Mechanised agriculture and outsourcing of non-core agricultural activities in the commercial sector of the industry are gradually eliminating sharp practices, which account for increase in labour costs, says Mr Ikechukwu Azogu, Executive Director, National Centre for Agricultural Mechanisation (NCAM). He explains to DANIEL ESSIET why mechanisation has become important to farmers’ economic survival.
What is the state of the agric machinery industry in the last five years?
The agricultural machinery industry has grown rapidly in the past five years. The government’s policy is changing towards supporting the sector. The administration has shown increased desire to support and sustain agriculture, ensure food security and encourage more productive farming methods. Agricultural machinery producing companies are making their presence felt as they move to expand their global footprint.The global downturn a few years ago, which led to a decrease in the purchasing power of consumers also offered farm machinery makers a chance to compete in market by producing low-cost machines and parts. Solid agricultural performances have also encouraged reinvestment this year.
The rising costs of raw materials, such as steel, and energy such as coal and fuel have been of concern. How are these affecting agricultural machinery?
Steel is one of the largest input used in making machinery and equipment. The impact of changing market requirements for steel has been dramatic. The demand growth is exceptionally strong. Consumption continues to grow strongly, matched by a large rise in production.The reasons for steel prices escalation are numerous.There has been a worldwide industrial growth. A boom in construction, along with rapid industrialisation is causing demand to increase. Impact of steel price increases is affecting the agricultural machinery industry. This is because manufacturers use steel, iron ore and coal as their basic input. So, the steel crisis has certainly provided manufacturers with a major challenge – reduce costs to offset the increases or risk losing margin. Locally, we rely on materials from the scrap market. The scrap price is crucial to the agricultural machinery industry.
Earlier, the industry was sustained by importation and assembly. Has it developed capacity for manufacturing and development of new equipment that are appropriate for the sector?
We were importing tractors both in completely knocked down (CKD) and completely built up (CBU) condition from abroad. With the realisation of the importance of farm mechanisation in crop production, the demand for tractors has increased gradually and also their imports. All the tractors and farm machines were imported. Since then, the imports have gradually given way to local production. However, a variety of implements are still being imported from Europe and USA. We are meeting the country’s needs for technologies that it could not obtain for a variety of reasons. We are developing what could be better education and agric research system. We hope that as the agric sector advances, foreign investors would be attracted to establishing assembly plants in Nigeria. We have also got to the level where we dissect imported tractors and copy their parts, to enable us to replace broken down or worn out machine parts. This is cheaper for us than going all out to import these parts.
What are the implements manufactured in the country?
We have done a lot in terms of simple tillage implements that prepare the soil for planting by loosening the soil and killing weeds or competing plants. They include machines for tilling the soil, planting seeds, irrigating the land, cultivating crops, protecting them from pests and weeds, harvesting, threshing grain, livestock feeding, and sorting and packaging the products. The Centre has developed technologies that have impacted positively towards the use of land tools, animal traction and engine powered mechanisation technology. The machines include: seed treatment dram, manual seed planter, manual seed and fertiliser broadcaster, weeding hoe, cassava lifter, cassava peeler, cassava grater, groundnut digger, groundnut decorticator, paddy parboiler, oil palm fruit processing machines, maize shellers, melon shellers, palm nut crackers, okro slicer, lysimeter, yam chipping machine, threshers and vegetable slicers. The centre has trained numerous fabricators on how to produce these machines. We need to create the necessary awareness of the immense potentials of these products to the economic development of the nation.
Our mandate empowers us to carry out adaptive and innovative research in design, fabrication and testing of proven agricultural technologies. NCAM conducts programmes on adaptive research for the development of better agricultural tools, equipment and machines for land clearing, weeding, harvesting, crop preservation and processing, as well as the development of low cost machine and equipment appropriate for the effective mechanisation of farming operations, which at present, are predominantly small-scale. We have a pedal operated cassava grater – a farm processing equipment fabricated to improve the traditional way of grating peeled cassava tubers into fine mash for further processing in terms of drudgery, timeliness and output capacity. The grater comprises a grating drum, a rectangular hopper and drum housing a gear system and a pedal. The output capacity of the machine depends on the strength and agility of the operators. Two operators can produce 30 kg cassava mash per hour. There is also the oil palm fruit processing equipment – a complete set of labour saving devices for the production of palm oil from palm fruit. The set comprises of a palm fruit steamer/steriliser which is made of standard 50-gallon oil drum with upper and lower chambers, perforated circular metal sheet and a drain plug. There is a palm fruit digester used to depericarp or macerate the mesocarp and extract the oil from the cooked palm fruits. They are of two types, namely: vertical and horizontal types. Their essential features include cylindrical housing, the inner perforated cylindrical drum, ashaft, spikes and a handle. The palm oil clarifier is a cylindrical container made from iron sheet. The main features are upper cylindrical section, lower cylindrical section and a drain pipe.
We have established a liaison programme to facilitate linkages with research Institutes, and the manufacturing Industries. This ensures that prototypes designed by the research institutes are manufactured and mass produced by the local and indigenous manufacturing industries that no doubt have more adequate engineering infrastructures for the manufacture and mass production of the prototypes for distribution to end-users. In addition, this arrangement encouraged more entrepreneurs to establish industries for the manufacture of the locally designed equipment or even sponsor research and development works on agricultural equipment development. We distribute our equipment through the Agricultural Development Programmes (ADPs) as well as directly to end users.
Do we have competencies to manufacture combined harvesters and heavy tractors?
No. It takes four to five years to develop a new product and have it ready for the market. We want to respond to this growing market by developing products unique to the nation’s agricultural processes. There is rapidly growing demand for agricultural equipment. The challenge, however, is the difficulty in obtaining investment for agricultural machinery.
At present, NCAM is mandated by the Federal Government to test the quality and adaptability of every tractor imported into the country, an attempt aimed at stalling the importation of low quality tractors that hardly last for six months before they pack up. We are aware that after we have tested and certified, some of these importers still go back and import low quality tractors. This singular reason underscores the need for NCAM officers to be at the ports and work hand in hand with the Nigeria Customs Service to ensure that the machines being brought in are in tandem with our specifications.
Do you have a functional national system of apprenticeship and formal education through the polytechnics for technicians, artisans and for qualified engineers?
As the agricultural and turf machinery business becomes more technologically advanced, the need for skilled people working in the industry becomes ever greater. It’s not just about the machines either. Sophisticated parts and service systems require the same skills too. One of the major benefits students and apprentices enjoy doing their industrial attachment with NCAM is the certainty of attaining prescribed standards of training. Indeed, the quality of training delivered is such that the students should be widely sought after in all fields of agric engineering. We focus on capacity building so that the farmer has a wide range of skills to run the farm. There are apprenticeship programme, which provide a high-quality route for agric engineers to acquiring skills. At NCAM, we provide internship for undergraduates. Those who participate are guaranteed adequate training and standards are followed. Apprentices have a chance to learn and get real work experience.
What impact will financial liberalisation have on agric businesses, especially farm machinery companies?
The availability and cost of finance within the agricultural sector is generally assumed to exert an indirect but important effect on the level of total agricultural production through its effect on investment. Because of the contribution made by the agricultural sector to the nation’s economic viability, it is most important that the resources required for the expansion of agricultural output, in both the traditional and non-traditional areas of production, are available. Perhaps the most vital of the resources needed, if the desired increase in agricultural output growth is to be achieved, is the provision of adequate capital.
The government has sought to encourage the flow of funds to agriculture from banks by indicating lending priorities. There are a number of long-term national policy issues related to agricultural financing, which may require review in the light of changing economic and market conditions, and their success in furthering government’s objectives and their effects on undesirable economic phenomena, such as land price escalation. These include concessional interest rates for farming, and the specific farming purposes for which funds are allocated under the lending policies of these institutions.
In the short term, decisions must be made on the annual allocation of funds to government institutions and on the need for special financing arrangements in times of climatic stress. It is essential that policy makers at both the national and institutional levels be able to plan for changes in demand and be aware of developing shortfalls in supply. Until the government has the necessary background data to make appropriate decisions, provision of funds for agricultural purposes will lack focus and coherence.
Objective decisions on the direction of government funds to the agricultural sector and on the allocation of those funds within the sector, there exists a risk that groups of farmers selected for targeted assistance will not be those in need of assistance, or that the assistance is not being given where the nation will benefit most.
Do you think the economy has prospects to sustain multinational agric businesses?
Management of international agric firms can utilise the benefits of what NCAM can provide them such as base of operations. There is an enabling environment to encourage many international firms to establish operations and/or conduct business within our market. Nigeria is highly regarded as a location, which includes highly-skilled engineers, governmental aid, good geographic location and some tax and custom benefits. The industry is capable of enjoying tremendous profitability. This is in terms of added value, export rates and productivity per employee. The government is making efforts to improve the climate for foreign investment as it seeks to develop a more market-oriented economy.
What has NCAM done to assist SMEs?
The major constraints on improving the small scale agricultural mechanisation value chain are lack of information, including financial feasibility information, about the machines and technologies that are available. The large capital outlay for specialised harvesting equipment can be daunting. If a farmer buys this equipment, he will likely only use it for a few weeks every year. It is not economically viable to have this expensive equipment standing idle in a shed for the remainder of the year. However, should a silage contractor do so, he can harvest and ensile forage crops for farmer clients, spreading his costs and income across many different farms and across different seasons to make the capital outlay and running costs economically viable. An added challenge is that, due to very high land prices, many farmers can’t afford to buy the neighbouring farm land to expand and so take advantage of economy of scale. So, many farmers are looking further afield for more economically viable farm land on which to grow maize silage.Technical know-how is by far the most important aspect to ensure that small-scale farmers succeed. This is why the centre has specific projects to enable small-scale farmers to produce enough food to meet their needs and contribute to national food security. This is a big task because small-scale farmers are not really being supported in this regard. There are lots of farmers in the rural areas that need training and better knowledge of agricultural practices such as preventing disease.
Can you justify the establishment NCAM, considering the similarity of roles with organisations, such as the Federal Institute of Industrial Research, Oshodi (FIIRO), that are also involved in the production of small agric machines?
NCAM was established by Decree No.35 of 1990 with the objective of accelerating the pace of mechanisation in the agricultural sector. To achieve this, we design and develop simple and low-cost equipment, which can be manufactured with local materials, skills and facilities. We bring into focus mechanical technologies and equipment developed by various institutions, agencies or bodies and evaluate their suitability for adoption. We manufacture replacement parts for equipment. Because the majority of purchases of farm equipment are financed, improvements in borrowing capacity represent potential for increased equipment purchases by farmers going forward as they work to keep up with increased demand.
We produce a wide range of machines including hand tools, draft animal implements, ridgers, shears, milling machines, cassava processing machines, oil palm processing machines, grinding machines, threshers, shellers, hullers, and expellers, among others. We carried out programmes focused on the enhancement of the capacities of the public institutions involved in the promotion of agricultural mechanisation to better perform their duties to increase production and utilisation of agricultural mechanisation input. NCAM has the mandate to conduct research towards development of indigenous machines for farming and processing, including the design of simple machines which can be manufactured locally. NCAM is also mandated to standardise and certify, in collaboration with SON, agricultural machines, equipment and engineering practices in use in Nigeria. In addition, it is supposed to bring to focus mechanical technologies and equipment developed by various institutions, agencies or bodies, and evaluates their suitability for adoption. Farm technologies from land preparation to milling activities are available here. These include, hand tractors, power tillers, floating tillers, four-wheel tractors, transplanters, drum seeders, mechanical reapers, combine harvesters, threshers, seed cleaners, shredders and different types of grain dryers and rice mills. The test and performance evaluation of the farm machinery is part of the monitoring of projects of NCAM to keep the quality and efficiency of the machines being availed by farmers’organisations. Experts from the centre train agricultural engineers to test the land preparation, planting, harvesting, drying and milling technologies. We are trying to support the development of skills and expertise within the industry. We have a long history of working hand in hand with government agencies and the private to deliver workable solutions appropriate to local conditions be it soil type, climate, social or environmental conditions. We work with the government to give advice on policy and strategy issues affecting agriculture and food security. We also make recommendations for agricultural projects and give government technical assistance when required.
Can Nigerians manufacture standard rice processing mills?
Modern rice mills are scientifically up-to-date units, with most modern plant and machinery. Rice produced in a modern mill would be of superior quality and thereby finding greater customer acceptance. Further, the bye-product of such mills, rice bran, could find great demand as raw material among solvent extraction plants.
NCAM has not produced rice mils. What we have just done was to order rice mills from abroad. The motive is essentially to dissect and copy this machine which is cheaper for us and it will enable us to mould and fabricate spare parts when necessary.
Rice cultivation becomes more profitable with the introduction of the machines, due to increased area under cultivation, maintenance of optimum plant density. Small scale farmers require small machines due to the small size of their farms and affordability and large scale farmers require bigger machines with higher work output. Compared to village-level systems, the commercial milling system is a more sophisticated and configured to maximize the process of producing well-milled, whole grains. In modern rice mills, many adjustments, for instance (rubber roll clearance, separator bed inclination, feed rates) are automated for maximum efficiency and ease of operation. The whitener-polishers are provided with gauges that sense the current load on the motor drives, which gives an indication of the operating pressure on the grain.This provides a more objective means of setting milling pressures on the grain.
Mechanisation is not just a question of supplying farmers with tractors and machinery or of making mechanisation services available to them through the public sector. The utilisation of mechanised input must be profitable to all parties concerned. The best way to mechanise is for farmers to own their machines or for them to hire services from other farmers. Most farmers still cannot afford mechanisation.
The cost of doing business plus the inherent risks involved in tractor ownership is key constraints currently affecting demand for mechanisation inputs. The major costs of doing business for the tractor owner is funding the initial capital costs of purchasing the tractor. The major risks are not being able to meet the loan repayments and lack of tractor-hire opportunities. The availability of credit is a major factor in the development of mechanisation. Investment in farm machinery requires large amounts of capital that is amortised over several years. Lending large amounts over long-time horizons is risky for lenders. Farmers need knowledge of which types of equipment are suitable for their conditions and crops being grown.
What are the problems in the industry?
Challenges facing the agricultural machinery industry in Nigeria include low purchasing power of most small scale farmers, inadequate agricultural credit and unfavourable interest rates of banks, importation of farm machinery of poor quality; inadequate after-sales service support, poor production infrastructure, comatose steel industry and inefficient power sector. The industry has been confronting a lot of issues such as, lack of adequate research facilities, lack of availability of standards and proper raw material for manufacture, lack of trained and efficient manpower, lack of after-sale service and lack of standardisation and quality control.
What are your plans for the year?
We have numerous projects that are either field orientated or deal with policy and strategy issues. Our biggest project relates to capacity building of agricultural professionals.
Mechanisation, particularly for harvesting, is being introduced. Introducing mechanisation for all stages of production – from transplanting to harvest – would help further improve efficiency.
NCAM has partnered with the administration of Governor Rauf Aregbesola to establish a low-land rice demonstration farm in the State of Osun. The initiative is to enhance food security and improve the yield for rice farmers to an average of 4.5 metric tonnes per hectare of land. The demonstration farm, which would be established on the Songbe-Ogbaagbaa Road, is expected to cover 385 acres based on the application of SAWAH Eco-Technology for low land rice production. It is obvious that to transform Nigeria’s largely traditional farming system to modern commercial one, there is the need to inject in the system, substantial engineering and technological input that are properly managed.
