The rapid - but from a low base - uptake of agricultural mechanization in Ethiopia: Patterns, implications and challenges

1. ETHIOPIAN DEVELOPMENT
RESEARCH INSTITUTE
The rapid - but from a low base - uptake of
agricultural mechanization in Ethiopia:
Patterns, implications and challenges
Guush Berhane (IFPRI)
Mekdim Dereje (EDRI)
Bart Minten (IFPRI)
Seneshaw Tamru (EDRI/Licos)
EEA
July 22, 2017
1

2. 2
1. Introduction
• Ethiopia’s economy quickly transforming; double-digit
average growth rates in last decade
• Agricultural sector also shows large changes:
- Modernization and increasing yields
- But also increasing wages and increasing costs of
animal traction
• As relative factor costs change, typical pattern
towards higher use of machinery

3. 3
1. Introduction
• At policy side, two reasons for interest:
1. Climate change
2. Further modernization of the sector (mechanization
important;)
But: Little recent empirical evidence on mechanization
and its uptake in Ethiopia
• In this analysis:
1. Mechanization patterns
2. Changing trends in demand conditions
3. Mechanization and productivity

4. 4
2. Data and methodology
• Qualitative data: Interviews with key informants from
middle to end of 2016
• Quantitative data:
a. Import data
b. Household data (2015) of the FtF program (7,000 hhs,
representative of 9 million hhs)
c. Ethiopia Socio-economic Survey (ESS) 2013/14 (5,262
hhs representative of 6 regional strata/nation)

5. 5
3. Current machinery use and ownership
Unit All Farm size (by quintile)
Ownership Q1 Q2 Q3 Q4 Q5
FTF areas
Average size of farm Mean hectares 1.6 0.3 0.7 1.2 1.8 4.2
High and Intermediate Mechanization Implements (HIMI)
Motorized water pump % of households 0.1 0.0 0.0 0.0 0.0 0.3
Small tractor % of households 0.3 0.0 0.3 0.1 0.7 0.5
Hand-held motorized tiller % of households 0.1 0.0 0.0 0.0 0.1 0.2
Low Mechanization Implements (LMI)
Plow yoke % of households 64.3 30.6 56.4 69.6 79.3 86.0
Maresha (metal) % of households 65.1 31.4 57.4 71.0 79.8 86.0

6. 6
3. Current machinery use and ownership
Use Unit All Farm size (by quintile)
Q1 Q2 Q3 Q4 Q5
FTF areas
Land preparation
Machine % of plots 0.7 0.4 0.6 0.6 0.6 1.5
Harvesting
Machine % of plots 1.2 1.1 1.0 0.8 1.1 2.0
Threshing
Sheller % of plots 1.5 1.6 1.2 0.7 1 3
Mechanical % of plots 0.8 0.7 0.7 0.5 0.5 1.5
National level (ES survey)
Plowing
Tractor % of plots 0.9 0.4 0.6 0.5 0.8 2.8

7. 7
3. Changes in imports
0
10
20
30
40
50
60
70
80
90
MillionUSD Imports of agricultural machines
(3-year MA)
Tractors
Combine-harvesters
Pedestrian tractors
Threshers

8. 8
4. Changes in rural factor markets
A. Wages
1020304050
2002m1 2004m1 2006m1 2008m1 2010m1 2012m1 2014m1 2016m1
real wage per day 95% CI
lpoly smooth: real wage per day
Trends in real daily wges for unskilled labor: 2003-2016

9. 9
4. Changes in rural factor markets
B. Livestock prices
2000400060008000
2004m1 2006m1 2008m1 2010m1 2012m1 2014m1 2016m1
real oxen price 95% CI
lpoly smooth: real oxen price
Trends in real Ox price: 2004-2016

10. 10
5. Patterns in Ethiopia
Tractors/combine-harvesters especially taking off in
South-east of the country. Some reasons:
- Commercial farms; Relatively bigger smallholder
farms
- History of interventions (ARDU/CADU)
- Rural wages on the high side
- Two harvests (Belg/Meher): time pressure
- Terrain is contiguous, flat, and stone-free

11. 11
5. Patterns in Ethiopia
Average Plot size (in ha) Slope of the plot (%)
Zone Mean Median Plain Hilly Valley
Mechanization-intensive zones
Arsi 0.39 0.25 76% 23% 1%
Bale 0.51 0.41 79% 21% 0%
West Arsi 0.38 0.25 79% 19% 1%
Jijiga 0.57 0.33 97% 3% 0%
W/Tigray 0.75 0.38 90% 9% 1%
Other zones
All other FtF zones 0.25 0.15 71% 28% 2%
Total 0.28 0.19 72% 27% 2%

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6. Costs and charges
• Ownership tractors: 60% commercial farmers/state
farms; 40% service providers
• Ownership combine-harvesters: 10% commercial
farmers/state farms; 90% service providers (about
200 of them; typically 3 per owner)
• Service providers:
- Mostly live in towns where mechanization used
- Other businesses (cereal trade; consumer shops; flour
factories); however, no integration of these activities

13. 13
6. Costs and charges
• Typical costs of tractor (Arsi/Bale) in 2016:
1. 1,200 Birr/ha first plowing (2 to 2.5 hours)
2. 650 Birr/ha harrowing (30 minutes)
3. 500 Birr/ha covering up soil (30 minutes)
• Sometimes second plowing (in vertisols): 900 Birr/ha
• Some areas more expensive if soil harder (Ginir)
• Plowing costs higher if after fallow
• Also distance to town might matter
• Less seasonal movement of tractors than for
combine-harvesters – more activities in one place

14. 14
6. Costs and charges
0
20
40
60
80
100
120
140
160
180
Cost of plowing (USD/ha)

15. 15
5. Costs and charges
• Typical costs of combine-harvester:
0
10
20
30
40
50
60
70
80
90
100
Jul.1sthalf
Jul.2ndhalf
Aug.1sthalf
Aug.1sthalf
Sep.1sthalf
Sep.1sthalf
Oct.1sthalf
Oct.2ndhalf
Nov.1sthalf
Nov.2ndhalf
Dec.1sthalf
Dec.2ndhalf
Jan.1sthalf
Jan.2ndhalf
Feb.1sthalf
Birr/quintal

16. 16
5. Costs and charges
• Typical costs of combine-harvester depend on:
1. Type of soil (sandy soils higher)
2. Yields
3. Religion
4. Temperature
5. Location of farm
6. Slope of land

17. 17
6. Mechanization and agricultural
transformation
0
.1.2.3
-2 0 2 4 6 8
Log of total labor use per Hectare
Users Non-users
Difference in labor use by use of Combine Harvestors
0
.1.2.3.4
0 2 4 6 8
log (total labor per Hectare)
Users Non-users

18. 18
6. Mechanization and agricultural
transformation
Unit
Adoption
tractor T-test
yes no t-value sign.
Land productivity
By crop
Barley Quintals/hectare 11.7 15.4 1.86 *
Wheat Quintals/hectare 14.0 19.3 3.29 ***
Maize Quintals/hectare 6.1 16.2 8.38 ***
Sorghum Quintals/hectare 8.4 7.3 -1.44
Sesame Quintals/hectare 2.2 2.7 1.37

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6. Mechanization and agricultural
transformation
• Yield effects of combine-harvesters seemingly due to
reduction in post-harvest losses: Losses because of
untimely rain; Theft; Transport from field to threshing
floor; Losses during threshing; Consumption animals
during threshing; Losses during winnowing
Unit
Adoption combine-
harvester T-test
yes no t-value sign.
Land productivity (wheat)
Mean Quintals/hectare 20.1 18.5 -1.61
Median Quintals/hectare 20.0 16.0

20. 7. Implications
Prices matter
- Improve access to credit
- Improve access to foreign exchange
- Those with investment license only allowed to
import duty free; others face higher prices
- Potential of cheap two-wheel tractors (2-wheel
tractor: 25,000 Birr; 40 HP tractor: 400,000 Birr)?
Need further piloting: Where? Which tasks? Etc.

21. 7. Implications
2. Maintenance and after-sale service matter
- Only selling machines is not enough
- After-sale service matters; Access to spare parts often an issue
- Changes in models makes spare parts a big issue
3. Success story in upscaling has arguably been the take-up by the
private sector
The public sector can contribute:
a. Capacity building and improve knowledge/awareness in potential
areas (training; study tours)
b. Create enabling environment for private supply chains to take off
(help in access to credit)
c. Help in the development of appropriate technology (encouraging
innovation in multi-functional tractor use; R&D)