AGRICULTURAL MECHANIZATION IN GHANA: IS SPECIALIZED AGRICULTURAL MECHANIZATION SERVICE PROVISION A VIABLE BUSINESS MODEL?

A study was conducted to assess whether specialized agricultural mechanization services, as promoted by the Ghanaian government, can be a viable business model at the current stage of mechanization in the country. Operational capacity is hindered by frequent machine breakdowns, which are exacerbated by poor maintenance or lack of skilled operators and weak operator incentives. For example, the ownership model and operator payment scheme allow operators to damage or misuse the tractors without bearing the variable costs incurred. Delays in repairs due to the unavailability of spare parts and lack of qualified mechanics are contributory factors. The study concludes that specialized service provision is not a realistic model that can be operated and sustained by the private sector in Ghana, even with the current subsidy policy. Achieving profitability in tractor-hire services requires either increasing the tractor utilization rate through the migration of service provider across rainfall zones.