Mechanization in Ghana: Searching for Sustainable Service Supply Models

Abstract

Little has been written in recent literature regarding the role of mechanization in agricultural transformation in Africa. Government-led mechanization schemes in the 1970s and 1980s proved unsustainable after structural adjustment policies removed government support. However, demand for mechanized services by smallholder farmers has grown recently, with urbanization and agricultural intensification creating a power bottleneck for land preparation, especially in some regions. Against this background, the government of Ghana has increased its support for mechanization by establishing subsidized mechanization service centers since 2007. This paper assesses the sustainability of the current supply network for mechanization, given government policy. Stylized models of mechanization supply are developed based on experience in Bangladesh, China, and India during similar stages of agricultural transformation. Ghana’s supply network is then analyzed in light of key lessons from the Asian experience. The analysis focuses on two policy issues: (1) whether the current model promoted by the government has left enough room for the private sector to develop the supply chain, including machinery imports and trade, and (2) whether this model can better link smallholders’ demand for mechanized services to its supply, such that supply can further induce demand and mechanization can broaden its role in agricultural transformation. By addressing these questions, this paper aims not only to fill the knowledge gap in academic literature but also to contribute to policymaking by identifying an appropriate and sustainable model tailored to the current needs of smallholder farmers in Ghana. The study concludes that the government-subsidized mechanization service center model is neither appropriate nor sustainable at the current stage of agricultural transformation in Ghana, and hence government policy should focus on the private-sector leadership along the mechanization supply chain, in the mechanized service market, in the machinery market (including imports and domestic trade), and in the repair service market.

Keywords: agricultural mechanization, government policy, intensification, Ghana, West Africa, Africa South of Sahara, Africa