Farm Mechanization Definition

Farm mechanization means higher usage of mechanical equipment – combine

harvesters, land levellers, cultivators, tractors, reapers, threshers, trolleys, mechanical
pickers etc. – for agricultural operations

Significance
As per NITI Aayog, Agricultural mechanization in India is increasingly needed–
1. Improve Productivity = Improve yield (30%), reduce costs (time, labour,
post-harvest losses – 20%) = boost farm income = Bridge inequality and
reduce rural poverty
2. Compensate for shortage of Labour for agriculture (~50% 2001  ~25%
2050 = shift to industrial, service sector, MNREGA)
3. Generate employment in industrial sector for rural youth (production,
operation, maintenance of machines)

Current Scenario & Challenges

At present, Indian farmers are adapting farm mechanization at a faster rate
compared to recent past, however
Current level of mechanization averages < 50% (developed economies = 90%)
Tractor penetration for small and marginal farmers remains abysmally low <
1%,
Because of the following reasons –
1. Small & Fragmented land holdings
2. High capital requirements and low credit worthiness of farmers
3. Inadequate rural infrastructure services (roads, fuel)
4. Non-availability of durable, light weight and low cost farm implements
tailored to Indian use case

Solutions
To promote mechanization, following suggestions have been given by various
experts
Rental model for high cost farm machinery
Ergonomically designed machinery specific to requirements of agro-climatic zone
and small & marginal farmers (durable, low cost, light weight) (suitable for large
female workforce)

Storage Significance
India’s post-harvest supply chain is fragmented with poor infrastructure and high
levels of wastage
The estimated losses due to inefficient supply chain management – lack of storage
and logistics facilities – is ~Rs 50 k Cr per annum
 Persistent seasonal inflation in vegetables and food grains despite bumper production
is often attributed to inefficient supply chain management
Price obtained by small & marginal farmers for their produce is very poor, often <
MSP, due to inadequate storage and poor connectivity with the Mandis. They depend
on the mercy of local money lenders, merchants etc. for selling their produce

Challenges
Stockholding capacity has not kept pace with increase in production and
diversification into perishable products like horticulture etc. Key challenges in
warehousing are –
Limited storage capacity ~70% shortfall in total capacity needed for storage of
food grains
Cold storage facilities available are also inadequate for all type of food items
Storage capacity concentrated towards selected crops ~75% cold – potato
Non-uniform regional distribution of warehousing facilities (concentrated in
Punjab, Haryana, UP, AP)
Lack of supporting infrastructure like logistics, power etc.

Solutions & Govt. Interventions

Over the last few years Govt. has taken several initiatives to promote private
investment in warehousing
1. The Warehousing Development and Regulation act (Negotiable
Warehouse Receipts = Post Harvest Loans)
2. The Private Entrepreneur Guarantee Act (FCI revenue guarantee)
3. Subsidies and Financial Incentives (Income Tax benefits, Investment
subsidy, 100% FDI allowed in agro-infrastructure)
4. Agricultural Market infrastructure scheme under Integrated Scheme
for Agricultural Marketing & Grameen Bhandaran Yojna for
strengthening of Agro-market primary processing (grading, sorting,
standardization, certification etc.) & storage facilities
5. Kisan Rail = Refrigerated Coaches in Train, Krishi Udaan = Flights to
transport agricultural cargo, NE & Tribal districts exotic fruits & flowers
6. Agriculture Infrastructure Fund: medium - long term debt financing
facility for investment in post-harvest management Infrastructure and
community farming assets through interest subvention, financial support
& Credit Guarantee (Rs 1 L Cr); Beneficiaries: PACS & other farmer
cooperatives, FPOs, agro-entrepreneurs, PPPs

Conclusion
Post-Harvest supply chain is one of the critical levers that can resolve some of the
key issues plaguing Indian agriculture