Product Description: The other familiar name of agricultural mechanization service is rental service of agricultural machinery, equipments, tools and technical advices. These services include the provision of modern agricultural machinery and equipment for ploughing, harvesting, processing, transporting and storing on rental basis and the acquisition of technical know-how through technical advices by paying fees for advisors. Services that are provided through agricultural mechanization are substitutes for mechanization of farms and other agricultural activities performed by owning the machinery and equipment. These types of services enable farmers to use modern farm machinery and equipment with out burdening each farmer or group of farmers in owning expensive farm machinery and equipment. Agricultural mechanization services reduce farming time and enable farmers to plow, harvest and store their farm produce in optimal periods of each season thereby increasing productivity and production volume. These agricultural machinery rental centers could also have middle level technical advisors who will consult farmers on the different activities of farming and livestock raising. The consultation will be done with the payment of reasonable fees. The main advantage of these rental centers to farmers is, they enable group of farmers with adjacent farms to rent (in group) agricultural machinery such as a tractor for plowing the adjacent farms as a unit. This will reduce the rental cost for each farmer and will also minimize the operation expenses of the farm mechanization service center.
Market Potential: More than 3 million hectares of land in the Amhara Region is under cultivation. Under normal conditions, One tractor plows about 10 hectares per day. For one cycle of plowing, 300,000 tractor-days are needed to plow the 3 million hectares of farm lands of the Region. This is the highest potential demand for tractor services in the Region. But many farms in the Region are too steep and/or too rugged for using tractors for plowing. In addition many other farms are also filled with small and big boulders which make them unsuitable for tractor plowing. Given these unfavorable conditions, we can assume that about 40 percent of farms in the Region are suitable for tractor plowing. This means about 120,000 tractor-days are required to perform one cycle of plowing in the Region. This is the highest realistic potential demand for tractor rental services. Let us get closer to the ground and see the potential zones of the Region which will use tractor services with the highest economic and financial benefits. The first candidates are most parts of East and West Gojjam and Awe zones, areas around Lake Tana in North and South Gondar Zones and West Gojjam, some valley plains in North and South Wollo zones, and the highland platen of North Shewa. These areas of the Amhara Region can have sufficient demand for agricultural machinery rental services which will make the center financially viable.
"Source of raw material": This project idea deals with the provision of services and as such it does not require the use of "raw materials". However, the main inputs for the provision of the services will be working hours of the various types of agricultural machinery and equipment to be rented/hired by clients..
"Process and Technology":- The main process or activities for providing agricultural machinery rental services are establishing the center, constructing machinery shades and a small repair and maintenance workshop, purchasing the most important pieces of machinery and equipment (such as tractors, harvesters...), developing and implementing an effective and appropriate marketing strategy and finally providing dependable machinery rental services.
Estimated Investment: For a rental center which will have about 10 tractors one harvesters and other assorted type of agricultural implements and tools, the estimated investment requirement will be:-
Buildings/shades 300 m2 at Birr 2000/m2 = Birr 600,000
Agricultural Machinery ........................... = Birr 2,500,000
Working capital..................................... = Birr 500,000
Total = Birr 3,600,000
Benefits: Enables farmers to perform agricultural activities on optimal periods of the various farming cycles, increases agricultural productivity and production, releases farmers from some farm work and creates the opportunity to work on other income generating activities, decreases the need of oxen for plowing and increases the possibility of fattening and for sale.
Location: East and West Gojam, Awi around Lake Tana, other areas of the Region suitable for large scale farm mechanization.