Bankers in Punjab betting big on farm mechanization sector

Aggregate credit potential for farm mechanization has been assessed at Rs. 2892 crore for 2015-16

Popularity of farm equipment, such as laser leveller, paddy transplanter and harvester, among farmers of Punjab has opened a plethora of opportunities for bankers. With the increasing need for precision implements and machinery other than tractor, there is an immense potential for enhanced credit flow in the sector.

The aggregate credit potential for farm mechanisation has been assessed at Rs 2,892 crore for the state for 2015-16, according to state focus paper prepared by the National Bank for Agriculture and Rural Development.

Earlier, in the state, the farm mechanisation has been effectively a ‘tractorisation’ process. The state has one tractor for every nine hectares of net-cultivated land, against the national average of 62 hectares, with 18 per cent of the tractors used in the country.

Though mechanisation in agriculture has grown steadily during the past three decades, the sector faces problems due to declining average size of land holding and scattered farms, which restrict the scope for large scale farm mechanisation.

With twice the number of tractors required, the sector is experiencing a situation of overcapitalisation and under-utilisation of farm machinery.

However, the introduction and use of other farm equipment, such as power tillers, tractor drawn implements, reapers, threshers, cleaners/graders, zero-till seed-cum-fertiliser drill, raised bed planters, reapers and rotavators, have also increased significantly over the past few years, making it an attractive sector for the banks. The emerging areas that need attention include mechanisation of labour-intensive operations like paddy transplanter, cotton picking, sugarcane harvesting, introduction of crop residue management and propagation of water conservation technologies through the use of suitable equipment.

The present focus of farm mechanisation in the state is resource conservation technologies (RCT) through the use of laser land levellers, zero till draft and happy seeders. With the increasing need for use of precision implements and machinery other than tractor, there is an immense potential for enhanced credit flow under the sector.

According to experts, in Punjab, the high wage rates and non-availability of farm labour necessitate promotion of farm mechanization, as mechanised farming reduces costs and drudgery, ensures timeliness of operations and augments efficiency and profitability of agriculture.