Impact of Ghana’s Agricultural Mechanization Services Center Program

Use of mechanization in African agriculture has returned strongly to the development agenda, particularly following the recent high food prices crisis. Many developing country governments—including Ghana, the case study of this paper—have resumed support for agricultural mechanization, typically in the form of providing subsidies for tractor purchase and establishment of private-sector-run agricultural mechanization service centers (AMSECs). The aim of this paper is to assess the impact of Ghana’s AMSEC program on various outcomes, using data from household surveys that were conducted with 270 farmers, some of them located in areas with the AMSEC program (treatment) and others located in areas without the program (control). A two-stage propensity score matching estimation procedure, with different model specifications and definitions of treatment, is used to estimate the impacts of the program.

The results indicate that the AMSEC program has had a mixed impact on different outcome indicators. For example, whereas the program has contributed to improving availability of mechanization services, reducing drudgery, promoting adoption of good practices, and raising yield, it has had no impact on the change in the prices paid by farmers for the services used and the change in the amount of area plowed. Implications of the results on labor-mechanization substitution and for raising productivity further are drawn.