1. >> www.nabard.org /nabardonline Taking Rural India
>> Forward FINANACING AGRICULTURAL MECHANISATION IN INDIA Dr.
Vinod Kumar Vidyarthi DGM, NABARD, Head Office, Mumbai
2. >> www.nabard.org /nabardonline Taking Rural India
>> Forward Ensuring timeliness of farm operations Reduction
of drudgery associated with various farm operations Reduction in
cost of cultivation Rise in productivity level/ net income per
hectare Helps in the conservation of the produce and byproducts
from qualitative and quantitative damages Product quality
improvement through use of post harvest machinery OBJECTIVE OF
FM
3. >> www.nabard.org /nabardonline Taking Rural India
>> Forward Small land holdings Less investing capacity of
farmers High cost of machines Inadequate repair and servicing
facilities for machines Shortage of trained man power Lack of
coordination between research organizations and manufacturers
Inadequate quality control of machines LIMITING FACTORS IN FM
4. >> www.nabard.org /nabardonline Taking Rural India
>> Forward Commercial Banks Cooperative Banks Short Term: can
not lend for investment Long Term Regional Rural Banks Non Banking
Financial Companies: Financing arrangement by Tractor companies
Lease arrangement FINANCING ARRANGEMENT FOR FM
5. >> www.nabard.org /nabardonline Taking Rural India
>> Forward GLC FLOW (Amt. Rs. crore) Year Total IC FM Share
of FM(%) 2003-04 32004 3986 12 2004-05 49247 4555 9 2005-16 75136
9695 13 2006-07 90945 10113 11 2007-08 73264 8303 11 2009-09 91447
8334 9 2009-10 107858 10211 9 2010-11 132741 12799 10
6. >> www.nabard.org /nabardonline Taking Rural India
>> Forward GLC FLOW 12 9 13 11 11 9 9 10 0 2 4 6 8 10 12 14 0
20000 40000 60000 80000 100000 120000 140000 Rs.Crore % Total IC FM
Share of FM(%)
8. >> www.nabard.org /nabardonline Taking Rural India
>> Forward PERFORMANCE OF LT-REFINANCE 21 19 14 14 13 14 13
14 8 12 21 0 5 10 15 20 25 0 10000 20000 30000 40000 50000 60000 %
Rs.Crore Year Total Refiance FM Refinance % Refinace for FM
9. >> www.nabard.org /nabardonline Taking Rural India
>> Forward ISSUES IN FM Though, India is one of the top
countries in agricultural production, in terms of farm
mechanisation, it is behind the world average. Tractor density of
India is about 16 tractors for 1,000 ha, while the world average is
19 tractors and that of US is 27. Scope for machinery other than
tractor and power tillers yet to catch our imagination. Clearly,
there is significant opportunity for mechanisation of
agriculture.
10. >> www.nabard.org /nabardonline Taking Rural India
>> Forward CHALLENGES FOR FM Highly diverse farm size &
soil types: resulting in the need for customized farm machinery and
equipment for different regions of the country. Skewed and seasonal
usage resulting in low economic viability: This calls for
innovative solutions for scaling up usage. Irrigation facility:
Best results from mechanization can be obtained if the usage is
coupled with sufficient irrigation.
11. >> www.nabard.org /nabardonline Taking Rural India
>> Forward CHALLENGES FOR FM Cattle population: Increased
mechanisation results in surplus draught cattle and their upkeep is
a concern for the farmers. Skilling: Education and training for
efficient usage of farm equipment is required to be imparted along
with knowledge about selection of appropriate machinery. Capital
investment, operational & maintenance cost: Small and marginal
farmers have cyclic nature of revenue streams resulting in limited
capital availability.
12. >> www.nabard.org /nabardonline Taking Rural India
>> Forward FINDINGS OF INTERNAL STUDY ON FM The scope for
financing tractors and other farm implements under farm
mechanisation exists & that the tractor continues to be one of
the important bankable item under the Farm Mechanisation segment.
The minimum land stipulated for tractor financing varied from bank
to bank. Raj SCARDB, 6 acres of perennially irrigated land(PIL) or
non-irrigated land of the same value was required for financing
tractors. RRB, the minimum requirement of PIL holding was 6 acres.
UCO Bank, SBI, BOB, HDFC and ICICI Bank, the minimum requirement of
PIL holding was 8 acres, 2 acres, 3 acres, 4-6 acres & 1 to 4
acres, respectively.
13. >> www.nabard.org /nabardonline Taking Rural India
>> Forward FINDINGS Post disbursement monitoring was observed
to be poor in the case of PCAARDBs and PSBs (including RRBs).
Whereas in case of Private commercial banks, the post monitoring
mechanism was found to be very aggressive. Under custom hiring, the
primary use of tractors was for farming operation viz. ploughing,
levelling, spraying, thrashing, etc. Limited use was made for
transporting of agricultural inputs, produce and also for
transportation of passengers.
14. >> www.nabard.org /nabardonline Taking Rural India
>> Forward FINDINGS contd. First time insurance of tractor
purchased out of bank loan was done by the dealer, thereafter the
renewal of the insurance was not insisted upon in majority of the
cases as the farmers were of the view that tractors were operated
only in farm field so there was no risk and need for insurance. In
many cases the mortgage clause in favour of the banks was missing
from the insurance policy.
15. >> www.nabard.org /nabardonline Taking Rural India
>> Forward WAY FORWARD Custom Hiring Centre PACS to Multi
Service Centre: taking care of the requirements of small and
marginal farmer Farmers Producers Organisation Agri-Clinic and
Agri-Business Centre Supporting the finance of second hand tractors
for SFs Sensitize SFs having operational holding of >
www.nabard.org /nabardonline Taking Rural India >> Forward
CUSTOM HIRING CENTRE NABARD commissioned study on Effectiveness of
Custom Hiring Centre (CHC) in Advancing Farm Mechanization to FACE
and CII Farmers are coming forward to set up CHCs and emerging as
entrepreneurs with the primary objective of augmenting their income
as also provide services to farmers in the catchment villages.
Other factors such as employment generation; increase in farm
productivity; usage of machines for personal requirement; making
services available to farmers and ensure farming operation are done
in a time bound manner and efficiently were cited as key drivers
for setting up CHCs. Access to bank finance and mandatory inclusion
of some machines not suited to local requirements were cited as a
barrier to setting up CHC.
17. >> www.nabard.org /nabardonline Taking Rural India
>> Forward CUSTOM HIRING CENTRE Farmers availing the services
of CHCs have benefitted majorly in terms of ease of access to farm
machines, timelines of farm operations and coping up with the issue
of labor shortage. I. Strengthening structural and operational
features of CHCs Support rental services with package of
agricultural practices: Promoting mechanization alone is not as
effective in improving farm productivity. There is need for
providing the right package of agricultural practices to the
farmers and ensuring that they have access to quality inputs
(seeds, fertilizers, other chemicals), irrigation facilities and
extension services. Improve the flow of subsidies and bank loans to
entrepreneurs: The process of subsidy disbursement was not smooth
across all the sample states. There is need for streamlining the
process and leverage technology for screening, shortlisting and
sanctioning subsidies and loans to the entrepreneurs.
18. >> www.nabard.org /nabardonline Taking Rural India
>> Forward CUSTOM HIRING CENTRE II. Focus on training and
capacity building Enhancing mechanical skills to service and
maintain machines: While entrepreneurs operating CHCs have knowhow
about machines, there is scope for improving the mechanical skills
to better service and maintain machines at the Centre to be able to
make these machines available for rental over a longer period of
time. Extend capacity building and create awareness about FM: CHCs
can form an excellent platform for extending capacity building and
creating awareness about the benefits of FM among farmers. It can
also provide a platform to educate other potential entrepreneurs in
the vicinity to venture into setting up CHCs.
19. >> www.nabard.org /nabardonline Taking Rural India
>> Forward CONCLUSIONS 1. We should think of FM in a broader
context. 2. We should design, develop and adopt machinery to suit
Indian agricultural situation. 3. Custom hiring Centres seems to
have potential to improve access to FM and is popular in few
states. 4. Credit policy should address to the constraints limiting
the bank finance flow.
20. >> www.nabard.org /nabardonline Taking Rural India
>> Forward THANK YOU
