ECONOMICS OF FARM MECHANIZATION: A CASE STUDY OF WESTERN UTTAR PRADESH
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Date
2019
Authors
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DIVISION OF AGRICULTURAL ECONOMICS ICAR-INDIAN AGRICULTURAL RESEARCH INSTITUTE NEW DELHI
Abstract
Agricultural sector has seen significant growth after the introduction of technological
revolution that led to tremendous rise in food grain production, especially in wheat
and rice crops. With the adoption of high yielding varieties, the input requirement also
increased resulting in rapid increase in the cost of production. In the recent past, the
problem of labour scarcity and rising farm wages has further contributed to the higher
cost of production. Though farm mechanization offers wide range of opportunities for
agriculture, various constraints exist in country which prevents farmers to take its
benefits. The major constraints involved with mechanization are small land holdings,
poor financial status of the farmer, and lack of repair and maintenance facilities in
remote areas and seasonal nature of agricultural crops. To solve these constraints,
custom hiring of farm machinery can prove to be an important mechanism to improve
the access of mechanization particularly on small farms. In this context, present study
was undertaken to analyze the trends and structure of the farm mechanization in India
and its impact on labour substitution. Study also examine the impact of different
forms of mechanization in agricultural productivity. Further, the inclusiveness of farm
mechanization and efficacy of the existing models of custom hiring has also been
studied. The primary data was collected for the year 2016-17 from Baghpat,
Muzaffarnagar and Aligarh districts of western Uttar Pradesh. The tractor production
has been increased by 8.1 percent from 1970-71 to 2016-17 in the country with largest
concentration in the range of 31-40 and 41-50 hp. Sale of tractors was found to be
highest in UP, MP, Rajasthan and Andhra Pradesh during 2003-04 to 2014-15.
Further, share of power operated implements in total implements used in farms has
increased from 6.9 percent (1995-96) to 33.5 percent (2011-12) while share of animal
operated and hand operated implements have declined, from 32 to 25.3 percent and 61
to 41.2 percent respectively. The extent of mechanization has increased across the
different crop groups and states during 2000-01 to 2013-14. Among the major food
grain producing states, mechanization index was found to be highest in Punjab, UP,
MP and Haryana and lowest mechanization was observed in Odisha and West Bengal.
Results of Translog cost function shows that the signs of input demand elasticities of
human labour, machine labour and fertilizer were consistent as per the micro80
economic theory. The demand elasticities of human labour was found to be less
sensitive to change in its prices as compared to machine labour and fertilizer (unitary
elastic in both) in paddy. However, for wheat demand elasticities for all three inputs
were less than one. The substitution between human labour and machine labour was
more on paddy (1.08) than wheat (0.95). The marginal rate of technical substitution
between labour and machine in wheat in Punjab has decreased from 13.4 to 8.75
hour/ha while it increased in Bihar from 25 to 65.6 hours/ha. The results obtained
from the panel data regression show that with 10 percent increase in machine labour
profitability of paddy and wheat crop will increase by 3.28 percent and 1.19 percent,
respectively. Based on the results of the regression analysis on primary data, wheat
productivity is increased by 0.13 qtl/ha with every one hour/ha increase in machine,
on an average. However, ownership of machines doesn’t have any significant impact
on the productivity of wheat. Study highlights the importance of mechanization and
its promotion through custom hiring.
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Keywords: Mechanization, Custom hirings, Agricultural productivity,
Inclusioness,Western UP,Labour scarcity
Description
T-10280
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