Labour scarcity and farm mechanisation

LABOUR SCARCITY AND ITS
IMPLICATION FOR FARM
MECHANIZATION IN INDIA
PRIYANKA UPRETI
20499
M.Sc. Ag. Economics
1

SCHEME OF PRESENTATION
1. Introduction
2. Trends in the agricultural workforce
3. Reasons behind labour scarcity
4. Impact of labour scarcity
5. Strategic options for labour shortage
6. Farm mechanization as a solution
7. Summary and conclusion 2

1. INTRODUCTION
 The notion of surplus rural labour and zero marginal product and
opportunity cost of labour does not seems valid today.
 Faster growth and employment in other sectors is causing decline in the
portion of agricultural workers to the total workers, while the
corresponding ratio in the secondary and tertiary sectors is on the rise.
 Even though India has the second largest manpower in the world, all sectors
of the economy have been affected by the scarcity of labour, specially
agricultural sector because of significant movement of rural labour from
farm to non-farm activities.
 Impact on agriculture: reduction in crop yield, reduction in cropping
intensity and changes in traditional cropping pattern.
3

TOTAL WORKFORCE VS. AGRICULTURAL WORKFORCE
(2011-12)
Total population
1.2 billion
Total workforce
467 million
Agricultural sector
228.3 million
(48.9%)
Secondary sector
110.7 million
(23.7%)
Tertiary sector
127.8 million
(27.4%)
Rest of population
743 million
Source: FICCI report, 2015
4

INTER - SECTORAL DIFFERENCES IN WORKER
PRODUCTIVITY
Sector 1993-94 2009-10 CAGR (%)
Agriculture 5,349 8,448 2.9
Industry 8,693 24,666 6.7
Construction 14,067 13,821 -0.1
Services 18,302 42,016 5.3
Total 7,476 15,863 4.8
5
(at 1986-87 prices,
NDP in Rs/employed worker)
Source: Chand and Srivastava, 2014

2. TRENDS IN THE AGRICULTURAL WORKFORCE
Source: FICCI report (2015)
• Goldman Sachs (2014)
calculated that labour is 4
times more productive in
industry and 6 times more
productive in services
compared to agriculture in
India.
• India is experiencing not
only declining share of
agriculture in total
employment but also a
significant decline in absolute
number of people employed
in the agricultural sector.
“net migration to other
sectors”
People employed in agriculture and total employment
6

CONTRIBUTION OF STATES TO AGRICULTURE LABOUR FORCE
REDUCTION: 2004-05 TO 2011-12
State Agricultural labor
(million)
Reduction (million)
2004-05 2011-12
UP 43.30 34.83 8.47
Karnataka 17.60 12.91 4.69
West Bengal 15.50 11.79 3.71
Bihar 21.30 17.67 3.63
Rajasthan 17.40 13.83 3.56
Others 143.83 137.31 6.52
Total 258.93 228.36 30.57
7

LABOUR INTENSITY ACROSS CROPS
Note: Man hours for crops are an average across states, data pertains for 2011
Total Area Under Paddy,
Wheat, Groundnut,
Cotton, Sugarcane
8

LABOUR INTENSIVE CROPS VS AGRICULTURAL LABOUR SHIFT
FROM 2004-05 TO 2011-12
9

SUPPLY – DEMAND GAP IN AGRICULTURAL LABOUR- A CASE
STUDY OF ODISHA
Year Requirement Availability Demand –supply gap
2002 54544 33348 (61.14) 21196 (38.86)
2007 54824 29474 (53.76) 25350 (46.24)
2012 55020 26528 (48.22) 28492 (51.78)
(Figures in the parentheses indicate percentage of the total requirement)
- Agasty et al. (2013)
For paddy crop
10

ESTIMATION OF LABOUR FORCE REDUCTION IN
AGRICULTURE BY 2019-20
Again 23
million
reduction
11

3. REASONS FOR LABOUR SCARCITY IN AGRICULTURE
Higher wages in other jobs available locally.
Shifting to a regular/ permanent job in the non-
farm sector since agricultural job is seasonal.
Migration from rural to urban areas.
MGNREGA and other Government sponsored
employment schemes.
Agriculture labour is presumed to be a low
esteemed job.
12

EVIDENCING LOWER REMUNERATION IN
AGRICULTURE
Industrial wages Other non-farm occupations Agricultural occupation
perday
Comparison of Wages - Industries, Agriculture and Other Non Farm Occupations
REASONS
• The average land holding size
has decreased to 1.16 Ha per
farmer in 2011 from 2.3 Ha in
1971.
• Increasing cost of inputs like
fertilizers and labour.
• Limited bargaining power.
13

STATE-WISE COMPARISON OF WAGES: AGRICULTURAL AND
NON-AGRICULTURAL (INR/DAY)
14

ALL- INDIA NOMINAL FARM WAGE RATE (1990-91 TO
2011-12)
 The nominal farm wages grew at only 1.8 % per annum from 2001-
02 to 2006-07 and at a high 17.5 % per annum during 2007-08 to
2011-12.
15
Source: Gulati (2013)

AVERAGE REAL FARM WAGE RATE AT 2011-12 PRICES
 A similar pattern emerges for real farm wages, which fell by (-) 1.8 % per
annum from 2001-02 to 2006-07 and then grew at 6.8 % per annum during
2007-08 to 2011-12.
16
Source: Gulati (2013)

TREND IN DAILY WAGE RATE IN RURAL INDIA
17
Deflated by CPIAL
and CPIRL with Base 1986-87
2.69%
1.75%

SHIFT TOWARDS NON-FARM SECTORS IN
RURAL AREAS
 Primary: Agriculture, fisheries,
forestry
 Secondary: Mining, Manufacturing,
Construction, Electricity- gas -steam and
air conditioning supply, Water supply –
sewerage - waste management and
remediation activities
 Tertiary: Wholesale and retail trade,
Repair of motor vehicles and
motorcycles, Transportation and storage,
Financial and insurance activities etc
Share in the rural employment
18

THE SHARE OF DIFFERENT SECTORS IN TOTAL RURAL
EMPLOYMENT (%)
Sector Male Female
1993-94 2009-10 Change 1993-94 2009-10 Change
Agriculture 74.10 62.80 -11.30 86.20 79.40 -6.80
Industry 7.00 7.00 0.00 7.00 7.50 0.50
Construction 3.20 11.30 8.10 0.90 5.20 4.30
Services 14.70 17.90 3.20 5.60 7.60 2.00
Total 100
(187.8)
100
(231.9)
- 100
(104.8)
100
(104.6)
-
19
Note: figures within parentheses refer to total workforce (million) in rural sector.

SOURCES OF NEW JOBS IN RURAL INDIA: 1983 TO 2009-10
Kumar et al. (2011)
20

EMPLOYMENT PATTERN SHIFT BETWEEN 2006-07 TO 2011-
12 IN RURAL AREAS AT STATE LEVEL
21

MIGRATION OF LABOUR
 The share of rural to urban migration among males increased by nearly 5
percentage points to 39% in 2007- 08 from 34% in 1999-2000.
 Nearly 60 per cent of urban male migrants and 59 percent of urban female
migrants had migrated from the rural areas in 2007-08. (Alha et al. 2011)
 Two critical factors that affect the movement of labour away from the
agriculture sector.
Pull factor: job opportunities in non-agricultural sector, the pace of
urbanization, improvement in the educational status.
Push factor: the status of wages and incentives in rural areas.
MGNREGA
22

Economic
Lack of continuous work at origin
Low wages at origin
Mechanization of agriculture
Economic status of family
Decline in per capita land availability
Non – economic
Population pressure
Social differentiation
Poor infrastructure
Penetration of market economy
Family feud
Economic
Availability of job at destination
Hope of getting a job at destination
Higher wage at destination
Information about employment
Flexible hours of work at destination
Non - economic
Skill development
Ambitions
City connections and relatives
Glamour of city life
Urban comforts
Push factors for out-migration in
Tamilnadu
Pull factors for out-migration in
Tamilnadu
Sundaravaradarajan et al. (2011)
23

IMPACT OF MIGRATION ON FAMILY WELFARE
Particulars Bihar (%) Uttar Pradesh (%)
Improvement in education of
children
79.67 67.84
Improvement in food
consumption
84.77 70.20
Increase in the overall
happiness of the family
98.49 78.39
Improvement in health 66.15 72.36
Addiction to liquor 11.46 15.08
Singh et al. (2011)
24

LINKAGE BETWEEN MGNREGA AND LABOUR
SHORTAGE
25
3

LABOUR SCARCITY TO AGRICULTURAL WORK IN MYSORE
DISTRICT OF KARNATAKA
Season Before MGNREGA After MGNREGA Decreased
participation
Kharif 80.39 66.27 14.12 (17.55)
Rabi and summer 64.12 30.39 33.73 (52.60)
Total 122.83 82.17 40.67 (33.11)
-By Vanitha & Murthy (2011)
Note: Figures within parentheses indicate the percentage decline
(No. of person days)
 The decline in labour supply for agriculture is higher in rabi and summer
seasons than in kharif, as most of the MGNREGS works are executed during
the period from September to May. 26

4. IMPACT OF LABOUR
SCARCITY
27

STUDY OF CUDDALORE DISTRICT OF TAMIL NADU
 The probability of retaining paddy, the principal food crop, is only
37%, of sugarcane 46% whereas the probability of retaining cashew
is 75% and of coconut is 67%.
 If this trend continues then of the total cropped area, around 32%
will be under cashew and 21% under coconut — the tree crops.
Sugarcane and paddy will occupy 18% and 14%, respectively.
1. Changes in cropping pattern
- By Prabakar C. et al (2011)
28

2. Productivity Levels of Labour-Scarcity Affected
and Unaffected Farms
29
Crop Productivity Productivity
difference
(kg/ha)
Labour-scarcity
unaffected
farms(kg/ha)
Labour-scarcity
affected
farms(kg/ha)
Paddy 5,090 4,487 603 (11.8)
Sugarcane 1,53,292 1,44,165 9,127 (6.0)
Groundnut 3,767 3,592 175 (4.6)
Pulses 850 780 70 (8.2)
Cotton 1,410 1,205 205 (14.5)
Note: Figures within the parentheses represent the difference in per cent values with
reference to unaffected farms.

CONSEQUENCES OF LABOUR SCARCITY
Labour
scarcity
Increased
wage
rates
Increased
cost of
cultivation
Increased
price
Food
inflation
30

STEEP RISE IN AGRICULTURAL WAGES SINCE
2006-07
Source: FICCI report (2015) 31

SHARE OF LABOUR COST IN OVERALL COST OF CULTIVATION
32

INCREASING COST OF CULTIVATION
33
The cost of cultivation of crops have been
growing at over 10% each year. The higher cost is
passed on by the farmer, which has partly
resulted in increasing wholesale prices of
principal food commodities like rice and wheat at
~10% as opposed to overall inflation of ~7%.

WHOLESALE PRICE INDICES AND FOOD INFLATION
34

5. STRATEGIC OPTIONS FOR LABOUR SHORTAGE
• Immediate Effect: Adopt techniques that can
replace and/or reduce the requirement of human
labour
• Long Term Effect: Increase returns from
agriculture and arrest the migration of workforce
from agriculture to other sectors
Input
factors
• Agri-linkages factor
Output
factors
35

INPUT FACTORS
Labour substitution
in Indian agriculture
Mechanization of
farms
Promoting
technology for
Seeds which
reduce labour
requirement
Increasing use of
herbicides
Mechanization of activities
like sowing and harvesting
can significantly reduce
labour intensity
For example seeds
supporting direct sowing in
rice which can save the
labour required for
transplanting
Use of herbicides can
cut down on the labour
required for weeding
fields substantially
36

OUTPUT FACTORS
Better Farm to
Agribusiness
Linkages
Contract Farming
Agricultural
Cooperatives
Farmer Equity
Model
The buyer and farmer form
an agreement with
conditions on quantity,
quality, delivery schedule in
lieu of pre determined price
and production support.
The co-operative acts as
an interface between the
small farmers and buyers.
It provides order taking,
shipment and logistics,
billing, collection and
remittance services for
farmers.
37
A model of producers
company where
producers will directly
invest their equity funds
into the company.

6. FARM MECHAIZATION AS A SOLUTION
38

FARM MECHANIZATION - DRIVERS
39
By 2050 India’s population: 1.6 bn
Required annual food grain production : 333 mt (increase in production of
more than 1/3rd)
lowest yields in both Rice and Wheat as compared to US and China. With an
urgent need in increase of production, the yields need to increase
dramatically to match up to the global standards.
Land Fragmentation has gone up with number of marginal farmers increasing
from 56K in 1985-86 to 94K in 2011, an increase of 67.3%. Land available for
agriculture has remained constant around 140 m Ha since 1970s.
Shortage of Labor in the Agri Sector will drive need for mechanization and
will call for Machines with minimal human intervention.

Source: Presentation on farm mechanization before Parliamentary consultative committee (Jan,2013), DAC
40
(2009-10)

MECHANIZATION IN INDIA
 Punjab, Haryana and western
UP: farm mechanization is
concentrated which increases
their productivity.
 Farm mechanization in south
India has increased considerably
but still has a long way to go
before adapting to a higher level.
 Uttar Pradesh and Bihar are
the future potential states which
have started using farm
implements with support
extended by the Government.
 West Bengal, Orissa and the
North eastern states are in the
process of adopting farm
mechanization.
41

Operation Extent of mechanization in India
Soil working and seed bed preparation 40%
Seeding and planting 29%
Plant protection 34%
Irrigation 37%
Harvesting and threshing 60-70% for wheat and rice and <5% for
others
Extent of mechanization by farm operations in India
Overall about 40-45%
Source: Presentation on farm mechanization before Parliamentary consultative committee (Jan,2013), DAC
42

CROP – WISE FARM MACHINERY USE
Crop Machine labour TE 2010 (Rs/ha)
Maize 1610 (7.42)
Chickpea 1986 (5.41)
Cotton 2051 (4.84)
Paddy 2200 (4.22)
Wheat 3840 (3.98)
Sugarcane 2386 (1.04)
43
Note: Figures in parentheses are CAGR (per cent) machine labour from 1997 to 2010.
Source: Reddy A.A. et al, 2014

TREND IN USE OF POWER SOURCES IN INDIAN AGRICULTURE
44
(Percentage share)
Total power
availability on
Indian farms :
CAGR of 4.58%
Source: Mehta et al, 2014

SALE OF TRACTORS IN INDIA FROM 1991-92
TO 2013-14
0
100000
200000
300000
400000
500000
600000
700000
800000
tractor sales (No.)
tractor sales (No.)
Data Source: Indiastat
45
CAGR
11.4% since
2006
Tractor density
(tractors per
thousand hectare
of net sown area)
Haryana: 84 Punjab:
76
Uttar Pradesh: 51
Overall: 33

MARKET OVERVIEW OF THE MAJOR FARM MACHINERY USED IN
INDIA
Name of machinery Market size annually (units) CAGR from 2006 to 2012-13
Tractor 600,000 11.4 %
Power tiller 56,000 13.4%
Combine harvester 4,000-5,000 28%
Thresher 100,000 10%
Rotavator 60,000-80,000 20%
Rice transplanter 1,500-1,600 50%
Self- propelled vertical
conveyor reaper
4,000-5,000
Zero till seed drill 25,000-30,000
Multi – crop planter 1,000-2,000
Laser land leveller 3,000-4,000
Power weeder 25,000 46

Human labour (man-hours)
1985
-86
2006-
07
Absolut
e
change
Chang
e %
Family 511 319 -192 -37.57
Permanent 193 153 -40 -20.73
Casual 385 368 -17 -4.42
Total labour 1,089 840 -249 -22.87
Effect of combine harvesters on
human labour in Punjab
During the period 1985-86 to 20006-07,
except transplantation of paddy, almost all
other operations for wheat and paddy
have been completely mechanized in
Punjab.
Estimated contributions from
farm mechanization
Savings in seeds 15-20%
Savings in fertilizers 15-20%
Increase in cropping intensity 5-20%
Savings in time 20-30%
Reduction in manual labour 20-30%
Overall increase in farm
productivity
10-15%
Source: Devi Y.L., 2013
47
(per ha)

FARM MECHANIZATION: KEY DRIVER OF PRODUCTIVITY
Agricultural productivity has positive correlation with level of farm mechanization
48

IMPROVEMENT IN LABOUR PRODUCTIVITY IN AGRICULTURE
State Labour productivity (kg/day)
TE 1999
paddy
TE 2010 TE 1999
wheat
TE 2010 TE 1999
cotton
TE 2010
Andhra Pradesh 35 33 (-0.5) 10 22 (7.4)
Maharashtra 7 12 (5.0)
Gujarat 43 59 (2.9) 10 13 (2.4)
West Bengal 24 25 (0.4)
Haryana 55 59 (0.6) 94 113 (1.7) 12 20 (4.8)
Punjab 88 127 (3.4) 99 185 (5.8) 8 24 (10.5)
Tamil Nadu 6 12 (6.5)
Total 37 45 (1.8) 58 88 (3.9) 9 17 (6.0)
49(Figures in parenthesis are CAGR (% per annum) between 1999 and 2010)
Source: Reddy A.A., 2015

LABOUR SCARCITY AND SELECTIVE MECHANISATION OF
SUGARCANE AGRICULTURE IN TAMIL NADU, INDIA
Operation Labour
requirement of
conventional
method (labour-
hours)
Cost of
operation in
conventional
method (Rs/ha)
Labour
requirement of
mechanized
operation
(labour-hours)
Cost involved in
mechanized
cultivation
(Rs/ha)
Preparatory
tillage
320 12,000 36 8000
Manuring 40 1,000 0 0
Irrigation 320 8,000 40 1,000
Earthing up 25 5,000 5 2,500
Weeding 50 6,000 5 2,500
Harvesting 1,000 55,000 10 32,500
Total 1,755 92,000 96 47,500
P. Murali, R. Balakrishnan (2012)
Average man hours for conventional and mechanised farm operations (2009-11)
50

ECONOMICS OF SELECTIVE MECHANISATION VERSUS
CONVENTIONAL CANE CULTIVATION (RS/HA)
Particulars Yield (t/ha) Gross returns Total variable
cost
Returns over
variable cost
Conventional
method
105 2,02,125 1,33,215 68,910
Mechanized 120 2,31,000 118,400 112,600
Sugar factory groups established Agri Service Centre which possess all machineries
such as trash shudders, tractor, power tillers, weeder, other accessories and
harvesters. Farmers who registered their cane area with sugar factories are provided
this facility to hire the machineries.
It saved labour, water and variable cost of cane cultivation and enhanced the yield and
sugar recovery of the cane cultivation in the state.
51

FARM MECHANISATION, MGNREGS AND LABOUR
SUPPLY NEXUS: A STATE-WISE PANEL DATA ANALYSIS
ON PADDY AND WHEAT CROP
 The machine labour cost increased after implementing MGNREGS.
 for paddy : Andhra Pradesh , Tamil Nadu, Karnataka and Madhya Pradesh
 For wheat: Madhya Pradesh, Himachal Pradesh, Uttar Pradesh and Punjab
 The use of human labour in man-hours has declined sharply in both paddy
and wheat.
 Besides MGNREGS, the factors such as coverage of irrigation , yield
enhancing inputs cost, land labour ratio has also significantly affected the
farm mechanization.
52By Narayanamoorthy A. et al, 2014

REASONS FOR NON-ADOPTION OF LABOUR-SAVING
TECHNOLOGIES
Reason Mean score Rank
Higher cost 53.62 1
Lack of skill 49.43 2
Smaller landholdings 45.30 3
Complacent attitude 41.51 4
Hesitation for adoption due
to fear of failure
40.03 5
Unawareness of
technology
38.27 6
Garrett ranking for reasons for non-adoption of
labour-saving technologies / implements
- By Prabakar C. et al (2011)
53

SCHEMES FOR PROMOTING AGRICULTURAL
MECHANIZATION
 Outsourcing of training and demonstrations of newly developed
equipments: Through this scheme, State Governments organize
demonstration of improved/newly developed agricultural/horticultural
equipment as identified by them at farmers' fields. In the year 2012-13, an
outlay of Rs. 12.08 crores has been made. Out of total outlay, Rs. 4.00 crores
is earmarked for North Eastern States.
 Macro management of agriculture (MMA): under this a level of 25-50%
subsidy on procurement cost is made available on the models approved by the
department under institutional financing. Self Help Group of farmers (SHGs),
user groups, cooperative societies of farmers etc are also made eligible for
assistance under the programme.
- By Dept. of Agriculture and Cooperation
54

 The Farm Machinery Training & Testing Institutes (FMTTIs) located at Budni
(Madhya Pradesh), Hissar (Haryana), Garladinne (Andhra Pradesh), and
Biswanath Chariali (Assam), have been imparting training to farmers,
technicians, retired/ retiring defence personnel etc., in the selection,
operation, maintenance, energy conservation and management of agricultural
equipments. During the year 2011-12, 6422 persons were trained till 31st
March, 2012 against the annual target of 6000 in different courses.
 Promotion and Strengthening of Agricultural Mechanization through
Training, Testing and Demonstration: implemented during the Eleventh Plan. It
conduct of demonstration of improved/newly developed agricultural/
horticultural equipment, identified by the State Governments/Government
Organizations at farmers' fields. During the year 2012-13, the number of
demonstrations conducted by the State governments were 16022 .
55

 State agro – industries corporations: act as catalysts in providing access to
industrial inputs to farmers. Thus, 17 SAICs were set up in the joint sector
with equity participation of the Government of India during 1965 to 1970.
 Gender friendly equipment for women: Under the Central Sector Scheme –
Promotion and Strengthening of Agricultural Mechanization through Training,
Testing, and Demonstration, and under the scheme for Outsourcing of Training
and Demonstration of Newly Developed Agricultural Equipment at Farmers’
Fields, separate physical targets have been fixed and 10 per cent of the funds
have been allocated for women farmers. A list of about 30 identified gender
friendly tools and equipment developed by the Research and Development
Organization has been sent to all states and UTs.
56

SUB MISSION ON AGRICULTURAL MECHANIZATION
1. Increasing the reach of farm mechanization to small and marginal farmers
and to the regions where availability of farm power is lower.
2. Offsetting adverse economies of scale and higher cost of ownership of high
value farm equipments by promoting cooperative based ‘Custom Hiring
Centres’ for agricultural Machinery.
3. Passing on the benefit of hi-tech, high value and hi-productive agricultural
machinery to farmers through creating hubs for such farm equipments;
4. Promoting farm mechanization by creating awareness among stakeholders
through demonstration and capacity building activities;
5. Ensuring quality control of newly developed agricultural machinery through
performance evaluation and certification at designated testing centres
located all over the country.
57

FINANCIAL ASSISTANCE OR PROCUREMENT SUBSIDY FOR
SELECTED AGRICULTURE MACHINERY AND EQUIPMENTS
Sub Component Pattern of Assistance
Implementing
Agencies
Beneficiari
es
Tractor upto 25
hp
50% of cost of procurement subjected to a ceiling of Rs. 1.75
lakh. Additional 20% assistance to small and marginal farmers
State
Government
Individual
farmers
Tractor above 25
hp
50% of cost of procurement subjected to a ceiling of Rs. 2.0 lakh
State
Government
Individual
farmers
Power Tiller with
implements
State
Government
Individual
farmers
Combine
Harvesters of all
types
50% of cost of procurement subjected to a ceiling of Rs. 5.0 lakh
State
Government
Individual
farmers
All other self
propelled
equipment
including Plant
Protection
equipment
State
Government
Individual
farmers58

Components of Sub-mission on
agricultural mechanization
Pattern of assistance Implementi
ng agencies
Beneficiaries
Establishment of farm Machinery
Banks for Custom Hiring
50% of the total cost of
procurement subject to a
limit of Rs. 0.30 Crore per
Centre.
State Govt. Individual
Entrepreneurs/Self Help
Group (SHG)/ User
Groups (UG) of farmers,
Cooperative Societies of
Farmers
Establishing Hi-Tech Productive
Equipment Centres to Target Low
Productive Agricultural Regions
procurement subject to a
limit of Rs. 1.0 Crore per
Hub.
State Govt. ----do----
Enhancing Farm Productivity at Village
Level by introducing appropriate farm
mechanization in selected villages.
procurement upto a limit
of Rs. 10 lakhs per village
State Govt. Farmers /SHG/User
Groups/ Farmer’s
cooperatives in villages
where level of farm
mechanization is very less
Creating ownership of appropriate
farm equipments among small and
marginal farmers in the eastern
/north eastern regions
procurement upto a limit
of Rs. 1.25 lakhs per
farmers.
State Govt. Small/Marginal farmers
in eastern/north eastern
region
59

INCREASE EFFICIENCY OF MECHANIZATION
 High yielding medium maturing Narma variety HS 6 in cotton. Being synchronous
in flowering and boll opening, less number of pickings are needed. This makes it
suitable for mechanized picking.
1. Improving the architecture and suitability of crops through Seed
Technology
2. Improving the suitability of equipment being used through
indigenization
 Mahindra came up with a modern multi-utility tractor called the Shaan with a
23.5 HP engine and a 750 kg payload trolley and can be used for a range of
activities. With a top speed of 40 kmph and a 23.5 HP engine, the Shaan is
especially suited to small and medium sized farms. In 2007, the Shaan was
recognized by the American Society for Agricultural & Biological Engineers Award
as one of the 50 Outstanding Innovations of the Year.
60

THE WAY FORWARD
State Government initiatives:
 Free up land lease market:
Suggested tenancy reforms:
- Prolonging the lease period to 10-15 years and removing any ceiling on
size of lease.
- It will help farmers and private sector companies to aggregate
agricultural land and invest in farm technology, drip irrigation and best
practices.
61

CENTRAL GOVERNMENT INITIATIVES
 MGNREGA reforms:
1. Recommendations for Gram Panchayats:
 The introduction of seasonal calendars.
 It will lead to implementation of activities relevant to increasing agricultural
productivity.
2. Recommendations on modifying current structure of MGNREGA to
improve convergence with Agriculture:
 Inclusion of some agricultural activities (such as weeding, irrigating ,
sowing and cutting for harvesting) into the MGNREGA shelf of works.
 It will ease some of the pressure on the farmers due to increasing wage
rates and at the same time provide employment to the landless labourers.
 large farmers can pay a percentage of the wages paid to the labourers for
work done on agricultural activities.
62

 The belief of surplus labour, zero marginal productivity and opportunity cost
of labour does not seems valid today.
 There has been a net reduction of 30.57 million agricultural labour from
2004-05 to 2011-12.
 In this UP (28%) contributes most followed by Karnataka (15%) and West
Bengal (20%).
 The states having higher share of agricultural workforce shifted i.e.
Maharashtra, AP, UP, WB, Punjab also having more area under labour
intensive crops -paddy, wheat, cotton, groundnut, sugarcane.
 Reasons: lesser remuneration in ag. Sector, shifting to a permanent job in the
non-farm sector, migration and MGNREGA.
 Impact: changes in cropping pattern, reduction in crop yield and cropping
intensity.
63
SUMMARY AND
CONCLUSION

 So adequate measures to reduce labour requirement need to be taken up,
otherwise productivity of farms may get affected and this may have spiralling
effects on output prices.
 In this context, farm mechanization seems to be the best possible solution.
 However, it has shown only 2.2% growth rate from 2001-2010.
 Reasons for non-adoption of labour-saving technologies: higher cost, lack of
skill and small landholdings etc.
 Hence, in 12th FY plan, Govt. has initiated an integrated scheme “Sub-mission
on Agricultural Mechanization”.
 Improving the efficiency of mechanization: improve suitability of crop
through seed technology or of machinery through indigenization.
 Central Govt.- MGNREGA reforms, state Govt.- free up land lease market.
 Hence if required actions are implemented for eliminating all the constraints
against farm mechanization, “then increased farm mechanization is the best
among all the possible solutions”.
64

Labour scarcity and farm mechanisation

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