PIM webinar conducted on October 4, 2018 by Dr. Hiroyuki Takeshima, International Food Policy Research Institute. More about PIM Webinars and archive her: https://pim.cgiar.org/resource/webinars/

2. Outline
 Background
 Synthesis of the work compiling experiences in Asia and Africa
 Policy engagements and key policy outcomes
 Agricultural mechanization and private investment for rural transformation

3. Substantial spread of tractors for land preparation in Asia and
widening gap with Africa
0
10
20
30
40
50
60
70
80
90
100
1960 1970 1980 1990 2000 2010
% of cultivated area prepared by
tractors (rice area for Sri Lanka)
Bangladesh
India
Sri Lanka
Vietnam
China
Nepal
Nigeria
0
10
20
30
40
50
60
70
80
90
100
0 20 40 60 80 100
Share (%) of
area plowed
by tractors
% of employment in agriculture
Thailand
Bangladesh
India
VietnamChina
NepalNigeria
Thailand

4. Farming system intensification and labor movement out of
agriculture in some African countries
Ethiopia
R-value = harvested area /
(arable land + pasture,
meadows)
0
0.1
0.2
0.3
0.4
0.5
0.6
0.7
1960 1970 1980 1990 2000 2010
Nigeria
Ghana
Kenya
East Africa
Southern Africa
Tanzania
West Africa
Middle Africa
0
10
20
30
40
50
60
70
80
90
100
Groningen Growth and
Development Center
Nigeria Ethiopia
Ghana Kenya
Tanzania
0
10
20
30
40
50
60
70
80
90
100
World Development Indicator
Nigeria Ethiopia
Ghana Kenya
Tanzania
Declining share of employment in agriculture in African countries

5.  Mechanization is a key driver of
technical change in returns-to-scale
in agriculture
 Shifting comparative advantage from
smallholders to larger farmers
 Land, labor market imperfections
may become more binding
constraints
 Smallholders still gain from
mechanization if they cannot exit
farming
 High-yielding varieties induce
smallholders’ mechanization
adoption
Where adopted, mechanization has directly raised returns-to-
scale, but also benefited smallholders
Takeshima H. (2017). Custom-hired tractor services and returns to scale in
smallholder agriculture: A production function approach. Agricultural Economics
48(3), 363–372.
Takeshima H, N Houssou, X Diao. (2018). Effects of tractor ownership on returns-
to-scale in household maize production: Evidence from Ghana. Food Policy 77,
33–49.
Takeshima H. (2018). Mechanize or exit farming? Multiple-treatment-effects
model and external validity of adoption impacts of mechanization among
Nepalese smallholders. Review of Development Economics, in press.
Takeshima H. (2017). The roles of
agroclimatic similarity and returns
to scale in demand for
mechanization: Insights from
Northern Nigeria. IFPRI Discussion
Paper 01692 (Nils Westermarck
Award at 30th Triennial Conference
for International Association of
Agricultural Economists,
Vancouver, Canada, 2018).

6. Synthesis of the work compiling experiences
in Asia and Africa

7. Scope of the synthesizing work
 Scope
o Historical evolution of mechanization
o Demand-side factors
o Supply-side factors
o Effects on agricultural transformation
 8 Asian countries
o E / SE Asia
o China, Myanmar, Thailand, Vietnam
o S Asia
o Bangladesh, India, Nepal, Sri Lanka
 5 African countries
o Ethiopia, Ghana, Kenya, Nigeria, Tanzania

8. Guiding framework of synthesis
A. Rising demand for mechanization in significant areas within Africa
o Farming system intensification
o Induced technological change (combined with increasing off-farm employment and rising rural wages)
B. Supply responds to rising demand over time, but with time lags and transition costs
o The public sector can mitigate these, partly through South-South knowledge exchange
1. Farming Systems Intensification (Boserup 1965; Ruthenberg 1980)
o Increasing population pressure and rising demand for agricultural products from urbanization
o Shortening fallow period, growing demand for more intensive tillage
o Farming system intensification in the 80s insufficient for tractor powers (Pingali, Bigot & Binswanger 1987)
2. Induced technological change in response to changing labor-land ratio (Hayami & Ruttan 1970; 1985)
o Mechanization as labor-saving technologies responding to increasing off-farm employment and rising rural
wages
3. Market Failures, particularly for the supply of machinery hiring service
o Indivisibility
o Limited spatial mobility
o Seasonality of demand
o Coordination failures
o Knowledge barriers

9. Mechanization growth experiences in Asia
1. Demand for mechanization originally raised through technological improvements and farming
system intensification
2. Demand has been further raised by rising labor costs due to economic growth, industrialization,
urbanization
3. Subsidies provided but with minimum distortions; competitive, without targeting particular types of
beneficiaries
4. Credit often provided by machine sellers, as well as commercial banks taking land use right as
collateral
5. Local manufacturing started from spare parts, then attachments, then machines
6. Smaller machines - power tillers, 4wt (< 50hp), small to medium sized combine harvesters
7. Multifunctionality of machines fully exploited, partly through irrigation expansion (powering water
pumps, carting)
8. Liberalization often facilitated mechanization growth – Vietnam, Bangladesh in the 90s, Myanmar in
the 2010s

10. Mechanization growth experiences in Africa
 Spatial heterogeneity in
mechanization growth; Pockets of
areas with rising adoption, albeit
with low national level adoptions
 Ghana, Nigeria, Tanzania
 Ethiopia -
o 1% of plots at national level
o but higher adoption in wheat-barley
systems in the Southeastern part
of the country (flatter terrain, more
presence of larger-farmers) where
tractors substitute draft animals
 Kenya
o low adoption at national level
o but higher adoptions in the tropical
highlands and coastal lowlands
Source: Kahan et al. (2018)
Draft animal 4-wheel tractor 2-wheel tractor
Tractor (Nigeria)Agricultural machinery (Ghana)
(Tanzania)

11. Demand side factors in Africa
1. Rising population density and improving market access have induced the shift to
permanent cropping (Binswanger-Mkhize & Savastano 2017)
2. Within-country heterogeneity in farmland endowments led to different types of demands by
smallholders and large farmers
o Emergence of medium scale farms (Jayne et al. 2016)
3. Urbanization without industrialization (Gollin et al. 2016) including ag-industrialization,
widespread mechanization in the agricultural sector
4. Low demand at intensive margin
o High demand for first tillage, but rapidly declining demand for second- or third- tillage
o Low demand for multi-functional use
5. Dominance of tree, root crops in certain parts of Africa – less conducive to plowing in the
short-run

12. Supply side factors: market / government failures limit supply
responses where demand has emerged
1. High horsepower, expensive tractors still dominant in Africa
2. Little commercial credit extended by dealers, banks for tractor purchase
3. Manufacturing of spare parts, attachments, have not grown in Africa
4. Insufficient knowledge of tractor operations
5. Government has faced challenges in identifying efficient service providers to support

13. 13
Market-sourced tractor owners use tractors more
extensively than government-sourced owners in Nigeria
Source: Presenter’s calculation based on survey.
MS owners operate longer hours, serve more areas than GS owners
692
499
977*
691
Mean Median
Hours operated, per tractor, year
GS MS
29 41
74
128
GS (mean) MS (mean)
Areas served (ha), per tractor
per year
Own farming Hired out farming
Source: Takeshima et al. (2015)

14. 14
Tractor use highly seasonal but market-sourced owners are
more active all-year around in Nigeria
34
39
33
65
75
111
80
43
242427
34
63*
5559*
104*
119*
147*
126*
65
44*
57*
66*
72*
1 2 3 4 5 6 7 8 9 101112
GS
MS
43
40
37
44
61
85
73
52
42
36
33
42
63*
58*59*
78*
89*
92
84
67
49
56*
67*68*
Hours of operation per tractor % operating by month
Month
Substantial seasonality
But MS owners – mitigate seasonality; still find some work in off-season
* = statistically significant difference
between MS and GS
Source:
Takeshima et al.
(2015)

15. Key strategies for Africa
1. Lift import restrictions, and allowing importation of a variety of machines, tractors of
various brands, horsepower
o Inspection of imported tractors
o Access to foreign exchanges
o Licensing and import duties waiver requirements
2. Allow markets to select efficient service providers, machine designs
o Service providers obtaining tractors from the competitive market, without subsidies,
are often more efficient than government-selected service providers
3. Use subsidies, if needed, to increase, rather than limit, exposure to more brands, types
of equipment
o Past concessional loans required equipment and parts to be imported from the donor
country
o Greater variety of imported brands and types provides ideas for local adaptation

16. 4. Public goods
o R&D to develop and adapt locally appropriate machinery, often in collaboration with
domestic private sectors
o Knowledge that the private sector can use
o Local soil conditions, performance of different types of machines, suitable plow-
depth, tractor horsepower
o Investments in other complementary technology, rural infrastructure, that make
mechanization feasible
o Coordination (Chinese experience)
o Linking combine harvester owners and customers in other regions
o Coordination among migratory service providers
o Harvesting calendars
o Local institutional mechanisms (farm-based organizations, cooperatives) to promote
local coordination in crop planting and harvesting
5. Solutions differ within countries, across agricultural systems
Key strategies for Africa

17. Policy engagements and key policy
outcomes
 Study-tour in Bangladesh
 Policy changes in Ghana, Nigeria

18. Bangladesh mechanization study tour for 9 African officials
• November 3 – 7, 2015
• 9 officials from 4 African
countries
• With collaboration with
Bangladesh consultants
• Visited
• Ministry of Agriculture
• 2 Agri. machinery Importers
• Agri. Machinery
manufacturer
• Machinery dealers & spare
parts distributors
• Farmers (rainfed region)
• 2 Agri. machinery research
institutes

19. Key reflections by government officials
1. Potentials of smaller tractors
o Multi-functionality
o Suitable soils in pockets of Africa
o Lower HP 4wt used for haulage
2. Private-sector provides many kinds of services to tractor buyers, addressing market
failures
o After-sales services with warranties
o Importers / dealers provided credit
o Demonstration, advertisements of available equipment
o Extensive networks throughout the country
3. Intensive tillage – several rounds of tillages as yield respond well
4. Significant investments into R&D, extension
o R&D institutes specifically focusing on machinery
o High human capital / skill levels of staff at R&D
5. Growth in mechanization despite still weak standardization / regulatory capacities

20. Impacts on policies in African countries: Ghana’s Agricultural
Mechanization Service Enterprise Center (AMSEC)
 Phase I (2007 - )
o Selective application requirements
o Low machine utilization
o High breakdown, damaging dues to improper operation / maintenance
o High default rates
 Phase II (2016 - )
o New concessional loan facility from Brazil
o Partly incorporating recommendations by international agencies, including IFPRI
o Less selective application requirements
o Exploiting multi-functionality by providing various complementary equipment
o maize shellers, harvesters that can be attached or mounted to tractors, among others
o Free scheduled 1,000-hour technical tractor maintenance service
o Mobile workshops set up with subsidy - run by private individuals
o Spare parts
o Mandatory participation in MOFA-provided training for first-time buyers

21. Impacts on policies in African countries: Nigeria
 Mini Mobile Mechanization System (MMMS)
o Power tillers and other machines provided, particularly for the youths
o Power tillers expected to be used for
o Plowing
o Transportation of light machines, including small harvesters, threshers, etc.
o Bangladesh study-tour helped them see the multi-functional use of power tillers
 Shift from subsidized distributions of tractors to more market-oriented
approach
o Kaduna state in Nigeria
o Facilitating tractor market stakeholders
o Linking farmers’ associations and tractor-supplying companies

22. Concluding remarks
 Public sector’s role in generating and transferring knowledge
o Asian experiences can offer much knowledge to Africa
o International (inter-continental) perspectives inform how mechanization grew, even though some
constraints had remained unresolved, or which constraints had been resolved by the private sector
o Important to more accurately understand Asian experiences through historical data
 Significant areas for research to contribute
o Determinants of mechanization spread among smallholders
o Mechanization and future of smallholders
o Roles of mechanical technologies on agricultural, rural transformation
 Agricultural mechanization – an outcome of private investment for rural transformation
o Significant roles of private investment for mechanical technologies; more private-sector driven than
biological technologies (Hayami & Ruttan 1985)
o Growth in agricultural mechanization reflects:
o Capital deepening (increased capital-to-labor ratio) in the rural and the overall economy
o Physical capital formation
o Capital market development
o Rural non-farm economies (tractor hiring service as backward-linkage from agriculture)

23. Acknowledgments
 Writing of the country case studies:
o Fredrick Abeyratne, Andrew Agyei-Holmes, Guush Berhane, Ben Belton, Madhusudan Bhattarai, Steve
Biggs, Rob Cramb, Hugo De Groote, Xinshen Diao, David G. Kahan, Mekdim Dereje, Zachary Gitonga,
Scott Justice, Yanyan Liu, Ahmed Mansur, Cliff Marangu, Ian Masias, Bart Minten, Geoffrey C. Mrema,
Thomas Reardon, Ravindra S. Shekhawat, Gajendra Singh, Cuong Van Nguyen, Seneshaw Tamru, Viboon
Thepent, Myat Thida Win, Jin Yang, Xiaobo Zhang
 Bangladesh study tour
o Kshirode Roy, African officials (Engineers Patrick O. Aboagye, Abdullahi G. Abubakar, Abdulai I. Adama,
Addisu T. Animaw, Akeem O. Lawal, Jasper A. M. Nkanya, John M. Nyakiba,, Tamiru H. Woldemariam,
Aliyu A. Musa)
 Synthesizing of the Asian/African experiences
o Jed Silver

24. Key references
Aboagye PO, AG Abubakar, AI Adama, AO Lawal, & AA Musa (Synthesized by H Takeshima). (2016). Agricultural mechanization
and south-south knowledge exchange: What can Ghanaian and Nigerian policymakers learn from Bangladesh’s experience?
GSSP Policy Note 6 and NSSP Policy Note 36, IFPRI.
Animaw AT, JAM Nkanya, JM Nyakiba & TH Woldemariam (Synthesized by H Takeshima). (2016). Agricultural mechanization and
south-south knowledge exchange: What can Ethiopian and Kenyan policymakers learn from Bangladesh’s experience? ESSP
Policy Note 47, IFPRI.
Binswanger-Mkhize, H. P., & Savastano, S. (2017). Agricultural intensification: the status in six African countries. Food Policy 67,
26-40.
Chamberlin J, TS. Jayne & D Headey. (2014). Scarcity amidst abundance? Reassessing the potential for cropland expansion in
Africa. Food Policy 48: 51-65.
Diao X, F Cossar, N Houssou & S Kolavalli. (2014). Mechanization in Ghana: Emerging demand, and the search for alternative
supply models. Food Policy 48, 168–181.
Diao X, J Silver & H Takeshima. (2016). Agricultural Mechanization and Agricultural Transformation. IFPRI Discussion Paper 01527.
Diao X, J Silver & H Takeshima. (2017). Agricultural Mechanization in Africa: Insights from Ghana’s Experience. IFPRI Issue Brief.
Diao X, J Agandin, P Fang, S E. Justice, D Kufoalor & H Takeshima. (2018). Agricultural Mechanization in Ghana: Insights from a
Recent Field Study. IFPRI Discussion Paper 01729.
Gollin, D., Jedwab, R., & Vollrath, D. (2013). Urbanization with and without Industrialization. Journal of Economic Growth 21(1), 35-
70.

25. Key references
Hayami Y & VW Ruttan. (1985). Agricultural development: An international perspective. Baltimore and London: The John Hopkins
University Press.
Jayne TS, J Chamberlin, L Traub, N Sitko, M Muyanga, FK Yeboah, W Anseeuw, A Chapoto, A Wineman, C Nkonde & R Kachule.
(2016). Africa's changing farm size distribution patterns: the rise of medium‐scale farms. Agricultural Economics 47(S1), 197-
214.
Pingali P, Y Bigot & H Binswanger. (1987). Agricultural mechanization and the evolution of farming systems in sub-Saharan Africa.
Johns Hopkins University Press, Baltimore, USA.
Takeshima H, E Edeh, A Lawal & M Isiaka. (2015). Characteristics of private-sector tractor service provisions: Insights from Nigeria.
Developing Economies 53(3), 188–217.
Takeshima H. (2017). Custom-hired tractor services and returns to scale in smallholder agriculture: A production function approach.
Agricultural Economics 48(3), 363–372.
Takeshima H. (2017). The roles of agroclimatic similarity and returns to scale in demand for mechanization: Insights from Northern
Nigeria. IFPRI Discussion Paper 01692.
Takeshima H, N Houssou, X Diao. (2018). Effects of tractor ownership on returns-to-scale in household maize production: Evidence
from Ghana. Food Policy 77, 33–49.
Takeshima H. (2018). Mechanize or exit farming? Multiple-treatment-effects model and external validity of adoption impacts of
mechanization among Nepalese smallholders. Review of Development Economics, in press.
Zhang X, J Yang & T Reardon. (2017). Mechanization Outsourcing Clusters and Division of Labor in Chinese Agriculture. China
Economic Review 43, 184-195.

26. THANK YOU !
For more information, please contact Hiroyuki Takeshima (H.Takeshima@cgiar.org)
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