The Farm Machinery Industry in India is an integral part of the agricultural sector, responsible for the production and supply of a range of machinery, equipment, and tools used in various farming activities. It aims to improve productivity and efficiency in farming operations. However, there are several challenges that it currently faces, which have been highlighted in the recent report by the National Council of Applied Economic Research (NCAER), titled “Making India a Global Power House on Farm Machinery Industry.” This article delves into these issues and discusses potential ways of revitalising this industry.
Understanding the Farm Machinery Industry
The Farm Machinery Industry is an industry sector that produces and supplies a range of machinery, equipment, and tools used in agriculture and farming activities such as ploughing, planting, harvesting, and more. These machines are designed to improve productivity and efficiency in farming operations, which encompasses small-scale and large-scale farming equipment. Examples of products offered by this industry include tractors, combine harvesters, irrigation systems, tillers, and more.
Challenges Faced by the Farm Machinery Industry
There are several significant challenges that the Farm Machinery Industry in India is currently contending with.
Limited Domestic Demand: Despite the high demand for farm machinery, there’s a stark mismatch between what the organised farm machinery sector produces and the needs of small and marginal Indian farmers.
Dependence on Imports for Non-Tractor Machinery: Tractors drive the farm machinery exports, while non-tractor farm machinery imports primarily fuel the farm machinery imports. Most of these imports, accounting for 53%, come from China, indicating a lopsided trade scenario.
Lack of Adequate Power: As the intensity of cropping increases, the turnaround time reduces drastically. Adequate farm power is crucial for timely farm operations to increase production and reduce losses. However, India’s farm power availability lagged at 2.49 Kw/ha in 2018-19, much lower as compared to countries like Korea (+7 kw/ha), Japan (+14kw/ha), USA(+7kw/ha).
Revitalizing the Farm Machinery Industry
The following measures could potentially revitalise India’s Farm Machinery Industry, making it more efficient and sustainable.
Encourage Local Innovation: Entrepreneurship ecosystems should be created in local education institutes in collaboration with farm machinery firms. Furthermore, district-level patent offices need to be opened and strengthened to cater to the needs of local communities.
Non-tractor Farm Machinery Cluster: A non-tractor farm machinery Science & Technology Cluster needs to be set up under the aegis of the Science & Technology (S&T) Cluster programme.
Level-playing Field for Indian Manufacturers: Indian manufacturers face unfair competition due to lax public procurement norms. It is recommended that the revised public procurement norms privileging ‘Make in India’ goods be followed for all farm machinery sold under government subsidy on government DBT portals.
Vision for Export Hub: While the Ministry of Agriculture & Farmers Welfare is promoting farm mechanization through various schemes like the Sub-Mission on Agricultural Mechanization Scheme, India needs a definitive vision for the next 15 years to transform itself into a production and export hub for non-tractor farm machinery.
Last Modified: February 20, 2024