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Need farm mechanisation atmanirbharta

Domestic farm machinery prowess is intrinsic to the idea of atmanirbhar krishi. The government must prioritise India-made farm machinery for its procurement scheme, while encouraging local production with PLIs

Need farm mechanisation atmanirbharta
Despite being highly organised, there is still a long way to go. While there is some level of mechanisation beyond tractors, it is largely skewed toward land preparation.

By Hemant Sikka

India is one of the largest agricultural economies in the world with low levels of mechanisation due to factors like affordability and accessibility of expensive machinery, being a deterrent to the use of such technologies. Hence mechanisation on farmlands holds the key, for sustainable and efficient development of this sector, as well as that of the rural economy.

So far growth of India’s agri sector has been on account of several positive factors related to the rural economy, including progressive policies towards agriculture, also leading to growth of the domestic tractor industry. Farm mechanisation in India may have made strong strides in recent years, with India as the largest tractor market in the world, which has had a significantly positive impact on the use of machinery on farmlands in India including output value, income and return rate of all types of crops.

Despite being highly organised, there is still a long way to go. While there is some level of mechanisation beyond tractors, it is largely skewed toward land preparation. For many other operations, simple implements are used, or the tasks are done by manual labour. Mechanisation also varies greatly by region, with states in north India having high levels of mechanisation due to highly productive land in the region, as well as declining availability of labour force.

Having said that beyond tractors, Make-in-India farm machinery holds the key to enable India to realise its dream of ‘atmanirbarta’. Creating self-reliance in farm machinery manufacturing is a critical step towards ensuring mechanisation of India’s farmlands and India needs a range of farm products and implements to increase productivity on its farmlands.

The use of modern machinery is currently being promoted both by the private and public sectors, with several initiatives being taken by the government, such as the Sub-Mission on Agricultural Mechanisation (SMAM) under National Mission on Agricultural Extension and Technology, Rastriya Krishi Vikas Yojana (RKVY) and Mission for Integrated Development of Horticulture (MIDH).

Prime minister Narendra Modi’s mission of making India ‘atmanirbhar’ is closely linked with creating an ‘atmanirbhar Krishi’, and this includes empowering farmers with efficient, technology-driven systems to improve productivity and efficiency. However, the farm mechanisation sector has a far more complex structural composition, with the performance of the sector dependent on the interplay of factors that include financial aspects, such as capital and rate of interest, lack of data, small and scattered landholdings etc.

Despite all this, to effectively mechanise India’s farmlands, we need to innovate and make farm machinery domestically, to ensure growth of agriculture, while ensuring growth of the farm mechanisation, especially in the context of diminishing agricultural labour.

The government can support India’s farm mechanisation programme by initiating a series of reforms, including but not limited to promoting indigenous R&D, and extend support for crop-specific mechanisation technologies. This will also boost India’s competitiveness at the global level.

Restrict imports of farm machinery

Import data shows that in eleven months of FY21 (April 2020 to February 2021) the value of farm machinery imported was around `1,185 crore compared to `477 crore in FY 2018, i.e. 148% growth in three years. In FY21, 63% of imported farm machinery by value came from China, making China-based manufacturers significant beneficiaries of the SMAM (Sub-Mission on Agricultural Mechanism) scheme.

Fully imported products dominate two categories of farm machinery, crawler type combine harvesters and rice transplanters both of which are major beneficiaries of SMAM. In FY 21 around 70 % of crawler type combines harvesters sold in India were imported. In the case of rice transplanters around 60 to 70 % were imported. Global manufacturers were major beneficiaries in both categories.

Need for procurement assistance

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The various government-run (states and the Centre) schemes that provide financial assistance for procurement of farm machinery (like SMAM) provide no distinction between a product fully designed and developed in India for Indian farm conditions and a product designed and developed abroad and imported into India. These schemes provide equal amount of subsidy to all products and thus do not incentivise businesses who have invested in India, to design and develop these products.

Need a farm-machine PLI 

India is “tractorised”, not “mechanised”. Globally, the tractor industry is only 38% of the total industry (tractor + farm machinery); here, it is 80% of the total industry. There is a need for incentivising the farm machinery industry through a PLI scheme to deliver “best in class” products for domestic and export markets.

In conclusion, the Indian tractor industry has been at the forefront of efforts to achieve self-reliance in mechanisation. We may have progressively built an entire ecosystem, while launching strategic finance and rental initiatives to make tractors more accessible and affordable to farmers. However, going forward and with the right approach, farm machinery, a $100-plus billion global industry, has enormous potential and scope to realisePM Modi vision of ‘Atmanirbhar Bharat’ with farm products made and developed in India for India. 

(The author is president, farm equipment sector, Mahindra & Mahindra Ltd)

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First published on: 11-10-2022 at 05:40:00 am