"Agricultural mechanization in Nigeria: Demand characteristics and nature of tractor service provisions", presented by Hiroyuki Takeshima at at NSD/IFPRI workshop on "Mechanization and Agricultural Transformation in Asia and Africa", June 18-19, 2014, Beijing, China

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

4. INTERNATIONAL FOOD POLICY RESEARCH INSTITUTE
Tractor policies in Nigeria
Past
• Government tractor-hiring service (THS)
• Expanded in 1970s
• 3000 4W 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
• 1970-74: 85 million / 5 year (converted to 2010 USD)
• 1975-79: 310 million / 5 year
• 1980-85: 775 million / 5 year
• 1986 ~: SAP started
• Currency devaluation => 8-fold increase in imported tractor prices
• Reduced tractor subsidy
• 2000s:
• Obasanjo administration – 1000 tractors and implements 25% subsidy
(Federal Government)(Ladeinde et al. 2009) in 2003, 2005
• State governments’ subsidized distribution

5. INTERNATIONAL FOOD POLICY RESEARCH INSTITUTE
Annual tractors imports in Nigeria
(period average)
0
500
1000
1500
2000
2500
3000
3500
61-64
65-69
70-74
75-79
80-84
85-89
90-94
95-99
00-04
05-07
08-11
Source: FAOSTAT for 1961–2007. Figures for 2008–2011 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 1973–1976 are generally
consistent with IBRD (1978), as cited in Bates (1981). Figures for 2005–2007 are
excluded due to unusually large importation recorded in 2006.
NA
Mostly 4 wheel
tractor
Power tiller =
only 100 / year
(2010-13)

6. INTERNATIONAL FOOD POLICY RESEARCH INSTITUTE 6
State tractor distribution programs:
Example: Kaduna state
• At least 10 ~ 20% of state agricultural
spending (Takeshima et al. 2014)
• Tractor brand recommended by
Engineering 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 2012 – 186 tractors distributed
• 129 units of 50 HP (Individuals - 50, Cooperatives - 79)
• 57 units of 75 HP (Individuals)

7. INTERNATIONAL FOOD POLICY RESEARCH INSTITUTE
Tractor policies in Nigeria
New focus of Federal Government
• Promotion of private sector tractor hiring services
• Mechanization Implementation Program (MIP)
• Establish Agricultural Equipment Hiring Enterprise (AEHE) - private-
sector managed tractor hiring enterprises
• 80 AEHEs 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 E-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. INTERNATIONAL FOOD POLICY RESEARCH INSTITUTE
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. INTERNATIONAL FOOD POLICY RESEARCH INSTITUTE
Areas (%) plowed by tractors and draft
animal (2010 Jan – Aug)
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
1
12
20
0
5
1
46
11
59
0
0
0
Tractor Animal
National = 8% National = 30%

10. INTERNATIONAL FOOD POLICY RESEARCH INSTITUTE
Tractorization in Nigeria is mostly for rice
0 1 2 3 4 5
Veg
Yam
Cassava
G nuts
Cowpea
Millet
Sorghum
Maize
Rice
Million ha
Total areaTractorized area
Source: LSMS-ISA Data 2010/12
Area (total, tractorized) by crops for 2010/12 January - August
10

11. INTERNATIONAL FOOD POLICY RESEARCH INSTITUTE
Tractor services mostly provided by
private tractor owners
11
Majority are by tractor service providers, instead of own tractor
0.8 0.5
Area (million ha) cultivated by own and rented tractors
service providers own tractors
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 sample-
weights.
Animal tractors owned or rented are based on those who reported the actual number of days using animal traction.
%
Private markets 42
Government 28
Friends/neighbors 14
Relatives 10
Other 7

12. INTERNATIONAL FOOD POLICY RESEARCH INSTITUTE
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. INTERNATIONAL FOOD POLICY RESEARCH INSTITUTE 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
EE
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EE
E
E
E
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EEEE
E
E
E
Kaduna
Nasarawa
Abuja

14. INTERNATIONAL FOOD POLICY RESEARCH INSTITUTE 14
Two types of tractor owners identified
based on the sources of tractors
Government-sourced
(GS) owners
Obtained tractors only
through government
scheme
Market-sourced (MS)
owners
Obtained tractors
through privat emarket,
private individuals
Tend to be more
efficient
H0: MS owners = GS owners
Non-parametrically test differences in average / median

15. INTERNATIONAL FOOD POLICY RESEARCH INSTITUTE 15
MS owners use tractors more than
GS owners
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
74
128
30
88
103
169
70
133*
GS (mean) MS (mean) GS (median)MS (median)
Areas served (ha), per tractor
per year
Hired out farming Own farming

16. INTERNATIONAL FOOD POLICY RESEARCH INSTITUTE 16
MS owners earn more revenues than
GS owners
Source: Presenters.
GS MS
Median Mean Median Mean
Total gross revenues per year 5 8 11* 13*
Monetary values of own-farm use 1 2 3 4
Gross earnings from hiring out 4 6 6 9
Payment for operators and fuels 1 3 3 5
Operators 0 1 1 2
Fuels 1 2 2 3
Repairing 1 1 1 1
• MS owners earn significantly more than GS owners
• Revenues are much greater while operators / fuels costs are similar
Benefits from tractor use in the last 12 months (current USD 1,000)

17. INTERNATIONAL FOOD POLICY RESEARCH INSTITUTE 17
MS owners spend less on operators /
fuels
Charges Payment for
operator
Payment for fuel
GS MS GS MS GS MS
Farming (USD / ha)
Harrowing 58 61 14 *10 25 *17
Plowing / tilling 68 73 15 13 28 *21
Ridge making 50 49 10 8 18 *12
Non-farming (USD / day)
Transporting farm products 101 86 14 13 26 *21
Transporting non-farm
goods
128 100 17 14 34 *22
Firewood transport 74 48 17 *8 21 21
Charges for service, payments for operators / fuels
(USD / ha - farming, USD / day - non-farm service)
Fuel Driver Total
GS MS GS MS
Mean 9.5 4.5 3.1* 14 12
Median 6.3 4.2 2.6* 11 9*
Cost of bringing tractors (USD per hour of move)
Source: Presenters.
Source: Presenters.

18. INTERNATIONAL FOOD POLICY RESEARCH INSTITUTE 18
Tractor use highly seasonal but MS
owners are more active all-year around
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*
38
90
56
20
34*
12*
23*
82*
103*
128
120*
54
5
16*
44*
51**
Hours of operation per tractor
Mean Median
% 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

19. INTERNATIONAL FOOD POLICY RESEARCH INSTITUTE 19
Tractor services limited to local area –
similar to Asia in the past
6 5
9 12
23262319
11 8 9 7
1 2 3 4 5 6 7 8 9 101112
Month
4 4 5
9
21
2825
20
9
5 6 7
20*
15*
45*
39*
45
23202423*
32*
39*
10
Travel alone (N = 79)
Travel in group (N = 11)
6 5
1012
212322
16
11 8 7 7
15
1110
25
73*
95
62*
84*
1010
53*
15
Travel on tractor (N = 83)
Travel on truck (N = 6)
Group traveler –
- travel further away in
off-season
Truck traveller (10% of sample)
- travel further away in
peak-season
- Travel is generally
confined within 25 km
radius (Euclidean distance)
Average distance away from home district in each
month (Euclidean distance from home district)

20. INTERNATIONAL FOOD POLICY RESEARCH INSTITUTE 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).
Kaduna Nasarawa Both
N of
obs
Corr.
Coeffic
ient
N of
obs
Corr.
Coeffic
ient
N of
obs
Corr.
Coeffic
ient
Could select from
a range of
horsepower
138 .196* 26 .577** 164 .241**
All 238 .011 71 .180 309 -.027
Source: Presenters.
Correlation between the tractor horsepower and bulk
density of soil – MS owners (conditional on operating
outside the home LGA)
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. INTERNATIONAL FOOD POLICY RESEARCH INSTITUTE
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. INTERNATIONAL FOOD POLICY RESEARCH INSTITUTE
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
• Economies 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. INTERNATIONAL FOOD POLICY RESEARCH INSTITUTE
References
Akinola A. (1987). Government Tractor Hire Service Scheme as a Tractorization Policy in
Africa: The Nigerian Experience. Agricultural Administration & Extension 25, 63-71.
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. 2001. 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 GES 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), 11-18.
IBRD (International Bank for Reconstruction and Development). 1978. Nigeria: An
Informal Survey. Lagos: IBRD (Typescript, 1978. Table 16).
Jabbar MA. (1995). Energy 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
19-23 September 1994, Cotonou, Republic of Benin. IITA.

24. INTERNATIONAL FOOD POLICY RESEARCH INSTITUTE
References
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Nigeria. J. Agric. Engng Res. 17, 289-294.
Ladeinde MA, EO Atanda, AJ Ageh, SO Idowu & SO Olayemi. (2009). Agricultural
machinery operators and mechanics training in Nigeria: An overview of contributions.
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1992. Review of African Political Economy 22(64), 199-212.
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 Economics 95(5, ASSA
Proceeding Issue), 1230–1236.
Takeshima H, E Edeh, 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.