Mechanization & Technology Division, Department of Agriculture & Cooperation, Ministry of Agriculture, Krishi Bhawan, New Delhi 8/15/ Farm Mechanization

Farm Mechanization: Everywhere 8/15/ Tillage & seedbed Preparation Sowing/ Planting Fertiliser Application Irrigation Harvesting Post Harvesting Inter Cultivation Plant Protection Mechanized Solutions for whole chain Mechanisation is clearly the answer to key performance parameter at every stage of cropping cycle

INDIAN AGRICULTURE STRENGTH 8/15/ Highest Arable Land - 47% of total land against Avg. 11 % in the world Round the Year Cultivation - 20 Agro-climatic regions and 46 Soil types suited for round the year cultivation Ranks first in production of Pulses, Tea, Jute and allied fibers Second largest producer of Wheat, Rice, Groundnut, Fruits and Vegetables, Sugarcane & Third largest producer of Mustard, Potatoes, Cotton lint, etc Million Farmers, over 7.5% owns > 4 ha. Avg farm land size <2 ha, LARGE > 10 ha (1.2 mil ) Medium 4-10 ha (6.3 mil) Semi medium 2-4 ha (13.1 mil) Small 1 -2 ha ( 20.9 mil) Marginal < 1 ha (61.3 mil) Average Land Holding and Number of Farmers

Farm Mechanization: Key Driver 8/15/ Productivity has positive correlation with Mechanization level FICCI-YES Bank Report, 2009

Farm Mechanization : Key Driver for Productivity 8/15/ Increase in Production Productivity increase [Yield/ha] Enhancing Cropping intensity Farm Mechanisation Key Driver Means Objective

Need For Accelerated Farm Mechanization 8/15/ Essential driver for sustaining agricultural growth Positive correlation between farm power availability and agricultural productivity Addressing scarcity of agricultural labour Climate Change Mitigation Notwithstanding advantages: Growth of farm mechanization (farm power/ha) is poor in last decade ; and Level of mechanization is significantly low in many potential regions ( Eastern, North Eastern)

The Need 8/15/ To bridge existing policy gaps and to envisages an inclusive growth of farm mechanization; One integrated Mission aiming an accelerated but inclusive growth of agricultural mechanization in India; Sub Mission on Agricultural Mechanization (SMAM)

Focus Areas 8/15/ Small and Marginal Farmers; Reaching the unreached: Lowly mechanized villages; Custom Hiring Services: Entrepreneurship; Creating ownership Capacity/Awareness building

Mission Objectives 8/15/ Increasing the reach of farm mechanization to small and marginal farmers and to the regions where availability of farm power is low; Offsetting adverse ‘economies of scale’ and ‘higher cost of ownership’ of high value farm equipment by promoting ‘Custom Hiring Centre’ for agricultural machinery; Passing on the benefit of hi-tech, high value and hi- productive agricultural machinery to farmers through creating hubs for such farm equipment.

Mission Objectives 8/15/ Promoting farm mechanization by creating awareness among stakeholders through demonstration and capacity building activities; Ensuring quality control of newly developed agricultural machinery through performance evaluation of newly developed agricultural machinery and equipment and certifying them at designated testing centers located all over the country.

Proposals on Agricultural Mechanization during 12 th Five Year Plan 8/15/ Sr.No. Components 1Promotion & Strengthening of Agricultural Mechanisation through Training Testing & Demonstration 2Post Harvest Technology and Management 3Financial assistance or Procurement Subsidy for selected Agriculture Machinery and Equipments 4Establishment of farm Machinery Banks for Custom Hiring 5Establishing Hi-Tech Productive Equipment Centres to Target Low Productive Agricultural Regions. 6Enhancing Farm Productivity at Village Level by introducing appropriate farm mechanization in selected villages. 7Creating ownership of appropriate farm equipment among small and marginal farmers in the eastern/north eastern regions.

8/15/ Sub ComponentPattern of AssistanceImplementing AgenciesBeneficiaries Human Resource Development and Capacity building in the field of farm mechanization through in house/ at farmers’ field training conducted by FMTTI’s Not Applicable Farm Machinery Training & Testing Institutes Farmers & other stake holders Testing of agricultural machines and equipments for their performance evaluation and quality up-gradation through existing FMTTIs. Not Applicable Farm Machinery Training & Testing Institutes Manufacturers/ Trade /Importer of agriculture equipments Procurement and Demonstration of newly developed agricultural / horticultural equipments at farmers’ fields. An illustrative list of equipment eligible for demonstration is at Annexure-A 100% on procurement of equipment and Rs. 5000/-per demonstration in all areas except in hilly regions where it will be Rs. 7500/- per demonstration. State Governments/ICAR Institutions Farmers Training of farmers/users/stakeholders by Institutions identified by State Govt./ICAR Rs. 4000/- per trainee per week. Including boarding/lodging and transport Institutions identified by State Governments/IC AR Farmers & other stake holders Strengthening of designated SAU’s/ICAR Institutions/Govt. Agencies for undertaking testing of agricultural equipment One time grant upto Rs. 1.5 crore Designated SAUs /ICAR Institutions/Governm ent agencies Component No.1:Promotion and Strengthening of Agricultural Mechanisation through Training, Testing and Demonstration

8/15/ Sub ComponentPattern of Assistance Implementing Agency Beneficiaries Establishment of units for transfer of primary processing technology, value addition, low cost scientific storage, packaging units and technologies for bi- product management in the production catchments. An illustrative list of equipment eligible for this sub component. 50% of the project cost subject to ceiling of Rs. 6 lakh per project for SHG/UG/Cooperatives/NGO;s OR 50% of the project cost subject to ceiling Rs. 2.5 lakh per for individual beneficiary. State Governments/ ICAR Self Help Group (SHG)/ User Groups (UG) of farmers, Cooperative Societies of Farmers and NGOs /Farmers/Rural Entrepreneurs Procurement and Demonstration of newly developed /appropriate Post Harvest Technologies. An illustrative list of equipment eligible for demonstration. 100% of the procurement cost of the equipment AND Rs. 5000/- per demonstration For hilly region assistance will be Rs. 7500/- per demonstration State Governments/ ICAR Farmers/End users Training of Farmers, Entrepreneurs and Scientists in areas related to Post Harvest Technology. Rs. 4000/- per trainee per week. Including boarding/lodging and transport State Governments/ ICAR Farmers and other stake holders Component No.2: Post Harvest Technology & Management

Sub ComponentPattern of Assistance Implementing Agencies Beneficiaries Tractor upto 25 hp (PTO) 50% of cost of procurement subjected to a ceiling of Rs lakh. Additional 20% assistance to small and marginal farmers State Government Individual farmers Tractor above 25 hp (PTO) 50% of cost of procurement subjected to a ceiling of Rs. 2.0 lakh State Government Individual farmers Power Tiller with implements 50% of cost of procurement subjected to a ceiling of Rs lakh. Additional 20% assistance to small and marginal farmers State Government Individual farmers Combine Harvesters of all types 50% of cost of procurement subjected to a ceiling of Rs. 5.0 lakh State Government Individual farmers All other self propelled equipment including Plant Protection equipment 50% of cost of procurement subjected to a ceiling of Rs lakh. Additional 20% assistance to small and marginal farmers State Government Individual farmers 8/15/ Component No.3: Financial assistance or Procurement Subsidy for selected Agriculture Machinery and Equipments

All kind of tractor driven equipment/ implements including Plant Protection equipment 50% of cost of procurement subjected to a ceiling of Rs lakh. Additional 20% assistance to small and marginal farmers State Governments Individual farmers All manual /animal drawn equipment/implements/ Tools including Plant Protection equipment 50% of cost of procurement subjected to a ceiling of Rs lakh. Additional 20% assistance to small and marginal farmers. State GovernmentsIndividual farmers 8/15/

Individual Ownership OR. Custom Hiring High cost of ownerships: Many can not afford Subsidy and Bank Linkages : Poor credit worthiness of farmers Fragmented Land Holdings (<2 ha): Adverse Economies of Scale Custom Hiring Key Question is How to cater marginal and small farmers who aggregate to > 80% of cultivators

8/15/ Establishment of farm Machinery Banks for Custom Hiring a) Procurement subsidy for establishment of Custom Hiring Centers b) Financial support to Private Entrepreneurs for setting up Custom hiring Centers through creation of Credit Guarantee Fund c) Financial support to Private Entrepreneurs for setting up Custom hiring Centers through creation of Venture Capital Fund Component No.4

Component No.4(a): Procurement subsidy for establishment of Custom Hiring Centers 8/15/ Pattern of Assistance Implementing Agencies Beneficiaries 50% of the total cost of procurement subject to a limit of Rs Crore per Centre. State Govt. Individual Entrepreneurs/Self Help Group (SHG)/ User Groups (UG) of farmers, Cooperative Societies of Farmers

Ministry of Agriculture Government of India Credit Guarantee Fund Implementing Agency Entrepreneurs May be parked with NABARD/ NCDC In the beginning,Government may be contribute 100% share of Corpus., Later banks,manufacturers may be join increase the corpus. 8/15/ Financial support to Private Entrepreneurs for setting up Custom hiring Centers through creation of Credit Guarantee Fund. May be NABOCNS/ NAFED/NCDC

8/15/ Sr. No Silent Features of Credit Guarantee Fund 1.Upto 80% of Initial Capital Cost (including working capital) will be financed/refinanced by the CGF holders against inadequate/without collateral. Entrepreneurs will bring remaining 20% either through own or through financing. Assets thus created will be hypotheacated as per extent norms. 2.All individuals / cooperatives/ NGOs are eligible to avail the facility. 3.There will be a maximum limit of investment in each centre. 4.Entrepreneurs will be provided three years grace period that include EMI and interest. Opportunity cost for far going EMI / interest will be adjusted against CGF. 5.Implementing agency shall be the single – window –interface between entrepreneurs and CGF holders. 6.IA will help creating/building assets. 7.IA will charge the stipulated service fees both from entrepreneurs as well as from CGF holders. 8.Entrepreneurs will pack back the loan after grace period as per condition of the loan.

Ministry of Agriculture Government of India Venture Capital Fund Implementing Agency Entrepreneurs May be parked with NABARD/ NCDC In the beginning,Government may be contribute 100% share of Corpus., Later banks,manufacturers may be join increase the corpus. 8/15/ Financial support to Private Entrepreneurs for setting up Custom hiring Centers through creation of Venture Capital Fund May be NABOCNS/ NAFED/NCDC

8/15/ Sr. No Silent Features of Venture Capital Fund 1Upto 80% of Initial Capital Cost (including working capital) will be funded. Entrepreneurs will bring remaining 20% either through own or through financing. 2All individuals / cooperatives/ NGOs are eligible to avail the facility. 3.There will be a maximum limit of investment in each centre. 4Entrepreneurs should pay back the VC amount within a stipulated period and after availing initial grace period. 5Implementing agency shall be the single – window –interface between entrepreneurs and VCF holders. 6Assets will be created / built by the IA on behalf of VCF holders and will be on lease to entrepreneurs. 7.There will be a profit sharing model between VCF holders and entrepreneurs. 8.IA will charge the stipulated service fees. After full realization of VC assets will be transferred to entrepreneurs.

Operationalisation of VCF/CGF 8/15/ The Implementing agency(IA): To act as sole,single window interface between fund holder and entrepreneur To provide end –to –end solution to Entrepreneurs starting from Project Appraisal sanctioning of Loan, assets creation,technical support etc. To monitor the performance of Custom Hiring Centres and appraisal potential strength /weaknesses. To create awareness about the scheme and market it among potential users through road show,print advertisement,electronic media etc. IA will charge service cum consultancy fees at a stipulated rate both from fund holder as well as from Entrepreneurs.

Operationalisation of VCF/CGF 8/15/ The Implementing agency(IA): To act as sole,single window interface between fund holder and entrepreneur To provide end –to –end solution to Entrepreneurs starting from Project Appraisal sanctioning of Loan, assets creation,technical support etc. To monitor the performance of Custom Hiring Centres and appraisal potential strength /weaknesses. To create awareness about the scheme and market it among potential users through road show,print advertisement,electronic media etc. IA will charge service cum consultancy fees at a stipulated rate both from fund holder as well as from Entrepreneurs.

Component No.5: Procurement subsidy for establishment of Hi Tech Hub 8/15/ Pattern of Assistance Implementing AgenciesBeneficiaries 40% of the total cost of procurement subject to a limit of Rs. 1.0 Crore per Hub. State Govt. Individual Entrepreneurs /Self Help Group (SHG)/ User Groups (UG) of farmers, Cooperative Societies of Farmers

Component No.6: Enhancing Farm Productivity at Village Level by introducing appropriate farm mechanization in selected villages. 8/15/ Pattern of AssistanceImplementing AgenciesBeneficiaries 80% of the total cost of procurement upto a limit of Rs. 10 lakhs per village. * State Govt. Farmers /SHG/User Groups/ Farmer’s cooperatives in villages where level of farm mechanization is very less.

Component 7: Creating ownership of appropriate farm equipments among small and marginal farmers in the eastern /north eastern regions 8/15/ Pattern of Assistance Implementing Agency Beneficiaries 100% of the total cost of procurement upto a limit of Rs lakhs per farmers. ** An illustrative list of eligible equipment for this component State Governments Small/Marginal farmers in eastern/north eastern region

8/15/ THANKING YOU