Gradual change underway

Gradual change underway

MECHANISATION OF AGRICULTURE : Mechanisation has helped farmers stay afloat by cutting costs at a time when agriculture is becoming highly unremunerat

Mechanisation of agriculture, especially in harvesting, has triggered a discernible, albeit gradual transformation of the rural economy. Using machines in harvesting has been rapid and overwhelmingly visible. Mechanisation of parts of the agricultural value chain is not new. Tractors have been used since the 1980s. The adoption of mechanical harvesters started in earnest about 7-8 years ago.

In south India, these changes are visible in large tracts where paddy cultivation is central to the rural economy. In many places, the rapid adoption of mechanical harvesters is reminiscent of the boom in the truck business in the 1980s and early 1990s which created a whole new ecosystem that was non-existent.

The need to adopt harvesters was triggered by the increasing cost of labour which was largely a consequence of increased emphasis on education and migration to cities. Additionally, the easy availability of financing meant that it required less upfront payment to invest in a mechanical harvester. As a generalisation, the cost varies from Rs 10 lakh to Rs 18 lakh. Each harvester requires an initial investment of about Rs 5 lakh.

Broadly, there are two types of mecha­nical harvesters: ‘chain’ harvesters and ‘tyre’ harvesters. The difference between the two is that a chain harvester can work even when the soil is soft. However, chain harvesters require larger investments by way of higher cost, number of staff and other forms of maintenance that makes them less preferable. The major financiers of mechanical harvesters are the Non-bank finance companies (NBFCs) rather than banks. A prospective buyer must possess at least 4-5 acres of land before they are eligible for a loan.

A large number of the harvester owners are usually those with higher than average holdings (usually above 10 acres) keen on increasing their incomes after the completion of their own agricultural operations. It takes a harvester an hour to harvest one acre. They can work for about 12 hours in a day. The charges for harvesting an acre varies from Rs 1,200 to Rs 2,000 depending on urgency of the farmer, the number of machines operating in the vicinity and personal relationship between the harvester operator and the farmer.

The net profit excluding labour and other costs for the owner varies from Rs 500 - Rs 1,000 per acre. In a good season, a harvester owner makes a net profit of about Rs 2 lakh excluding finance costs. An overwhelming part of their business is through ‘brokers’ and even referral by old customers.

The increased adoption of harvesters is grounded in the cost savings that it facilitates and the speed that it offers. In the past decade, the cost of manual labour has more than doubled while in the more prosperous paddy cultivating areas, it has increased by at least three times. Moreover, labour is not easily available during peak season. It takes about 10-12 labourers working for at least half a day to harvest an acre while the machine it takes one hour.

The total cost of using manual labour for harvesting is Rs 4,000-Rs 5,000 per acre. The problem of mobilising manual labour and its related logistics compou­nds with the increase in the size of landholding. Hence, a farmer with 5-10 acres of land can complete harvesting in a maximum of one day, unlike in the past when it required at least a week in normal times and longer during peak season. This waiting time increases the cost incurred in mobilising labour with a looming risk of losses that may strike in case of a cyclone.

Net result

Thus, the net result of mechanisation is that the harvesting process is not only cheaper but also faster. In fact, it has helped agriculturalists stay afloat by cutting costs at a time when agriculture is becoming increasingly unremunerative. As a generalisation harvesting and sowing are the most labour intensive parts of cultivation.

Thanks to mechanisation and the concurrent improvement in transportation, communication and banking, it now takes a maximum of 3-5 days to harvest the crop and deliver it to the doorsteps of the buyer in the market. This is in sharp contrast to the past when it took 30-45 days for harvesting, weighing and delivering it to the buyer. Thus, an important economic impact of mechanisation is that it has shortened the agriculture production cycle from the previous 4-5 months to the present 75-80 days.

This in turn has helped speed up almost all those parts that were dependent on agricultural production apart from reducing anxiety about the timely completion of harvesting and more free time at their disposal. This enables them to take up a broad range of activities – from business to more active participation in politics. In many parts, this increased availability of time has served to reinforce the demand for more harvesters as an additional and profitable diversification.

This shortening of the agricultural production cycle along with other changes like spread of banking, technology and 24-hours television has profoundly altered the way people in rural areas live, work and perceive the world around them. There are two other interesting facets to mechanisation: First, rather than leading to increased unemployment in the villages, the increased attraction was a consequence of a shortage of labour and its increasing cost. Migration to towns and increased emphasis on education played an important part in the growing shortages.

Second, adoption of mechanisation often defies conventional economic logic in that the areas which have embraced mechanisation in earnest were not those areas where labour was more expensive but rather those which are considered “backward”. In Andhra Pradesh and Telangana, the areas with a large density of harvester ownership are not the coastal parts where labour is expensive and in short supply but rather in the poorer districts like Mahabubnagar where is not uncommon for farmers to own more than one harvester.

(The writer is an independent researcher based in Andhra Pradesh and is associated with Institute for Development and Research in Banking Technology, Hyderabad)