I once participated in an international effort to map Nigerian business requirements with quality international technology exports to address the information and networking gap that is preventing partnership between international technology suppliers and Nigerian businesses that will boost innovation and increase productivity, efficiency and employment. This was aimed at reducing Nigeria’s net imports with a beneficial impact on poverty and security. I was particularly excited by the part of our work that involved x-raying the agricultural sector both internationally and in Nigeria to analyse and show the gaps and opportunities that abound.
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Our findings extensively covered the sales of farm equipment to mechanisation service providers, for onward provision of mechanisation services to smallholder farmers. The scenario on ground is that your typical smallholder farmer in Nigeria cannot afford to buy or lease a tractor to cultivate their land and as such can only hire workers to do the work, use animals; hire tractors. Since 2010, There has been an increase in demand for tractor hiring for land cultivation, and three large corporate organisations – spread across Nigeria – have emerged to offer these services to smallholder farmers. From the perspective of the complete farming life-cycle, tractors can be used for much more than land cultivation and therefore there is significant potential for the provision of additional farm mechanisation services to smallholder farmers. Be it in the planting of seeds, fertilizer or other chemical applications or harvesting, the tractor can be truly transformational for the farm. While most farmers know this, and most governments too are aware of this, mechanisation is still very low.
The cost of owning or hiring a tractor is still prohibitively high for most farmers in Nigeria, and as a sector, our agriculture is greatly under-mechanised because of this tractor deficit. The world bank estimated even during the height of implementing the Agricultural Transformation Agenda that there are less than 50,000 tractors in the country, translating to a density of 5.7 tractors per 100 square kilometres, far short of the estimated 81,000 tractors that would be needed to satisfy demand for tractors. I joke that the number of defunct tractors far outpaces the number of active tractors in the country but this is not far from the truth. Almost half of all the tractors in the country are not functional. Sometimes, it is so pathetic that brand new tractors can sit for two years in display in a state ministry of agriculture without a single day in the farm, awaiting ‘commissioning’, until they are in decay and thus ready for auction. However, more than brand new tractors loitering, broken down or bad tractors in the public sector are innumerable. It is almost ironic that almost every tractor in private hands has a 20-year life span but government owned tractors do not work beyond three years. On the average Nigeria imports 1,000 tractors annually, and given that about half of that number will not be on the fields, this is less than adequate to mechanise Nigerian agriculture. Meanwhile, tractor imports are themselves duty free but there are high tariffs charged on imported spare parts which is perhaps one of the reason some tractors have a short average life span of 5-7 years. In countries of great agricultural output, 1,500 to 2,000 engine hours are recorded in tractor operations while in Nigeria tractors operate an estimated 507 to 682 hours per year.
On the other hand, there is significant potential for post-harvest mechanisation services, specifically regarding threshing of crops like rice, maize, sorghum, millet and beans. In our research, we identified some world leaders in producing pre-harvesting, harvesting and post-harvesting farm equipment. Some of these companies at the time sold some products in Nigeria through distributors, but we believed there was an opportunity for increased exports if they were connected directly to mechanisation service providers in Nigeria, commodity associations or even state governments.
The low level of processing of agricultural produce that adds value and creates job is a great impediment to developing the agricultural sector. The World Bank in its ‘Agribusiness Indicators: Nigeria’s report estimated that Nigeria loses significant value of between 15-40 per cent of its post-harvest output due to its inability to process most of the farm produce and lack of efficient storage and transport systems particularly in the rural areas. For example, cassava tubers must be processed within two days of harvesting. This means that commercial cassava farmers producing for industrial use require driers, grinders and pelleting machines to ensure harvested tubers do not go to waste.
Of the companies we identified in our research, four years ago, were also a global leader in large scale processing equipment, specifically for tubers like yams and cassavas, grains like rice and maize, and pulses like beans. Now that I look back at this work, having been active in both the farming and processing sectors in the past five years, I wish all agribusinesses were not only mapped with appropriate technology but given access to the finance required to acquire them in order to increase productivity. But above all, I wish there was a local market with Nigerian manufacturers making these machines and meeting these immense demands. Only then can we truly see the fruits of a technology-driven agricultural increase in productivity, efficiency and employment.
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