A. Indian Agriculture
Agriculture and allied sectors form the core strength of India’s economy. By 2020, agriculture and allied sector accounted for nearly 20% of India’s GDP, supporting half of the country’s population as its principal source of income. From being a subsistence based farming system to a self-sustained, modernized, capital and knowledge intensive one, Indian agriculture has seen a transformative growth in agricultural production the productivity of foodgrains has increased from 0.5 MT/Ha in 1950-51 to 2.4 MT/Ha in 2020-21, while the per capita availability of food grains increased from 144.1 kg/person/year in 1950-51 to feed a population 0.36 Billion then, to 187.1 kg/person/year to feed a population of 1.34 Bn people in 2019-20. This growth in productivity has been driven by farmers’ better access to and use of various factors of production.
India has the 2nd largest arable land resource in the world, 20 agro-climatic regions and all 15 major climates that exist in the world. These inherent strengths, coupled with government focus, have enabled the country to meet food security needs on the one hand while gainfully employing millions on the other. Over the seven decades since independence, this sector has shown strong resilience against a diverse set of adversities and has remained a key source of income and livelihood for more than 50% of the country’s population. Agriculture sector in India has shown growth during the pandemic which signifies its resilient nature.
Exhibit 1. : Estimate of current market sizes for select sub-sectors in Indian Agriculture:
|
Sector
|
Market size in 2020
|
|
Seeds
|
-INR 222.4 Bn (USD 3 Bn)
|
|
Fertilizer
|
-INR 926.7 Bn (USD 12.5 Bn)
|
|
Agrochemicals
|
-INR 444.8 Bn (USD 6 Bn)
|
|
Farm Equipment
|
-INR 915.3 Bn (USD 13 Bn)#
|
|
Agri Warehousing
|
-INR 70.4 Bn (USD 1 Bn)#
|
|
Cold Chain
|
-INR 300.0 Bn (USD 4 Bn)
|
|
Food Processing
|
-INR 19,496.8 Bn (USD 263 Bn)
|
Source: Industry sources, FICCI ~ *Converted basis average USD: INR exchange rate of 74.1322 in 2020 and 70.4059 in 2019
B. Farm mechanisation plays a key role in sustaining agriculture growth:
However, as we embark on a new era of agriculture with enormous pressure to produce more food from less land there is an urgent need to strengthen the existing agricultural value chain. Farm mechanisation plays a key role in sustaining agricultural growth, improving agricultural productivity and reducing the cost of production by timely farm operations.
There is substantial increase in agriculture mechanization in India as a joint effort by the Government of India and the farm equipment industry. At present, Indian farmers are adopting farm mechanization at a faster rate in comparison to recent past. Farm power availability from tractors has grown from 0.007 kW/ha in 1960-61 to 1.03 kW/ha in 2013-14 and it is further estimated to reach 3.74 kW/ha by 2032-33.
C. Indian Tractor Industry:
Indian tractor industry has emerged as largest in the world and accounts for about 1/3rd of the total global tractor production. Sale of tractors in India has increased from 3.9 Mn in 2000-01 to 8.8 Mn in 2019-20.
India’s tractor industry gets 10% of its revenues from exports. Year 2020-21 witnessed growth of 17% in export of tractors from India to key export destinations. In the past few months tractor exports have reached a crescendo and in September 2021, India exported 12690 tractors, marking one of the highest monthly sales.
Exhibit 2. Export of Tractors from India:
|
Tractors
|
Unit
|
2019-20
|
2020-21
|
% growth
|
|
Numbers
|
76,054
|
88,621
|
17%
|
Source: The Tractor and Mechanization Association (TMA)
D. Importance to other farm implements: Farm mechanisation has gone beyond tractorisation
Agriculture is a labour-intensive sector and its shortage during peak season can certainly derail growth. Therefore, the role of farm mechanisation has now gone beyond tractorisation with much more emphasis on increasing productivity of land and labour. Year 2020-21 has been a good year for Indian farm implements export business against last year.
Exhibit 3: Export of other farm implements from India:
|
Other farm implements
|
Unit
|
2019-20
|
2020-21
|
% growth
|
|
(‘000 Units)
|
|
Rotary Tillers
|
Kgs
|
80.68
|
118.97
|
47%
|
|
Combine Harvester-Threshers
|
Numbers
|
21.08
|
24.18
|
15%
|
|
Tractor Ploughs
|
Numbers
|
2.07
|
2.33
|
13%
|
|
Disc Harrows
|
Numbers
|
193.2
|
371.34
|
92%
|
|
Portable Sprayers
|
Numbers
|
106.42
|
66.83
|
-37%
|
Source: Ministry of Commerce & Industry
E: Initiatives by Government of India :
The Government of India (GoI) has executed various schemes and policies supporting mechanization in Indian agriculture. During the last four years, Government has given massive thrust to promoting the latest agricultural machineries, like laser leveller, happy seeder (no till planter) technology, combine harvesters and small equipment like power weeders.
The Sub Mission on Agricultural Mechanization (SMAM) is a significant initiative by GoI in this direction. An ambitious target of increasing the availability of farm power from 2.02 kW/ha (2016–17) to 4.0 kW/ha24 by the end of 2030 has been set. A seven-year plan which is effective till 2021-22 has identified new targets for SMAM like establishment of 280,000 Custom Hiring Centers, distribution of 190,000 machines including multiple equipment threshers, harvesters, tillers.
Apart from SMAM, GoI has launched various comprehensive schemes like Rashtriya Krishi Vikas Yojana (RKVY), Mission for Integrated Development of Horticulture (MIDH) and National Food Security Mission (NFSM) having farm mechanization as a significant component.
All such positive developments indicates that transformation has begun in country. Governments across the world are trying to focus on increasing food productivity. The demand for agricultural equipment with modern technology is expected to rise, as machinery with better technology will act as a catalyst for optimal utilisation of Agri-Inputs (Seed, Pesticides, Fertiliser, Power, Water) and also protect soil degradation there by increasing the agricultural yield.
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Federation of Indian Chambers of Commerce and Industry (FICCI): Established in 1927, FICCI is the largest and oldest apex business organisation in India. A nongovernment, not-for-profit organisation, FICCI is the voice of India's business and industry. From influencing policy to encouraging debate, engaging with policy makers and civil society, FICCI articulates the views and concerns of industry. It serves its members from the Indian private and public corporate sectors and multinational companies, drawing its strength from diverse regional chambers of commerce and industry across states, reaching out to over 2,50,000 companies.
