Sustainable Agricultural Mechanization Hire Service Provision Practices in SSA: The Private Sector Involvement

1. Joseph Mpagalile
FAO-Regional Office for Africa, Accra, Ghana
Sustainable Agricultural Mechanization Hire Service
Provision Practices in SSA:
The Private Sector involvement
December 9-12, 2019, Imperial Royale Hotel, Kampala, Uganda

2. The private sector must be involved and lead the
Mechanization Hire Services Provision (MHSP)
The involvement of the private sector in effort to enhance mechanization hire
services provision:
• Is in line with the lessons learnt from the past experience
• Increase responsible and productive investments in mechanization,
• Helps to increase efficiency/timeliness on MHSP
• Increase entrepreneurship and technology transfer for MHSP
• Improve the management and dissemination of knowledge, including lesson learned and
expertise
• Implementation of sustainable business practices
• Drive digitalization for mechanization hire services (Hello and Tro Tro Tractors)

3. Harvesting
Post-harvest
MarketingProduction
Irrigation
CA practices
Drying
Processing
Packaging
Value addition
Milling
Transportation
Storage
Threshing
Tillage
Seeding
Opportunities
for private
sector in MHSP
Support
services
Levelling

4. Financing of mechanization efforts
• Financing agricultural mechanization at different levels is still a challenges:
- Mechanization hire service providers establishing their business
- Small holder farmers accessing mechanization service along the FVC
• The private sector should continue to play a key role in:
- Developing sustainable financing models i.e. inclusive esp. smallholder farmers including
women and youth
• Financial institutions both MFI, Banks etc.:
- Should develop financial products that suits small, medium scale farmers etc.
- PPP in implementation of mech. hire service provision

5. Financing-Example
• Setting up and operation Agricultural Equipment Hiring Enterprises
(AEHEs) in Nigeria
• A typical list of equipment (costing USD 60-123,000) for an AEHE is:
- 3-5 units of tractors + basic implements
- 5 Power tillers
- 2 Mini-harvesters
- 3 threshers;
- Sprayer
• Funding for an AEHE is divided between the public and private
sectors as follows:
- FMARD 35%
- Bank of Agriculture 35%
- Agro-machinery Vendor Partner 10%
- Service Provider Operator Equity 20%

6. Maintenance
“It is important to ensures that all machinery and equipment used in
mechanization hire services are operating at the required level of productive
efficiency”
Individual
Rural R&M
mechanic
(Fundis)
Rural/urban
based small
R&M workshops
Semi urban/
Urban
Medium scale
R&M workshops
Urban based
Large scale
R&M workshops

7. Maintenance
• The private sector has a key role to play to achieve that:
 Support services:
- Setting up repair and maintenance facilities to support mechanization (suitable
workshop, tools etc.)
- Dealerships, stocking and supply of spare-parts, repair and maintenance shops, etc.
 Commissioning and conducting training for operators of equip/machinery
 Providing opportunities for hands-on skills development (apprenticeship)
in workshops

8. Linkages
• The role of the private sector in enhancing linkages to support MHSP is important:
- Linking with the domestic R&D to transform findings into actual equipment/machinery
- Engaging with the manufacturers of machinery for:
- Dealership/Local agency/ Distributor roles
- Machinery services, repairs and maintenance
- Spare parts
- Participate in the training on the operations and repair of equipment
- Working closely with other stakeholders e.g. PPPs to expedite MHSP

9. Knowledge management
• Support and provide access to information about machinery capacities, functions etc.
• Availing information about new innovations and support services including after sale
services including spare parts, repair and maintenance etc.
• Capturing and sharing lessons learned, good practices and knowledge
• Supporting and participating in online platform /collaboration on MHSP issues to
share experiences
“Knowledge Management is important to assure that actors in MHSP get the
right information & knowledge at the right time in the right form”

10. Conclusion
• On overall, there is huge potential for private sector investment on MHSP
along the food value chain.
• In addition to providing Mechanization Hires Services, the private sector has a
key role to play on support services provision
• The public sector need to incentivize the private sector to take mechanization
to scale
- By creating a conducive business and services environment around MHSP.