Okoli: Nigeria Requires Emergency Declaration on Agriculture Mechanisation

The Country Director, Agricultural and Construction Equipment Division, Tata Africa Services Nig, Engr. Chijioke Okoli, says the failure of successive administrations to prioritise mechanisation is a key reason the country’s agriculture is underperforming despite the much talked about potentials of the sector. Tata International is in the forefront of efforts to improve Nigeria’s abysmal mechanisation gap. To achieve a turnaround, he advocates that the federal government should declare an emergency on agricultural mechanization, as well as make the sector attractive to youths in order to harness its full potentials. In this exclusive interview with James Emejo, he emphasises the need to further rebrand agriculture as a core business in order to boost the sector’s contribution to the economy and create the much-needed jobs among others.

Nigeria’s agriculture mechanization gap – the proportion of equipment and tools deployed in the country’s agriculture – remains very low. What is the current level?

Thank you very much for that question. I think as of today, there are several statistics out there on the number of tractors that are available in the country. But the closest to reality is the number that is being shown around by the mechanization service providers (MSPs). Today we have some MSPs in the country, like the Tractor Owners and Operators Association (TOOAN), the Tractor Owners and Hiring Facility Association of Nigeria (TOHFAN) and you have some other private service providers like AgroPro, AfriMech, Ambel, Scagric, among others. And based on their figures, because they are currently on the field offering these services, they don’t even count up to 7,000 units out there in the field. And when you put this close to the number of arable lands, which is estimated at 34 million hectares of arable land, you will find out that there is still a huge gap. As a matter of fact, we’ve not even scratched the surface considering where we are supposed to be in the industry. If you try to tie that to where the best in the industry is today, especially when you’re talking about the mechanization of smallholder farmers because our market is primarily dominant of smallholder farmers whom today are basically farming at the subsistence level – if you want to compare that with India, you’ll find out that we’ve not even done up to one per cent of what they do. The number of tractors we have currently is not even up to one per cent that they send into their farms every year.

How important is mechanisation to agriculture amid government’s drive to diversify the economy through the sector?

Mechanization is the starting point because it addresses the issue of farm labour shortage. Whatever humans used to do in the past, it’s time to allow the machines to do way more than that. For example, it will take more than a day for 10 able bodied men to work on a hectare; whereas, a small tractor of 65 horsepower can nicely plough five hectares in one day and it’s merely operated by one operator and an assistant.

And let’s also not forget the fact that land preparation is very crucial to what you expect at yield point because during harvest you will see the difference between what was tilled manually using human labour and what the machine did. Nutrient and water retention are vital for the crop to do well. You have to cut to the right depth which only a machine can do efficiently, you can’t get a human who would cut that deep to produce a good yield.

There are several studies out there that confirm this. We also conducted a study locally and now we saw that where the farmers could get 1.5 metric tons of maize manually; with mechanization, they were declaring five tons per hectare. That’s almost an improvement of three times the yield. And that was achieved by basically replacing labour with mechanisation. The results are even more impressive when you take this a step further by replacing the grain with seed. There’s a huge difference between grain and seed. Sadly, most of our farmers still have access to grain instead of seed. With the right seed and other adjustments in Agrochemicals and fertilizer, the yield can even get to where the world standard is today, which is above eight tons per hectare (for maize). So, there’s a huge role that mechanization has to play, and it’s the starting point – If we can address mechanisation, you’ll find out that at least, the difference in productivity is massive. That’s why mechanisation is so critical for the sustainable improvement of Nigerian agriculture and agribusiness.

 You alluded to the fact that it’s not about deploying heavy equipment alone as there are issues around seeds deployment among others. In recent times, there have also been conversations around Good Agricultural Practices (GAP) by local farmers. Would you say the sector is currently bereft of good policies needed to make the difference?

I think first and foremost, the major issue is the labour shortage today and the lack of mechanization to aide in bridging that gap. As a farmer, I can easily decide that for a season, I just want to work on two hectares. If I want to buy fertilizer for two hectares, it is nothing compared to the cost of getting a tractor to the farm. But the problem is that once I decide to buy the fertilizer for my two hectares and I am only able to prepare land for 0.5 hectares; whatever projection the country has on me as a farmer has actually reduced to 25 per cent – which is a significant loss to the economy. Only mechanisation can ensure that you can achieve the minimum projected yield for two hectares. The challenge is that while you can have small packages for other inputs at the subsistence level, it is difficult to do that for mechanisation. That’s why you need the right policies and the right strategies to improve mechanisation which is capital intensive. Because you can’t easily see solution for mechanisation in small package where you say, oh, I want mechanization for only one hectare, you can’t easily see it.

So, the volume of tractors out there is not sufficient to get us to that point where a farmer can easily say this year, I just want to work on five hectares; please give me a bill to prepare my five hectares alone. In the past, Nigeria was actually very good in agriculture, but it was primarily attached to the volume or number of labour available in the rural settlements. But today, how many of those youths are still in those areas? Majority of them are already in the urban cities. So, with that shortage, we need to quickly bridge that gap like the developed and developing nations have already done by sending machines. One service provider can actually take care of a whole community, and that’s where we need to get this conversation to. 

There is a consensus that mechanization is the way forward for Nigerian agriculture, yet it is adjudged to be too expensive. How can farmers navigate this challenge?

So, for us as a company and this is actually tied back to the values of the Tata Group. We would always want to do business in a way that the community would survive. Community comes first.  Based on the hectarage you’re working on; we can advise you on whether you need to own the tractor or whether you need to look for a service provider around you to offer that service to you. But at commercial level, beyond outright payment for assets, you can explore bank financing, but we as Tata have also gone a step ahead to set up an in-house finance company that finances our customers who are interested in owning the John Deere tractors that we distribute in the country today.

So, today we can start that conversation with a customer and in less than a week or two the customer will be picking up the asset; with the commercial banks these conversations can span for months. As we speak today, we have more than 80 units of tractors out there that were financed for MSPs and customers to use on their farms and to utilise in working for farmers within their own community.

Do you think mechanisation was a key success factor in the CBN’s Anchor Borrower’s Programme (ABP)?

I think first and foremost, let’s acknowledge the fact that the Anchors Borrower’s Programme like every other programme that is agriculture-related, drew attention to the importance of looking at agriculture as a business. In the past, we’ve had a situation where people would look at agriculture as a poverty alleviation programme – let’s give the farmers this or let’s just keep them busy doing something, producing food. But for the first time in a while, we saw a programme that wanted to treat agriculture as a business because from the primary production, the programme also wanted to take care of that produce getting to the processor. However, like every other programme that was designed in the country, I think we missed a point, and that point is that we kept mechanization for somebody else to handle it.

Every other thing was provided for in the programme like other programmes in the past, it failed to provide mechanization as a core, inbuilt component in the conceptualisation. Yes, the provision for land preparation and every other thing was in the design but the absence of the tractors that would render those services has negatively affected every programme that was designed around agriculture in the country.

A farmer would easily say in the ABP that I’m coming into this programme with my two hectares land and on that basis he or she gets inputs for two hectares. He will get seed allocated to him or her for two hectares, fertilizers for two hectares, chemicals for two hectares and water pump that will take care of the two hectares. But the farmer goes back and couldn’t get access to mechanisation service, and what happens? He dives into the farm with scarce manual labour sourced within community or freelance manual labourers and instead of doing two hectares, he or she ends up doing 0.5 hectares before the planting window closes. Remember, he or she has collected a loan in inputs for two hectares and now he is supposed to plant only on 0.5 hectares with 0.5-hectare yield and pay for a two-hectare loan. The result is predictable. The farmer will find it difficult to pay back the loan and take care of his family obligations. Whoever is a farmer today is on the farm to produce and also be able to support his or her livelihood and the moment that goal is defeated, he won’t be able to pay back that loan and that’s a fact.

Looking at solutions now, what steps has Tata Africa taken specifically to improve agricultural mechanization in Nigeria?

For us at Tata, we’ve been here on the agriculture front since 2013. On November 1, 2012 precisely, we signed an agreement with John Deere to distribute the John Deere equipment in the country. And so far, I think we’ve consistently exceeded our previous successes; yes, there’s still room to do more, but just to mention some of the critical things we’ve done in the industry. At the time we entered the industry, there were very few trained operators in the country. But today, I can tell you that we’ve trained more than 800 operators of tractors in the country. And we’ve trained over 250 technicians as we speak, whom we use as dealer certified local technicians (DCLT); which means we can send them on a job that is too far from us and they will go render the service to the farmer; get paid for it and they will pick the spare parts they need to do the job from us. That is to mention the job creation aspect of what our involvement in the sector has done. Then beyond that we’ve stayed very close to supporting a whole lot of commercial projects in the country. As a matter of fact, more than 80 per cent of the commercial projects in the country that are involved in primary production are currently having one John Deere or John Deere-related products on the farms. This equipment requires maintenance and services which we do our best to ensure are available at all times to support those projects. Just to mention a few of them; there’s the Flour Mills Project, there’s the Sunti sugar farm, the Savannah Sugar farm, the Olam Rice farm, Coscharis rice farm, PandaAgric Novum farm and others.  Many of these projects are currently running their operations using the John Deere tractors, and that’s where we have also played a huge part. And beyond that, we’ve also tried as much as possible to remodel the mechanization service business in the country.

So, currently, we have service providers who are registered with Tata and those MSPs have been able to pick assets from us on a three to four-year loan period. And as we speak, they are offering services in the communities where they operate; on a rough scale, a small tractor would give you about 400 hectares of annual job. So, if I tell you I have more than 100 tractors out there with my service providers rendering services to farmers; multiply that by 400 to have an idea of what our existence in the sector has actually added to the sector.

How much of the public sector involvement is in the mechanization projects, given what was observed during the Anchor Borrower’s Programme?

So, first of all, the Anchor Borrower’s Programme made provision for land preparation, specifically ploughing and harrowing and watering within the framework. But what the programme did not take care of was the equipment that will provide those services. That was not accounted for, and it’s evident in the amount that was allocated for those services because in the design, you will see an inadequate amount that is not sufficient for the urgently needed mechanization service.

Now coming to your question on public sector engagement, because we’ve talked about the private sector – we’ve had some engagement at the public level where we’ve done some transactions with some state government and they are going well.

We did it with Delta State and AWAA, Cross River State, Kebbi State, Kano and Ogun state as well. So, we’ve done some works here and there for the states. However, we think that the public sector’s role in mechanization is just more like an enabler.

Ultimately, the people that should be able to drive this should be the private sector. But looking at the cost of mechanisation equipment today, it’s very pertinent that the public sector steps into the space to find a way to provide the needed comfort for the service providers to acquire the assets and be able to render the services to the farmers.

We are not advocating for the public sector to be out there on the field, no; the moment that is done, I can assure you the goal will be defeated. What we need to do is to get more of the private sector who would engage the youths in these services because that’s a critical part we need to consider in this design.

What level of success have you recorded so far?

I think it’s our 10th year here and I can’t say that it has been an easy ride but we’re still here. Yes, the economy downturn has actually affected practically every business in the country but we know that there is a huge potential here because Nigeria has actually not scratched up to 10 per cent of the arable land, mechanisation-wise.

Nigeria is a youthful country, demographically speaking. Are the youths a part of your strategy?

Actually, they are the key to that strategy because even the utilisation of the assets we’re talking about today – the mechanisation equipment is quite tedious to some extent and it requires somebody in his or her prime to manage those assets. So, they are very critical to the design. However, there is a big challenge there – the challenge remains that agriculture needs to be rebranded. When you talk about agriculture today, an average youth in the country will run away because the image they have about agriculture is not a sweet one. So, to answer you in a very short statement, the youths are actually the key to taking our agricultural sector to where we need it to be.

What recommendations would you give to the new administration on improving agricultural mechanization in the country?

I think I will just drop it to three points – first, they need to declare an emergency around agricultural intervention. Yes, today there’s a huge attention on that, but mechanization should be a standalone – and they should look at it as a core business that has the potential of not just bringing the investment back but also producing the needed raw material that we need today to reduce the pressure on our currency. Secondly, rebrand the business of agriculture and make it attractive to the youths. The image of agriculture needs to change to pull the untapped strength of the youth. Without the youth in the sector, we won’t achieve the desired result. Lastly, we need to also look at policies. In the past four decades, India’s mechanisation policy has been strategically driving the adoption of mechanisation by farmers. This has positioned them as one of the largest agricultural equipment manufacturers (by units). That’s picking mechanisation as a subject, not agriculture policy but mechanisation. Create a policy around it. And the policy should be able to address a whole lot, because today we talk about not being able to even assemble some small equipment that can be attached to the tractor. We import plough, we import harrow; the technologies are not too difficult, but the truth is, because there’s no policy around it, you find out that it still more feasible to import.

So, you have to declare an emergency around mechanisation, and see if there’s a way to sit down with existing players in the industry and have a conversation with them because today, yes, we talk about the values or the cost of these things and it scares us from even having that conversation.

But the truth is that there is whole lot of financial models across the globe that can even help us to create a self-funding business structure around mechanisation that would at the end of the day be able to fund the existence of that business model.  So, those are basically what we’re talking about, and lastly, have a policy around it.

Where do you see Nigerian agriculture in the next 10 years, if mechanisation is given the priority attention?

This question basically puts together everything. Let’s even look at one tractor impact before looking at the whole mechanisation. One small tractor of 65hp gives you approximately 400 hectares per annum job. Let’s even take four metric tons per hectare today; so, you look at four tons per hectare times 400 hectares, and that’s 1,600 tons.

That is what one tractor would have given you for rice production at four ton-capacities per hectare. Imagine what a hundred, a thousand or 10 thousand could do if we decide to make mechanisation a priority and see how to focus on getting the youth back into the business of agriculture. So, that’s basically what I would say now; 10 years is too far to even measure the impact; in a year, the impact will be visible. If you have 200 tractors working out there on rice alone, we will feel it.

What are your targets and objectives in the Nigerian agricultural business?

I think it would be nice to look at it from the potential in the market as we speak. So, the Nigerian market today is sitting on 34 million hectares of arable land. India is on 152 million hectares of arable land and that means we are 22 per cent of India’s land.

In three years, India’s brand-new tractor purchase was 2.7 million brand new tractors in the country, and we are 22 percent of their landmass. Our farm model looks close to them because we have about 88 percent in smallholder farmers range and India have about 80/85 percent approximately. So, if you draw a line from where we are and where they are, you will find out that we should be talking about 22 percent of 2.7 million tractors. The gap to get to where we are supposed to be is actually huge and for us as a company, we think that this market is actually ripe for mechanisation because we’ve come to a point where we need to start utilising our land to produce our food. We need to keep the youths actively engaged. We need to keep our industries working. Our industries today will not work if they don’t get the raw materials that they need locally. Those raw materials that need to come from the farm cannot come until we get services to every farmer that needs to produce. And those services cannot come until we get to rebrand agriculture as a business that the youth today can say proudly that this is what I do for a living.

So, for us, we think that this market is actually there and whatever we’ve done in the past is nothing compared to the picture that we have in mind for the future.