key findings High horsepower tractors (50 hp or more) common Most repair is done within the village 50% of spare parts are still obtained outside LGA Age of tractors at purchase New 15 ~ 20 years, Used 10 ~ 30 years Slightly but not much older than in the US - 14 years in Iowa in 1998 (Freeman 1999) MS owners old, used attachments Mostly purchased within the state Travelling in group earn more revenue Tractor purchase financed through own savings of several years Speed of operation Most operate less than maximum desired # of days

22 Summary policy / research issues in Nigeria Seemingly rising farm wage, growing rice consumption => mechanization as important aspects of Nigerian agricultural transformation Lack of data particularly since the beginning of SAP in 1986 Tractor census Data for assessing mechanization demand Seeming preference for large, high hp tractors (60 ~ 70hp) Demand factors conomies of scale? Lack of high-yielding varieties? Supply factors Biased support for large tractors? Market-sourced tractor owners more efficient service providers than government-sourced (subsidized) tractor owners But supply may be still constrained across space and time market failure in mechanization service Further research needed on government s roles

23 References Akinola A. (1987). Government Tractor Hire Service Scheme as a Tractorization Policy in Africa: The Nigerian xperience. Agricultural Administration & xtension 25, Bates R. (1981). Markets and states in tropical Africa: The political basis of agricultural policies. Berkeley, CA: University of California Press. Dixon, J., A. Gulliver, and D. Gibbon Farming systems and poverty. Improving farmers livelihoods in a changing world. Rome and Washington D.C.: FAO and The World Bank. Federal Ministry of Agriculture & Rural Development (FMARD) (2014). Private sector driven agricultural mechanization framework (PSDAMF) and GS application strategy for ATA. Computer Disk. Freeman SA. (1999). Potential Impact of a ROPS Retrofit Policy in Central Iowa. Journal of Agricultural Safety and Health 5(1), IBRD (International Bank for Reconstruction and Development) Nigeria: An Informal Survey. Lagos: IBRD (Typescript, Table 16). Jabbar MA. (1995). nergy and the evolution of farming systems: The potential for mixed farming in the moist Savannas. In Moist Savannas of Africa: Potentials and Constraints for Crop Production : Proceedings of an IITA/FAO Workshop Held from September 1994, Cotonou, Republic of Benin. IITA.

24 References Kolawole MI. (1972). conomic aspects of tractor contracting operations in Western Nigeria. J. Agric. ngng Res. 17, Ladeinde MA, O Atanda, AJ Ageh, SO Idowu & SO Olayemi. (2009). Agricultural machinery operators and mechanics training in Nigeria: An overview of contributions. Journal of Agricultural ngineering and Technology 17(2), Okolie AC. (1995). Oil rents, international loans and agrarian policies in Nigeria, Review of African Political conomy 22(64), PrOpCom. (2011). Making tractor markets work for the poor in Nigeria: A PrOpCom case study. PrOpCom, Nigeria. Takeshima H, A Nin Pratt & X Diao. (2013). Mechanization and agricultural technology evolution, agricultural intensification in sub-saharan Africa: typology of agricultural mechanization in Nigeria. American Journal of Agricultural conomics 95(5, ASSA Proceeding Issue), Takeshima H, deh, A Lawal & M Ishiaka. (2014). Tractor owner operators in Nigeria: Insights from a small survey in Kaduna and Nasarawa states. Forthcoming in IFPRI Discussion Paper.