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African agricultural mechanization could lead to a mechanization divide, where only large farms have access to machines. Technological solutions such as scale-appropriate machines and institutional solutions like service markets offer hope for more inclusive mechanization. Two-wheel tractor-based service markets combine both technological and institutional elements, but there is limited research on their economic viability and challenges.

We analyze the economic viability of two-wheel tractor-based service provision based on data from service providers in Ethiopia, Burkina Faso, and Zimbabwe. We also examine the institutional framework conditions for such service providers based on qualitative interviews with these service providers and stakeholders such as machinery dealers, spare parts providers, and banks.

Two-wheel tractor-based service provision is economically highly viable, largely due to multifunctionality. Post-production services such as threshing and transportation are particularly lucrative. However, the emergence and economic sustainability of service providers can be undermined by bottlenecks such as access to finance, knowledge and skills development, access to fuel and spare parts, and infrastructure problems.

This is the first study on the economics of two-wheel tractor-based service provider models. Past studies have focused on large four-wheel tractors, but two-wheel tractors are different in many aspects, including regarding investment costs, repair and maintenance costs, capacity, and multifunctionality.

The purpose of this paper is to identify sources and quantifying distortions to agricultural incentives to produce along the small ruminant value chains in Ethiopia.

National and district level average nominal rate of protection (NRPs) were computed for a five-year period (2010–2015). The authors developed four scenarios based on combinations of the different data generation processes employed in relation to each of the key variables.

The NRPs at farm gate and retail market for both sheep and goats are negative indicating a strong deviation of producer and retailer prices from the comparable export prices over the five-year period. Policy induced distortions were separated from market inefficiencies through use of data on access costs throughout the value chain. These access costs are positive and significant in value. It is clear that market inefficiencies are also due to government policy to a certain extent.

This study focuses only on sheep and goat value chains and covers only five-year period. This certainly limits the extrapolability of the results.

This study presents the extent to which smallholder livestock keepers are discouraged through disincentives in a unique context. This is the first study done on small ruminant value chains in the developing world.