Anecdotal evidence indicates labor costs for farming in Nigeria are rising while levels of mechanization remain low. Information is scarce regarding the types of farm households that use mechanization in Nigeria and the potential demand for mechanization services among farmers. We apply cluster analysis to data from the Living Standards Measurement Study—Integrated Surveys on Agriculture project in Nigeria to identify associations between mechanization and farm household types. We then simulate an agricultural household model to assess the potential demand for mechanization services in southern Nigeria. We find the following:
(1) current tractor use is associated with input-intensive crop production;
(2) tractor use in northern Nigeria is associated with increased nonfarm income-earning activities rather than area expansion and is emerging, albeit slowly, across many farm household types;
(3) tractor use in the South is highly concentrated among medium-scale rice producers;
(4) many smallholder farmers growing staple crops in the South may be willing to pay for a mechanized land preparation service if the service were available at the same market price charged in other locations; and
(5) using mechanization services, such farmers may cultivate a smaller area and allocate more labor for off-farm income-earning activities.
By Hiroyuki Takeshima, Alejandro Nin Pratt, and Xinshen Diao
