Farm Mechanisation in India: An Overview

The contribution of agriculture and allied sectors to the Gross Domestic Product (GDP) and Gross Value Added (GVA) of the country are 17.32 percent and 16.4 percent respectively during 2017-18. Although the share of agriculture and allied sector in GVA, which was 18.2 percent in 2012-13, has been declining steadily, it does not undermine the significance of the sector since it provides substantial employment, livelihood in rural areas and ensures much needed food security for the people. Agriculture employs more than 50 percent of the total work force of the country and approximately 60 percent households are dependent on it. However, it is estimated that the percentage of agricultural workers to the total work force, which was 58.2 percent in 2001, will drop to 25.7 percent by the year 2050 due to rapid urbanization and other reasons. Further, this will result in ‘feminism of agriculture’ whereby more number of women will be involved in various agricultural operations. The shortage of hands in agriculture can only be compensated by enhancing the level of farm mechanization in the country.

Why focus on Farm Mechanisation 

There are a number of factors justifying the need to strengthen farm mechanization. Due to implementation of Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGA) wages for labour have increased, resulting in scarcity of labourers for farm operations. Further, the timeliness of agricultural operation, the quality and precision of operation, which ensure optimal yield, are possible through farm mechanization. Use of farm power for various other operations such as land leveling, fertilizer application, plant protection, harvesting and threshing, increases the efficiency of inputs, thereby reduces the farm losses. Thus, production and productivity increase with the availability of adequate farm power.

Farm Mechanisation in Developed countries vis-à-vis India 

The level of farm mechanisation in India is at 40 to 45 percent while developed countries are far ahead of us in this regard. For instance in countries like USA, Canada the level of farm mechanization is 95 percent, whereas in France and China it is 99 and 60 percent respectively. This increased level of mechanization has reduced the number of people engaged in agriculture in those countries significantly. In USA for instance only 0.7 percent of its population is in agriculture. The percentage of population in agriculture in Canada, France, Japan and China stands at 2, 3, 2.9 and 33.6 percent respectively. Due to higher level of farm mechanization in USA, a farmer, who was able to supply food to 26 persons in 1960, is now able to supply food to 144 persons approximately. This is because there is a quantum jump in the yield per hectare in these countries. For example, the average yield per hectare in USA is 7340kg. The same in Canada, France, Japan and China are 4170 kg, 7070 kg, 6105 kg and 5891 kg respectively. On the other hand the productivity in India is abysmally low at 2962 kg per hectare. Thus, it may be inferred that the food grain productivity increases with the enhancement of level of farm mechanization. The farm power availability in India was just 0.032kw/ha in 1965-66. Of course Indian farmers are adapting agricultural mechanization at a faster pace and this is evident from the fact that the farm power availability in India, which was 1.35kw/ha in 2000-01, is estimated to have reached 2.02 kw per hectare in 2013-14.

Level of Farm Mechanisation 

Level of mechanization is not uniform throughout the country. It is the highest in Northern states like Punjab, Haryana and Western Uttar Pradesh. The reasons for concentration of tractors in this region are fertile land, higher percentage of irrigated land, decline in availability of agricultural labour and timely support by state governments etc. During the last decade the Southern, Western and to some extent the Eastern States have seen considerable increase in the number of tractors. However, the level of mechanization is extremely low in North Eastern States. Hilly terrains, high transportation cost and inadequate support from State governments have adversely impacted the growth of farm mechanization in these States. Further, the operation wise level of mechanization for soil working and seed bed preparation, seeding and planting, plant protection and irrigation are 42, 29, 34 and 37 percent respectively. The mechanization is mostly focused on two crops, wheat and paddy.

Tractorisation 

India, which saw the first tractor in 1914, had 8000 tractors in 1950. It has now become the largest producer of tractors in the world and one third of the total global production of tractors comes from India. As per ICAR, tractor density in the country was 27 tractors per 1000 ha In 2013-14. Average annual sale of tractor is 6 lakh units. Within the tractor market 41 to 50 HP segment is the largest having 44 percent of the total sales, followed by 31 to 40 HP, above 50 HP and less than 30 HP segments having 34, 12 and 10 percent respectively.

Market Segmentation 

India’s agricultural equipment industry caters to the requirements across the value chain which include land development, tillage, seed bed preparation, weeding, inter cultivation, plant protection, harvesting and threshing, post harvest and agro processing. However, tractor, tractor driven devices and tillers are the main products of the organized market. Four major segments of equipments such as tractors, threshers, tillers and rotavators have registered steady growth. Thresher sales hovers around one lakh unit per annum, while 50,000 to 70,000 units of power tillers and rotavators are being sold every year. Power tillers are finding acceptance in low land flooded rice fields and hilly terrains. Approximately, 5000 units of Combine Harvesters are being sold every year. Similarly, Diesel engines and electric motors are being used for pumping, threshing, dal and flour milling and oil extraction etc. Undoubtedly, tractorisation has helped in the growth of implement manufacturing, specifically trailers, disc harrow, seed drills etc.

Custom Hiring Centres 

Small and marginal farmers, constituting more than 80 percent of the farmers, own approximately 68 percent of the land. Due to their limited resource base most of them pursue traditional methods of cultivation with traditional equipments. It is necessary to provide access of farm mechanization to these farmers, through Custom Hiring Centres (CHC), so that they reap benefits of farm mechanisation. In each CHC a set of farm machineries and implements like tractor, power tiller, rotavator, multi crop thresher, laser land leveler, seed cum fertilizer drill, power weeder, combine harvester etc., can be kept for hiring by farmers. These CHCs can be established in Primary Agricultural Cooperative Societies, which provide crop loan to farmers and also act as the centres in procurement operation. Farmers Producers Organisations (FPOs), SHGs and entrepreneurs may also be encouraged to set up CHCs.

Credit 

Of the total number of tractors sold in the country 80 percent is financed and 20 percent is on cash payment. Although financing of farm machineries comes under priority sector lending, unwillingness of commercial banks to lend on liberal terms has enabled NBFCs to enter the market of tractor financing and usurp a major share of it. Most of the manufacturers finance through their own captive financing companies. Consequently, the farmers are made to pay higher rate of interest.

Role of Government in the promotion of Farm Mechanisation 

Government of India launched a Sub-Mission on Agricultural Mechanisation (SMAM) in 2014-15 to promote farm mechanization among small and marginal farmers. Apart from the traditional components like training, testing, demonstration of agricultural machinery, the mission envisages setting up of Farm Machinery Banks for custom hiring. There is an urgent need to implement the scheme in far flung areas of the country in the best interest of SF and MF. As per the guidelines, for SC, ST, Small and Marginal Farmers, Women and farmers of North Eastern states, subsidy of 50 percent of the cost of machinery is available from Government of India, while the subsidy for other category of farmers is 40 percent.

Research and Development 

Two institutes of ICAR viz. Central Institute of Agricultural Engineering (CIAE), Bhopal and Central Institute of Post Harvest Engineering and Technology (CIPHET), Ludhiana, have been conducting research and development exclusively in the field of farm machinery and post harvest engineering and technology. Besides most of the State agricultural universities have agricultural engineering programme with farm mechanization as a major component.

Challenges 

1. At present India does not have a long term Farm Mechanisation policy, although investment on Farm Mechanisation is substantially higher. Further, due to poor information dissemination and inadequate guidance, farmers face problem in proper selection, use and maintenance of these costly machineries. 

2. Inadequate or no irrigation facilities in vast tract of cultivable area is hindering the growth of farm mechanization. 

3. There is a predominance of small operational holdings in Indian agriculture due to prevalence of large number of small and marginal farmers, whose land are also scattered. The law of inheritance further accentuates the problem resulting in increasing the number of adverse holdings, for whom owning costly farm machineries becomes economically unviable. 

4. Bank’s apathy for extending credit on liberal terms for farm mechanisation is compelling farmers to borrow from the money lenders and NBFCs at higher rate of interest, which in turn is impacting the natural growth of the sector. 

5. Farm power availability varies highly from one state to the other as well as among agro-climatic zones. 

6. High equipment cost, absence of adequate number of quality testing and after sales service centres are points of serious concern. Due to inadequate service centres in rural areas farmers face problem in the proper maintenance of machineries. 

7. Farm mechanization in its present form can at best be termed as ‘tractorisation’. There is a need to rectify this imbalance by promoting other types of farm machineries used in rainfed agriculture, horticulture, precision farming, other crops and other operations.

Way forward 

1. Government may come forward with a long term Farm Mechanisation policy for the country to ensure its balanced growth. 

2. The problem of small operational holdings in Indian agriculture can be addressed by going in for consolidation of the land holdings in a big way to optimize the benefits of farm mechanization. There is a need to ponder over other innovative solutions as well. 

3. In order to increase the access of the farmers to the high cost farm machineries such as combine harvester, rotavator, laser guided land leveler, paddy transplanter, sugarcane harvester, potato combine etc., there is a need to innovate custom hiring service or a rental model through institutionalization. 

4. In order to encourage State Governments to set up Custom Hiring Centres (CHC) of farm machineries, equipments and implements at PACs, NABARD may include CHC as an eligible category of activity under Rural Infrastructure Development Fund (RIDF) for financing State governments. This will enable small and marginal farmers reap the benefits of farm mechanization. 

5. There is a need to enhance the farm power availability in North Eastern States and other similarly positioned States, where it is low or extremely low, through policy intervention and government support immediately. Developing customized farm machinery and equipment for different regions may also be considered. 

6. In future, due to likely change in demographic composition of rural areas, more number of women farmers will be undertaking various agricultural operations themselves. Accordingly, the farm machineries should be designed to suit to their operational needs and convenience. 

7. Focus of farm mechanization may be shifted to rainfed agriculture, horticulture crops, sugarcane, cotton, pulses, oilseeds, precision machinery for improving cropping systems etc. from the present wheat and paddy. 

Farm mechanization needs to be approached more pragmatically involving all stakeholders. To achieve the farm power availability target of 2.5kw per hectare, there has to be innovative private business solutions and proper government policies, which will also enable the small and marginal farmers to reap the benefits of farm mechanization. 

The article has been published in the November 2018 issue of SmartAgripost, a leading monthly magazine on agriculture and food processing published from New Delhi,  as its cover story.