NAMEL – TOOAN AGREEMENT
AEHE – Bridging Smallholder Farmer’s Mechanization Gap
Effective mechanism of providing mechanization services to small holder farmers have been a thing of concern over the pass decades due to their small farm holdings of average of one hectare their poor resource base that prevent them from being able to own a tractor/farm machinery of their own, the availability of stones and storms in their farms which clearly limits their access to mechanization services yet the small holder constitute about 80% of our farmers and they are the producer of over 70% of our local food production and therefore needs to be mechanized.
Government huge investment in mechanized equipment and pubic sector service provision has not yielded the desired result, as government is responsible for 100% cost of such farm machineries and the equipment either disappears from the system or are poorly maintained and often are broken down and completely grounded.
The Nigerian agricultural mechanization equipment leasing company (namel) in an effort to provide sustainable solutions to the problems of mechanizing small holder famers, namel through a PPP arrangement with the federal ministry of agriculture is implementing an agricultural equipment hiring enterprise model.
AEHE is an enterprise model equipped with tractors, implement, planters, harvesters threshers and are located in a demand driven areas providing mechanization services to the small holders farmers for a fee. The AEHE usually adopt a pay/service or a pay/day model that enables farmers to choose their preferable service model.
Organized farmers group/ cooperatives, individual investors are qualified to off take the AEHE with just 20% equity deposit while the balance of 80% loan on the equipment are spread over the period of 6 years as single digit interest rate.
The namel PPP arrangement with government also optimizes government budgetary provision by converting as 35% while namel is responsible for syndicating 65% from private sector partners including the off taker 20%, this give room for more mechanized equipment to be provided.
The AEHE model guarantees farmers access to assessable, affordable and sustainable mechanized services at their doorstep.
Track your Asset with the Innovative Agro Mach DTC
The Nigerian Agricultural Mechanization & Equipment Leasing Company (NAMEL) has taken a step further to embrace the 21st century technology by developing Agro-Machinery Data Tracking Centre (Agro-Mach DTC) to enable investors monitor their investments effortlessly.
The Agro-Mach DTC which is a data bank designed to keep track of all agricultural machineries deployed through NAMEL and helps to keep agricultural mechanization in check through a tap. It comprises of an information management system, Real time monitoring and map application, Business analysis and system management
Small scale service providers have shown a high level of default in microfinancing and land financing as operators do not remit the finances in due time. As a way of giving comfort to investors, monitoring the influx of finances and measuring the impact of agricultural mechanization in food production, the Digital Loan Repayment Monitoring System (Digi LOREMS) was developed under the Agro Mach DTC.
Digi LOREMS is a full system dedicated to tracking the flow of finances from the key line actors viz a viz Booking Agents, Agricultural Equipment Hiring Enterprise (AEHE) operators, Mechanization Service Providers (MSPs) and the financing bank.
The entirety of the system can do the following but not limited to:
- Identify the location of any machine.
- Give a real time update on the machinery activity as well as history playback.
- Alert functions for Geofencing, fatigue and ideal time.
- Determine the level of optimization of machineries in relation to its use.
- Determine the density and intensity of mechanization in a given area.
- Efficiently monitor financial transactions amongst AEHEs, MSPs and Booking agents.
- Enhance data flow between NAMEL and its investors.
This service is a strict security criterion to ensure transparency and authenticity in order to maintain a comprehensive system.
FG partners with NAMEL and John Deere to deploy 10,000 tractors
The Nigerian Agricultural Mechanization and Equipment Leasing Company (NAMEL) with support from the Federal Government has made it possible for farmers to Pay only 20% to acquire any set of agricultural machinery or equipment and balance the payment over a period of 6years at a very low interest rate. The development is borne out of the Memorandum of Understanding (MoU) between NAMEL, the Federal Ministry of Agriculture and Rural Development (FMARD) and leading tractor manufacturing firm, John Deere to deploy over ten thousand tractors and other farm machineries to boost agriculture in Nigeria.
The MoU which was signed in Abuja on 14th June 2018 is intended to ease the burden of tractor procurement and improve mechanized farming to give room for food sufficiency and reduce poverty in the country.
Jason Brantley, the Managing Director of John Deere Sub Saharan Africa during the ground-breaking event, said he is indeed delighted to sign this partnership agreement with Nigerian government as it affords John Deere to deploy its quality technology in advancing Nigerian agricultural production processes.
Also speaking: The Head, Project Coordination of NAMEL, Mr. Innocent Ogirinye on his path said the development is also to encourage more youth participation in Agriculture, increase food production, boost job creation and promote local content in agricultural mechanization through the establishment of Agricultural Equipment Hiring Enterprises across all the 774 LGAs nationwide but on a demand driven. He further explained that operators and technicians will be trained by NAMEL, John Deere and the relevant training institutions under the Federal Ministry of Agriculture and Rural Development. After sales service centers stock with spare parts will also be established around clusters of the AEHE to provide maintenance services.
The Minister of Agriculture and Rural Development, Chief Audu Ogbeh who doubled as the Federal Government representative during the MoU signing, expressed deep satisfaction with the partnership saying “this signifies a landmark in our efforts to reposition Agriculture to serve and benefit Nigerian farmers, especially the smallholder
“We shall continue to deliver Mechanization extension services to optimize yield per hectare and we look forward to a fruitful working relationship with NAMEL, John Deere and all other partners in this very important programme.” He added.
The first batch of 400 tractors under the partnership are currently being finalized for deployment to set up about 286 AEHEs.
NAMEL Signs MoA with Mechanization Service Providers (MSPs)
In preparation for commencement of the implementation of the NAMEL and Federal Ministry of Agriculture and Rural Development Public Private Partnership on Private Sector Driven Agricultural Mechanization Programme(PSDAMP) which was earlier signed to deploy 10,000 tractors and other farm machineries, NAMEL has signed a Memorandum of Agreement with two leading private sector lead mechanization service providers (MSPs) ; Tractor Owners & Operators Association of Nigeria (TOOAN) and Tractors Owners & Hiring Facilities Association of Nigeria (TOHFAN).
This signed MoA qualifies TOOAN and TOHFAN as the accredited MSPs under PSDAMP to offtake and operate the first set of AEHEs to be deployed under the scheme. Prospective operators of the AEHE are expected to be managed and coordinated by TOOAN and TOHFAN in service delivery to small holder farmers. NAMEL working closely with FMARD are currently accessing and structuring other prospective organizations to qualify as MSPs under the programme.
Speaking at the ceremony, the Honourable Minister of Agriculture and Rural Development, Chief Audu Ogbeh said: “The government do not have business in managing tractors only private sector has the right structure and mechanism to drive tractor service provision as a business to ensure its sustainability, which is why we have signed a Public Private Partnership – PPP with NAMEL which in turn has led to the MoA signing today between, NAMEL, TOOAN and TOHFAN. He further reassured of Federal Government’s commitment to continuously create the enabling environment for the private sector to lead the process.
The Chief Executive, Nigerian Agricultural Mechanization & Equipment Leasing Company, NAMEL – Dr. Ahmed Adekunle in his remark said: “We have attained this stage only because of the ministry’s firm support to NAMEL to deliver on our joint program of ensuring available, accessible and affordable Mechanization for primary producers in our dear country through a PPP.” He further stressed that NAMEL evolved as a Mechanization ecosystem-based organization to bridge the gaps between stakeholders in ensuring delivery of sustainable Mechanization to commercial, medium scale and smallholder farmers.”
President of TOOAN, Engr. Bitrus Yakubu while speaking at the event said, with Nigeria’s increasing population and food demand, traditional farming methods are inadequate hence the need for innovation.
Engr. Yakubu further commended the efforts of the Muhammadu Buhari-led administration to enhance mechanization service delivery to Nigerian farmers.
Also speaking, President, TOHFAN, Alhaji Danladi Garba highlighted how far they have come since inception with only 9 tractors. He said “In 2003 when we started, we had only 9 tractors, today we have 552 tractors and we hope to increase the number through this PPP”
He expressed delight in the role his organization is playing in the agricultural revolution happening in Nigeria.
Reacting to questions, the head of project coordination in NAMEL, Mr. Innocent Ogririnye, further explained that NAMEL in the entire arrangement serves more as a mechanization ecosystem coordinator syndicating resources and funding from private sector partners for the establishment of the AEHEs and put all structure in place to ensure effective project coordination, 80% loan repayment by the MSPs. The MSPs are the organizations directly responsible for service provision to small holder farmers.