SACAU: Machinery rings – a proven cost-saver

7 August 2014. SACAU considers mechanization as a key driver of agricultural development and the organisation is exploring various options to enhance production methods of smallholder farmers. To this effect the organisation is looking into the adoption of the concept of machinery rings by its members which has proven to be a cost-saver for farmers in Germany. Could this be the answer to resource challenged smallholders in southern Africa?

A SACAU delegation of eight undertook a study tour to Hanover in Germany to learn first-hand about the concept of machinery rings which has enabled German farmers to purchase the latest available farming equipment together, which individual farmers could not afford on their own.

Dr Theo de Jager, President of SACAU and presidents of SACAU’s farmers’ organisations were part of the delegation. The ownership of machinery rings is determined by the farmers and aims to get the work of the farmers done at a reasonable price. The ownership of the equipment in the machinery ring can take different forms depending on how the farmers are organised. Under a group investment the farmer is a shareholder of the machinery ring as well as the customer. The farmer will have paid for the purchase of the equipment as part of a group which then becomes part of the pool of equipment owned by the machinery ring.

According to Johnson Bungu, SACAU Marketing Advisor who was part of the delegation in May 2014, the idea of machinery rings starts with the realization that there is a need to increase efficiencies and to bring economies of scale to operations.

“Machinery rings should be run by professional employees who operate, schedule, service, contract and work to ensure maximum utilisation of the equipment. The training of the employees to manage the machinery ring is important and must be in line with the technological advances of the equipment. The professional employees play a key role of mediating between those requiring a service from the equipment and those who own the machinery,” he explained. 

Negotiations with different stakeholders will form part of the responsibilities of the machinery ring office. During the agricultural seasons the machinery ring office should be busy working on supporting the farmers and may be open for long hours.