Can Big Companies’ Initiatives to Promote Mechanization Benefit Small Farms in Africa? A Case Study from Zambia
ZEF-Discussion Papers on Development Policy No. 262
32 Pages Posted: 26 Jun 2018
Date Written: June 12, 2018
After many years of neglect, there is a renewed interest in agricultural mechanization in Africa. Since government initiatives to promote mechanization, e.g., by importing and subsidizing tractors, are confronted with major governance challenges, private-sector initiatives offer a promising alternative. This paper analyzes an initiative of the agricultural machinery manufacturer John Deere and its dealership partner AFGRI to promote smallholder mechanization in Zambia through a contractor model. The analysis focuses on the impact of this initiative on smallholder farmers who receive tractor services and on the demand for hired labor. The analysis is based on a survey of 250 smallholders and focus group discussions using Participatory Impact Diagrams. The results of a Propensity Score Matching (PSM) analysis indicate that farmers who access tractor services for land preparation can almost double their income by cultivating a much larger share of the land that they own. The analysis also suggests that the increased income is used for children’s education and for purchasing more food, but does not result in increased food diversity. The findings indicate that the demand for hired labor increases due to the expansion of the cultivated area and due to a shift from family labor, including that of children, to hired labor. Questions that require further investigation are identified, including policies and strategies to increase the incentives of tractor owners to provide services to smallholders, to use mechanization more effectively to increase land productivity, and to avoid new forms of dependency of agricultural laborers that may result.
Keywords: Agricultural mechanization policy, agricultural intensification, private business, Zambia, employment effects
JEL Classification: J0, O3, Q10, Q12, Q15, Q16
Suggested Citation: Suggested Citation