For years, one of the most pressing challenges in agriculture has been finding effective ways to provide mechanization services to smallholder farmers. These hardworking individuals typically own small plots of land, averaging just one hectare, and often lack the resources to purchase their own tractors and machinery. To make matters more challenging, their farms are frequently beset by stones and storms, which further limit their access to mechanization services. Yet, smallholders constitute a staggering 80% of our farming community and contribute to over 70% of local food production. Clearly, they are in dire need of mechanization.

Government investment in mechanized equipment and public sector service provision has, unfortunately, fallen short of expectations. Government-funded machinery often disappears from the system or is inadequately maintained, leading to breakdowns and inefficiencies. It’s a situation that has left smallholder farmers struggling.

Enter the Nigerian Agricultural Mechanization Equipment Leasing Company (NAMEL). In a bid to offer sustainable solutions to the mechanization challenges faced by smallholder farmers, NAMEL, through a Public-Private Partnership (PPP) arrangement with the Federal Ministry of Agriculture, has pioneered an Agricultural Equipment Hiring Enterprise (AEHE) model.

The AEHEs are essentially enterprise hubs equipped with tractors, implements, planters, harvesters, and threshers. They are strategically located in areas where there is a high demand for mechanization services among smallholder farmers. Here’s how it works:

1. Pay-as-You-Go Model: The AEHEs offer smallholder farmers the flexibility to choose their preferred service model. Farmers can opt for a pay-per-service or pay-per-day approach, depending on their needs and resources.

2. Accessibility Through Partnership: Organized farmers’ groups, cooperatives, and individual investors can get involved in the AEHE initiative with just a 20% equity deposit. The remaining 80% of the equipment cost can be covered through a six-year loan with a single-digit interest rate.

3. Public-Private Synergy: NAMEL’s PPP arrangement with the government optimizes budget allocation. The government covers 35% of the costs, while NAMEL takes charge of syndicating the remaining 65% from private sector partners, including the off-takers who contribute 20%. This collaborative approach ensures that more mechanized equipment can be made available.

The AEHE model has become a game-changer for smallholder farmers, providing them with accessible, affordable, and sustainable mechanization services right at their doorstep. It’s a revolutionary approach that promises to transform the agricultural landscape and empower those who feed the nation.