The proposal aims at encouraging farmers to create assets by purchasing machines, cut labour cost.
The ministry of agriculture proposes to extend subsidised crop loan of four per cent for agriculture mechanisation. The proposal which is currently being worked out by the department, aims at encouraging farmers for creation of assets by purchasing machines for agricultural practices and other similar inputs, thus to cut labour cost. At present the loan at subsidised rate of four per cent is only available for crop related inputs like seeds, farming etc.
Officials said, the idea is to bring down the labour cost for farmers, which consumes around 20-30 per cent of the total cost. Agriculture mechanisation refers to extensive use of machinery for farming jobs. Currently macro management scheme of agriculture provides price-based subsidy for promotion of agri-mechanisation. Under this 25 per cent of the total price is borne by the government, albeit the reimbursed price is limited to a certain ceiling in the total price. This is provided for tractor, power tiller, self propelled, manually operated, power driven and even animal driven tools and machines, diesel pump sets, drip irrigation, sprinklers, plant protection equipment etc.
The government is putting more emphasis for creation of assets in agriculture. Sources said while agriculture remains the main stay for the Indian economy, agriculture mechanisation is weak and restricted to big farmers. On the other hand, India has a big contribution to the global food and agriculture market by exporting and importing foodgrain and cash crops in large scale. At the same time many uncertain factors affect agriculture and sale of equipment in India like monsoon, government-declared support prices for crops, commodity prices, crop production expenses (including fuel, fertilizer, pesticides and other costs) and the credit policy announced by banks among others.
Even though farm mechanisation is growing at an increasing trend, there are wide ranging disparities in the levels of mechanisation across states. Northern States such as Punjab, Haryana, Uttar Pradesh (particularly Western and Tarai belt) have achieved a faster growth in mechanisation over various Plan periods while the sale of other implements and machines like combine harvesters, threshers and other power-operated equipment have been increasing almost throughout the country.
Officials said the pace of mechanisation in north-eastern states has not been satisfactory due to constraints such as hilly topography, socio-economic conditions, high cost of transport, and lack of institutional financing and lack of farm machinery manufacturing industries.
Mechanisation in western and southern states of the country has increased with an increase in area under irrigation and also with the growing awareness among farmers.