PSDAMP Product Document
Sector Driven Agricultural Mechanization Programme
Private Sector Driven Agricultural Mechanization Programme (PSDAMP) is a Public-Private Partnership Programme between the Federal Ministry of Agriculture and Rural Development (FMARD) and Nigerian Agricultural Mechanization & Equipment Leasing Company (NAMEL) to deploy high quality mechanized equipment, mechanization extension and capacity building services using an Equipment Leasing Model (ELM).
The project also guarantees farmers' access to available, accessible and affordable farmgate mechanization services in a sustainable manner through the establishment of Agricultural Equipment Hiring Enterprises (AEHEs). The project provides Technical Support, Innovative Lease Financing, Capacity Building among other solutions by creating a converging point for major sectoral players to advance local engineering and mechanization services for enhanced Agricultural productivity, job creation while contributing to attainment of national food security and poverty reduction.
1.1.1 Federal Ministry of Agriculture and Rural Development (FMARD): Is the promoter of the program and particularly funds 35% of the project cost which is aimed at facilitating mechanization support and access to farm machineries by Nigerian Farmers nationwide
1.1.2 Nigerian Agricultural Mechanization & Equipment Leasing Company (NAMEL): is a strategic Mechanization organization operated by a team of experts with severally years of combined experience in Mechanization, Project design, implementation and Service provisions. The NAM EL team brings to bear the best experience and expertise pedigree to expand. consolidate and ensure the sustainability of the PSDAMP through this Public Private Partnership.
1.1.3 Agro-Machinery Vendor: These are the Agro-Machineries Manufacturer’s representative who have obtained licensed as the major distributors of the machines In Nigeria, in addition to that they have also satisfied all the FMARD/NAMEL criterial for participation in the PSDAMP and have demonstrated the capacity and readiness to render complimentary after-sales services alongside the supply of the Equipment required.
1.1.4 Mechanization Service Providers (MSPs): These are organized and accredited groups, farmers associatio and cooperatives who have vast experience and track record in mechanization services delivery. The MSPs makes an equity deposit of 20% of the cost of equipment and off-take the equipment. These equipment will be used to set-up Agricultural Equipment Hiring Enterprise (AEHE) in market and demand driven areas nationwide, especially farming communities, to provides value added services, such as leasing/hiring out of various kinds of agricultural equipment to their member farmers.
2.0 PROJECT DELIVERABLES
2.1 Short-term Project Goals
- To implement a multi-stakeholder partnership programme for the deployment, coordination and management of 10,000 units of tractors and various planting, harvest and post-harvest equipment required to set-up 2,500 Agricultural Equipment Hiring Enterprises (AEHE) across the 774 LGAs between 2018 - 2023.
- To Implement specialized Mechanization Extension Scheme through the establish AEHEs to optimize farmers yield per hectare and build local capacity for effective service delivery and mechanization products development.
- The project also targets to open contiguous Agricultural Lands for the purpose of promoting Commercially driven Agriculture to create jobs for the unemployed while creating a pool of skilled manpower and ensuring Local Industrialization for the Mechanization sub-sector.
2.2 Medium-term Vision
- Lead a novel indigenous Mechanization Industrialization process that ensures at least 30-40% local content inclusion in Mechanized equipment in Nigeria.
2.3 Long Term Vision:
- Coordinate an innovative Agricultural Land development and liberalize Mechanization services that is available, accessible, and affordable to all farmers ensuring 70% substitution of imported farm equipment with locally viable manufactured farm machinery.
3.0 PROJECT STAKEHOLDERS (ROLES OF EACH STAKEHOLDER)
3.1 Federal Ministry of Agriculture & Rural Development (FMARD)
3.2 Nigerian Agricultural Mechanization and Equipment Leasing (NAMEL)
3.3 Agricultural Machinery Manufacturers/Representatives
3.4 Local and International Financial Institutions
3.5 Agricultural Insurance Companies
3.6 Mechanization Service Providers. (MSPs)
3.7 State/Local Government
3.8 Development Partners
4.0 FUNDING MODEL
The AEHEs are off-taken by MPS, organized farmers Group and cooperatives and other organized investors through the funding model below:
|Bank / Vendor||45%|
|Interest rate||Single digit|
4.1 EQUIPMENT PROVISION BY THE VENDOR
As a precondition for participation in this scheme, Vendors must have the quoted number of tractors/harvest and post-harvest equipment on ground before they can be considered for partnership. A concession may be given to vendors/manufacturer representatives who have verifiable evidences to deliver the tractors within sixty (60) days of the contract award. And all agro-machinery to be supplied MUST BE CERTIFIED BY NCAM and backed by genuine 24 months Warrantee to enhance the after-sales services.
The vendors solely fund the importation and ware housing of the machineries and other equipment before off take by the mechanization service providers as will be signed in a first Memorandum of understanding with NAMEL and FMARD. The specific units of equipment and the period over which it will be deployed in batches will be agreed upon and signed in another Implementation Agreement (IA).
4.2.3 LOAN COMPONENT (TENOR & INTEREST) – LOAN REPAYMENT SCHEDULE
The MSPs accept a loan component of 80% which is to be repaid under this term
|Interest rate||Single digit|
|Loan Tenor||6 Years|
5.0 AEHE OPERATIONAL DYNAMICS
The delivery of mechanization services to farmers from the AEHE follows this sequence of operations.
- The AEHE is an organized and well protected structure where the equipment are kept and maintained
- The booking agent receives payment for the equipment before they are released to render services to the farmers
- The hiring agent aggregate the mechanization demands from the farmers
- The farmers are the end -users of the equipment
5.1 SELECTION OF BENEFITIARY
- The call for expression of interest is usually advertised in National Dailies and through direct mail and messages to earlier Applicants on our data base.
- Competitive Bidding process is adopted putting into consideration density and intensity of mechanization of a given area of the applicant.
- All individuals, Companies, Farmers cooperative without National outfit are requested to register with any of the Accredited MSPs under the Programme to off take the Equipment
- AEHE Operators in addition to meeting the conditions of the NAMEL/FMARD must satisfy the due diligence requirement of the accredited MSPs
5.2 CATEGORIES OF AEHE
Under this project, provision has been made to accommodate the two distinct Agricultural terrain in Nigeria i.e the Northern zone where the 65Hp tractors can work perfectly okay and the southern zone requiring 75Hp.Small holder farmers who cannot afford the Gold and silver AEHE with three and two units of tractors respectively can settle for the bronze centre which has one unit of tractor and accompanied matching Implements and the Harvest / post-Harvest Equipment.
5.2.1 GOLD CENTRE: This consist of three units of tractor, implements and other equipments
5.2.2 SILVER CENTRE: This consist of two units of tractor, implements and other equipment
5.2.3 BRONZE CENTRE: This consist of one unit of tractor, implements and other equipment
6.0 PROJECT INCENTIVES
- Conditional grant from the Loan up to 25% for AEHEs
- 2,000 hours Service Parts
- Installation of Tracking Devices with renewable Subscription
- Training of Tractor Operators/Mates
- Training of Local Certified Dealer Technician (DCLT) for routine cluster maintenance
6.1 EQUPIMENT SUSTAINABILITY TOOLS
- Agricultural Machinery Data Tracking System (Agro-Mach DTC)
- Digital LOREMS
- MSP Single Obligor Structure
- Comprehensive Insurance Cover
- 25% Conditional Grant
- Equipment deployment, Management and Payment structure
- Strong After Sales Services
- MSP Internal Task Force Structure
- Buy Back Scheme
6.2 PERFORMANCE GRANT INCENTIVE:
This offer is from FMARD to the performing MSPs in terms of loan repayment. The 25% out of the 35% funding by FMARD will be serve as a grant which will be applied in milestone on the basis of machinery usage in the delivery of mechanization services and strict compliance with expected percentage repayment within the specified period as shown below:
PRODUCTIVITY ENHANCEMENT SCHEME
It is a special mechanization extension package which all participating agro-machinery vendors in the programme are required to design, which is necessary to
- Provides user education
- Optimize the use of Farm Machinery
- Increase Productivity of farmers (Increase yield per hectare up to 300%
S Solution for Nigeria Agriculture
M Mechanizing for Yield
A Access to Finance
R Reliability of Farm Equipment (After Sales)
T Training and Technology
8.0 REPAYMENT PLAN / SCHEDULE
The 80% loan shall be repaid in this order:
NAMEL/Bank Loan 45%
36 Months (19% Interest
FMARD 35% (10%) loan Next
36 Months (interest free)Collateral requirement
Credit Risk Guarantee (CRG)