Talking Business Industry

India is still in early stages of farm mechanisation

The quintessential farm vehicle, the tractor, has become critical for the farming community as the country is driving towards greater mechanization due to labour shortages and pressure to boost productivity. Now these tractors also come with host of features including AC cabins, ergonomically designed pedals and levers. Leading tractor maker Mahindra & Mahindra (M&M) Ltd has recently rolled-out a new platform and that is something unusual in the tractor segment. Rajesh Jejurikar , Chief Executive – Farm Equipment and Two Wheeler Division, M&M spoke to The Hindu about shift in horse power and farm mechanisation, among others. Edited excerpts:

Is there a major shift towards higher HP tractors and what is driving that change?

Yes, the tractor market is moving towards higher HP. The move has been happening the past few years. In 2005, 4-5 per cent of the total industry was higher HP ie, above 48 HP. In 2013-14, the domestic tractor industry volumes were about 6.35 lakh and of which above 48 HP tractors accounted for 16 per cent. So, we can clearly see there is a shift towards higher HP. As there is shortage of farm labour, the need for greater mechanisation arises. As you move to more mechanisation, for eg, use of rotavator, higher HP tractors play vital role for the implements to work more effectively. Also, farmers start experiencing new implements, they see various benefits such as higher productivity. This is now becoming a movement which is catching on very quickly. We have seen shift towards use of implements in the past 2-3 years and hence increasing interest in higher HP segment. We are not saying this trend or shift is going to happen overnight. We see that is the future and that will happen as we go forward.

Where does the new Arjun Novo range fit into your higher HP growth plans?

This new platform launch is part of our strategy to stay ahead in that segment. We are already a leader with over 40 per cent market share in the 48 HP and above segment. A leader has to keep reinventing and raising standards. This is what we have exactly done with the new Arjun Novo range in which we have created a product that is significantly better than existing one even though we are doing very well with the existing range and dominate the segment. We have done a lot of work to make sure that we create a product which is advanced, but at a very affordable price. We believe that once the farmers try this they will experience a new high of productivity, output and yield, among others. So the strategy has been to capture all needs of customers, incorporate them in the new product and sell it at an affordable price. Hence we have priced the product at a premium of only Rs.15,000 over the present offering. The other thing in this is the AC cabin and that has also been done at a very affordable price. We believe this AC cabin tractor at below Rs.10 lakh price point could be a big game changer in the segment.

How far are mechanisation solutions addressing the challenges like low productivity and farm labour scarcity in the country?

India is in the early stages of evolution as far as mechanisation is concerned. So, big move towards mechanisation is going to come only in the future. Because, labour shortage was not a big issue 2-3 years ago. It increased in recent years due to the rural employment guarantee scheme and migration to urban areas.

Credit and money availability is a big factor in mechanisation. Has that improved in the recent years?

In higher HP segment, availability of finance is not a constraint. In this category, the buyers are the upper economic strata of the farming community. But in the lower segment it is challenging. Because finance companies are wary that buyers don’t have enough collateral to offer for loans and uncertain income flows. Also, their ability to pay back becomes an issue in the event of crop failures. But, we have our Mahindra Finance that lends to buyers and this arm contributes 32-35 per cent of total financing of our tractors.

Is the young generation showing interest in farming?

Sadly, interest is fading among the young generation. But that is mainly due to lack of infrastructure such as power in rural areas. Also, stability of earning is one big factor in this as they tend to compare earning potential with other jobs. But our goal is to generate and sustain the interest in farming activities among youngsters.

One specific thing towards this plan is the offer of AC cabin in Arjun Novo range. We believe many people will go for it as it is just Rs.1.2 lakh higher. We hope it will create a new level of comfort and usage benefit for them and bring down the negativity mindset over working for long hours under heat and dust. A lot has to be done around irrigation and continuity of water supply and change in overall eco-system are essential in ensuring stability. Something we can do, something government can do to sustain their interest in farming.

balachandar.g@thehindu.co.in


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Printable version | Jun 24, 2022 7:10:34 am | https://www.thehindu.com/business/Industry/Talking-Business-India-is-still-in-early-stages-of-farm-mechanisation/article56847794.ece