Big tractors, but small farms: Tractor hiring services as a farmer-owner’s response to an under-developed agricultural machinery market

CGIAR Research Program on Policies, Institutions, and Markets (PIM)

IFPRI1; CRP2; GSSP; D.1 Agriculture's role in national development strategy

DSGD; PIM

Working paper

The debate about agricultural mechanization in Africa south of the Sahara (SSA) has largely ignored the role of the capital service market in spreading the use of mechanical technologies. Yet, custom machinery hiring ser-vices have been essential for the widespread use and ownership of tractors and other agricultural machines in many countries where small farms are dominant. Using survey data collected in 2013, this paper suggests that tractor services can play a key role in the adoption of tractor use among Ghanaian farming households. Medium and large-scale farmers own tractors in the survey districts, while most small-scale farmers access tractors through hire services. Farmers expand their farm size when they acquire a tractor, but not to such an extent as to fully utilize the capacity of the machine. They engage in hiring-out tractor services to increase the scale of tractor use and make profits. Medium-scale farmers offer the bulk of tractor services. These farmers will be key for spreading agricultural mechanization in Ghana.

Non-PR