With the growth in population, issues related to food security and malnutrition are posing serious challenges at the global level, especially in developing economies like India.
Although investments and technological innovations in agriculture have boosted productivity considerably over the past few decades, the pace of increase in farm yields has not been rapid enough to meet these emerging challenges and future requirements. The declining contribution of agriculture to the GDP, and the sufficient availability of farm labour are additional concerns.
The Indian Agri sector accounts for around 18% of the country’s GDP and currently provides about 57% of total employment. In other words, India is one of the largest agricultural economies in the world and mechanisation on farmlands holds the key to the sustainable and efficient development of this important sector of the Indian economy.
Besides increasing production, farm mechanisation also ensures timely farming, the optimal utilisation of resources, all while bringing down input costs and ensuring overall savings. Essentially, mechanisation brings in higher farm productivity, reduces farm drudgery and better management of crop lands.
Tractor power is one of the key inputs related to agricultural efficiency and profitability in farming and India has seen rapid progress in this farm power. In fact, over the last 53 years the average farm power availability in India has increased from about 0.30 kW/ha in 1960-61 to about 2.02 kW/ha in 2013-14.
Previously tractor demand was met almost entirely through imports, however, today India is the largest manufacturer of wheeled farm tractors in the world; followed by USA and China. Powered by strong R&D and relevant innovations, the Indian tractor industry also serves customers across continents, with global levels of quality and application suitability, driving the growth of this sector. With 18 tractor OEMs making up India’s manufacturing landscape, tractor production in India reached a record high in 2018-19 at just under 0.9 million units (Including exports), making the Indian tractor industry truly ‘Atmanirbhar’.
Beyond Tractors
Farm Mechanisation has been identified as a key tool to increase agri production globally. Several studies suggest a direct correlation between increased yield and farm mechanisation, which also leads to several other economic and social benefits for farmers.
While a tractor is a prime mover, the agri machinery value chain involves mechanisation right from land preparation to sowing to harvesting and post-harvest. At every step in the production lifecycle, the use of farm equipment enhances the efficiencies, not only in reducing labour time and post-harvest losses, but also helping cut down on production costs over the long term.
Amongst the largest in the world, the Indian tractor market is highly organized. However, India has a low level of mechanisation compared to developed countries. And this level of mechanisation varies greatly by region. States in the north of India such as Punjab, Haryana and Uttar Pradesh have high levels of mechanisation due to the highly productive land in the region, as well as declining availability of labour force.
The governments in these states have also provided timely support in promoting mechanisation of farming. The western and southern states in the country have a lower level of mechanisation due to the smaller land holdings prevalent in these regions as well as the fact that these holdings are more scattered. As a result, in many cases, mechanisation has been uneconomical.
Looking at India from a broader lens, over 85% of Indian farmers are small and marginal ones, having less than two hectares of land, but they own just 47.3% of the total crop area. These small farmers are simply unable to afford these mechanization technologies due to cost, low yield and income issues. As a result, there is a low overall rate of mechanisation on Indian farms.
While farm mechanisation in India has made strong strides in recent years, there is still a long way to go. Countries like the United States and European nations are completely mechanized, while places like China and Japan have also seen higher penetration of farm machinery. In comparison, the Indian agricultural sector still lags behind and requires an increase in farm equipment.
From a global perspective the tractor industry is worth around USD 60 billion, and the farm machinery industry is worth an additional USD 100 billion. In contrast, the Indian tractor industry is at around USD 6 billion and the farm machinery industry is at just USD 1 billion. Looking at these numbers it’s clear that India is Tractorised, but not Mechanised.
While there is some level of mechanisation, it is skewed toward land preparation. For many other operations, simple implements are used, or the work is done by manual labour (see diagram ).
Holistic Farming Solutions
With the growing realisation that farm mechanisation is imperative for increasing yield and quality, it is now time to bring in technologies that are customised, affordable and accessible to Small & Marginal farmers.
The farm machinery industry in India is largely focused on low technology implements mainly manufactured by unorganised workshops in rural areas. Hence, the manufacturing industry for these products needs to grow rapidly like that of the tractor industry driving manufacturing growth, technology development, exports, finance and employment, while enhancing rural incomes.
To this effect the central and state governments, along with several private companies, including start-ups are working towards the development of need-based, regionally differentiated farm machinery and mechanisation solutions for the country. Because of this mechanisation is expected to increase substantially in the years to come.
Going forward specialised farm machinery can be popularised through CHC’s (Custom Hiring Centers), ensuring affordability and accessibility, driving the penetration of farm equipment among small & marginal farmers, thereby significantly contributing toward making the Indian agricultural sector and its farmers ‘Atmanirbhar’.
The Ministry of Agriculture and Farmers Welfare recently launched a Multi-lingual Mobile App called “CHC- Farm Machinery” connecting farmers with Custom Hiring Service Centers situated in their locality facilitating access to mechanisation. Many private companies have set up operations in this space too.
Other reasons for Farm Mechanisation
Beyond the traditional role of putting food on every table, farmers are also important custodians of the environment.
The crop residue burning problem (especially in the northern markets) is an economic problem to solve. The key cause of crop burning is that there is no economic value for the crop residue. However, crop residue has found several uses in sustainable farming practices compared to stubble burning. These include the production of ethanol or biofuel (for mixing 25% of it with diesel), the use of crop residue for cardboard manufacturing, etc.
Specialised farm machinery like square balers are extremely important to familiarise farmers about more environment friendly options, compared with crop residue burning, while providing new means for revenue generation. These specialised machines can be popularised through CHC’s as well. With all these factors the farm machinery industry in India is poised to move into a high-growth period and is expected to transform the way India farms. However, the pace of this transformation depends on how all the stakeholders (e.g. farmers, machinery manufacturers and the government) work together in close coordination to provide an appropriate framework in terms of policy, schemes, financing and technology that is suited to drive the overall development of the Agri Sector.
