CLUB of BOLOGNA 25 th Annual Meeting of the Club of Bologna November 15-16, 2014 Bologna EIMA International 2014 AGRICULTURAL MECHANIZATION STRATEGIES FOR SUSTAINABLE INTENSIFICATION: CONCEPTS AND CASES FROM (FOR) SUB-SAHARAN AFRICA Josef Kienzle josef.kienzle@fao.org Brian G. Sims briangsims@aol.com
Content Context and Background The current situation of agricultural mechanization in African countries Agricultural mechanization demand Agricultural mechanization supply Constraints to the private sector Towards agricultural mechanization development Suggested Interventions Conclusions
mechanization by farm size Source: FAO, 2014
How Africa compares with other developing regions Region Africa (less Egypt and Mauretania) Average of 9 selected countries (Bangladesh, Brazil, China, India, South-Korea, Pakistan, Philippines, Thailand, Vietnam) Cereal Yield [Kg/ha] Source: The World Bank (2007) as cited by FAO and UNIDO (2008) FERTILIZER USE [Kg/ha] IRRIGATION PERCENTAGE OF ARABLE LAND TRACTORS PER 1000 ha 1040 13 5 28 3348 208 38 241
Africa Source: Sueddeutsche Zeitung, No. 259, 9-10 November, 2013
90 80 70 60 50 40 30 20 10 0 Use of different sources of power in agriculture in Africa (%) Hand Draught Animals Tractor Central Western Eastern Southern Source: Clarke, FAO, 1997 Key Note Kienzle- Sims
Africa African governments have encouraged farmers to use agricultural machinery through many development programs and other incentives, Structural Adjustment in the 1980s did not clearly define the respective roles of the government and private sectors, Since this period agricultural mechanization entered into a vicious circle caused mainly by an inadequate political and economic environment which has hindered the emergence of the private sector.
Agricultural mechanization (AM) demand Vicious Cycle of AM under development Low income of farmers Low productivity Low saving of farmers Low AM demand
Agricultural mechanization demand Physical environment with harsh tropical and sub-tropical climates, fragile eco-systems and highly degraded soils, but also abandoned land resources, Mostly small-scale and subsistence farmers, Lack of farmers skills and lack of effectiveness of professional organizations, Harsh business environment which includes the social, political, economic, regulatory, tax, cultural, legal, and technological environments, health
Agricultural mechanization demand Vicious circle of AM underdevelopment AM demand Low income of farmers Low productivity Low saving of farmers Low AM demand
Agricultural mechanization supply Low income of farmers Vicious circles of Agricultural mechanization Supply Low productivity Low Low AM AM demand Low saving of farmers High cost of AM use low AM supply High cost of AM
Agricultural machinery importation and distribution The specialist private importers Occasional private importers State institutions Importation of used equipment Agricultural machinery donations Agricultural machinery importation and distribution Direct importation Reduced potential for private investors to become involved
Agricultural machinery manufacturing State institutions Formal private manufacturer Informal sector Agricultural machinery Manufacturing
Objectives of Agricultural mechanization Improved income of farmers development (the strategy) High productivity Low High AM AM demand demand High saving Virtuous circles of AM development Low cost of AM use High AM supply plus. Low cost of AM
Objectives of Agricultural mechanization development (the strategy) Environmentally sustainable & climate resilient interventions Highest possible production Environmental footprint < recovery capacity Conservation Agriculture & Climate Smart Agriculture Sustainable Crop Production Intensification
Agricultural mechanization development Interventions to assist the farmers (demand side) Policies and regulations which restrict the choice of farm machinery by the purchaser should be removed; Leasing or credit programmes should allow purchase or leasing of imported machinery as well as domestically produced machines; Consumer protection legislation should be introduced to protect consumers against being sold faulty or inappropriate or un-safe and potentially dangerous machines; Programmes should concentrate on providing information for farmers and farm businesses to enable better choices to be made that consider both technical, business and environmental issues.
Agricultural mechanization development Interventions to improve supply side (private sector) Policies which protect local industries should be removed, e.g. subsidized finance favourable tax exemptions for domestically manufactured machinery protective tariffs on imported machinery and barriers to foreign investment. Free up the market for the importation of foreign machinery, including removal of unreasonable testing and certification; Reduce bureaucracy and barriers to business development; Create an environment which eases the development of businesses including such measures as easing import restrictions, creating a level playing field for foreign businesses Key Kienzle - Sims
Agricultural mechanization development Interventions to improve supply side (private sector) Any subsidized programme operated by the state should have a pre-defined period of operation after which it would be privatized. Introduce training and education programmes for commercial development as well as technician training (scope for donor support). Donors should consider supporting the farming and agricultural machinery sector by underwriting credit for these purposes. Such programmes could include business and technical training elements. Key Kienzle - Sims
Agricultural mechanization development Interventions to support efficient, lean and environmentally sound and sustainable mechanization Introduce smart subsidies for mechanization inputs that are in line with sustainable mechanization and concepts such as Save and Grow and Climate-Smart Agriculture. Develop precision agriculture applications as an integrated tool within the sustainable agricultural intensification concept. Work on global agreements for good practices in the procurement and supply of agricultural mechanization inputs. Accept FAO together with others such as UNIDO and OECD, as international bodies that provide a neutral platform for private and public sectors to work in harmony to develop and implement sustainable mechanization strategies for the benefit of farmers and rural enterprises in developing regions especially Africa
Summary and Conclusions A1. Reinforcing Human capacitybuilding A2. Improving Business environment A4. Promote environmental sustainability with innovations in AM A3. Providing financial support to enhance investment in AM
Thank you josef.kienzle@fao.org http://www.fao.org/agriculture/crops/core-themes/theme/spi/en/