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Van9Uj.i,Yd... MONDAV, 0'i1'~~EK '10, •



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peopl e to boost Gassava prodilGtion ,.


S tories by YlNKA KOlAWO~rJ



Challenge; Improvlo9 farm productivity Nige ria has 78.5 mUlton ha of c ultivable land, but only 33 milli o n ha are c urrently

years when compared wUh

yield gains in Asia . Why isn'\ Nigeria fulfilling its farming potential? Agriculture labour i s scare, du e to the drudgery

fa r m

work .

This res ults in lost c ropping

opportunilies; some farmers cannot rind lab ourers for

planling, and seaso nal demand s causes labour cost to rise. Many day labourers lack Ihe incentive or tools: to perform the high quality work needed to improve productivily. In c reasing agricultural mechanization is one sol uli on . Nigeria ha s co n s ide rable potentia l for growth; there is an average of 6.8 tractors per 100 km2 of arable land, compare d to 26.9 in Kenya and 195.3 globally. And the pot e ntial be ne fits of using a tractor instead of manual labour ace high . II can redu ce land preparation costs by 3OOk, and inc rea se ou tputs and produ ctiv it\, by making seasonal cropping operalions more timely and precise . The public sector controls: Nige ri a's traclor market, resulting in ineffi cienq' and marke t d istortion. Federal and s late governments buy Iractors to se ll at subsidized rates 10 publiC ag Io centres, farmers' association and other organized buyers. As a result , private dislribulors and trac tor importers courl gove rnment purc ha ses to win large contracts. But they lack sales departments or dealership n e two rks. And banks are unwilling to lend money 10 s mall buyers. viewing them as 100 risk prone to repay loans. Tractor nwners ohen have Insuffi cient knowledge on how to 0r,erale and maintain them. eadi ng to poor perfonnance and mechanical breakdown . The lack o f knowledgeable mechanics or s pare parts sup pliers , especia lly in rural areas , further limits the tractors ' operational life; only 50% of Nigeria 's tractors a re functiona l. Agro centres' traclor hiring services are almost non existent. With many tractors in unusable conditions. where such services are available, political patrons may be favour ed , c reallng wailing

... marl(5 World Food Day

s Lagos joins th ~ re~1 ~ f the glob e In celeb rat ing World Food Day thi s wee k . Lagos S tate G ove rnm e nt on T hursda}' discloH d it wou ld be e mploy ing tb e se n ' ices of abou t 1.3 million residents of the stst .. i nto mas.;Jve prod ucLon of casiavt. as pAlt of sush ined measures to boosl food production in the slate . C om nliss ione r lor Agricultt.lre and Coop elalive, Mr. ~b oiahan Lawa i disclos.!d th is at a medI a bnefing on the h ighlights of the comm g agncultural show and m~rking o f thi! 10 11 World Food Day, theme ; 'Food r'nce: Fro m crisis to

ag ric ulture .

Crop yie lds across the nation have remained re lati vel y stagnant over the pa s t 50

of manual

security: lagos to employ 1.301

.. , intends increasing dryseason cropping

u se d for




Tractor intervention: PrOpCom N55m direct impact


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· t hat Ihe 1.3 in agncuHur41 sector ' V111 assist th e slale govern lu e nt ill producing cassaV i, which th e sta le governHlent bas d iscovered can bOOit foo d productton as well as r.,duce the price of flour (01 bakers and stabilize food pri;:e mUle stat.:. Accoruing to him: "We must be unit ....-d against the thredt oJ hung>.! r and take co U ~cllve, coUabol ~tive a nd coordmated action t" ~ nsure high quality foods w,th stable prices. ' ~t pns ent. 1,500 c,,"ss,,"va fanners in the state currenUy occupy 15 heclares of land in the stale whic h thi! state has discovered number is nol ;~b;",~i", enough to combat security in the Slate." He ex ,l l&inad th at this was one of ih ..:: reasons why the government is employing more hands IOta the agricultural seclor of the slate especially in the area o( caSSava p roduc tion to incre a se the rate of availability of flour. lawai Slated : " In line with the prf<se r.t ad mini stration f{\rj sel.urity thrust on Ule !O point d a\'elopment ag~nda, the minis try has built a .nodern Jllrmers mark e t chnstened El;o Farmers MArt al th is sec retarial complex here at Alausa and we also inlend \0 replicate this in aU the local gove rnment Meas of th e state to sell fresh farm produce at very reasonabl e prices. This facility will be commist:ioned very soon . .. The co mmissioner added the state government will be comnnssioningltbe rice factory in lmota, Ikorodu before December 31, 2011 . tleopl ~

lists 01 many months- IiIUe use to poor farmers needin~ the plant within speclfied limeframes.

The strategy: Enhance private tractor sale rOp co m's strategy for t r a c to r P intervention focuses on d eveloping a private secto r sales channel that will equip private tractor service providers (TSPs) wllh new, functional tractors. This sales model linking private sellers to private buyers - aims to provide an alternative to the dysfunctional public schemes upon which TSPs and farmers have depended. After considering how the tractor and equipment sales system needed to change, PrOpCom tested the concept before seeking sector wide change. PrOpCom partnered with Spring field Agro, the licensed distributor of Mahindra & Mahindra tractors in Nigeria. to develop its private sector sales channel. Ne1t, ·PrOpCom linked Spring fie1d Agro to a group of private tractors buyers b e l onging to the Tractors Owner a nd Operators Associa t ion of Nigeria (TOOAN) . PrOpCom and Spring field Agro aPl>roacbed First Ba.nk of Nigena to develop a lease license product . This facilita tes buyers ' access 10

credit 10 pUlchase expenSIve tractor assets . Working with an organized group of tractor buyers through TOOAN, as opposed to lending to individua l buyers . was an acceptable risk lor the bank. PrOpCom linked Spring field, First Bank, TOOAN and th e C entral Bank 01 Nige ria under a risk sharing arran~ement to support First Bank s pilot lease finance scheme. This enabl ed th e private seclor purchase of 50 tractors across Kaduna, Ogun and Oyo slates. Ule first sucb pr,ivat~ - private scheme in Nlg e na. PrOpCom supported Sp r i n g f i e l d Agro ' s e mb edded sales ~ervice by sharing the cost 01 a tra.ining session lor tractor owners on th e proper use and preventive mainl2nance of Mahindra tractors. PrO,PCom also helped Spnngtield Agro to improve its after s ales support structure through spe cialized training thai encou raged Mehindra tractor mechanics to become certilied spare parts dealers. PrOpCom also helped TOOAN's members achleve greru.eroperalional effidency. for ex.ample aggregating tractor service to multiple famlers at remote locations . EXPECTED IMPACT This pilot intervention aims to increase t he access of 31590 larmers to trac tors services, saving them an es timated 30% on manual labour costs.

PrOp C om anti Cipates th a t 40% of farmers in the south west st",tes of Ogun and Oyo will be abl e to prepare th eir la nd for dry season larming, in crease the land under cultivation by 630h a. Tractor owners' loan repayment rates a re s h owing strong s igns of success . From July 2010 10 April 2011. borro wers m a de 93% of their lo a n r e p a y m e nt s . Of the borrowers in a rrears. 82% are only 1· month s behind . GIVe n the ri sk sharing guarantees provided by PrOpCom and CBN as well as the estimated resale value of the tractors in case of d e fault. First Bank's exposure is 0%. Already there are signs of broader systemic change occurring in the tractor leasing market. First Bank now aims to seU 500 tractors across Nigeria. through private sector lease arrangements. Th e pilot proves that th e cone-ep l work s . PrOpCo m has no w withdrawn its risk covering s upport, su that private partners may take up th e model on a more sustainable basis . And th e farmers are benefitting througb red\lced labour costs and the ability to increase farming al:tivibes to include dry season cropping. PrOpCom anticipate a direct lmpdct of NS4. .9 million in increased i ncome for farmers in the first season.