'Quality Data on Farmers' Use of Machinery Lacking : Daily Current Affairs

Date: 30/03/2023

Relevance: GS-3: Transport and marketing of agricultural produce and issues and related constraints; e-technology in the aid of farmers.

Key Phrases: Sub-Mission on Agricultural Mechanisation, NCAER, Farm Machinery Industry, Small Farmers, Entrepreneurs, All-India Debt and Investment Survey, Harmonised Commodity Description, Imports.

Context:

Despite the fact that the government has been implementing a Sub-Mission on Agricultural Mechanisation since 2014, there is no comprehensive record of how much farm machinery is being used by farmers.

Key Highlights:

The NCAER White Paper titled 'Making India a Global Power House in the Farm Machinery Industry' reveals that the ownership of power farm equipment in India is not high.
The paper suggests that the farm machinery industry in India is facing challenges related to both demand and supply.
However, the quality of data stands out as a key challenge. The lack of a comprehensive database of farmers' usage of farm machinery poses a significant hurdle to the development of the sector.

Demand-side Challenges:

One key demand-side challenge faced in the farm machinery industry is the need for comprehensive data.
- In order to carry out robust analyses, there must be a clear understanding of how many farmers are using machinery, the types of equipment used, the ownership status of the equipment, and the impact farm machinery has on agricultural productivity.
Additionally, it is necessary to know if farmers have become entrepreneurs by leasing equipment, what kind of equipment they are leasing, and whether they are experiencing any profitability.
The All-India Debt and Investment Survey (AIDIS) provides ownership data and reveals that the ownership of tractors among farmers is only 4.4%, as of June 2018.
- On the other hand, only 5.3% of cultivator households own any one of the non-tractor farm equipment, which includes power tillers/power-driven ploughs, etc.
Regarding rental data, the ‘Land and Livestock Holding of Households and Situation Assessment of Agricultural Households’ published by the MoSPI show that as of June 2018, 63.5% of agricultural households spent on hiring machinery and equipment for crop production.
Despite the Sub-Mission on Agricultural Mechanisation (SMAM) launched by the government since 2014, a comprehensive database of farmers’ usage of farm machinery is still lacking.
- Additionally, the surveys do not include the new crop-specific, operation-specific, and region-specific farm machinery that is now available.

Supply-side Challenges:

The supply side of the farm machinery industry also faces several challenges, and the lack of a dedicated National Industrial Classification code for the industry is one of them.
- The industry has been mapped using the 7-digit product classification codes from the Annual Survey of Industries. However, relevant codes were clubbed together to form the industry since there is no dedicated code.
Estimating the size of the sector, considering both the organised and unorganised sector, requires approximations.
- Data show that the farm machinery sector is 0.6% of the overall manufacturing sector, with tractors alone accounting for 70% of that share.
- However, mapping the National Industrial Classification codes to Harmonised Commodity Description and Coding System codes is still a challenge, and sometimes the same HS code can be used for two products, which complicates the classification process.
Estimating demand, domestic supply (from ASI product codes), and external supply (imports) is also problematic, since the codes used cannot be matched comprehensively. Therefore, matching the demand-supply remains an issue.

Consequences of Inadequate Data Quality:

The lack of quality data hinders decision making and the implementation of appropriate policies in the farm machinery industry.
Without a comprehensive understanding of the ownership of power farm equipment, it is challenging to plan for the sector's growth and development.
- The inadequate data quality also makes it difficult to match demand-supply and estimate domestic supply and external supply correctly.
Furthermore, the data limitations make it challenging to include the new types of farm equipment in the surveys, hindering the sector's development.
- It is essential to capture crop-specific, operation-specific, and region-specific farm machinery data to meet the needs of farmers adequately.

Conclusion:

The ownership of power farm equipment in India is still low, and the farm machinery industry faces significant demand and supply challenges.
Improving the quality of data by expanding the scope of surveys and including new types of equipment is crucial to address these challenges effectively.
The government must take further steps to encourage farmers to own or lease farm equipment to improve agricultural productivity and advance the development of the sector.

Source: The Hindu BL

Mains Question:

Q. Discuss the impact of the lack of a comprehensive database of farmers' usage of farm machinery on the development of the farm machinery industry in India. What measures can be taken to address this challenge? Discuss (250 words).