Impact of Agricultural Mechanization on Production and Income

Generation in Afghanistan
The case of Herat Province

Abstract

Agricultural mechanization implies the use of different power sources and modified farm
tools and equipment with a view to reduce the drudgery of farmers and the use of draught animals.
This helps increase cropping intensity, accuracy, and timelines of efficiency leading to the benefit
of various crop inputs and reduce the losses at different stages of crop production. The objective
of farm mechanization is to enhance the overall production and income generation with high level
of productivity and lower cost. Agriculture is critical for Afghanistan’s food security and a key
driver of economic growth. Most of the Afghan families live in rural areas relying on agriculture
and farming for their livelihood and their family sustenance. Agriculture also creates employments
and investments opportunities for people living in urban areas.

Keywords: Agricultural Mechanization, Production, Productivity, Income generation

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Introduction

Forms of agricultural mechanization have become significant with the existence of concerns on
food security, rural employment, water scarcity, energy generation, future global food supplies.
As a result, global food supplies dialogues have mostly paid attention to the large- scale equipment,
large irrigation systems and mechanization of agriculture, but in Afghanistan lesser attention have
been paid on rural economies where mostly agriculture sector is managed traditionally. During the
past decades both the government and private sector have not provided sufficient efforts for
mechanization of agriculture in this country. However, smaller-scale mechanization plays an
important role in increasing agricultural and other rural economic activities. More importantly
agriculture and rural development are significant to inclusive growth in the country (World Bank,
2014).

Afghanistan’s economy is dependent on the agricultural sector, which makes significant

contributions to food security, economic growth, poverty alleviation, employment enhancement,
and the fiscal health of the nation. For instance, agriculture plays a significant role in the livelihood
of more than 80 percent of the country’s population and almost 90 percent of the deprived, who
live in rural areas (World Bank, 2014). Therefore, agriculture is definitely the most significant
economic activity and livelihood component in Afghanistan (NRVA, 2007).

Agriculture is also important for the growth and development of Afghanistan. This sector
provides employment for more than fifty percent of the population and contributed ¼ of Gross
domestic product (GDP) (MAIL, 2017). Moreover, the existence of linkages between agriculture
and other sectors in the country is vital for the growth and development of the country. For
example, on one hand agriculture provides raw materials and labor supply for industry, on the
other hand agriculture sector uses products of industrial sector, like machineries. Therefore, lack
of existence of an effective agriculture sector can affect both sectorial growth and growth of the
country as a whole.

In the agriculture sector of Afghanistan, farmers use hand tools and very limited parts of
the country are equipped with tractor and other agricultural machineries. For instance, for land
traction power, Afghanistan is still highly dependent on animals: 52 percent, mechanical 39 and

2
manual sources is 8 percent, (NRVA, 2005). As a result, agriculture is traditional sector and
farmers do not have access to mechanization in Afghanistan. Especially, most people in deprived
rural areas are not able to afford agricultural mechanization. Thus, jeopardizing both the growth
and development of the country.

For mechanization of agriculture large farm size is essential since it can allow farmers to have
more production and higher income. However Afghanistan’s agriculture farm is recognized by its
small size, seven jerib. Though, from 652,000 square kilometers of total land space of Afghanistan,
about 12 percent (78240 Square KM) is arable, three percent of the land is considered forest
covered, 46 percent is under permanent pasture and 39 percent is mountainous, not usable for
agriculture (CSO, 2007). So, Afghanistan needs to focus on large size farm, for mechanization.

Farm power in Afghanistan’s agriculture, especially in Herat depends on human muscle power
and is based on operations that depend on the hoe and other hand tools. By using hand hoes, a
farmer can arrange about 0.5 ha for planting per season (FAO, 2010). While mechanization may
help farmers to better prepare the land with lesser time and increase production.

Therefore, there is a need to highlight the importance of agriculture mechanization and its effects
on production. So, throughout this research we will investigate the impact of mechanization on
agriculture production and farm income generation.

Literature Review:

Robert C. Hsu (1979) investigates problems, polices and prospects of agricultural mechanization
in China, he finds that, as mechanization proceeds, the income inequality between the rural and
urban areas will decrease while the interactions between the two areas will rise. He also added that
agriculture mechanization will be accelerated through technical skills of peasants, increase in
supply of fertilizer and petroleum.

Verma (2008) on research about “Impact of Agricultural Mechanization on Production,

Productivity, Cropping Intensity Income Generation and Employment of Labour” in India finds
out that mechanization leads to development of new jobs such as managerial and supervisory jobs,
driving, servicing, maintenance and repair of the machines. He also mentions that farm
mechanization has considerably assisted the farmers in the overall economic improvements.

3
Zaijion Yuan (2011) has published a paper on agricultural input-output in north of China. He
analyzed the agricultural input and output in the last ten years by applying the Cobb-Douglas
production function. He finds that agricultural output effective irrigation area, rural electricity
consumption, agricultural machinery power and chemical fertilizer usage of Hebei province have
had an upward trend. While cultivated land area and rural manpower are decreasing.
Musa et.al (2012), uses the investigative research approach method, for mechanization effect on
farm practices, in north central Nigeria. They find that modern technology in agriculture has high
potentials in increasing farm productivity.

According to (Ruttan&Hayami 1971; Ruttan & Binswanger 1978) the rate and pattern of
mechanization is deeply influenced by relative scarcities of capital and labor, and other
macroeconomic variables. The responsiveness of invention and innovation to economy wide
factors has become recognized as the process of induced.
Hans Binswanger (1986) clarified, that mechanization is the main facilitator of the trend toward
bigger farm. Large farms adopt new forms of machinery considerably faster than small farm.
Muhammad Qasim (2012) applied Cobb-Douglas production and found that irrigated areas, off-
farm income, the number of livestock, hired labor and tractor ownership positively correlated with
the farm income.
Singh (2015) finds that physical and institutional infrastructure along with laws, regulations and
business friendly policies are the key factors to the success of agricultural mechanizations in India.

Mankaran Dhiman and Jaskaran Dhiman (2015) believe that Mechanization of farm operations
has greatly assisted in reducing the labor requirement, drudgery and cost of cultivation and saving
farmers from vagaries of weather. In order to make farmers globally competitive and checking
harm of natural resources a major shift in farm mechanization is required to realize the goal of eco-
friendly sustainable agriculture with low cost of production and high quality produce.

Theoretical Framework:

Cobb-Douglas Production Function (CDPF) are among the best production functions utilized in
applied production analysis (Enaami, et al., 2011). The Cobb-Douglas Production Function is
widely used in economic analysis to show the relationship of output to input (Qasim, 2012, p. 29).
The procedure was first suggested by Knut Wicksell (1851-1926) after that the formula was again

4
tested by Charles Cobb and Paul Douglas in 1928. They investigated and considered a simple way
in which production output is determined by the amount of labor and amount of capital. It is one
of the most important methods that are used in many sectors like agriculture, education, and health.
This form of production function has several advantages. For example, it is widely applied in
economic and econometric analysis and it is more flexible in the number of input variables used.
Furthermore, scale of economies can be computed as limited input coefficients that sum to one or
without this limitation to reflect this kind of scale for economy, industry, firm and so on. In
addition, this method of production is easy to estimate and interpret. Unconstrained (CDPF)
increase its potentialities to handle different scales of production. Different econometrics
estimation problems, such as serial correlation, heteroscedasticity and multi-collinearity can be
handled adequately and easily by using this method. The only criticism on the model is parsimony
and flexibility. This can be solved by some assumptions in the model. The problem of simultaneity
can be taken into account with the use of stochastic (CDPF) (Bhamnumurthy, 2002, p. 75) . The
main characteristic of (CDPF) is that the elasticity of substitution is unified. The original form of
Cobb-Douglas production function is as follows:

P = F(A K ∝ Lβ ) (1)

Where,

P= Total production of output (The monetary value of all goods produced in the economy)

K= Capital input (The monetary worth of all equipment’s, buildings, machinery and…..etc.)

L = Labor input (The total number of hours worked by person in the economy)

A= Total factor productivity

∝ and β are the output elasticities of capital and labor respectively , constant between 0 and 1 (0 <
α < 1)

The Ordinary Least Squares (OLS) is a practical method to analyze linear relationships in the linear
regression model. But is pointless when a non-linear relationship between an independent variable
and the dependent variable can be converted into a linear relationship by changing the model into
logarithmical model (D'Ambra & Sarnacchiaro, 2010). The Cobb-Douglas Production Function
has exponential relationships that are quite observed in theories of economics and can be converted

5
into linear relationship by taking the logarithm of separate variables (Pennings, et al., 2006, p.
324). In application of this method most of the researchers in the economic area frequently start
by estimating the (CDPF) using OLS, and hoping to get the estimate of the labor and capital output
elasticities that look probable and interpretable from the theoretical point of view (Armagan &
Ozden, 2007).

The Cob-Douglas Production Function in the form of stochastic is represented in the following
form

𝛽1 𝛽2
Yi = β0 𝑋1𝑖 𝑋2𝑖 eui (2)

Where

Yi = Total output

𝑋1𝑖 = Labor input

𝑋2𝑖 = Capital input

𝑢= Stochastic disturbance term

𝑒 = base of natural logarithm

𝛽1 𝑎𝑛𝑑 𝛽2 = Output elasticity of Labor and Capital respectively

The model above shows a non-linear relationship between output and inputs. The model can be
converted into the logarithm function or transfer to the log model as the following

Log Yi = β0 + β1 Log X1i + β2 Log X2i + ui (3)

The model is linear in parameters β0 , β1 and β2 and it is therefore a linear regression model. The
equation is a log-log model. Cobb-Douglas Production Function have some attributes and will be
explained in more details in the following paragraph.

β1 is the partial elasticity of output with respect to labor input. This represent the percentage
change in output with one percentage change in labor input when the capital input is constant.

β2 is the partial elasticity of output with respect to capital input. This represent the percentage
change in output with one percentage change in capital input when the labor input is constant.

6
The aggregate of parameters β1 and β2 shows the returns of scale. It represent the output level
with the proportionate change in inputs. If the sum is equal to one, it shows constant return to scale.
If the sum is lower than one, it shows decreasing return to scale and if the sum is bigger than one,
it represents an increasing return to scale.

When we have log linear-regression model including any number of variables, the coefficient of
each of the X variables measures the elasticity of the dependent variable Y with respect to that
variable. Therefore, if we have K number of variables, the log linear model will be in the following
form:

𝐿𝑜𝑔𝑌𝑖 = 𝛽0 + 𝛽1 𝐿𝑜𝑔 𝑋1𝑖 + 𝛽2 𝐿𝑜𝑔 𝑋2𝑖 + ⋯ + 𝛽𝑘 𝐿𝑜𝑔 𝑋𝑘𝑖 + 𝑢𝑖 (4)

Each of the regression coefficients 𝛽2 through 𝛽𝑘 , is the elasticity of Y with respect to variables
𝑋1 through 𝑋𝑘 (Gujarati, 2003).

This research uses the log linear form of Cobb-Douglas Production Function to investigate the
impact of agricultural mechanization on production and income generation in Afghanistan
especially in Herat province. This will be done in order to estimate the coefficient that represents
the effect of mechanization on output elasticity of each variable in the model. The details of the
functional form of the Cobb-Douglas Production Function is given in the Methodology part of this
research.

The production function that will be used in this research (double-log production function as the
lead equation) determines the effect of mechanization on production and income generation. If the
regression coefficients of farm quantity of product, farm size, quantity of seed, and quantity of
fertilizer, labor-input, agrochemical, access to tractors, irrigated area and price of product take
positive values, this means that an increase in each of these variables would lead to an increase in
the level of the effect of mechanization on production. The second equation shows the effect of
mechanization on income generation. All the cost will be deducted from the revenue of the farm
and then the data will be analyzed to find out the effect of mechanization on production and income
generation at farm level.

Moreover, further analyzes will be done through comparing the output of the farm that used
tractors with the output of the farms that have not used tractor.

7
Research Objective:
1- To analyze the impact of agricultural mechanization on production and income generation
in Afghanistan.
2- To find out the factors that drive the adaptation of mechanization in Afghanistan.
3- To assess the current level of adaptation of mechanization technology in the selected areas
of the research.
4- To assess the mechanization of experiences in selected study areas.
5- To provide the policy recommendations for government relevant ministries and intentional
donors.
6- Compare the level of mechanization in five districts.
Research Questions:
1- Does Agricultural Mechanization affect Production and Income generation at farm level in
Herat?
2- Does the effect of mechanization on output at farm level differ?
3- What are the factors that drive the adaptation of mechanization in Herat?
4- What kind of mechanization experience is available in research area?
5- Is the level of mechanization differ in research area?

Methodology of Research:
The above theoretical conceptualization necessitates an empirical study to test the hypothesis in
the real situation. Five districts include Injil, Guzara, Ghoryan, Pashtun-zarghun and Zind-jan
make form the empirical basis of this research. There are two reasons for the selection of these
districts.
1) These are most populated districts and thousands of families who live in these districts work in
agricultural sector.
2) These areas are more accessible for the field research comparing to other places in the province.
There is better security. Additionally, it is possible to obtain the support of Herat Department of
Agriculture to make contact with farmers, and to provide support facilitate to the field research
process. The researcher will be able to interview farmers, and some government and non-
governmental organization when completing the data that are required. Both primary and

8
secondary data will be used in this research. The primary data collection involved a sample survey,
which will be conducted in the study locations during the period March- May 2019. The survey
involves the interviewing of 400 farmers in the study locations (Injil, Guzara, Ghoryan, Pashtun-
zarghun and Zind-jan ). Secondary data sources including reports are already gathered by CSO,
Some of governmental organizations and ministries. Sample farmers will be selected via using the
Stratified random sampling method.
Distribution of sample size in the selected districts
District Population Percentage Sample Size
Enjil 233900 38 152
Guzara 140300 23 92
Ghoryan 84300 14 56
Zinda Jan 54600 9 36
Pashton Zarghon 95900 16 64
Total 609000 100 400
Source: CSO ( 2011-2012)
Production Function Analysis: Regression model will be used to examine the input-output
relationship, the first model will investigate the quantity of production.

𝑌 = 𝑓( 𝑋1 , 𝑋2 , 𝑋3, 𝑋4 , 𝑋5, 𝑋6, 𝑋7 , 𝑋8 , 𝑈𝑖 ) (5)

Where:

𝑌 is the Quantity of Crop Production (kg)

𝑋1 is the Farm Size (hectare)

𝑋2 is the Quantity of Seed (kg)

𝑋3 is the Quantity of Fertilizer (kg)

𝑋4 is the Labor Input (man-day)

𝑋5 is the Agrochemical (Liters)

𝑋6 is the Access to Tractors ( Dummy variable will be used such as 1 represent access to Tractor
while 0 for otherwise )

9
𝑋7 is the Irrigated Area ( hectare)

𝑋8 is the Farmers Education ( years)

𝑈𝑖 is the Error Terms

The explicit form of this function takes the following forms:

𝑌 = 𝛽0 + 𝛽1 𝑋1 + 𝛽2 𝑋2 + 𝛽3 𝑋3 + 𝛽4 𝑋4 + 𝛽5 𝑋5 + 𝛽6 𝑋6 + 𝛽7 𝑋7 + 𝛽8 𝑋8 + 𝑈𝑖 (𝐿𝑖𝑛𝑒𝑎𝑟) (6)

𝐿𝑜𝑔𝑌 = 𝛽0 + 𝛽1 𝑙𝑜𝑔𝑋1 + 𝛽2 𝑙𝑜𝑔𝑋2 + 𝛽3 𝑙𝑜𝑔𝑋3 + 𝛽4 𝑙𝑜𝑔𝑋4 + 𝛽5 𝑙𝑜𝑔𝑋5 + 𝛽6 𝑙𝑜𝑔𝑋6 + 𝛽7 𝑙𝑜𝑔𝑋7

+ 𝛽8 𝑙𝑜𝑔𝑋8 + 𝑈𝑖 (𝑑𝑜𝑢𝑏𝑙𝑒𝑙𝑜𝑔) (7)

In the second model, we will investigate the effect of mechanization on income generation in farm
level.

𝑌 = 𝑓( 𝑋1 , 𝑋2 , 𝑋3, 𝑋4 , 𝑋5, 𝑈𝑖 ) (8)

Where:

𝑌 is the Amount of Income (Us$)

𝑋1 is the Price of Product (Us$)

𝑋2 is the Quantity of Production (kg)

𝑋3 is the Farmers Education (years)

𝑋4 is the Labor Input (man-day)

𝑋5 is the Farmers Experience (years)

𝑈𝑖 is the Error Terms

The explicit form of this function takes the following forms:

𝑌 = 𝛽0 + 𝛽1 𝑋1 + 𝛽2 𝑋2 + 𝛽3 𝑋3 + 𝛽4 𝑋4 + 𝛽5 𝑋5 + 𝑈𝑖 (𝐿𝑖𝑛𝑒𝑎𝑟) (9)

𝐿𝑜𝑔𝑌 = 𝛽0 + 𝛽1 𝑙𝑜𝑔𝑋1 + 𝛽2 𝑙𝑜𝑔𝑋2 + 𝛽3 𝑙𝑜𝑔𝑋3 + 𝛽4 𝑙𝑜𝑔𝑋4 + 𝛽5 𝑙𝑜𝑔𝑋5

+ 𝑈𝑖 (𝑑𝑜𝑢𝑏𝑙𝑒𝑙𝑜𝑔) (10)

10
Questionnaire Survey
The major tool that will be used for the data collection is a standardized questionnaire survey in
Afghanistan with a sample size of 400 farmers from five populated districts. This represents
approximately 50% of the total population in Herat province. The questionnaire will be divided
into two sections. The first section deals with the demographic characteristics of the farmers. The
purpose of obtaining this kind of data is to establish the following: The structure of farmers labor
in terms of age, gender, members of households, the size of households, the educational-
experience and others qualifications of the household leaders as well as information on the decision
also included in the evolution of the farmers structure. The second section is the largest and deals
with data on quantity of product, farm size, quantity of seed, quantity of fertilizer, labor-input,
agrochemical, access to tractors, irrigated area and price of product and the problems faced are
also included in this section.
Area of study: Herat province is located in the western area of Afghanistan. The total population
of the province is about 1,780,000, (CSO, 2011) the majority of which live in rural parts. With
international borders to Iran and Turkmenistan and an international airport, trade could potentially
play an important part in the economy of Herat Province. Due to the lack of urbanization in Herat
Province, around 75% of the population lives in rural areas and economic activity is
correspondingly heavily reliant on agriculture and horticulture production. The map of the study
area is as the following :
Figure 1: Map of Herat Province

Source: Google Maps, 2011

11
Data entry and cleaning
The data, which is handwritten and recorded on the questionnaire sheets, will be checked for
recording and transfer errors, missing values, and outliers before being entered into a personal
computer for analysis. The main programs use for data analysis is Econometrics Package Eviews
9 and Stata’ ‘Microsoft Excel Package’ will be used for some parts of the data.
Methods of data analysis
Both quantitative and qualitative analyzing methods will be used to analyze the data. Analyze of
data will be processed by the software E-views. All data regarding 400 farmers of five districts
will be processed using this method. Econometric analysis and statistics methods will be used as
well to find the effectiveness of agricultural mechanization on production and income generation
in the research area.

Limitation of the study

Possible limitation that the researcher may face are as below:

1- Currently Taliban and insurgent groups are active in most of the districts in Herat province,
including the research areas. The researcher will coordinate with local governors in order
to decrease the risk.
2- Illiteracy rate is low in Afghanistan especially in rural areas. The researcher will train the
surveyors to read the questions for farmers and write their responses.
3- Access to the districts are difficult because mostly the roads are rough and transportation
is inconvenient.

12
Project activity budget

Category Details Description Unit Cost Total Cost

Researcher will allocate 260 hours’ time for
completing the research (Literature review,
Preparation of questionnaire, Review of
methodology, data analysis, . Research editing
Researcher and design and writing the final report. Unit 5.25 per hour 1365
cost for each hour is 5.25€ and the total cost is
expected to be: 5.25€ x 260Hrs =1365€
So, the research will work for three months,
each day 3.3 hours
2 Euro per hour
5 person will be hired to collect data from 5 for each person.
districts of Herat province. The data collector five persons will
Surveyor 800
will be hired for 10 days with daily salary of 10 be hired for ten
Personnel days*8 hours*5 person*2Euro per hour salary days each person
work 8 hours daily
The research assistant will be hired to
coordinate and facilitate among servitor,
Supervisor/
farmers and data entry officers. He will also
Research 2.2 Euro per Hour 1,030 €
assist the research for doing the research. He
Assistant
will be paid with hourly salary of €2.2
(78 DaysX6 hoursX x €2.2= €1170
2 Euro per hour.
Two person will be hired as data entry
Two person will
officers for two weeks. They will be working
Data Entry be hired for 12
with daily salary of €10 each person will work 288 €
officers days and each
for 12 days and five hours of daily work. So,
person will work
6 Hourx12 days x 2 Person x €2 Per hour
for six hours daily
Total personnel cost 3483 Euro
Travel cost is for data entry officers and co-
researcher.
Surveyor Since the research area is far from the city, €10 10 for each person
Travel transportati will be paid for each data entry officer as travel transportation cost € 500
on cost cost and food cost. There will be 5 data entry daily
officers who will be working for 10 days.
€10 per day x 5 persons x 10 days = € 500
Copy, print,
Cost of printing questionnaires, reports and 100 for overall
Stationery and € 100
other formats is expected to be €100 printing
stationery

High speed internet will be purchased for

Communica Internet/Mo
duration of 3 months. Monthly internet cost is 100 per month € 300
tion Cost bile
€100

Grant Total € 4,383

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Project Timetable

March April May

2019 2019 2019

Literature Review

Methodology

Data Collection

Data Analysis

Complete the Project

Conclusion:

This research will focus on the impact of the agricultural mechanization on production and income
generation at the farm level in Afghanistan. The research area will cover five districts of Herat
province including Injil, Guzara, Ghoryan, Pashtun-zarghun and Zind- Jan. In order to achieve the
research objectives; the researcher will use both primary and secondary data. The primary data
will be collected through standard questionnaire. The research will find the effectiveness of
agricultural mechanization on production and income generation in the research area. It will also
investigates the current level of mechanization and its adoption drivers in Herat province of
Afghanistan.

14
Bibliography:

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douglas production function in agriculture: The case of aydin-Turkey. Journal of Applied
Sciences, Volume 7, pp. 499-502.
2- Bhamnumurthy, K... V., (2002): Arguing A Case for The Cobb-Douglas Pro-duction
Function. Review of Commerce Studies 2002, Delhi, India: s.n.
3- Binswanger, Hans P. 1978. The Economics of Tractors in South Asia: An Analytical
Review. New York: Agricultural Development Council; and Hyderabad, India:
International Crops Research Institute for the Semi-Arid Tropics.
4- Binswanger, Hans P., and Vernon W. Ruttan. 1978. Induced Innovation: Technology,
Institutions, and Development. Baltimore, Md.: Johns Hopkins University Press.
5- Chancellor, W. 1998. “Agricultural Mechanization: A History of Research at IRRI and
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Paper Series No. 30. Los Baños, Philippines: International Rice Research Institute
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dependence with highly collinear variables: A simulation study. Asian Journal of
Mathematics & Statistics, Volume 3(2), pp. 69-81.
7- Enaami, M., Ghani, S. A. & Mohamed, Z., (2011): Multicollinearity Problem in Cobb-
Dounglas Production Function. Journal of Applied Sciences, Volume 11 (16), pp. 3015-
3021.
8- Gujarati, D. N., (2003): Basic Econometrics. Published Book Fourth Edition. ISBN 0-07-
112342-3. In: s.l.:s.n., pp. 223-224.
9- Liu, Xianzhou. 1962. "The Invention of Agricultural Machinery in Ancient China." Acta
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Strattegies, PhD Thesis, Kassel: s.n.

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12- World Bank, 2014. Agricultural Sector Review, Revitalizing Agriculture for Economic
Growth, Job Creation and Food Security.
13- http://cso.gov.af/Content/files/ALCS/NRVA%202007-08%20Main%20report.pdf
14- http://mail.gov.af/en/tender

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