Farm Mechanization - ICFA · Indian Tractor Market Indian Council of Food and Agriculture Farm...

FARM MECHANIZATION

Market Update

Farm Power Available

Farm Mechanization: Market UpdateIndian Council of Food and Agriculture

2

Farm Power Available on Indian Farms; 2011-14

1.73

1.84

2.02

1.55

1.60

1.65

1.70

1.75

1.80

1.85

1.90

1.95

2.00

2.05

2011-12 2012-13 2013-14

Kw

/Ha

Source: Country presentation paper, Agricultural Machinery Manufacturers Association (AMMA) India, October 2014



3

Farm Power Available on Indian Farms by Different Sources; 2011-14

13.3 13.5 13.620.1 20.1 19.8

118.2126.8

136.7

2.0 2.3 2.5

46.5 46.8 47.3

61.8 62.2 62.9

0

20

40

60

80

100

120

140

160

2011-12 2012-13 2013-14

Mil

lio

n K

w

Agricultural Workers Draft Animal Power Tractors

Power Tillers Diesel Engines Electric Motors

Source: Singh (2013); Singh et al. (2010); Singh et al. (2009)



4

Extent of Farm Mechanization at Different Levels of Value Chain Process

40%

29%

34%

37%

65%

60%

71%

66%

63%

35%

0% 20% 40% 60% 80% 100%

Soil Working and Seed

Bed Preperation

Seeding and Planting

Plant Protection

Irrigation

Harvesting & Threshing

Mechanized (%) Non-Mechanized (%)

Source: UNESCAP CSAM

Indian Farm Mechanization Market


5

Indian Farm Mechanization Market; 2015-20

320

338

358

378

400

300

320

340

360

380

400

420

2015-16 2016-17 2017-18 2018-19 2019-20

₹B

illi

on

Source: agrination.org.in

Indian Tractor Market


6

Indian Tractor Market by Volume; 2011-17

544.43

608.58

591.50

697.68

626.84

571.25

500

550

600

650

700

750

2011-12 2012-13 2013-14 2014-15 2015-16 2016-17

Th

ou

san

d U

nit

s

Source: Department of Agriculture and Cooperation, State of Indian Agriculture 2013-14, ICRA, A report on ‘Farm Mechanization in India’, TechSci Research

Indian Tractor Market


7

Indian Tractor Market by Market Players; 2016-17

50%

18%

14%

10%

6%

2%Mahindra & Mahindra Ltd.

TAFE

VST

International Tractors Ltd.

Force Motors

Escorts

Source: Company Reports

Indian Power Tiller Market


8

Indian Power Tiller Market by Volume; 2011-17

55 60

25

56

46 49

-

10

20

30

40

50

60

70

2011-12 2012-13 2013-14 2014-15 2015-16 2016-17

Th

ou

san

d U

nit

s

Source: Department of Agriculture and Cooperation, A report on ‘Indian Tractor Industry’ by ICRA, TechSci Research, DAC - Dept. of Agriculture and Cooperation

Market Drivers


9

Labor shortage is being experienced at peak seasons due to which labor is available

at a higher cost per hectare hence increased demand for mechanization.

The continuation and growth of contract farming with more entities getting

involved provides future opportunities for the expansion of the industry.

The government is promoting ‘balanced farm mechanization’ by providing

subsidy on various equipments and by supporting bulk buying through front-end

agencies.

The government also provides credit and financial assistance to support local

manufacturing of farm mechanization equipment.

The penetration of farm equipments is low with the small and marginal farmers

who own land less than 5 hectares. This segment forms over 80% of the land

holdings in the country. Thus, there is a lot of potential for increasing the penetration

and therefore growing the market size.

Rise in demand of Food Grains by 2030 to 355 MT

Market Challenges


10

Small and Scattered Land Holdings

Tractorization is practiced rather than Mechanization

The entire process of acquiring farm equipment is very tedious and cumbersome for

a farmer.

An issue that has been persistent in financing is the purchase of standalone

implements.

Farm equipment, especially the energy-efficient options, is capital intensive and is a

major investment for most of the farmers in India.

The quality and after-sales service of farm equipment is another concern, since

agriculture is largely carried out in rural parts of India.

Recommendations


11

Government can set up custom hiring centers which would facilitate hiring of

equipments by small and marginal farmers. It is further submitted that PPP model

should be employed for the purpose.

Farmers should be extended with financial assistance in the form of subsidy for the

purchase of agricultural equipments and should have the discretion to select the

quality machinery to be purchased with subsidy rather than it being pre decided vide

norms.

KVK along with corporate participation in PPP model may be utilized to increase

knowledge of farmers on the benefits of using latest farm machinery and to train

them for appropriate use of the machinery.

There is a need to develop customized farm machines and equipments with special

focus on small and marginal land holders. Therefore, dedicated funds are required to

promote research to come up with technology suitable to small and marginal

farmers.

Recommendations


12

Awareness Campaign should be initiated to sensitize rural youth about available

employment opportunities and support provided by the government to promote

training of personnel.

After sale service, operational education and performance warranty for at least three

years should be inbuilt into the marketing and sale process to avoid hardship to

users. Government should intervene and have a regulatory mechanism to ensure

after sales services to farmers.

In order to expedite the process and conserve resources, it is suggested that imported

machinery, if approved by recognized agency need not be retested. Further, some

agencies involved in testing and approval of farm machinery worldwide can be

enlisted and recognized for the purpose.

Thank You

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