Farmers' willingness to invest in mechanized maize shelling and potential financial benefits: Evidence from Tanzania

Abstract

Sub‐Saharan Africa has the least mechanized agriculture in the world due to various reasons including low effective demand at farm level, low policy attention, and ineffective mechanization strategies. However, the situation has changed since recently in favor of mechanization while limited empirical evidence is available on how mechanization can be enhanced among smallholder farmers. In this study, we explore farmers' willingness to invest in mechanization services by considering the group business model (GBM) and the individual business model (IBM) of mechanized maize shelling in Tanzania. Moreover, we analyze the potential financial benefit for those farmers who would like to invest in mechanized maize shelling. We use data mainly collected through a household survey and apply econometric and mathematical models for analysis. The results show that about 65% of the sample farmers are willing to invest in mechanized maize shelling within the GBM, while about 10% of them would like to do so within the IBM. Moreover, the results show that investment in mechanized maize shelling is profitable considering both small‐scale (4 and 7 HP engine capacity) machines and medium‐scale (16 and 20 HP engine capacity) machines. The results show that expanding agricultural mechanization in Tanzania through investments coming from smallholder farmers, as also experienced elsewhere, is possible while they suggest that policy instruments such as targeted loan programs, entrepreneurial and technical trainings, and smart subsidies or tax exemptions are important to encourage and enable smallholder farmers to participate in the mechanization supply chain. [EconLit Citations: Q120, Q130, D250].

Sustainable intensification of smallholder farming systems in Sub-Saharan Africa and South Asia

“…This assumption is supported by studies elsewhere in Africa (Fischer et al, 2021;Kotu et al, 2023). For instance, Kotu et al (2023) found that about 65% of smallholder farmers in their sample were willing to invest in mechanized maize shelling within the group business model while only about 10% of them would like to do so within the individual business model. groups agreed to provide two types of services to their members including shelling services at payment and loan services to those who need.…”

“…Despite acknowledging the importance and potential benefits of collective action in overcoming resource constraints and achieving better economies of scale, there is a scarcity of empirical evidence and comprehensive studies focusing on the conditions essential for the success of these collective initiatives, particularly in the domain of agricultural mechanization within smallholder farming communities. The existing literature provides insights into the advantages of mechanization in transforming agriculture and highlights the challenges faced by smallholder farmers in accessing mechanization services (Houssou et al, 2013;Diao et al, 2014;Fischer et al, 2021;Hodjo et al, 2021;Kotu et al, 2023). However, the specific factors that contribute to the success or failure of collective efforts in adopting mechanized maize shellers among these farmers remain underexplored.…”

Farm digital tools: A systematic review of investments and environmental implications

“…As would be expected given technological advances in farm equipment and the rise of precision agriculture, a fair amount of research (n = 49 articles) has focused on investments in equipment [38,42,97,98]. Interest in this topic has been fueled by the diversity of equipment and production systems, which each have distinct characteristics and applications, whether or not DTs are involved.…”

“…These DTs function as independent pieces of equipment. Thus, their investment cost is equivalent to their purchase cost and can be evaluated using accounting classification criteria if amortization occurs [98,108,110,111].…”

Willingness to pay for agricultural mechanization services by smallholder farmers in Malawi

“…More specifically, agricultural mechanization using tractors has significant impacts on labor productivity (Hamilton et al, 2022), farm efficiency (Huan et al, 2022), off‐farm income (Nguyen & Warr, 2020), land productivity (Zheng et al, 2021; Zhou et al, 2020), farm income growth (Kotu et al, 2023; Takeshima, 2018), off‐farm employment (Ma et al, 2018), and voluntary employment (Zhou & Ma, 2021). Moreover, in a study conducted in Myanmar, for example, agricultural mechanization enabled farmers to have incremental, overlapping, and complementary advantages such as labor savings, reduced drudgery, convenience, increased speed and timeliness of operations, improved ability to manage weather‐related risks, and reduced loss of grain during harvesting (Belton et al, 2021).…”