Agriculture is a labour intensive occupation. Increased cost of maintenance of draft animals and growing scarcity of farm labour has created new challenges to farmers. The basic requirement among farmers is to meet such competition by reducing labour usage and maximize labour productivity and judicious use of mechanized power by the farmers. Mechanical power is largely consumed in big land holdings and is still beyond the reach of small and marginal holdings which constitutes around 80 per cent of the total land holdings. This is due to the fact that the small and marginal farmers, by virtue of their economic condition are unable to own the machinery on their own or through institutional credit. Therefore in order to bring farm machinery available within the reach of small and marginal land holdings collective ownership or custom hiring centre (CHC) play a major role. Custom hiring has the potential to be one of the most effective strategies to introduce high quality and most efficient farm mechanization to the small farm holdings. The custom hiring enables new machines to be used at their maximum capacity and enables farmers to gain access to technology they would otherwise not be able to afford. Government of Andhra Pradesh promoting custom hiring centres in order to make available the high cost machinery within the reach of small and marginal farmers. Therefore, there is every need to analyze the performance and utilization of the services of custom hiring centres of the State Department of Agriculture that were maintained and utilized by the farmers. Keeping the above aspects in view, a comprehensive study entitled “A STUDY ON PERFORMANCE OF CUSTOM HIRING CENTRES IN CHITTOOR DISTRICT OF ANDHRA xv PRADESH” was under taken which was presented in the State Level Technical Programme meeting at the University headquarters, Lam, Guntur in the month of May 2018 and approval has been obtained. Ex-post-facto research design was followed in the present investigation. Chittoor district was purposively selected. Groundnut is the major crop in the district and considerably a good number of custom hiring centres were also functioning in the district for hiring machinery to carry various operations in groundnut cultivation. Eight mandals viz.,Peddamandyam,B.Kothakota,Peddathippasamudram(P.T.M),Molakalache ruvu,Kalikiri,Kalakada,Kambhamvaripalli and Gurramkonda were purposively selected where maximum number of custom hiring centres were present. Two villages were selected purposively from each mandal where the maximum number of users of custom hiring centres were present. Thus sixteen custom hiring centres were selected from sixteen selected villages. Among the sixteen selected custom hiring centres, the respondents were selected based on proportionate random sampling procedure from each selected custom hiring centre thus making a total of 120 respondents. A pre tested interview schedule with measurement devices of all the variables was used for the collection of raw data. The data was collected by personal interview method through a structured interview schedule and analyzed by employing suitable statistical tools. The analysis of profile characteristics of users of custom hiring centres indicated that majority of the respondents were middle aged, belonged to male category with primary school education, small farmers with medium farming experience, social participation, innovativeness, management orientation, annual family income, accessibility, extension contact, mass media exposure, trainings received, achievement motivation and economic orientation. Majority of the custom hiring centres have shown medium level of performance. Majority of the respondents were utilizing the services of custom hiring centres upto medium extent. Correlation analysis revealed that there was a positive and significant relationship between education, social participation, innovativeness, management orientation, annual family income, accessibility, extension contact, mass media exposure, trainings received, achievement motivation, economic orientation with the performance of the custom hiring centres. However age, gender, farm size and farming experience had non-significant relationship with the performance of the custom hiring centres. All the selected 15 independent variables put together explained about 65.30 per cent variation in the performance of custom hiring centres. xvi Correlation analysis revealed that there was a positive and significant relationship between education, social participation, innovativeness, management orientation, annual family income, accessibility, extension contact, mass media exposure, trainings received, achievement motivation, economic orientation with the extent of utilization of the custom hiring centres. However age, gender, farm size and farming experience had nonsignificant relationship with the extent of utilization of the custom hiring centres. All the selected 15 independent variables put together explained about 63.20 per cent variation in the utilization of custom hiring centres. The most important constraints in the utilization of services of custom hiring centres based on rank as indicated by farmers were non availability of farm machinery during peak season; lack of timely availability of farm machinery; damage to the kernals due to the use of machinery (groundnut dry pod thresher); non availability of skilled farm machinery operator; overlapping farming operations; non availability of service centres for repairing the machinery in the vicinity of CHCs; lack of awareness about type of machinery available at CHCs; location of the field; lack of shelter for keeping the machinery. The most important suggestions for efficient utilization of services of custom hiring centres based on rank as indicated by farmers were expansion of custom hiring centres each at panchayat where ever necessary so that small and marginal farmers can access the services of custom hiring centres; training of man power for efficient handling of the farm machinery; need to strengthen the custom hiring centres by increasing the number of farm machinery. This will overcome the problem of timely non availability particularly during the peak season, especially to the small and marginal farmers, other suggestions given were strengthen the subsidy component for these custom hiring centres by the government; creating awareness for hiring of machinery in CHCs; fixed hiring charges for the machinery by the district monitoring team and provision of subsidy for construction of shelter for keeping the machinery. Based on the results obtained through the present research, the scope of custom hiring centres were explored and a suitable strategy was designed for effective functioning and utilization of services of custom hiring centres.