Economics & Politics

Farm Mechanization in India: Challenges & Way forward

India, with population only 2nd to China in the world, 3rd largest economy, 4th largest agricultural sector… , there is so much to talk about India. And yet, 400+ million Indians live on less than a dollar a day, 200+ million are undernourished and the United Nations Development Programme has ranked India 134th (out of 187) in terms of the human development index. How is it that this country, an agricultural giant and a driver of worldwide growth, is not able to make sure food security at home? What strategy can India carry out nationally and with regard to international negotiations in particular? 

India is the largest producer in the world of milk, cashew nuts, coconuts, tea, ginger, turmeric and black pepper, Coffee. It also has the world’s largest cattle population (281 million). It is the second largest producer of wheat, rice, sugar, groundnut and inland fish. It is the third largest producer of tobacco. India accounts for 10% of the world fruit production with first rank in the production of banana and sapota.

The country’s agricultural production has stagnated at a time when the broader elements of the economy have grown. In order to sustain an overall growth rate of 9 per cent it is imperative for the agricultural sector to grow at 4 per cent. Though India has achieved self-sufficiency in food grain production, the last couple of decades have seen the growth rate of food grain production (1.5 per cent) lag behind that of population (1.9 per cent).

 

Growing demand

Efforts such as introduction of high yielding varieties and expansion of irrigated area have played a crucial role in achieving the goal of food self-sufficiency in the past, rapidly growing demand for food has brought the need for building efficiencies in agriculture to the forefront. Towards this objective, it is imperative to focus on improving the intensity of farm mechanisation in the country.

Availability of farm power increased from 0.36 kilowatts a hectare in 1971 to 1.66 kilowatt a hectare in 2011, the share of animated labour (that includes animal and human labour) to farm power dropped from 60 per cent to less than 12 per cent. At the same time, the contribution of human labour to farm power increased during the same period.

Increased rural employment 

This clearly indicates that growth in farm mechanisation is on account of replacement of animal labor. Further, farm mechanisation also provides different streams of employment related to handling of farm machines thus resulting in increased rural employment. Clearly, increased farm mechanisation is a key step towards better rural prosperity. However, farm mechanisation in India is in the initial stages of development and dominated by use of tractors and tractor mounted implements. While the Indian tractor market is highly organised and among the largest in the world, the farm equipment market is dominated by unorganised players accounting for more than 50 per cent of market share.

Issues and Challenges

  • Highly diverse farm size & soil types: resulting in the need for customized farm machinery and equipment for different regions of the country.
  • Skewed and seasonal usage resulting in low economic viability: This calls for innovative solutions for scaling up
  • Usage, Irrigation facility: Best results from mechanization can be obtained if the usage is coupled with enough irrigation
  • Cattle population: Increased mechanisation results in surplus draft cattle and their upkeep is a concern for the farmers
  • Extension service: Education and training for efficient usage of farm equipment is required to be imparted along with knowledge about selection of appropriate machinery
  • Capital investment, operational & maintenance cost: small and marginal farmers have cyclic nature of revenue streams resulting in limited capital availability


Recommendations, Way Forward 

Though policy makers have initiated preliminary support to farm mechanisation by including it as focus area in broader schemes such as in Rashtrya Krishi Vikas Yojna and Macro Management of Agriculture schemes, concerted focus on this sector is still lacking. A lot more focus needs to be brought in to further enhance the growth of this sector and tap the immense potential it offers.

Some of the key areas that need specific interventions include:

  • Develop a legislative and structural framework that encourages custom hiring (renting) services so as to facilitate better capacity utilisation of farm equipment.
  • Need to focus research efforts towards design and development of farm machinery suitable for different types of soils, farm sizes and diverse crops.
  • Increased focus on commercialization of research done by various university especially in the farm equipment space.
  • Focus on standardization and quality control especially for farm equipment so as to protect the interest of farmer and increase usage.
  • Sensitize the small farmers having operational holding of less than 4 ha from owning tractors unless they have substantial grounds to make economical use of it.

For taking care of the requirements of small and marginal farmer, the following measures need to be encouraged:

  • Formation of cooperative for ownership of farm machinery at village level
  • Supporting the finance of second hand tractors for small farmers;
  • Extension services to advise the farmer on suitability of various makes, models and horse powers for different size of land holdings.

In conclusion, though mechanization has improved the state of agriculture in certain parts of the country, it is still a bottom of the pyramid story and it will remain so unless concrete measures are taken to propel farmers towards adoption of efficient farm mechanization practices especially in the farm equipment space. Given the right focus from various stake holders, farm mechanization has the potential to play a critical role in increasing farm productivity and improving rural employment generation.

What government has to offered in Budget 2012 

The weighted deduction in income tax on agriculture extension expenditure is a welcome signal to the private sector as it could encourage their role in the agri-extension services.

It has so far been given for agri research and today there is the know how available through agri research and this move will now help transfer these to the farmers,” says S Sivakumar, chief executive, agribusiness, ITC.

The other important move in the Budget has been the mobile-based fertiliser management system. Pilots had been tried out in this space earlier and the budget seems to suggest that the efforts in this direction are on track. Though, it is a mega exercise. Experts suggests if  this is done well, it could have huge implications for it could be used for cash transfers to farmers in several areas of agriculture and not just be confined to fertiliser.

Also, in the budget there are some initiatives that are futuristic in nature. For instance, reduction in the customs duty for farm equipment could boost efforts at farm mechanisation – crucial at a time when many rural youth in agri India are looking for jobs outside the sector causing labour shortage.

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6 thoughts on “Farm Mechanization in India: Challenges & Way forward

  1. Pingback: Farm Mechanization in India « For Whatever It's Worth…

  2. Pingback: India’s Growth Trends: Interesting story so far… « For Whatever It's Worth…

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