- ➔ The business case for motorized mechanization is based on its potential to reduce production costs, expand and intensify production, and improve productivity. The main barriers to adoption include inadequate access to necessary services (e.g. finance and extension) – especially by vulnerable, excluded and marginalized groups, including small-scale producers and women – absence of a conducive business environment, lack of technologies tailored to small-scale agriculture, and poor infrastructure.
- ➔ Motorized mechanization can still provide benefits to many low- and middle-income countries where adoption has been slow. These countries should take advantage of the wide variety of available machinery and their possible multiple uses, tailoring machinery to local needs, especially those of small-scale producers often operating in small areas on uneven terrain.
- ➔ Digital technologies can enhance the precision and timeliness of agricultural operations, make agricultural advisory services more effective, and address the environmental challenges resulting from past mechanization (e.g. soil erosion), while building resilience to shocks and stresses.
- ➔ Digital technologies enable machinery hire services, including in low-income countries, allowing access to technologies for often excluded groups, such as small-scale and female producers. Young farmers, in particular, are key drivers of the transformation of family farming towards agricultural automation.
- ➔ The business case for digital automation technologies is still weak, especially in low- and lower-middle-income countries, due to poor connectivity and electricity supply, and limited access to services (e.g. finance, insurance, education). This is even more so for robotics with artificial intelligence (AI), where adoption is expected to accelerate mostly for large-scale producers in high-income countries.
- ➔ Harnessing the potential of digital automation technologies requires addressing the factors that hinder adoption – poor infrastructure, digital illiteracy, high costs of the technologies, and lack of an enabling environment – while investing in research and testing worldwide to develop context-appropriate technologies.
Chapter 2 discussed the trends and drivers of agricultural automation, including motorized mechanization and more recent digital automation technologies associated with precision agriculture. Motorized mechanization is widely adopted around the world, although unevenly both across and within countries. Most sub-Saharan African countries still lag behind. Other regions have seen unequal access to mechanization, with generally less for vulnerable groups such as small-scale producers and women. The world is now in the early stages of a wave of digital automation in agriculture, involving sensors, robots, AI and other digital tools to automate one or more of the components of agricultural operations – diagnosis, decision-making and performing. While many countries have adopted motorized mechanization extensively, agricultural producers and agribusinesses are still in the process of identifying which digital automation technologies are worthwhile and suitable for them, taking into account local conditions and the technologies they are currently using. One of the main barriers to adoption is a lack of perceived benefits from such an investment, due to the high purchase or operation costs compared with the labour costs of current systems. Other factors impeding adoption are the lack of technologies suitable for small-scale production, inadequate access to maintenance and repair services, the low level of digital literacy, poor connectivity, and scepticism about innovations. This chapter discusses how these factors affect the business case for agricultural automation and how to improve that case.
The business case for investing in agricultural technology rests on the potential gains for agricultural producers, as well as for those involved in producing, delivering, and maintaining or repairing the said technology. The assumption is that the relevant actors – producers, dealers, and maintenance and service providers – make rational decisions to maximize their profits and well-being. Investing in automation technologies entails costs, which tend to increase if the technologies are not widely available locally. Producers and technology suppliers will only embrace automation if the benefits outweigh these costs.
For some technologies and in certain conditions, investment costs may exceed the potential benefits, at least in the short term; this can discourage investment, despite the advantageous prospects for wider society. Public intervention is therefore required to align private benefits with the interests of society as a whole and thus incentivize the business case. This chapter also looks at (mostly environmental) issues related to motorized mechanization and considers how these can be addressed (at least partially) by new digital automation technologies, including those still in the pipeline. This is particularly relevant to some low- and lower-middle-income countries where motorized mechanization adoption has been slow but can now be implemented in a potentially sustainable, efficient and inclusive manner.
Based on the case studies commissioned for this report and the wider literature, this chapter presents and summarizes evidence for the business case of both motorized mechanization and digital automation technologies. A discussion on how policies and investments can affect the business case and shape incentives for adoption of automation technologies follows. Finally, the chapter analyses future trajectories for a wide range of technologies, and considers their potential to transform agriculture and make it sustainable, in light of the different local challenges faced by producers.
The business case for motorized mechanization confirms its consistent potential in many contexts
There is a large and rich literature on the benefits that mechanization has brought and can still bring to agricultural and rural development. By allowing producers to perform agricultural operations faster and more effectively, it can lead to enhanced agricultural productivity, higher incomes, labour and cost savings, and reduced drudgery, among others. For example, switching from animal-drawn ploughs to power tillers in the intensive wetland rice production systems in Asia led to major cost savings on labour used for land preparation. Rice cropping intensities and productivity also increased due to shared mechanization of land preparation and threshing.1 The use of small mechanical mills for extremely labour-intensive and tedious tasks, such as dehusking paddy or pounding grain into flour, also resulted in substantial gains in leisure time, especially for women.1 Mechanization has contributed to reduced crop damage and losses, as observed in India, where combine harvesters reduced rice losses and raised yields by 24 percent.2 Based on two recent case studies, Box 8 provides evidence for the business case of investing in motorized mechanization in Ethiopia and Nepal.
BOX 8A comparative cost–benefit analysis for mechanized vs manual and/or animal traction in wheat production: evidence from Ethiopia and Nepal
In Ethiopia, farmers using a two-wheel tractor in wheat production reduced the costs of the essential operations of seeding, harvesting and threshing by 46 percent, 65 percent and 48 percent, respectively, compared with traditional technologies using manual tools or animal traction (see figure). Transportation costs also went down. The average total revenue increased: from USD 1 964 for traditional practices to USD 2 567 for mechanized operations. The average total variable cost for mechanized and conventional farming systems was USD 526 and USD 818, respectively.
FigureCost of agricultural operations in wheat production using motorized vs non-motorized equipment – the case of Ethiopia
As a consequence, the gross margin for mechanized operations was 78 percent higher, reaching USD 2 041. These results indicate that mechanized production of wheat is far more productive and profitable than non-mechanized production.
Similarly, in Nepal, wheat production using motorized mechanization – including a fertilizer drill, a reaper and a tractor-powered thresher – resulted in reducing the total farm operation cost by almost half and increasing the gross margin by 81 percent, reaching USD 514 (see table).
TABLECOST OF AGRICULTURAL OPERATIONS IN WHEAT PRODUCTION USING MOTORIZED VS NON-MOTORIZED EQUIPMENT – THE CASE OF NEPAL
SOURCE: FAO, 2022.16
Even in sub-Saharan Africa, where mechanization is not widely adopted (see Chapter 2), evidence indicates that it has brought great benefits. In Côte d’Ivoire, tractor use promoted the application of modern inputs and better crop management, increasing land and labour productivity. A study across 11 African countries found that tractor use increased maize yields by around 0.5 tonnes/ha.3 In Ethiopia and Ghana, households using tractors were able to expand their production by cultivating more land rather than trying to raise yields.4, 5 In Zambia, agricultural households using tractors almost doubled their income by cultivating a much larger share of their land and achieved twice the gross margin per hour of farm labour compared with other households.6 Despite reducing by half labour requirements per hectare, the demand for hired labour actually increased for all non-mechanized activities as a result of expanded production. The shift from family labour to hired labour also reduced the burden on women and children, allowing the latter to attend school.
The benefits of agricultural mechanization thus go well beyond increased agricultural productivity. Mechanization can free up household labour and enable agricultural households to spend time away from agriculture on other activities, such as food preparation – thus improving nutrition – or off-farm work to enhance their livelihoolds.7, 8, 9 It can further support the creation of new jobs, for example, mechanics to maintain and repair equipment. There can be spillover effects for the wider economy due to increased demand for non-farm goods and services.10, 11 Mechanization can also lead to improved food safety through preservation and storage technologies (e.g. dryers and cold storage), which can reduce contamination,12 provided appropriate implementation is in place. Box 9 highlights the role of agricultural automation in improving food safety.
BOX 9Leveraging agricultural automation to improve food safety
The introduction of technologies – from refrigeration for food storage and transport to innovations in dehydration and smoking processes – has vastly improved food preservation and safety. For example, in the livestock industry, the vertical meat rail system used for carcass dressing in slaughterhouses is a simple yet effective mechanism to prevent meat contamination. The automation of harvesting, sorting and packaging of foods greatly reduces the risks of transmitting food-borne pathogens from workers to food. Mechanical sorting of peanuts to reject kernels with high fungal infection has been extremely successful in improving public health. However, it is important to follow appropriate equipment sanitation and hygiene practices to prevent the transmission of food-borne hazards from the machines themselves. For example, machinery used to collect crops can introduce allergens into a supply chain unless cleaned properly. Machines can also introduce food safety hazards through oil leakages, hydraulic fluids, exhaust fumes and others.
Advances in digital automation also offer improvements in rapid detection of contaminants in food, provide better tools to facilitate timely investigations of food-borne illness outbreaks, and enhance surveillance and monitoring systems. Remote sensing technology in precision agriculture allows for early detection of pest damage and targeted and timely applications of agrochemicals, thus preventing overuse. However, benefits are not inevitable; for example, in some cases, automation may increase inputs of agrochemicals to reach the desired goal, which can be harmful to both humans and the environment. It is also important to ensure equitable access to technologies and to address issues related to data privacy and ownership.
SOURCE: FAO, 2022.17
Mechanization also makes agricultural production more resilient. In particular, it improves resilience to climate shocks, such as droughts, since it allows farmers to complete farming activities more quickly and to be more flexible in adapting work to changing weather patterns. For example, irrigation pumps can increase or stabilize yields where rain is unpredictable and drought is common,1 as is mostly the case in the Near East and North Africa.13 Mechanization also helps build resilience to health shocks affecting family or hired labour, which can in turn severely disrupt agricultural production.14
Tailoring motorized mechanization solutions to local needs is key to enhancing the business case
The evidence presented thus far suggests there is continuous scope for the use of motorized mechanization, especially where adoption to date has been slow or absent. It may be possible to leapfrog the mechanization stage and pass directly to digital automation and robotics with AI, but this is only really feasible in a few high-income countries (see Chapter 2); in contrast, a wide variety of motorized mechanization solutions are available to low- and lower-middle-income countries. A large part of the business case for motorized mechanization depends on context and the agricultural machinery considered for adoption. For large farms located on plain terrains, agricultural producers can benefit from large machinery such as combine harvesters and four-wheel tractors. However, small-scale producers may benefit more from small-scale machines such as small four-wheel and two-wheel tractors, which are both less costly and more considerate of environmental sustainability.18 These machinery solutions have proved key for narrowing the mechanization divide in Asia.2, 19, 20 They are better adapted to small farms as they can manoeuvre around tree stumps and stones, in addition to being easier to operate, maintain and repair, and more suitable for microfinance. Furthermore, they can be used to pull rippers and direct seeders for mechanized conservation agriculture, thus contributing to improved climate resilience.21, 22 Box 10 provides a concrete example of the benefits of small-scale machinery in building the resilience of small-scale producers in Myanmar.
BOX 10Enhancing the resilience of small-scale producers through small-sized motorized mechanization
In response to the 2015 cyclone and subsequent drought in 2016 in Rakhine, Myanmar, FAO, together with the Government of Myanmar, began a one-year project (2016/17) funded by the Government of Japan. Its goal was to improve household food security and increase resilience of small-scale producers in conflict and natural disaster-prone areas. Among the project components, FAO increased the availability of small farm machinery such as two-wheel tractors and water pumps. The mechanization activities were rolled out in 7 townships and 73 villages affected by flood and conflict in Rakhine. In total, the project distributed 55 two-wheel tractors and 94 water pumps, and provided training on the use and maintenance of small machinery. In addition, 146 village members received training as tractor operators.
The results reveal significant benefits for farmers and the community in general, with lower land preparation costs (USD 1.6/ha) and major savings in time (two-wheel tractors were seven times faster than draught animals). Timely land preparation further translated into increased resilience, as farmers improved their ability to cope with erratic weather and labour shortages, and respond to other hazards. Other benefits in terms of improved incomes and food security came from cultivation of legumes and vegetables for both household consumption and markets, thanks to irrigation from water pumps installed during the dry season.
Other small machinery such as dryers, threshers and reapers can have a positive impact on the resilience of small-scale producers while creating rural job opportunities and reducing work burdens. However, the selection of one technology over another must depend on the local context and a needs assessment. Furthermore, technical support is vital, as well as the availability of repair and maintenance shops and technicians in the villages or surrounding areas, to sustain mechanization services. Finally, the project concluded that results would have been greatly enhanced by increased attention to women and youth.
SOURCE: FAO, 2019.24
Recent innovations tailoring motorized machinery to local needs go beyond simply adapting the size of the machinery to meet local challenges. Countries in the Near East and North Africa increasingly face water shortages that limit agricultural output growth. Box 11 describes the case of mechanized raised-bed planting in Egypt – an example of innovative synergies between mechanization implements and improved inputs and field practices, which together raise yields while saving scarce natural resources.
BOX 11Mechanized raised beds in Egypt for improved productivity and sustainable water use
Mechanized raised-bed planting is an effective means of increasing productivity and crop yields, saving scarce water, and reducing waterlogging through better drainage. When applied to wheat production in Egypt, the technology was associated with a 25 percent increase in productivity due to higher yields, 50 percent lower seed costs, a 25 percent reduction in water use, and lower labour costs. As a result, a mechanical raised-bed programme is now a component of Egypt’s national wheat campaign, and it is estimated that by 2023 approximately 800 000 ha of wheat will be planted with the technology. It is further estimated that over a 15-year project horizon, the benefits will exceed USD 4 billion, mostly accruing to over 1 million Egyptian wheat producers. Other benefits include reduced wheat import dependency (by more than 50 percent by 2025) and increased water productivity on more than 200 000 ha of water-scarce land.
For positive results, it is essential that this technology be adapted to local conditions and that the precise components of the technology package vary according to the specific context. In Egypt, a long-term evaluation resulted in a defined technology package comprising: an improved wheat variety, seeded at a rate of 108 kg/ha; sowing dates in the period 15–30 November; bed preparation and planting using a mechanized plough/seeder; and nitrogen fertilizer applied at a rate of 168 kg/ha. When well adapted, the technology is particularly attractive to small and medium-sized farms. It is relatively affordable, can easily be implemented by small tractors, is easy to maintain with locally available crops, and allows both monocropping (e.g. wheat or rice) and multicropping for interspaced crops (e.g. corn, sugar beet, fava beans).
Agricultural mechanization is currently high on the policy agenda of many low-income countries, especially in sub-Saharan Africa, where it was neglected for some time following the earlier failures of state-led mechanization programmes.23 There are ongoing debates about which technological pathway governments and development partners should support, especially where automation has not yet been introduced (e.g. most of sub-Saharan Africa and many mountainous areas). There is no one-fits-all approach; instead, there will be a best fit under certain conditions.18 Decisions to automate agricultural operations should take into account local conditions, including opportunities and barriers, and associated market demand for mechanization technologies.
The (continued) importance of manual and animal draught power
Despite the benefits of motorized mechanization, there is evidence that manual technologies and animal traction can still play an important role. Animal traction can be an important source of power for very small and fragmented farm holdings, especially if pasture and water are available and animal diseases can be contained.18 Animal traction makes it possible to integrate livestock and crops, and optimize resource use, for example, using manure for crop production and crop residues for animal feeding. For many producers, it is also the best immediate strategy to overcome power shortages before transitioning to motorized mechanization.21, 27 For the majority of African small-scale producers, the transition to animal draft power would mean real progress.18
A similar reasoning can be applied to advanced manual tools – that is, tools that rely principally on human power but are intelligently designed such that maximum results are achieved with minimum effort. Such tools are particularly suited to farms where machinery is difficult to operate. They save labour – freeing up time for rest or for other income-generating activities – reduce costs and drudgery, and improve resilience. Box 12 provides a concrete example of the benefits of such machinery, reviewing the impacts of the manual drum seeder on profitability, efficiency, environmental sustainability and resilience in the Lao People’s Democratic Republic and Nepal.
BOX 12Saving time, effort and money with drum seeders in the Lao People‘s Democratic Republic
In Sayabouly, Lao People‘s Democratic Republic, a drum seeder was field tested to support sustainable intensification of rice production in a programme implemented by the Government and small-scale producers, with support from FAO. A drum seeder is a manual tool used for sowing pregerminated rice seeds. It is more attractive than the traditional planting methods of manual transplanting and broadcasting. Indeed, it reduces time spent on planting by 90 percent, increases labour productivity by more than 40 percent, reduces production costs by 20 percent, and saves seeds at a rate of more than 60 percent. The drum seeder is also an environmentally friendly technology, as it does not require fossil fuels and is suitable for agroecological approaches, such as rice–fish systems. The drum seeder increases farmers’ resilience to climate change, enabling them to perform timely planting with more flexibility in choice of planting time. Moreover, should a natural disaster destroy recently planted rice, the farmer can repeat the drum seeding easily and speedily.
SOURCE: Flores Rojas, 2018.28
In summary, the potential use of draught animals and advanced manual tools depends on the context. While less powerful than tractors, they can still help overcome labour bottlenecks, deliver higher crop yields and allow land expansion. In many cases, advanced manual tools and animal traction are probably the best options for increasing power supply. A best fit framework can help governments and development partners better understand which technological pathways to promote, together with the accompanying institutions and investments, taking into account the existing agroecological and socioeconomic conditions of their country’s farming systems. As innovation processes related to farm mechanization unfold in response to these changing conditions, the pathways need to adapt and adjust.
