Viewpoint

April 12, 2024

Honorable Minister, please don’t buy 10,000 tractors

Honorable Minister, please don’t buy 10,000 tractors

By CORNELIUS ADEWALE 

I RECENTLY came across news that left me disheartened – the Federal Government of Nigeria has partnered with John Deere, an American firm, through a Memorandum of Understanding, MoU, to supply the country with 2000 tractors annually for the next five years. The goal, as stated by the Minister of Agriculture and Food Security, Senator Abubakar Kyari, is to tackle the challenges of land preparation and mechanised farming nationwide. The minister is currently collaborating with the Bank of Agriculture to devise a plan for offering low-interest loans to farmers interested in acquiring these tractors.

As someone deeply committed to fostering food security and sustainability in Africa, you might wonder why this news saddened me. There are two primary reasons. Firstly, the notion that a mere 2000 tractors per year can adequately address Nigeria’s mechanisation challenges indicates a lack of seriousness in tackling agricultural development in the country. Secondly, the proposed implementation strategy of providing low-interest loans directly to these “farmers” suggests that we haven’t learned from past agricultural policy failures in Nigeria. Albert Einstein famously said: “We cannot solve our problems with the same thinking we used when we created them.” The 10,000-tractor project seems destined for failure due to flaws in both its design and implementation.

The current vision for the 10,000-tractor project falls short of its intended objective. If the aim is to tackle Nigeria’s mechanisation challenge, this project won’t make a significant impact. Allocating 2000 tractors per year translates to less than three tractors per local government in Nigeria. Consider Bichi Local Government Area in Kano State, with over 50,000 farmers. These farmers often have a narrow window of 30 days to plant maize during the brief rainy season. How can just three tractors cater to such a large number of farmers within that limited timeframe?

Let’s analyze this differently. Take the John Deere 4075R, a mid-range highly efficient Compact Utility Tractor. Depending on factors like soil type and depth, it can cover up to 40 acres per day. Even with three such tractors, only around 3000 acres can be managed in a month. Contrast this with Kachia Local Government Area in Kaduna State, boasting over one million acres of land.

Therefore, if our true goal is to bridge the mechanisation gap, we must adopt a different approach, as Albert Einstein famously said. To truly address this gap and implement effective agricultural development policies, we need to learn from past experiences, overhaul our policies, think on a larger scale, and consider the unique nuances and cultural aspects of our country.

Based on my rough estimate, the current vision for the 10,000-tractor project could cost around $500 million. There’s a more efficient way to utilize this fund: envisioning a scenario where every farming local government in Nigeria has access to 100 new functional tractors annually. Over five years, this could mean 350,000 new tractors in Nigeria, far surpassing the 10,000 initially proposed. Moreover, I believe this could be achieved at a lower cost to the government.

The government’s role should be to create an environment conducive to business growth. Businesses aim to sell and make profits. With millions of farmers in need of tractors and small farm implements, government’s focus should be on policies that facilitate sales and eliminate barriers for both manufacturing companies and farmers eager to purchase tractors. Successful models in developed countries emphasize policies that encourage competition and individual responsibility, effectively addressing challenges like agricultural mechanisation. The current vision for the 10,000-tractor project doesn’t align with these principles.

Here is the initial draft of my proposal outlining how we can begin addressing Nigeria’s agricultural mechanisation challenge:

1. Transform Nigeria into an appealing market for tractor and implement manufacturing companies, not just one. Eliminate import duties, offer tax breaks, and streamline clearing logistics for tractors and farm implements entering Nigeria. Beyond John Deere, engage renowned brands like Kubota, Massey Ferguson, New Holland, Case IH, Mahindra, DEUTZ-FAHR, Fendt, and AGCO.

2. Establish a robust contract enforcement mechanism. Globally, farmers often purchase tractors on credit, paying over extended periods, sometimes up to a decade. However, the bedrock of this credit system’s success lies in integrity and contract enforcement. Without these, any developmental agenda is futile. It’s the government’s fundamental role to ensure contract compliance, particularly for deals integral to agricultural mechanization.

3. Develop a system enabling individual farmers to purchase directly from manufacturers. Tractors suited for flat fields in Kano differ from those for uneven land in Ekiti. Each tractor manufacturer has existing financing systems; government should negotiate favourable deals for Nigerian farmers and implement an insurance-backed payment plan.

4. Foster market competition at all levels. Allocate a 20-million-naira matching grant to ten local companies per state (360 in total). Winning companies become farm equipment sales and servicing affiliates for tractor manufacturers in Nigeria, fostering healthy competition. The grant, phased over 18 months with key milestones, costs approximately $7.5 million.

5. These affiliates vet farmers, handle tractor financing, and provide maintenance services. Tie the grant to performance indicators like vetted farmers, trained maintenance engineers, and tractors sold, among others.

6. Allow farmers or cooperatives to express interest in buying tractors and specify their needs through chosen companies via affiliates.

7. Encourage manufacturers to offer similar financing options available in other countries.

8. Establish a mechanisation insurance system to alleviate concerns for manufacturing companies.

9. Condition the insurance system on all parties fulfilling their roles as per laid-out rules, thereby sharing risks.

10. Set up an independent monitoring team in each geopolitical zone (42 people in total) to oversee affiliate operations.

11.  For the long-term sustainability, create a fund to support local manufacturing of farm implements and equipment.

Despite President Bola Tinubu’s declaration of a State of Emergency on food insecurity in July 2023, over eight months have passed without a coherent agricultural development policy. To combat food insecurity effectively, President Tinubu must demonstrate commitment to ambitious plans, increased budget allocations, and improved governance in agriculture. Transitioning from current palliative policies to competition-driven ones that reward creativity and hard work can unlock Nigeria’s agricultural potential. For sure, the first step in this direction would not be the one designed to gift a set of political farmers 10,000 John Deere tractors. 

•Dr Adewale, Founder, Farmwella Social Purpose Corporation, wrote via [email protected] and www.corneliusadewale.com