Mechanization & Technology Division,Department of Agriculture & Cooperation,

Ministry of Agriculture,Krishi Bhawan,

New Delhi

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Farm Mechanization

Farm Mechanization: EverywhereFarm Mechanization: Everywhere

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Tillage & seedbed

Preparation

Tillage & seedbed

Preparation

Sowing/ PlantingSowing/ Planting

Fertiliser ApplicationFertiliser

Application IrrigationIrrigation HarvestingHarvesting Post Harvesting

Post Harvesting

Inter CultivationInter Cultivation

Plant ProtectionPlant Protection

Mechanized Solutions for whole chain

Mechanisation is clearly the answer to key performance parameter at every stage of cropping

cycle

Mechanisation is clearly the answer to key performance parameter at every stage of cropping

cycle

INDIAN AGRICULTURE STRENGTH

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•Highest Arable Land - 47% of total land

against Avg. 11 % in the world

•Round the Year Cultivation - 20

Agro-climatic regions and 46 Soil types suited

for round the year cultivation

•Ranks first in production of Pulses, Tea, Jute

and allied fibers

•Second largest producer of Wheat, Rice,

Groundnut, Fruits and Vegetables, Sugarcane &

Third largest producer of Mustard, Potatoes,

Cotton lint, etc.102.8 Million Farmers, over 7.5% owns > 4 ha. Avg farm land size <2 ha,

LARGE > 10 ha

(1.2 mil)Medium 4-10 ha

(6.3 mil)

Semi medium 2-4 ha

(13.1 mil)

Small 1 -2 ha

( 20.9 mil)

Marginal < 1 ha

(61.3 mil)

Average Land Holding and Number of Farmers

Farm Mechanization: Key Driver

04/22/234 Productivity has positive correlation with Mechanization level

FICCI-YES Bank Report, 2009

Farm Mechanization : Key Driver for ProductivityFarm Mechanization : Key Driver for Productivity

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Increase in Production

Productivity increase [Yield/ha]

Enhancing Cropping intensity

Farm MechanisationKey Driver

Means

Objective

Need For Accelerated Farm MechanizationNeed For Accelerated Farm Mechanization

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Essential driver for sustaining agricultural growth

Positive correlation between farm power availability and agricultural productivity

Addressing scarcity of agricultural labourClimate Change MitigationNotwithstanding advantages:

Growth of farm mechanization (farm power/ha) is poor in last decade ; and

Level of mechanization is significantly low in many potential regions ( Eastern, North Eastern)

The Need The Need

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To bridge existing policy gaps and to envisages an inclusive growth of farm mechanization;

One integrated Mission aiming an accelerated but inclusive growth of agricultural mechanization in India;

Sub Mission on Agricultural Mechanization (SMAM)

Focus AreasFocus Areas

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Small and Marginal Farmers;Reaching the unreached:

Lowly mechanized villages;Custom Hiring Services:

Entrepreneurship;Creating ownershipCapacity/Awareness

building

Mission Objectives

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Increasing the reach of farm mechanization to small and marginal farmers and to the regions where availability of farm power is low;

Offsetting adverse ‘economies of scale’ and ‘higher cost of ownership’ of high value farm equipment by promoting ‘Custom Hiring Centre’ for agricultural machinery;

Passing on the benefit of hi-tech, high value and hi-productive agricultural machinery to farmers through creating hubs for such farm equipment.

Mission Objectives

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Promoting farm mechanization by creating awareness among stakeholders through demonstration and capacity building activities;

Ensuring quality control of newly developed agricultural machinery through performance evaluation of newly developed agricultural machinery and equipment and certifying them at designated testing centers located all over the country.

Proposals on Agricultural Mechanization during 12th Five Year Plan

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Sr.No. Components

1 Promotion & Strengthening of Agricultural Mechanisation through Training Testing & Demonstration

2 Post Harvest Technology and Management

3 Financial assistance or Procurement Subsidy for selected Agriculture Machinery and Equipments

4 Establishment of farm Machinery Banks for Custom Hiring

5 Establishing Hi-Tech Productive Equipment Centres to Target Low Productive Agricultural Regions.

6 Enhancing Farm Productivity at Village Level by introducing appropriate farm mechanization in selected villages.

7 Creating ownership of appropriate farm equipment among small and marginal farmers in the eastern/north eastern regions.

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Sub ComponentPattern of Assistance

Implementing Agencies

Beneficiaries

Human Resource Development and Capacity building in the field of farm mechanization through in house/ at farmers’ field training conducted by FMTTI’s

Not ApplicableFarm Machinery Training & Testing Institutes

Farmers & other stake holders

Testing of agricultural machines and equipments for their performance evaluation and quality up-gradation through existing FMTTIs.

Not Applicable

Farm Machinery Training & Testing Institutes

Manufacturers/Trade /Importer of agriculture equipments

Procurement and Demonstration of newly developed agricultural / horticultural equipments at farmers’ fields. An illustrative list of equipment eligible for demonstration is at Annexure-A

100% on procurement of equipment and Rs. 5000/-per demonstration in all areas except in hilly regions where it will be Rs. 7500/- per demonstration.

State Governments/ICAR Institutions

Farmers

Training of farmers/users/stakeholders by Institutions identified by State

Govt./ICAR

Rs. 4000/- per trainee per week. Including boarding/lodging and transport

Institutions identified by State Governments/ICAR

Farmers & other stake holders

Strengthening of designated SAU’s/ICAR Institutions/Govt.

Agencies for undertaking testing of agricultural equipment

One time grant upto Rs. 1.5 crore

Designated SAUs /ICAR Institutions/Government agencies

Designated SAUs /ICAR Institutions/Government agencies

Component No.1:Promotion and Strengthening of Agricultural Mechanisation through Training, Testing and Demonstration

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Sub Component Pattern of Assistance Implementing

AgencyBeneficiaries

Establishment of units for transfer of primary processing technology, value addition, low cost scientific storage, packaging units and technologies for bi-product management in the production catchments. An illustrative list of equipment eligible for this sub component.

50% of the project cost subject to ceiling of Rs. 6 lakh per project for SHG/UG/Cooperatives/NGO;sOR 50% of the project cost subject to ceiling Rs. 2.5 lakh per for individual beneficiary.

State Governments/ICAR

Self Help Group (SHG)/ User Groups (UG) of farmers, Cooperative Societies of Farmers and NGOs /Farmers/Rural Entrepreneurs

Procurement and Demonstration of newly developed /appropriate Post Harvest Technologies.An illustrative list of equipment eligible for demonstration.

100% of the procurement cost of the equipment AND

Rs. 5000/- per demonstration

For hilly region assistance will be Rs. 7500/- per

demonstration

State Governments/ICAR

Farmers/End users

Training of Farmers, Entrepreneurs and Scientists in areas related to Post Harvest Technology.

Rs. 4000/- per trainee per week. Including

boarding/lodging and transport

State Governments/ICAR

Farmers and other stake

holders

Component No.2: Post Harvest Technology & Management

Sub Component Pattern of AssistanceImplementing

AgenciesBeneficiaries

Tractor upto 25 hp (PTO)

50% of cost of procurement subjected to a ceiling of Rs. 1.75 lakh. Additional 20% assistance to small and marginal farmers

State Government

Individual farmers

Tractor above 25 hp (PTO)

50% of cost of procurement subjected to a ceiling of Rs. 2.0 lakh

State Government

Individual farmers

Power Tiller with

implements

50% of cost of procurement subjected to a ceiling of Rs. 1.25 lakh. Additional 20% assistance to small and marginal farmers

State Government

Individual farmers

Combine Harvesters of

all types

50% of cost of procurement subjected to a ceiling of Rs. 5.0 lakh

State Government

Individual farmers

All other self propelled equipment

including Plant Protection equipment

50% of cost of procurement subjected to a ceiling of Rs. 1.25 lakh. Additional 20% assistance to small and marginal farmers

State Government

Individual farmers

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Component No.3:Financial assistance or Procurement Subsidy for selected Agriculture Machinery and Equipments

All kind of tractor driven equipment/

implements including Plant

Protection equipment

50% of cost of procurement subjected to a ceiling of Rs. 0.75 lakh. Additional 20% assistance to small and marginal farmers

State GovernmentsIndividual farmers

All manual /animal drawn

equipment/implements/Tools

including Plant Protection equipment

50% of cost of procurement subjected to a ceiling of Rs. 0.50 lakh. Additional 20% assistance to small and marginal farmers.

State Governments Individual farmers

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Individual Ownership OR. Custom HiringIndividual Ownership OR. Custom Hiring

Key Question is How to cater marginal and small farmers who aggregate to > 80% of cultivators

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Establishment of farm Machinery Banks for Custom Hiring

a) Procurement subsidy for establishment of Custom Hiring Centers

b) Financial support to Private Entrepreneurs for setting up Custom hiring Centers through creation of Credit Guarantee Fund

c) Financial support to Private Entrepreneurs for setting up Custom hiring Centers through creation of Venture Capital Fund

Component No.4

Component No.4(a):Procurement subsidy for establishment of Custom Hiring Centers

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Pattern of Assistance

Implementing Agencies

Beneficiaries

50% of the total cost of procurement subject to a limit of Rs. 0.30 Crore per Centre.

State Govt.

Individual Entrepreneurs/Self Help Group (SHG)/ User Groups (UG)

of farmers, Cooperative Societies of

Farmers

Ministry of Agriculture

Government of India

Credit Guarantee Fund

Implementing Agency

Entrepreneurs

May be parked

with NABARD/

NCDC

In the beginning ,Government may be contribute

100% share of Corpus., Later

banks ,manufacturers may be join

increase the corpus.

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Financial support to Private Entrepreneurs for setting up Custom hiring Centers through creation of Credit Guarantee Fund.

May be NABOCNS/

NAFED/NCDC

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Sr.No

Silent Features of Credit Guarantee Fund

1. Upto 80% of Initial Capital Cost (including working capital) will be financed/refinanced by the CGF holders against inadequate/without collateral. Entrepreneurs will bring remaining 20% either through own or through financing. Assets thus created will be hypotheacated as per extent norms.

2. All individuals / cooperatives/ NGOs are eligible to avail the facility.

3. There will be a maximum limit of investment in each centre.

4. Entrepreneurs will be provided three years grace period that include EMI and interest. Opportunity cost for far going EMI / interest will be adjusted against CGF.

5. Implementing agency shall be the single – window –interface between entrepreneurs and CGF holders.

6. IA will help creating/building assets.

7. IA will charge the stipulated service fees both from entrepreneurs as well as from CGF holders.

8. Entrepreneurs will pack back the loan after grace period as per condition of the loan.

Ministry of Agriculture

Government of India

Venture Capital Fund

Implementing Agency

Entrepreneurs

May be parked

with NABARD/

NCDC

In the beginning ,Governmen

t may be contribute 100% share of Corpus.,

Later banks ,manufacturers may be join increase

the corpus.

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Financial support to Private Entrepreneurs for setting up Custom hiring Centers through creation of Venture Capital Fund

May be NABOCNS/

NAFED/NCDC

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Sr.No

Silent Features of Venture Capital Fund

1 Upto 80% of Initial Capital Cost (including working capital) will be funded. Entrepreneurs will bring remaining 20% either through own or through financing.

2 All individuals / cooperatives/ NGOs are eligible to avail the facility.

3. There will be a maximum limit of investment in each centre.

4 Entrepreneurs should pay back the VC amount within a stipulated period and after availing initial grace period.

5 Implementing agency shall be the single – window –interface between entrepreneurs and VCF holders.

6 Assets will be created / built by the IA on behalf of VCF holders and will be on lease to entrepreneurs.

7. There will be a profit sharing model between VCF holders and entrepreneurs.

8. IA will charge the stipulated service fees. After full realization of VC assets will be transferred to entrepreneurs.

Operationalisation of VCF/CGF

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The Implementing agency(IA):To act as sole ,single window interface between fund

holder and entrepreneurTo provide end –to –end solution to Entrepreneurs

starting from Project Appraisal sanctioning of Loan, assets creation ,technical support etc.

To monitor the performance of Custom Hiring Centres and appraisal potential strength /weaknesses.

To create awareness about the scheme and market it among potential users through road show ,print advertisement ,electronic media etc.

IA will charge service cum consultancy fees at a stipulated rate both from fund holder as well as from Entrepreneurs.

Operationalisation of VCF/CGF

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The Implementing agency(IA):To act as sole ,single window interface between fund

holder and entrepreneurTo provide end –to –end solution to Entrepreneurs

starting from Project Appraisal sanctioning of Loan, assets creation ,technical support etc.

To monitor the performance of Custom Hiring Centres and appraisal potential strength /weaknesses.

To create awareness about the scheme and market it among potential users through road show ,print advertisement ,electronic media etc.

IA will charge service cum consultancy fees at a stipulated rate both from fund holder as well as from Entrepreneurs.

Component No.5:Procurement subsidy for establishment of Hi

Tech Hub

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Pattern of Assistance

Implementing Agencies Beneficiaries

40% of the total cost of procurement subject to a limit of Rs. 1.0 Crore per Hub.

State Govt.

Individual Entrepreneurs

/Self Help Group (SHG)/ User

Groups (UG) of farmers,

Cooperative Societies of

Farmers

Component No.6:Enhancing Farm Productivity at Village Level by introducing appropriate farm

mechanization in selected villages.

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Pattern of Assistance

Implementing Agencies

Beneficiaries

80% of the total cost of

procurement upto a limit of Rs. 10 lakhs

per village. *

State Govt.

Farmers /SHG/User Groups/ Farmer’s cooperatives in

villages where level of farm

mechanization is very less.

Component 7: Creating ownership of appropriate farm equipments among small and marginal farmers in the eastern /north eastern regions

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Pattern of Assistance

Implementing AgencyBeneficiari

es100% of the total cost of procurement upto

a limit of Rs. 1.25 lakhs per farmers. **An illustrative list of eligible equipment for this component

State Governments

Small/Marginal

farmers in eastern/nort

h eastern region

04/22/2328

THANKING YOU