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Farm equipment market moving into high gear on agri mechanisation, rentals

Arvind Kumar | Updated on January 16, 2018 Published on September 01, 2016

Boosting mechanisation: Procuring farm equipment said to become easier   -  THE HINDU

Start-ups and firms offer new solution for every farm needs

Indian agriculture is a confusing paradox. On the one hand, it is the largest contributor to workforce and employment and, on the other, lags way behind competition on GDP contribution.

With nearly 137 million hectares under crops, India competes with large agricultural economies like China. Yet, with a languishing productivity rate, it is yet to come close to production levels of smaller countries like Japan. The world’s largest tractor manufacturing company by volume is Indian but mechanisation levels are alarmingly low.

Mechanisation alone has the potential to change these paradoxes as it will lead to higher productivity and economic contribution. Yet, it has been inaccessible to farmers for long largely due to economic reasons. With small land ownership and constant fragmentation, small and marginal farmers find it almost impossible to own a tractor.

On the other hand, tractor ownership is high among larger farm owners. Nearly 85 per cent of small farmers depend heavily on the 15 per cent pool of large farmers and tractor owners for mechanisation.

A large informal hiring practice does exist but comes with its own set of problems including lack of quality standards, caste discrimination and land size. These, in turn, are compelling second generation farmers to migrate to cities for jobs. Census 2011 data shows that land under cultivation has gone down from 141 to 137 million hectares. With the Centre’s focus on doubling farmers’ income, mechanisation will be a key growth lever. Setting up custom hiring centres for farm equipment rentals along with incentives such as subsidies on capital investments has helped the cause.

With growing participation by private players, this business is on the verge of seeing a massive digital revolution.

Private entrepreneurs/companies and larger farmers are now eyeing farm equipment rentals as a large business opportunity . Dedicated rental centres, offering high-end equipment on hourly rentals to farmers along with trained, professional drivers and mechanics, will solve mechanisation needs of small farmers. Farmers can just walk into these centres and book high-end equipment .

Farm equipment have moved on from merely being a product and this has enormous implications for farmers as they are no longer dependent on someone for mechanisation.

With a pay per use model, they will no longer be fleeced either. Most importantly, they get access to the best implements at affordable rates.

There is still a long way to go before actual changes become visible on the ground. While private enterprises are treading carefully, the Centre is working on bringing change in the approach to mechanisation.

A lot still needs to be done like discarding archaic rules such as rate contracts which force custom hiring centres to stock only Government-approved equipment. This restricts service providers from supplying farmers high-end, high quality equipment .

The revolution has only just begun with the entry of private companies and start-ups in this space. From offering rentals of farm equipment through call centres and mobile apps to using analytics for predictive demand generation, this sector will see a digital spin that will change mechanisation in agriculture.

The writer is CEO, Trringo, M&M

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Published on September 01, 2016
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