INDIAN AGRICULTURE AND MECHANIZATION

by

Gajendra Singh

email: prof.gsingh@gmail.com

Second largest country in the world. May become the largest country by 2030.Total population:1.21 billion (2011)Population growth rate:1.3% annuallyMajority (68%) of people live in rural areas.

Land area: 297.3 million ha (2.4% of world)17% of population; Only 4.2% of world water; 1200 mm annual rainfallAgriculture accounts for 80% of water needs; 60% from ground water.

India: Economic Conditions

India:GDPService sector contributing: 58%; Agriculture contributing: 13% (with 50% workers); It was 56% in 1950. USA: Ag workers: <2%, 41% in 1900.Manufacturing contributing: 15%; China: 34%; Thailand: 40%.

GDP (PPP): About US$ 4 trillionPer Capita Income (PPP)=US$ 38004th largest economy after USA, China and Japan.

Agricultural Areas

India is a country with various landforms: lofty mountains to ravines, deltas, high altitude forest of Himalayas,sprawling grasslands of Indo-Gangetic plains,peninsular plateaus of South East and South West India.

CLIMATE

Climate of India is full of extremities.

Temperature from arctic cold to equatorial hot.

Rainfall from extreme aridity with less than 100 mm in Thar Desert (West India) to world’s maximum rainfall of 11200 mm in Meghalaya, Norteast India.

Indian Agriculture

Both irrigated and rain-fed (dry land)

Country grouped into 20 agro-climatic regions and 60 agro-ecological sub-regions on the basis of soil, agro-ecological conditions and physiographic situations.

Diverse: Capable of producing most of the food and horticultural crops in the world.

Indian Agriculture

Cultivated area :142 million haIrrigated: 60 m ha; Rain-fed: 82 million ha Cropping intensity: 1.37 and stagnating.

With increasing industrialization and urbanization arable land may decline.

About 100 million farm families with 250 m workers (50% of work force) contributing only 13% to GDP.

Social conditions

A very poor country.Per Capita Income: US $1300 ($3800 PPP). 35% population below poverty line (<$1.25/day).

Literacy: 75 %Inadequate and poor quality schools in rural areas.640 universities; Gross Enrolment Ratio: 20%. Share in Global Research: 4%; China: 18%.

Life Expectancy: 65 years17% population undernourished.

Only 32,000 Bank branches for 640,000 villages.

Technical Capacity: Agricultural Manpower

66 Agricultural Universities: 56 State Agri. Univ. + 5 Deemed Univ. + 1 Central Univ.+ 4 Central Universities with Agriculture Faculty.

Annual admission in Agri. & allied sciences: UG: 25,000; Masters: 8,000; PhD: 2000.ICAR institutes: 99; KVKs: 631.

Only 0.6% of Ag. GDP is invested in Agricultural Research, Education and Extension (AREE).

A large network of training centers is requiredto impart skills at gross root level particularly to farm workers.

Item 1960 1970 1980 1990 2000 2010

Agricultural land (million ha)

133 140 140 143 143 142

Irrigation pumps (million) 0.4 3.3 6.2 12.9 19.5 25

Irrigated area (percent) 19 22 28 33 34 35

Cropping intensity 1.15 1.18 1.23 1.30 1.33 1.39

Fertilizer use (kg/ha) 2 15 39 88 125 150

Grain yield (kg/ha) 700 860 1 000 1 300 1 600 1 900

Tractors (thousands) 37 146 531 1 200 2 600 4 000

Area per tractor (ha) 3 600 960 260 120 55 36

Power tillers (thousand) 0 9.5 16 31 100 200

Draft animals (million) 80.4 82.6 73.4 70.9 60.3 50

Aspects of Indian Agriculture (1960-2010)

Indian Agriculture: Present Status

Grain production (2012-13): 259 m tonsGrains in stocks (Jan 2013): 66 m tonsExports 2011-12: Rice: 9 mt; Wheat: 9.5 mt

During the15 years agricultural products:Imports: about 3-8% of total importsExports: about 11-20% of total exports

Main imports: vegetable oils and pulses.Main exports: cereals, marine products, oil meals, cashew and tea.

Out of total Indian food market, the processed segment is only 10%; semi-processed is 15%; and rest 75% is constituted by fresh foods.

About 98 percent of the fruits and vegetables produced in India are traded as fresh products. Post harvest losses may be as high as 30%.

Budget and SubsidyBudget 2013-14: Rs 16700 billion ($300 billion)Allocation: Agriculture: Rs 270 billionAllocation: Rural Development: Rs 802 billionTotal Subsidies 2013-14: Rs 2480 billionPetroleum Subsidy (2012-13): Rs 1000 billionFood Subsidy (PDS: 2012-13): Rs 1000 billionMajor items subsidized by the government: Irrigation (very low charges for Canal water);and Electricity for Agri. (lower or no charges).Fertilizer subsidy >10X investment in agriculture.

Subsidy on Agricultural Machines

Only about 1% sales receive subsidy.

Government provides subsidy and credit at reduced rate to economically and socially disadvantaged farmers. Rate of subsidy: about 25% with limit on amount.

Tractors, power tillers, combine harvesters and other farm machines must be tested according to Bureau of Indian Standards (BIS) Test Codes, by authorized test stations.

Production of tractors

1961 880 tractors1970 20,000 Net importer upto 19761980 71,000 Exports started: Africa1990 140,000 Exports grew upto 7,000/year2000 256,000 Exports grew upto 50,000/year2010 560,000 USA, Malaysia,Turkey, South 2011 630,000 Asian and African countries2012 579,0002013 690,000Of global production of tractors India produces more than 1/3rd of total tractors and more than 50% of <60 hp category. India is the biggest producer of tractors in world.

Mechanization technologies were first adopted by the large farmers [over 10ha farm size] followed by medium scale farmers [4 to 10 ha farm size]. Water lifting was the highest priority for mechanization followed by threshing, transport and tillage.

The large numbers of such farmers in states likePunjab, Haryana and Western Uttar Pradesh playeda critical role in facilitating the creation of a viable agricultural machinery and implements distributionand services sector. Such farmers were also the ones who were able to provide mechanization and other services to the more numerous semi medium[2 to 4 ha farm] and small holder farmers [1 to 2 ha]farmers.

Projections for Mechanization in India

Item 2010 2020 2030 2050

Agricultural Workers (millions) 250 300 340 350

Draft Animals (millions) 50 30 20 10

Tractors (millions) 4.0 5.0 6.0 7.0

Power Tillers (millions) 0.2 0.4 0.6 1.0

Diesel Engines (millions) 6.8 7.3 7.8 8.5

Electric Motors (millions) 18 28 35 40

Power (kW/ha) 1.8 2.5 3.5 4.5

Annual Investment in Farm Machines

1997: Estimated to be 180 billion Indian Rupeesor over US $ 5 billion (Singh, 1998). 2005: Estimated to be 300 billion Indian Rupees or over US $ 6.5 billion (IASRI, 2006). 2010: Estimated to be 500 billion Indian Rupees or over US $ 10 billion. Investment in hand operated tools & implementswill grow very slowly with slow increase in the population of agricultural workers. Investment in animal operated implements is decreasing gradually due to declining number ofdraft animals. Investment in the power operated farm equipmentis increasing significantly and rapidly.

Policy 1

Business and enterprise friendly policies, laws, and regulations as well as physical and institutional infrastructures which encourage commercial activities and

entrepreneurship in farming, input supply, produce handling, processing and marketing as well as in manufacturing will be key factors to success of agriculture in the different

states of India.

Policy 2

Reduce subsidies and invest in infrastructure, mainly, roads, electricity supply, irrigation systems and markets with storage and processing facilities in catchment areas.

57% of subsidized food grains under PDS does not reach intended beneficiaries, costing Rs 3.57 to deliver Rs 1 grains (Ajay Chhibbar, 27 Feb 2014).

Reduce interest rates on loans and taxes for purchase of equipment & machinery for agricultural operations and food processing.

Policy 3

Provide assured support prices for thefarmers produce.

Strengthen support services for research and development; testing and standards as well as for human resources development in support of agricultural development.

Policy 4

The fuel prices have been increasing. Development of bio-fuels, especially from agricultural residues, needs urgent attention.

Use of production techniques with low energy requirement (e.g. minimumtillage, Zero till planting, drip irrigation, fertigation, etc.) need to be promoted.

ChallengeThe main challenge will remain to increase the food production to feed the growing population.

With sufficient food stocks the big challenge is to curve wastage, provide adequate access and ensure judicious distribution of food.

Urgent need is to improve the income of 100 million farm families (250 million workers) cultivating 142 million ha land; 50% work force contributing only 13% to GDP.

Future Prospects (Worldwide)Based on a FAO report (2011) investment requirements for primary agriculture and its down-stream industries in 93 developing countries show that the total over 44 year period (2006 to 2050) could amount to almost

US$ 9.2 trillion (in 2009 $ terms), 46% of which will be for primary agriculture.

Almost a third (31%) of all capital needs will stem from projected mechanization needs and almost a quarter (23%) from further expansion and improvement of irrigation.Broken down by type of investment 60% (US$ 5.5 trillion) will be for replacing existing capital stocks and 40%(US$ 3.6 trillion) for growth investments.

Cummulative Investment from 2005-07 to 2050 (Billion US$; 2009)

________________________________________________________________

Total for 93 Developing Countries 9174Total in Primary Production 4236Crop Production 3505Land development, soil conservation and flood control 161Expansion and improvement of irrigation 960Mechanization (tractor & equipment) 1312Other power sources and equipment 482Livestock Production 731Downstream Support Services 4938Cold and dry storage 797 Rural and wholesale market facilities 959First stage processing 3182

Region % Share

Sub-Saharan Africa 10Near East and North Africa 13Latin America and Caribbean 20Asia 57South Asia 25East Asia 32China and India 40