Deere & Company, USA, is the world?s largest company when it comes to manufacturing agricultural equipment. Its subsidiary John Deere India Private Limited is headquartered in Pune. The company?s global chairman and chief executive officer Samuel Allen shares his take on the
Indian agriculture scene, among other things, with Subhomoy Bhattacharjee.
Why should India, with small farm holdings, opt for mechanisation of agriculture?
I just submit that productivity growth in agriculture responds to the level of mechanisation achieved. The evidence from across the world shows that mechanisation causes a jump in productivity across small and big farms. China, for instance, has small farms and so do Japan and Turkey. Yet, in all these countries, agricultural productivity has increased. Japan has very small plots but these are highly mechanised. So, adopting higher mechanisation in agriculture has a clear benefit.
If you look at the critical enablers across most places in the world, what happened was that as land was acquired and agriculture grew bigger, these factors, in turn, allowed for larger mechanisation. That is not going to happen in India. People here value their land; the average farm size is 1.4 hectares and it is going to stay low. What we have to figure out is a way to enable solutions. Say, an agricultural contractor acquires equipment and does some of the work for farmers, or a group of farmers buys it and uses it together, or one farmer buys the equipment and leases it to others.
Because land size is not going to increase, there is a need for different solutions that allow mechanisation and increase output.
But despite the prospects of productivity improvement, is it worthwhile to make the radical changes required to bring in mechanisation to small farms?
Yes, India is no different from other countries. Take the summer season for instance. Production is not very extensive in that period and this in turn narrows the window available for crops in the rest of the year. What you then get per crop is a short time cycle. Within that, when you do things manually, often the crop is not fully developed by the time you harvest it. So this is one area where there can be a jump in productivity.
You have also referred to the water constraint in Indian agriculture…
The data I have seen shows that if India does not change its management of water for agriculture, the available water is going to be over by 2020 or thereabouts. This is where policies can bring in changes. For instance, laser levelling of farms can ensure that water is used more efficiently, going across a larger area and irrigating a larger crop land. You can also do driptape irrigation. Tremendous opportunities are available but these need to be used.
Another way in which water management can produce excellent results is through economic incentives. Give the farmer an incentive to level his field. This could also be done through other ways, for instance, if the farmer is given an incentive to opt for a particular water saving technology. Providing subsidies for such adoption is another alternative.
How about imposing water charges? That could cut down on excess usage.
May be this is not all that good an idea. There are countries that use this method, like Israel. But farmers in India are economically not in a position where they can afford to pay for water. The charging model, in my personal opinion, is not good for India. You could instead pay farmers for becoming more efficient. This is the process of creating reverse incentives, as opposed to charging for water. It is such processes that will be good for the population, basically more appropriate.
We have touched on productivity issues related to mechanisation. What about the costs of implementing mechanisation?
If you look around the world, in places that have mechanised and particularly that export agricultural commodities, the costs have come down. They have to, or production will not be globally competitive. So what you end up with with mechanisation is a reduction in the total cost of commodities, and not a rise. The challenge in places like India, which is considering mechanising on a large scale to raise productivity, is to make sure that there are plenty of opportunities for the people you free up. When you mechanise agriculture the first time, it will raise output. But at the same time, you have got to create jobs in other fields or businesses. Because it is a fact that employment opportunities in agriculture will go down.
If we looked ahead at the future, say five years down the line, what are the spin-offs from the strategy you suggest?
I don?t have a good answer for that but I can tell you, take the four crops where India is number two in the world in total output, and you will find that there is a gap in yield per hectare between here and the best abroad. Here, efficiency ranges anywhere from 20-30% less to even half as compared to best international practices. So if you said, ok let?s just get to the levels where the global output levels are benchmarked, a case could be made that India could raise its agricultural output by even 50%. What this needs is to go out there and check out what?s pulling you back. Is it education or is it mechanisation of agriculture? The plan should be to fix these gaps.
