Consolidated land holdings key to capitalise agri-mechanisation: Economic Survey

The predominance of small operational holding in the agriculture sector calls for consolidation of land holdings to capitalise the benefit of agricultural mechanisation, the Economic Survey 2017-18 noted.

As per the survey, Indian farmers are adapting to farm mechanisation at a faster rate in comparison to recent past, reflected by the extensive sale of tractors.

Indian tractor industries have emerged as the largest in the world and account for about one-third of total global tractor production, it added.

According to the World Bank estimates, half of the Indian population would be urban by the year 2050.

It is estimated that the percentage of agricultural workers in the total workforce would drop to 25.7 percent by 2050 from 58.2 percent in 2001. Thus, there is a need to enhance the level of farm mechanisation in the country.

Due to the intensive involvement of labour in different farm operations, the cost of production of many crops is quite high. Human power availability in agriculture also increased from about 0.043KW/ ha in 1960-61 to about 0.077 KW/ ha in 2014-15. However, as compared to tractor growth, increase in human power in agriculture is quite slow.

Over the year, the survey stated that the shift has been towards the use of mechanical and electrical sources of power. In 1960-61, about 93 percent farm power was coming from animate sources, which has reduced to about 10 percent in 2014-15.

On the other hand, mechanical and electrical sources of power have increased from 7 to 90 percent during the same period.

According to the Economic survey, there is a need to innovate custom service or a rental model by institutionalisation for high cost farm machinery such as combine harvester, sugarcane harvester, potato combine, paddy transplanter, laser guided land leveler, rotavator to reduce the cost of operation and it can be adopted by private players or state or central organisation in major production hubs.

Agricultural R&D is the main source of innovation, which is needed to sustain agricultural productivity growth in the long-term, the survey said. The actual expenditure of Department of Agricultural Research and Education/Indian Council of Agricultural Research has increased from Rs.5393 crore in 2010-11 to Rs.6800 (BE) crore during 2017-18.

Furthermore, the compound annual growth rate of expenditure has been 4.2 percent over the years and in recent years' expenditure has been on the higher side. During the current year (2017-18), investment in Agriculture Research and Education protected new Agricultural innovation by filling 45 patent applications at Indian Patent Office (IPO) and the cumulative patent applications have now risen to 1,025. 10 copyright and 12 trademark applications were filed by ICAR for products and processes.

To meet various obligations arising from interest subvention being provided to the farmers on short-term crop loans, Rs.20,339 crore was approved by the Government in 2017-18.

The survey further added that this institutional credit will help in delinking the farmers from non-institutional sources of credit, where they are compelled to borrow at usurious rates of interest. Since the crop insurance under Pradhan Mantri Fasal Bima Yojana (PMFBY) is linked to availing of crop loans, the farmers would stand to benefit from both farmer oriented initiatives of the government, by accessing the crop loans.

The government has been undertaking market reforms with a view to ensuring that the farmers benefit from remunerative prices for their produce in the market. The electronic National Agriculture Market (e-NAM) that was launched by Government on April, 2016 aims at integrating the dispersed APMCs through an electronic platform and enable price discovery in a competitive manner, to the advantage of the farmers.

While the farmers are advised to undertaken on-line trade, it is also important that they avail themselves of post-harvest loans by storing their produce in the accredited warehouses.

The loans are available to Kisan Credit Card (KCC) holding small and marginal farmers at interest subvention of 2 percent on such storages for a period of upto six months. This will help the farmers to sell when they find the market is buoyant, and avoid distress sale. It is, therefore, needful for the small and marginal farmers to keep their KCCs alive, the survey added.

Reiterating the government's vision to double the income of the farmers by 2022, the survey said several new initiatives were launched that encompass activities from seed to marketing. The credit from institutional sources will complement all such government initiatives like Soil Health Card, Input Management, Per Drop More Crop in Pradhan Mantri Krishi Sinchai Yojana (PMKSY), PMFBY, and e-Nam, the survey noted.

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

Dear Reader,

Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.

We, however, have a request.

As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.

Support quality journalism and subscribe to Business Standard.

Digital Editor

Business Standard is now on Telegram.
For insightful reports and views on business, markets, politics and other issues, subscribe to our official Telegram channel