Mechanization in Africa: Experts discuss in Berlin

ZEF director von Braun.

February 27, 2019. 

 

Around 200 visitors attended the presentation and discussion of “Mechanized” in German language at the premises of the Federal Ministry for Economic Cooperation and Development (BMZ) in Berlin on February 20, 2019. The event was organized by the German International Cooperation GIZ on behalf of BMZ.

"Mechanized" was published in English and German (find downloads below) by the Malabo Montpellier Panel.

On the expert panel discussing the “Mechanized” report were:
Gunther Beger (Department head in BMZ),
Ousmane Badiane (Co-Chair Malabo Panel and IFPRI Director for Africa)
Frank Nordmann (Grimme agricultural machines)
Jehiel Oliver (Hello Tractor),
Jochen Moniger (Welthungerhilfe),
Joachim von Braun (Co-Chair Malabo Panel and ZEF-Director).

Input talk and Q&A with Dr. Ousmane Badiane

Why do we think there is room to learn from Africa now? What has happened over the last 20 years?

Between the nineties and the twenties: there has been a large positive change: government spending in the agriculture sector almost doubled, agricultural growth product expanded by two thirds, the share of population under the poverty line reduced by 36 percent, depending on the indicators used level of malnutrition went down by 20 to 40 percent, and over the last fifteen years on average African countries have done better in agricultural value added, food production and national income compared to the rest of the world.

In such an environment some must have been doing something right, so we can learn something from them. Why do we need to learn from these countries? Despite the progress, there is still a lot to be done. In doing so, the Malabo Montpellier panel has chosen the topic of mechanization among others where success has been achieved and lessens can be drawn.  

Is there mechanization in Africa?

Mechanization is not understood as something just on the farm and in the production segment. It is something all along the value chain. It encompasses everything from production to post harvest handling, transportation and processing.

As in most countries, there is a lot of opportunities and potential in mechanization for Africa: reduce drudgery, improve timeliness and efficiency of agricultural operations – in Senegal it allowed double rice cropping in a season, reduce/ improve post-harvest processes, improve processing of crops and value addition and generate employment and entrepreneurship opportunities

What are the drivers of mechanization today?

The rapid rise of 5-20 hectares farms is driving part of the mechanization, particularly for tractors; 20% Kenya, 32% Ghana, 50% Zambia.

The rise of the processing sector across Africa; 8% and 20% of traditional staples are going to be consumed processed (crops like millet and cassava). This means that the equipment and mechanization to improve the efficiency of processing is going to be a bottleneck. No one is going to be able to sell more mill if the processing sector is not capable of delivering a processed product to the growing urban consumer base in Africa.

So, what are successful mechanization processes?  What worked, where, what and how?

Let’s look at different segments: Production segment: Burkina Faso and Uganda are good examples in how they have domesticated the pedal form of tractor. Senegal: rice thrasher and cleaner. Kenya and Tanzania: tricycle tractors services showing how one can reach smallholder farmers with less than half of a hectare of land. Post-harvest: Nigeria: solar post station driers, Ghana: Motorized tractors, Senegal: tricycle collection. Staple crops processing: West Africa: millet, Kenya: Fruits like mango, Nigeria: cassava processing.

Is mechanization of these segments of the production process eating up jobs?

Beyond creating wealth and value and therefore expanding the sector which will then create jobs in and outside of agriculture, Mechanization can certainly create jobs if it is done right.

Mechanization can create jobs, if it is inserted in sectors where there are labor shortages. Although people believe that there are a lot of people in Africa, there is seasonal labor shortage. If mechanization responds to sectors that are on average labor intensive like horticulture, foods and vegetables, where you do have labor shortages, it can create jobs.

Mechanization can create jobs, if it is scaled out across the whole value chain because that’s where you create the jobs. It is not only just the tractor drivers, the maintenance, and the operators but also with the equipment for processing, grading, quality assurance, the transport sector, packaging, distribution,  all of it is an area where we can create jobs if we do it right.

Mechanization can create jobs only if we couple it with training and invest in skills development.
So, these are the condition that will ensure mechanization does not kill jobs but rather create jobs.

What are the obstacles and the risks for mechanization?

If the importation of equipment kills the private sector.
If mechanization is inserted in areas and segments without labor shortages.
Issues in soil compacting.
If we target the big farms and ignore the small farms.
If we don’t invest in training and skills development.
If there is weak regulatory and ... policies.

What positive changes are taking place in mechanization of agriculture in Africa? Which African countries have been successful in mechanization of agriculture? What have they done differently? What have they done right?

The report selected countries where positive change is taking place based on two criteria: countries where there is high mechanization growth and high economic growth. Seven African countries at the forefront of mechanization: Ethiopia, Morocco, Mali, Rwanda, Tanzania, Malawi and Zambia.
What do we observe in these countries? Dedicated government programs for mechanization. The government works with private sector on mechanization. Mechanization not public sector driven, but rather private sector driven. They pay attention to the downstream value chains. They don’t only focus on tractors. It is mechanization across the value chain. They do R&D. They train people on how to operate the machines and do maintenance.

They have programs around hiring services to cater to the needs of the small-scale farmers as well. For those that cannot buy tractors. They have fiscal incentives and work with the banking sector for access to finance.

So our recommendations are:

1.       Develop national agricultural mechanization investment plans that form part of countries’ national agricultural investment plan.
2.       Focus on mechanization pathways and strategies that generate new employment opportunities.
3.       Prioritize.


 
General discussion points for all panelists:

1.       What is the effect of mechanization on the climate in the long run?

2.       How was mechanization growth measured in the report?

3.       Is there a finding or statistics on the loss of jobs due to mechanization, particularly for women? How should the relationship be between private and public services? Besides creating jobs, does mechanization create decent jobs? Does it improve the quality of jobs or working conditions?  Does it lead to skills development?

4.       What role do the country leaders, ministers and state secretaries play in the mechanization process?

5.       You were making argument about the shortages of farm labor, which is a hug contributor to post-harvest loss and that it destroys the agricultural economy. But at the same time, you were saying that the solution should not be a government driven handout, but is it a market-based solution? Because if there is a shortage of farm labor and mechanization can address it, why is it not already happening? What are the bottlenecks and how can we address them?

-> Lack of complementary things that are needed together with mechanization create a vicious cycle and are the bottlenecks. This is where the government can come in: institutions, incentives, fiscal policy, training, skills building which the government would do but the private sector won’t do.

6.       It is well known that mechanization is capital intensive. However, majority of the farmers in Africa are smallholder farmers that produce mostly on less than half a hectare land to provide for their family’s basic needs. So, what is the likelihood that these farmers will be able to buy and use tractors and other technologies? From where will they get the capital?

They need hiring services and social enterprises.

7.       In terms of the bottlenecks for mechanization or adoption of innovations, such as the traditional values can be handled and also learning and training; but the opportunity cost of labor this is something at the very beginning to have adoption and adaptation at the very end. And for me this is something that is very important and very hard to achieve and in this maybe you have good examples for this. At the same time also, farmers need demonstrations on this. Demonstrations so that they have a proven success to adopt this innovation. Without any demonstration of success, it will be very hard to convince that mechanization is really doable and feasible on the ground. Against this background maybe you have an experience that worked very well.

8.       Speaker from solar kiosk. The role of the government and the state is very often are in bed with large processing units that in the country and bringing value not in the community but values created in another level? And I would like to know how this mindset can change? And how can we create a push where it would be more beneficial to really bring value in the community? If you do not bring value to the communities, you can bring all types of mechanization and people would still run away because it does not help them to earn money. At the end if you want to improve their livelihood, you need to create value in the community. And I think there is a little mismatch there.

9.       Tomas: You mentioned the focus in skills and knowledge development and we also see that in our work where we did some historical studies on what happened during mechanization in Germany and the US in the public sectors what happened with knowledge and skills were extremely important. And this is not the case in Africa, where the political economy is much more attracted to import tractors and this does not work. And you also mention this investment work in Ghana showing that, but still now Nigeria is importing 10000 tractors and Zambia, every country is sticking to that. And you have also worked with policy makers, so what is the argument to address them or why is this happening again and again.

Skills development and training are not only key for advancing mechanization but also for creating jobs, particularly for the high paying jobs you were talking about. About the ones that are buying the tractors, I do not think we will ever see it being associated with success. And when they probably fell, they will ask us and they will at least see from our work the things they can do to get mechanization to work. Its politics, sometimes they think it is good for them but I think at the end of the day it is the results that will help them.
 
Jehiel Oliver (HelloTractor) 

Main points:

1.       The important role that social enterprises can play to support mechanization in Africa by making mechanization affordable for smallholder farmers.

2.       The fact that it is important to focus on the mechanization of the whole value chain and not only on tractors or mechanization at the production level. And that in order for mechanization to be successful in Africa, the whole ecosystem of agriculture needs to be addressed. When that is done then mechanization will also be able to generate more jobs.

3.        Mechanization should be user oriented. Scaling innovation? Supporting incremental innovation? Supporting local innovations? The innovations should be fitting, usable and adoptable. Given that mechanization such as large tractors might be difficult for smallholder farmers because of financial issues and the systematic risks in agriculture, social enterprise might make it financially feasible for such farmers to adopt such technologies and profit from it.

4.       Dr. Ousmane talked about the importance of the ecosystem and how in order for mechanization to function properly the ecosystem needs to addressed. Hellotractor addresses the whole ecosystem from tractor for production to data that can be used for precision agriculture and credit history data that can support provision of finance to small scale farmers. The governments should not be in the business of buying tractors. Mobilizing the demand for tractors and identifying those farmers that are willing and able to pay is the most challenging part of the mechanization ecosystem. This is also something we struggle with as a private company.

5.       All boxes need to be checked. It is not enough just to provide tractors. We need to make it possible for smallholder farmers to use such technologies, for instance through skill development.

6.       Social business or enterprises and their role in making mechanization affordable for farmers.

7.       Impact investment. The potential of using impact investments to support agribusiness SMEs and Mechanization in Africa. The role impact investments can play in servicing the financing needs of SME in Africa and smallholder farmers for mechanization?

8.       The main challenges for hellotractor and what can others learn from hellotractor? The biggest lesson for us is I think that you have to adopt to market forces. One can start with research, but at some point, we need to listen to customers, be responsive to their need and make the products user centered to make the social business sustainable.

9.       What can be done so that mechanization create jobs instead of killing jobs? What’s needed in the agricultural sector to make mechanization successful? De-risking. Better coordination is probably more important than de-risking across the system. Development agencies should coordinate with the private sector to ensure the sustainability of projects and services that they provide to smallholder farmers. The design of a program should consider the sustainability of that program beyond that program’s cycle. So, the necessity to engage the private sector should be embedded in a program. At the end of the grant cycle, if you spend a large capital on the project and the farmers disappear and they have no access to business that can continue to meet their needs, then that’s a crime check and a massive west of money. So, I think that the coordination is more important than the systemic risk we all face in the agriculture sector, even if it is hard to achieve.

Prof. Joachim von Braun (ZEF/ MaMo Panel)

When it comes to creating jobs through mechanization, the how is more important than the what.

1.       Jobs are created when new market opportunities arise. For example, when African countries are self-sufficient in food production and rely less on imported goods, they will be able to substitute imported goods with locally produced goods and create jobs locally. With this example, I wanted to highlight that we should think macroeconomically before we think about the negative impact of mechanization on jobs in Africa. We need to think of the macroeconomic effects.

2.       That is also my second point. Mechanization can create jobs locally through trickle down effects. What will farmers use the higher earnings they get from mechanization? When mechanization leads to increased agricultural production and improves farmers’ livelihood and earnings, the farmers will spend more in the local economy, resulting in increased business activities which will in turn lead to more jobs being created. Farmers’ earnings has a multiplier effect.

3.       Mechanization done right can create jobs, e.g. in equipment maintenance and repair service sector, in blue collar jobs such as wood work and furniture manufacturing, electricians, mechanics etc. But for these to happen we need to invest in vocational training and skills development.

4.       Jobs will be created when mechanization not only focuses on tractors but also on small equipment that are essential and practical for smallholder farmers.

5.       Mechanization creates jobs when it improves timeliness and efficiency of agricultural operations and reduces time spent on labors activities and/or reduce the drudgery. There is a seasonal shortage of labor in Africa. Therefore, when mechanization increase efficiency in agricultural production, especially in such value chains where there is labor shortage, it can create more jobs.

6.       A successful mechanization process cannot be achieved in Africa when the push is only coming from outside. Africa needs its own agricultural machinery industry. Even if it is small, a small development is taking place in the industry in Africa. It can go hand in hand together with the mechanical industry and system in Germany. To make the process of mechanization in Africa successful, we need to build an intelligent, technical and organizational partnership together with Africa.

 
 
Report and photos by Dr. Bezawit Beyene Chichaibelu, Senior Researcher at ZEF.


 
Mechanized in English: https://www.mamopanel.org/resources/

Mechanisiert (German): https://www.zef.de/uploads/tx_zefportal/Publications/MaMo_2018_Mechanisiert_web.pdf

Press release in German here

Contact

Joachim von Braun

Prof. Dr. Joachim von Braun

Phone.:
+49-228-73-1800