The document analyzes the use of custom hiring of combined harvesters by smallholder farmers in Madhya Pradesh, India. It finds that the practice has led to increased farm mechanization, profitability, and efficiency by allowing farmers to intensify crops like soybean and wheat without being hindered by high machinery costs. A case study shows that hiring a combined harvester saves farmers time and labor while increasing yields, though it also results in some grain and straw losses. The widespread adoption of combined harvesters has been facilitated by changes in rural labor markets, government subsidies, and custom hiring services that make the machinery accessible to small farms.

1. 58th
Annual Conference of the Australian
Agricultural & Resource Economics Society,
Port Macquarie, New South Wales, 4-7 February 2014
Rural Transformation through Farm Mechanization:
Custom Hiring of Combined Harvesters
in Madhya Pradesh State of India
Madhusudan Bhattarai1
, B L Varalakshmi2
and Cynthia Bantilan3
1
Principal Scientist, 2
Scientific Officer, and 3
Program Director, Research Program - Markets, Institutions and Policies
International Crops Research Institute for the Semi-Arid Tropics, Patancheru, Andhra Pradesh – 502 324, India
Abstract
The practice of custom hiring of farm machinery has led to the
widespread use of equipment such as combined harvesters by
smallholder farmers in India, paving the way for increased farm
intensification, profitability, and efficiency.
Introduction
Farm mechanization is a very crucial factor for crop intensification
and development of agriculture, and is one of the major thrust
areas of the Government of India. Since the year 2000, the
practice of custom hiring of expensive farm machinery in India has
led to the quick adoption of combined harvesters and other farm
equipment, thereby facilitating agricultural intensification. Small-
holding farmers are no longer impeded by the huge investment
costs of buying machinery.
Table 1. A partial budget analysis of the use of combined harvesters for wheat in Papda
village, Raisen district, Madhya Pradesh, India, 2013.
BENEFITS US$/ha COSTS US$/ha
ADDED RETURNS ADDED COSTS
Rental charge of
combined harvesters
41
REDUCED COSTS REDUCED RETURNS
Reduced cost of labor for
harvesting, threshing,
etc.
140 Loss of straw using
harvester (opportunity
cost)
62
Grain losses (5%) 23
TOTAL ADDED BENEFIT 140 TOTAL ADDED COST 126
Net benefits per ha = US$ 140 – US$ 126 = US$ 14.
Objectives
• To analyze the extent of use of combined harvesters in Papda
and Rampura Kalan villages of Madhya Pradesh (MP) state in
India.
• To estimate costs and benefits of using combined harvesters
and farmers’ perceptions.
• To recommend options for their use among smallholder
farmers.
Methodology
Data on the use of combined havesters was collected from
secondary sources, farmers using these machines, entrepreneurs
renting them out and other key stakeholders in selected villages
of Madhya Pradesh, as a part of the Village Dynamics Studies
in South Asia (VDSA). The results were derived by integrating
quantitative and qualitative survey data.
The study site in India. The sale of combined harvesters in India
(source: India Market Research Bureau, 2013).
Results and Discussions
• Expansion in monocrop area: The use of combined harvesters has led to the
expansion of profitable monocrops. Soybean is now grown on 75% of the crop
area in the rainy season. Wheat occupies 80% of the crop area in winter. Farmers
were unable to attain this level of expansion earlier due to the shortage of labor
during the peak season.
• Time and labor saving: Farmers who used the combined harvester took 45
minutes to harvest, thresh and pack wheat in an acre, which otherwise takes
a week and 15 labor days (Table 1).
• Changes in labor market: The shift of rural labor from farm to non-farm activities,
their migration to cities and rising rural wages have served as incentives
to increased adoption of combined harvesters in India. Custom hiring and
government subsidy have also supported its dissemination, allowing smallholder
farmers to adopt and benefit from the combined harvesters (Singh 2010).
• Better adaptation to climate vagaries: The use of the harvester has helped
farmers cope better with and adapt to climate vagaries during the crop
cultivation period.
Conclusions
• Custom hiring has helped smallholder farmers to use costly machinery and led to
the intensification of their farm practices.
• The technical efficiency of the combined harvester needs to be increased to
minimize straw and grain losses.
• The extent of adoption and dissemination of improved technologies such as the
combined harvester are determined by a combination of factors such as the rural
labor market, agrarian structure, farm intensification, and rural transformation.
India
China
This work is
undertaken
as part of
Reference: Singh S. 2010. Agricultural Machinery Industry in India. Allied Publisher
Pvt. Ltd. India
For details, contact b.madhu@cgiar.org