Agricultural Mechanization in Bihar

Avinash KishoreDivya Pandey

Why mechanize : Crop intensification

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 20150

5

10

15

20

25

30

35

40

45

Growth of tractors and power tillers in the study districts (2005-15)

Madhubani -All Purnea -All Coochbehar-AllRajshahi -All Rangpur -All

Purnea

Madhubani

Machine density has increased, but the GCA has hovered around 8 million ha (CI = 1.42) in Bihar.

In comparison, CI >1.8 in West Bengal and Bangladesh

Mechanization without intensification in Bihar while intensification even without mechanization in West Bengal

Why mechanize : Yield enhancementAndhra Pradesh

Assam BiharChhatisgarh

Haryana

Himachal Pradesh

Jharkhand

Karnataka

Kerala

Maharashtra

Orissa

Punjab

Tamil Nadu

Uttar Pradesh

Uttarakhand

West Bengal

1020

3040

5060

yiel

dqtlp

erha

0 2000 4000 6000 8000totalmachinecost

For their yield levels, farmers in Bihar use much less animal labor in paddy

Andhra Pradesh

Assam

Bihar

Chhatisgarh

Gujarat

Haryana

Himachal Pradesh

Jharkhand

Karnataka

Kerala

Madhya Pradesh

Maharashtra

Orissa

PunjabTamil NaduUttar Pradesh

UttarakhandWest Bengal

050

100

150

200

10 20 30 40 50 60yieldqtlperha

pairhrsperha Fitted values

Why Mechanize : Induced innovation• Scarcity of labor and rising wage rates

• 2.5 agricultural laborers/ha land (1.59 males)

• 3.93 (cultivators + ag. Laborers)/ha land (2.76 males)

• Rice-wheat cropping system is not labor intensive

• ~1200 hours/ha or 150-200 person-days/ha At most 60-70 days of employment/year

• Bihar has the highest labor availability among all states

• Evident in wage comparisons Jharkhand UP

Orissa

KarnatakaAssa

m HP

Punjab AP0

10

20

30

40

50

60

17181819202023242425

2933353536

48

Wage Rates (Rs./hour) across States

Mechanization levels in Bihar is higher than many states with similar/higher wage rates

Andhra Pradesh

Assam

Bihar

Chhatisgarh

Haryana

Himachal Pradesh

Jharkhand

Karnataka

Kerala

Maharashtra

Orissa

Punjab

Tamil Nadu

Uttar Pradesh

UttarakhandWest Bengal

2000

4000

6000

8000

1000

0

20 30 40 50wage_casual

totalmachinecost Fitted values

Migration induced labor scarcity during key agricultural operations could be a driver of mechanization in the state

2004 2005 2006 2007 2008 2009 2010 2011 20120

2

4

6

8

10

12

14

16

18

20

6.21 6.47 6.76 7.21

9.3210.14

11.83

16.34

18.37

Hourly Wage (Rs)Year

Hrly Wage FHP

Total Hrs

totalwage Yield GVP/ha

Wage share (%)

2004 6.21 504 875 5433 23 11494 47

2005 6.47 478 831 5379 26 12331 44

2006 6.76 531 840 5676 25 13329 43

2007 7.21 632 771 5556 29 18318 30

2008 9.32 726 797 7423 27 19344 38

2009 10.14 856 768 7784 19 16244 48

2010 11.83 968 757 8954 19 18680 48

2011 16.34 830 797 13023 28 22881 57

2012 18.37 977 808 14842 24 23695 63

2.96 1.94 0.92 2.73 1.06 2.06

Then, What is the Issue?

Labor’s Share in total value of paddy (excluding husk) in select states

0.2

.4.6

.8la

bors

hare

2004 2006 2008 2010 2012year

Bihar KeralaPunjab West Bengal

Bihar

Another issue…Size Class % of Total Holdings Avg. Size (ha) Share of total land (%)

Number of Holdings (cr.)

<0.5 ha 74.4 0.16 30.44 1.210.5-1.0 16.6 0.64 26.99 0.271.0-2.0 5.9 1.25 18.56 0.09

2004 2005 2006 2007 2008 2009 2010 2011 2012900

1100

1300

1500

1700

1900

2100

2300

2500

Cost of Machine Hiring (Rs./ha)

From land rent to machine rents• Most farmers cannot and should not buy big

machines

• Machine rental markets are critical to mechanization of ag. Operations

• But machine rental markets appear to be oligopolistic

• Transfer of rents from sub-marginal farmers to the large farmers who also own machines

• Reinforcing existing inequalities in land ownership

District Tractor Rent (Rs./acre)

#/1000acres

Madhubani 1041 35

Purnea 937 55

Malda 716 31

Cooch Behar 585 67

Merely subsidizing new units is not enough

• Existing subsidy and credit policies are not helping : benefit only those with collateral

• Opportunity: create machine service providers in agriculture• Use technology to create competitive rental markets in ag. Equipment

• Bangladesh has much less subsidy on power-tillers than Bihar

• But Bangladeshi farmers get them significantly cheaper: Smaller Chinese power tillers• Lower rents, in spite of higher diesel prices and lower fuel use efficiency• More vibrant rental markets: serves larger area of a larger number of farmers over longer distances; each

renter has more options• More frequent use, even by sub-marginal farmers

• Can Bihar learn from Bangladesh in mechanizing its agriculture?

Thanks!