Lawmakers investigate failed FG’s N141bn tractor deal with  American firm

Onome Amuge 

In November 2023, the Federal Ministry of Agriculture and Food Security struck a Memorandum of Understanding (MoU) with American farm equipment powerhouse John Deere, to supply 2,000 tractors each year for five years.

The deal was heralded as a milestone in the modernisation of Nigerian farming practices, with the nation poised to reap the rewards of cutting-edge agricultural technology and increased farming efficiency, leading to higher food production.

Despite the promise of modernized farming practices, over a year after the deal was signed, it has come to light that no equipment has been delivered to Nigeria, leaving farmers without the promised advancements in their farming practices.

This news raises serious concerns about the progress of the agreement, as the Nigerian farming community remains without the benefits of John Deere’s technological expertise and equipment.

Following the non-delivery of the 2,000 tractors and 100 combined harvesters, which formed part of the Presidential Food Security Initiative and Hope Agricultural Mechanisation Drive, despite a widely publicised agreement, the House of Representatives has taken a proactive stance, launching an investigation into this failure to honour the agreement.

The decision was reached during plenary, after the adoption of a motion presented by Saba Adam, the member representing Edu/Moro/Patigi Federal Constituency in Kwara State.

Adding to their ongoing investigation into the non-delivery of farm equipment, the House of Representatives has widened the scope of their inquiry to include a second agreement- the N138.61 billion deal struck between the Federal Government and AFTRADE DMCC for the establishment of a tractor assembly plant in Nigeria.

Adam brought to the forefront an agreement between the Federal Ministry of Agriculture and Food Security and John Deere Tractors for the supply of 2000 tractors, implements, and 100 combined harvesters on an annual basis.

According to Adam, the contract for a tractor assembly plant in Nigeria was estimated to cost N3 billion ($70.042m) and include sales, after-sales services, spare parts, and training for mechanised service providers.

“A year after the agreements were signed by the National Agricultural Development Fund and the Federal Ministry of Agriculture and Food Security, no single tractor or implement has been received in Nigeria, despite the huge public funds involved in these transactions.

“The non-delivery of these tractors and implements is a setback to the Renewed Hope Agenda in agricultural mechanisation and poses a challenge to Nigeria’s food sufficiency ambitions, as two  farming seasons have been lost since the signing of the agreements.

“There is a need to investigate the non-delivery of the tractors, implements, and combined harvesters over a year after the agreements were signed, as well as the status of the tractor assembly plants envisioned by the agreements,” the lawmaker said.

In a move reflecting the gravity of the situation, the motion was adopted without debate, reflecting the consensus among members of the House. The unanimous voice vote, led by Speaker Abbas Tajudeen sets the stage for an investigation into the procurement and distribution process.

Food crisis and the need for intensified mechanisation

The months preceding 2023 had seen a steady but worrisome rise in the price of food in Nigeria, but with President Tinubu’s unexpected fiscal policies in 2023, including the removal of petrol subsidies and adoption of a free-floating naira, this issue was catapulted into a full-blown crisis.

The resulting price hike for staple foods, such as rice, wheat, and maize amongst others, dealt a devastating blow to millions of Nigerians already struggling with economic hardship, driving many further into poverty and intensifying food insecurity in the country.

With food security concerns looming large over Nigeria, President Tinubu wasted no time in declaring a state of emergency on food security.

The president underlined the crucial importance of agricultural mechanisation in increasing food production,  a strategy his administration pledged to be a top priority in efforts to tackle Nigeria’s persistent food insecurity.

While agriculture remains the lifeblood of the Nigerian economy, employing more than 70 per cent of the population and contributing significantly to the country’s GDP, it has been plagued by a chronic lack of mechanisation, according to experts from both the government and private sectors.

The World Bank’s Agribusiness Indicators for Nigeria disclosed that with only 5.7 tractors per 100 square kilometres, Nigeria is severely undersupplied when compared to the 81,000 tractors required to meet demand. This dearth of mechanisation in the agricultural sector has resulted in a domino effect, leading to low productivity, poor infrastructure, and limited access to finance and technology.

According to the United Nations’ Food and Agriculture Organisation (FAO), Nigeria’s tractor density hovers around  0.2 horsepower per hectare, estimated at  5.7 tractors per 100 square kilometres, a low number when compared to the FAO’s recommendation of 1.5 horsepower per hectare (1.1 kW/hectare).

With approximately 80 million hectares of arable land available for farming, Nigeria has the potential to be a powerhouse of food production. However, the current state of mechanisation in the country’s agricultural sector is a far cry from what is needed to tap into this potential.

The low level of mechanisation in the agricultural sector has led to several challenges, including low productivity, poor infrastructure, and limited access to credit and technology. These challenges have made it difficult for Nigeria’s agricultural sector to reach its full potential, hampering the country’s overall economic development.

FG, John Deere sign agreement for tractor delivery to address mechanisation troubles

To tackle the persistent issue of under-mechanisation in Nigeria’s agricultural sector, the federal government, led by the Ministry of Agriculture and Food Security, took decisive action in November 2023 by signing a Memorandum of Understanding (MoU) with John Deere.

The partnership aimed to establish a tractor plant in Nigeria, providing the country with a much-needed boost in the availability of modern agricultural equipment and machinery.

Reiterating the government’s dedication to improving access to modern agricultural equipment for farmers,  Abubakar Kyari, Minister of Agriculture and Food Security, clarified that the collaboration with John Deere was driven by a vision of creating a more favourable environment for farming activities.

The terms of the MoU, as explained by Kyari, stipulated that John Deere would be expected to produce a minimum of 2,000 tractors annually for five years.

Minister Kyari acknowledged that Nigeria’s level of agricultural mechanisation is very low, with only about 50,000 serviceable tractors for a country with over 70 million hectares of farmland. He emphasised the need to increase the number of tractors and other agricultural machinery, as well as the need to improve the availability of spare parts and maintenance services.

“Nigeria is grossly under-mechanised; we have less than 50,000 serviceable, workable tractors today, and in a country with at least 70 million hectares of land, it is grossly inadequate, and I think this is a way to go and to modernise our agriculture,” he said.

“The original arrangement is for 2000 tractors per year, but what we are saying is that it depends on how much the farmers are willing to take.

“This is purely a partnership for the off-take for the farmers, not the government taking, but what the government is supposed to do is to have an environment that is very conducive for John Deere to sell the tractors to the farmers,” he remarked.

Jason Brantley, the vice president of John Deere, expressed excitement about the MoU signed with the Nigerian government and Tata Nigeria. He stated that the partnership is critical for increasing agricultural productivity and ensuring food security, as well as for improving the livelihoods of farmers.

In addition to providing tractors, Brantley explained that the company is also exploring the feasibility of supporting the Nigerian market with after-sales services. This includes the provision of genuine spare parts, as well as the training of operators and mechanics. He noted that these services are essential for ensuring the continued efficiency and productivity of the tractors.

The one-year mark since the signing of the MoU between John Deere, and the Nigerian government, has come and gone without any substantial updates on the progress of this deal, causing confusion among the nation’s farming community.

With the House of Representatives now conducting an official investigation into the John Deere MoU, the attention of the nation turns to the Federal Ministry of Agriculture and Food Security, which must now provide concrete information on the status of this critical agreement.

As it stands, Nigerians, particularly those in the agriculture sector, hold onto a thread of hope that this MoU is not merely another hollow promise, as the country eagerly awaits the realisation of this potentially transformative partnership.