An Overview

An Overview

by szadmin

Farm machinery is a crucial driver of agriculture development in India. The last few years have been particularly remarkable for tractor industry with total 6,34,153 tractors sold in 2013-14 which is unprecedented in any country. The trend seems to be similar with other segments of the farm machinery sector such as combine harvesters, seed drills, threshers, laser levelers, etc. The joint efforts made by Government and industry have led to such progress in mechanization over the years. The agriculture equipment market in India is presently valued at approx 6 billion USD and has enormous potential for further growth.

What has driven this growth? The two strong drivers are (a) pressure on increasing crop productivities and (b) significant reduction in supply of labour for agriculture operations. The Government of India places high priority on reducing poverty by raising agriculture productivity. Empirical evidence confirms that there is a strong correlation between farm mechanization and agricultural productivity. States with greater availability of farm power show higher productivity as compared to others. Thus, there is heavy variation in level of mechanization across different regions of India.

Secondly, agriculture is a labour intensive activity. Cost of cultivation data shows that labour accounts for more than 40% of the variable cost of production in most cases. The labour intensive crops entails high manpower requirement, which is fast depleting and posing a big challenge to crop productivities. More recently, the wages of those employed in agriculture have also increased at a much more rapid pace in last six years compared to tractor prices. This has resulted in shift from labour-intensive to mechanization intensive techniques.

Transformations have begun in the country with efficient machinery being introduced in country for improving productivity, supported by favorable policy, infrastructure and market structure. The role of farm mechanization has now gone beyond tractorization with much more emphasis on optimal use of inputs and more innovations in the pre-harvest as well as post-harvest operations. The usage of farm machinery is expected to accelerate over the years in niche segments such as sugarcane harvester, sugarcane planters, cotton pickers, rice transplanters etc.