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Tractorization

Mar 31 2016

Transfer of Government owned tractors to Farmers' Cooperative Societies 


This involves the redeployment of newly-acquired tractors and implements for repurchasing and management by selected farmers’ cooperative societies under public-private partnership known as “manage, repay and own”- MRO. This intervention will create jobs for tractor drivers and tractor mechanics and increase farmers’ ability to cultivate more lands and employ more persons.

OBJECTIIVE
The objective is to make tractor hire services available to farmers on affordable and sustainable basis. Public private partnership model (PPP) will be used to ensure sustainable ownership and management of tractors.

THE PPP MODEL
The public-private partnership arrangement will be “manage, repay and own” – MRO. Under this arrangement, farmers’ cooperatives will manage the tractor hire services, repay a share of the purchase cost and own the tractor upon full repayment.

Farmers’ cooperatives will be invited to re-purchase the tractors at 60% of cost (40% subsidy), paid over a given period until completion and thereafter take ownership. The tenor will be determined after the actual cost of purchase is determined and a proper cash flow crafted.

The prices charged by farmers’ cooperatives will be regulated at 60% discount of market price, equivalent to subsidy on purchase price.

ALLOCATION OF TRACTORS
The distribution of tractors to senatorial districts will depend on the area under cultivation (need for tractors). Maintenance will be done in government-designated workshops at costs to cooperatives, while efforts will be made to transfer both technology and workshop to the private sector.

ROLE OF TRACTOR HIRE AGENCY IN THE NEW ARRANGEMENT
The Delta State Tractor Hiring Agency will focus on training of tractor operators and tractor mechanics and monitoring the hiring and use of the tractors to ensure price compliance and appropriate use. It will also maintain service centres for the operational fitness of the tractors. Existing technical staff of the Tractor Hire Agency will provide paid services to needy farmers’ cooperatives on case by case basis.

PREQUALIFICATION OF FARMERS’ COOPERATIVES
The S.M.A.R.T agenda of the State Government places great emphasis on partnership with agricultural cooperatives in PPP arrangements for the management and delivery of common agricultural services to farmers, processors and other agricultural value chain operators. For the agricultural cooperatives to partner effectively with the state government however, they should be stable, capable and ready.

There is therefore the need to assess the agricultural cooperatives for strength, stability and ability. The assessment will establish strengths and weaknesses of the cooperatives and help to identify those that can be engaged for PPP and also identify support measures that will raise the levels of fitness and readiness for PPP arrangements.

The assessment will involve pre-qualification screening of agricultural cooperatives based on certain organisational criteria.

The pre-qualification criteria are as follows:

i. Type of Cooperative – Emphasis should be on farmers cooperatives, but other cooperatives may be included if they demonstrate keen interest in partnering with the   state government.

ii. Strength of membership (no. of members) – evidence is attendance at meetings (minutes of meetings).

iii. Functionality of the cooperative – how regular are the meetings, does it hold Annual General Meetings (AGMs) – evidence should be the minutes of AGMs.

iv. Extent of members’ participation – amount of savings by members, amount of loans to members –evidence should be the financial records/accounts

v. Capital base (financial strength) of the cooperative – Investment profile – nature and size of capital investments and existence of corporate projects entered into by the cooperative

vi. Financial activity (financial transactions) – evidence should be certified bank statements.

vii. Knowledge of the agribusiness involved.

viii. Proposal on how it intends to run the business.

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