Labour scarcity and farm mechanisation

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LABOUR SCARCITY AND ITS IMPLICATION FOR

FARM MECHANIZATION IN INDIA

PRIYANKA UPRETI20499

M.Sc. Ag. Economics

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SCHEME OF PRESENTATION1. Introduction

2. Trends in the agricultural workforce

3. Reasons behind labour scarcity

4. Impact of labour scarcity

5. Strategic options for labour shortage

6. Farm mechanization as a solution

7. Summary and conclusion

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1. INTRODUCTION The notion of surplus rural labour and zero marginal product and

opportunity cost of labour does not seems valid today. Faster growth and employment in other sectors is causing decline in the

portion of agricultural workers to the total workers, while the corresponding ratio in the secondary and tertiary sectors is on the rise.

Even though India has the second largest manpower in the world, all sectors of the economy have been affected by the scarcity of labour, specially agricultural sector because of significant movement of rural labour from farm to non-farm activities.

Impact on agriculture: reduction in crop yield, reduction in cropping intensity and changes in traditional cropping pattern.

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TOTAL WORKFORCE VS. AGRICULTURAL WORKFORCE (2011-12)

Total population 1.2 billion

Total workforce467 million

Agricultural sector228.3 million (48.9%)

Secondary sector110.7 million (23.7%)

Tertiary sector127.8 million (27.4%)

Rest of population743 million

Source: FICCI report, 2015

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INTER - SECTORAL DIFFERENCES IN WORKER PRODUCTIVITY

Sector 1993-94 2009-10 CAGR (%)Agriculture 5,349 8,448 2.9Industry 8,693 24,666 6.7Construction 14,067 13,821 -0.1Services 18,302 42,016 5.3Total 7,476 15,863 4.8

(at 1986-87 prices, NDP in Rs/employed worker)

Source: Chand and Srivastava, 2014

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2. TRENDS IN THE AGRICULTURAL WORKFORCE

Source: FICCI report (2015)

• Goldman Sachs (2014) calculated that labour is 4 times more productive in industry and 6 times more productive in services compared to agriculture in India.

• India is experiencing not only declining share of agriculture in total employment but also a significant decline in absolute number of people employed in the agricultural sector.“net migration to other sectors”

People employed in agriculture and total employment

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CONTRIBUTION OF STATES TO AGRICULTURE LABOUR FORCE REDUCTION: 2004-05 TO 2011-12

State Agricultural labor (million)

Reduction (million)

2004-05

2011-12

UP 43.30 34.83 8.47Karnataka 17.60 12.91 4.69West Bengal 15.50 11.79 3.71Bihar 21.30 17.67 3.63Rajasthan 17.40 13.83 3.56Others 143.83 137.31 6.52Total 258.93 228.36 30.57


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LABOUR INTENSITY ACROSS CROPS

Source: FICCI report (2015) Note: Man hours for crops are an average across states, data pertains for 2011

Total Area Under Paddy, Wheat,

Groundnut, Cotton, Sugarcane

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LABOUR INTENSIVE CROPS VS AGRICULTURAL LABOUR SHIFT FROM 2004-05 TO 2011-12


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SUPPLY – DEMAND GAP IN AGRICULTURAL LABOUR- A CASE STUDY OF ODISHA

Year Requirement Availability Demand –supply gap2002 54544 33348 (61.14) 21196 (38.86)2007 54824 29474 (53.76) 25350 (46.24)2012 55020 26528 (48.22) 28492 (51.78)

(Figures in the parentheses indicate percentage of the total requirement)

- Agasty et al. (2013)For paddy crop

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ESTIMATION OF LABOUR FORCE REDUCTION IN AGRICULTURE BY 2019-20


Again 23 million

reduction

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3. REASONS FOR LABOUR SCARCITY IN AGRICULTURE

Higher wages in other jobs available locally.

Shifting to a regular/ permanent job in the non-farm sector since agricultural job is seasonal.

Migration from rural to urban areas.

MGNREGA and other Government sponsored employment schemes.

Agriculture labour is presumed to be a low esteemed job.

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EVIDENCING LOWER REMUNERATION IN AGRICULTURE

Industrial wages Other non-farm occupations

Agricultural occupation

per d

ay


Comparison of Wages - Industries, Agriculture and Other Non Farm Occupations

REASONS• The average land holding size

has decreased to 1.16 Ha per farmer in 2011 from 2.3 Ha in

1971.• Increasing cost of inputs like

fertilizers and labour.• Limited bargaining power.

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STATE-WISE COMPARISON OF WAGES: AGRICULTURAL AND NON-AGRICULTURAL

(INR/DAY)


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ALL- INDIA NOMINAL FARM WAGE RATE (1990-91 TO

2011-12) The nominal farm wages grew at only 1.8 % per annum from 2001-

02 to 2006-07 and at a high 17.5 % per annum during 2007-08 to 2011-12.

Source: Gulati (2013)

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AVERAGE REAL FARM WAGE RATE AT 2011-12 PRICES

A similar pattern emerges for real farm wages, which fell by (-) 1.8 % per annum from 2001-02 to 2006-07 and then grew at 6.8 % per annum during 2007-08 to 2011-12.

Source: Gulati (2013)

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TREND IN DAILY WAGE RATE IN RURAL INDIA

Deflated by CPIALand CPIRL with Base 1986-87

2.69%

1.75%


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SHIFT TOWARDS NON-FARM SECTORS IN RURAL AREAS

Primary: Agriculture, fisheries, forestry Secondary: Mining, Manufacturing, Construction, Electricity- gas -steam and air conditioning supply, Water supply – sewerage - waste management and remediation activities Tertiary: Wholesale and retail trade, Repair of motor vehicles and motorcycles, Transportation and storage, Financial and insurance activities etc


Share in the rural employment

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THE SHARE OF DIFFERENT SECTORS IN TOTAL RURAL EMPLOYMENT (%)

Sector Male Female 1993-

942009-

10Change 1993-

942009-10 Change

Agriculture 74.10 62.80 -11.30 86.20 79.40 -6.80Industry 7.00 7.00 0.00 7.00 7.50 0.50Construction

3.20 11.30 8.10 0.90 5.20 4.30

Services 14.70 17.90 3.20 5.60 7.60 2.00Total 100

(187.8)100(231.9)

- 100(104.8)

100(104.6)

-Note: figures within parentheses refer to total workforce (million) in rural

sector.


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SOURCES OF NEW JOBS IN RURAL INDIA: 1983 TO 2009-10

Kumar et al. (2011)

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EMPLOYMENT PATTERN SHIFT BETWEEN 2006-07 TO 2011-12 IN RURAL AREAS AT

STATE LEVEL


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MIGRATION OF LABOUR The share of rural to urban migration among males increased by nearly 5 percentage points to 39% in 2007- 08 from 34% in 1999-2000. Nearly 60 per cent of urban male migrants and 59 percent of urban female migrants had migrated from the rural areas in 2007-08. (Alha et al. 2011) Two critical factors that affect the movement of labour away from the agriculture sector.

Pull factor: job opportunities in non-agricultural sector, the pace of urbanization, improvement in the educational status.

Push factor: the status of wages and incentives in rural areas. MGNREGA

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Economic Lack of continuous work at originLow wages at originMechanization of agricultureEconomic status of familyDecline in per capita land availabilityNon – economicPopulation pressureSocial differentiationPoor infrastructurePenetration of market economyFamily feud

Economic Availability of job at destinationHope of getting a job at destinationHigher wage at destinationInformation about employmentFlexible hours of work at destinationNon - economicSkill developmentAmbitionsCity connections and relativesGlamour of city lifeUrban comforts

Push factors for out-migration in Tamilnadu

Pull factors for out-migration in Tamilnadu

Sundaravaradarajan et al. (2011)

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IMPACT OF MIGRATION ON FAMILY WELFARE

Particulars Bihar (%) Uttar Pradesh (%)Improvement in education of children

79.67 67.84

Improvement in food consumption

84.77 70.20

Increase in the overall happiness of the family

98.49 78.39

Improvement in health 66.15 72.36Addiction to liquor 11.46 15.08

Singh et al. (2011)

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LINKAGE BETWEEN MGNREGA AND LABOUR SHORTAGE


3

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LABOUR SCARCITY TO AGRICULTURAL WORK IN MYSORE DISTRICT OF KARNATAKA

Season Before MGNREGA After MGNREGA Decreased participation

Kharif 80.39 66.27 14.12 (17.55)Rabi and summer 64.12 30.39 33.73 (52.60)Total 122.83 82.17 40.67 (33.11)

-By Vanitha & Murthy (2011)

Note: Figures within parentheses indicate the percentage decline

(No. of person days)

The decline in labour supply for agriculture is higher in rabi and summer seasons than in kharif, as most of the MGNREGS works are executed during the period from September to May.

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4. IMPACT OF LABOUR SCARCITY

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STUDY OF CUDDALORE DISTRICT OF TAMIL NADU

The probability of retaining paddy, the principal food crop, is only 37%, of sugarcane 46% whereas the probability of retaining cashew is 75% and of coconut is 67%.

If this trend continues then of the total cropped area, around 32% will be under cashew and 21% under coconut — the tree crops. Sugarcane and paddy will occupy 18% and 14%, respectively.

1. Changes in cropping pattern

- By Prabakar C. et al (2011)

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2. Productivity Levels of Labour-Scarcity Affected and Unaffected Farms

Crop Productivity Productivity difference (kg/ha)

Labour-scarcity unaffected farms(kg/ha)

Labour-scarcity affected farms(kg/ha)

Paddy 5,090 4,487 603 (11.8)

Sugarcane 1,53,292 1,44,165 9,127 (6.0)Groundnut 3,767 3,592 175 (4.6)Pulses 850 780 70 (8.2)

Cotton 1,410 1,205 205 (14.5)

Note: Figures within the parentheses represent the difference in per cent values with reference to unaffected farms.

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CONSEQUENCES OF LABOUR SCARCITY

Labour scarcity

Increased wage rates

Increased cost

of cultivati

on

Increased price

Food inflation

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STEEP RISE IN AGRICULTURAL WAGES SINCE 2006-07


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SHARE OF LABOUR COST IN OVERALL COST OF CULTIVATION


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INCREASING COST OF CULTIVATION


The cost of cultivation of crops have been growing at over 10% each year. The higher cost is

passed on by the farmer, which has partly resulted in increasing wholesale prices of

principal food commodities like rice and wheat at ~10% as opposed to overall inflation of ~7%.

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WHOLESALE PRICE INDICES AND FOOD INFLATION


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5. STRATEGIC OPTIONS FOR LABOUR SHORTAGE

Input factors

•Immediate Effect: Adopt techniques that can replace and/or reduce the requirement of human labour•Long Term Effect: Increase returns from agriculture and arrest the migration of workforce from agriculture to other sectors

Output factors •Agri-linkages factor

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INPUT FACTORSLabour substitution in Indian agriculture

Mechanization of farms

Promoting technology for Seeds which

reduce labour requirement

Increasing use of

herbicides

Mechanization of activities like sowing and

harvesting can significantly reduce

labour intensity

For example seeds supporting direct sowing

in rice which can save the labour required for

transplanting

Use of herbicides can cut down on the

labour required for weeding fields substantially

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OUTPUT FACTORSBetter Farm to Agribusiness Linkages

Contract Farming

Agricultural Cooperative

sFarmer

Equity Model

The buyer and farmer form an agreement with conditions on quantity,

quality, delivery schedule in lieu of pre determined price and production support.

The co-operative acts as an interface

between the small farmers and buyers. It provides order taking, shipment and logistics, billing, collection and

remittance services for farmers.

A model of producers company where

producers will directly invest their equity

funds into the company.

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6. FARM MECHAIZATION AS A SOLUTION

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FARM MECHANIZATION - DRIVERSBy 2050 India’s population: 1.6 bn

Required annual food grain production : 333 mt (increase in production of

more than 1/3rd)

lowest yields in both Rice and Wheat as compared to US and China. With an urgent need

in increase of production, the yields need to increase dramatically to match up to the global

standards.

Land Fragmentation has gone up with number of marginal farmers increasing from 56K in 1985-86

to 94K in 2011, an increase of 67.3%. Land available for agriculture has remained constant

around 140 m Ha since 1970s.

Shortage of Labor in the Agri Sector will drive need for mechanization and will call for Machines with minimal human

intervention.

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Source: Presentation on farm mechanization before Parliamentary consultative committee (Jan,2013), DAC

(2009-10)

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MECHANIZATION IN INDIA Punjab, Haryana and western UP: farm mechanization is concentrated which increases their productivity.

Farm mechanization in south India has increased considerably but still has a long way to go before adapting to a higher level.

Uttar Pradesh and Bihar are the future potential states which have started using farm implements with support extended by the Government.

West Bengal, Orissa and the North eastern states are in the process of adopting farm mechanization.


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Operation Extent of mechanization in India

Soil working and seed bed preparation

40%

Seeding and planting 29%Plant protection 34%Irrigation 37%Harvesting and threshing 60-70% for wheat and rice and <5%

for others

Extent of mechanization by farm operations in India

Overall about 40-45%

Source: Presentation on farm mechanization before Parliamentary consultative committee (Jan,2013), DAC

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CROP – WISE FARM MACHINERY USE

Crop Machine labour TE 2010 (Rs/ha)Maize 1610 (7.42)Chickpea 1986 (5.41)Cotton 2051 (4.84)Paddy 2200 (4.22)Wheat 3840 (3.98)Sugarcane 2386 (1.04)

Note: Figures in parentheses are CAGR (per cent) machine labour from 1997 to 2010.

Source: Reddy A.A. et al, 2014

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TREND IN USE OF POWER SOURCES IN INDIAN AGRICULTURE

(Percentage share)

Total power availability on Indian farms : CAGR of 4.58%

Source: Mehta et al, 2014

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SALE OF TRACTORS IN INDIA FROM 1991-92 TO 2013-14

1991-9

2

1992-9

3

1993-9

4

1994-9

5

1995-9

6

1996-9

7

1997-9

8

1998-9

9

1999-0

0

2000-0

1

2001-0

2

2002-0

3

2003

-04

2004-0

5

2005-0

6

2006-0

7

2007-0

8

2008-0

9

2009-1

0

2010-1

1

2011-1

2

2012

-13

2013-1

40

100000

200000

300000

400000

500000

600000

700000

800000

tractor sales (No.)

tractor sales (No.)

Data Source: Indiastat

CAGR 11.4%

since 2006

Tractor density (tractors per

thousand hectare of net

sown area)Haryana: 84 Punjab: 76

Uttar Pradesh: 51Overall: 33

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MARKET OVERVIEW OF THE MAJOR FARM MACHINERY USED IN INDIA

Name of machinery Market size annually (units) CAGR from 2006 to 2012-13Tractor 600,000 11.4 %Power tiller 56,000 13.4%Combine harvester 4,000-5,000 28%Thresher 100,000 10%Rotavator 60,000-80,000 20%Rice transplanter 1,500-1,600 50%

Self- propelled vertical conveyor reaper

4,000-5,000

Zero till seed drill 25,000-30,000Multi – crop planter 1,000-2,000Laser land leveller 3,000-4,000Power weeder 25,000

Source: Mehta et al, 2014

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Human labour (man-hours)1985-86

2006-07

Absolute change

Change %

Family 511 319 -192 -37.57Permanent 193 153 -40 -20.73Casual 385 368 -17 -4.42Total labour

1,089

840 -249 -22.87

Effect of combine harvesters on human labour in Punjab

During the period 1985-86 to 20006-07, except transplantation of paddy, almost all other operations for wheat

and paddy have been completely mechanized in Punjab.

Estimated contributions from farm mechanization

Savings in seeds 15-20%

Savings in fertilizers 15-20%Increase in cropping intensity 5-20%Savings in time 20-30%Reduction in manual labour 20-30%Overall increase in farm productivity

10-15%

Source: Devi Y.L., 2013

(per ha)

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FARM MECHANIZATION: KEY DRIVER OF PRODUCTIVITY

Agricultural productivity has positive correlation with level of farm mechanizationSource: Mehta et al, 2014

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IMPROVEMENT IN LABOUR PRODUCTIVITY IN AGRICULTURE

State Labour productivity (kg/day)

TE 1999 paddy

TE 2010 TE 1999 wheat

TE 2010 TE 1999 cotton

TE 2010

Andhra Pradesh 35 33 (-0.5)

10 22 (7.4)

Maharashtra 7 12 (5.0)Gujarat 43 59 (2.9) 10 13 (2.4)West Bengal 24 25 (0.4)Haryana 55 59 (0.6) 94 113

(1.7)12 20 (4.8)

Punjab 88 127 (3.4)

99 185 (5.8)

8 24 (10.5)

Tamil Nadu 6 12 (6.5)Total 37 45 (1.8) 58 88 (3.9) 9 17 (6.0)(Figures in parenthesis are CAGR (% per annum) between 1999 and 2010)

Source: Reddy A.A., 2015

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LABOUR SCARCITY AND SELECTIVE MECHANISATION OF SUGARCANE AGRICULTURE IN TAMIL NADU, INDIA

Operation Labour requirement of conventional method (labour-hours)

Cost of operation in conventional method (Rs/ha)

Labour requirement of mechanized operation (labour-hours)

Cost involved in mechanized cultivation (Rs/ha)

Preparatory tillage

320 12,000 36 8000

Manuring 40 1,000 0 0Irrigation 320 8,000 40 1,000Earthing up 25 5,000 5 2,500Weeding 50 6,000 5 2,500Harvesting 1,000 55,000 10 32,500Total 1,755 92,000 96 47,500

P. Murali, R. Balakrishnan (2012)Average man hours for conventional and mechanised farm

operations (2009-11)

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ECONOMICS OF SELECTIVE MECHANISATION VERSUS CONVENTIONAL CANE CULTIVATION (RS/HA)

Particulars Yield (t/ha) Gross returns

Total variable cost

Returns over variable cost

Conventional method

105 2,02,125 1,33,215 68,910

Mechanized 120 2,31,000 118,400 112,600Sugar factory groups established Agri Service Centre which possess all machineries such as trash shudders, tractor, power tillers, weeder, other accessories and harvesters. Farmers who registered their cane area with

sugar factories are provided this facility to hire the machineries.

It saved labour, water and variable cost of cane cultivation and enhanced the yield and sugar recovery of the cane cultivation in the state.

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FARM MECHANISATION, MGNREGS AND LABOUR SUPPLY NEXUS: A STATE-WISE PANEL DATA ANALYSIS

ON PADDY AND WHEAT CROP The machine labour cost increased after implementing MGNREGS. for paddy : Andhra Pradesh , Tamil Nadu, Karnataka and Madhya Pradesh For wheat: Madhya Pradesh, Himachal Pradesh, Uttar Pradesh and Punjab The use of human labour in man-hours has declined sharply in both paddy

and wheat. Besides MGNREGS, the factors such as coverage of irrigation , yield

enhancing inputs cost, land labour ratio has also significantly affected the farm mechanization.

By Narayanamoorthy A. et al, 2014

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REASONS FOR NON-ADOPTION OF LABOUR-SAVINGTECHNOLOGIES

Reason Mean score Rank Higher cost 53.62 1Lack of skill 49.43 2Smaller landholdings 45.30 3Complacent attitude 41.51 4Hesitation for adoption due to fear of failure

40.03 5

Unawareness of technology

38.27 6

Garrett ranking for reasons for non-adoption oflabour-saving technologies / implements

- By Prabakar C. et al (2011)

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SCHEMES FOR PROMOTING AGRICULTURAL MECHANIZATION

Outsourcing of training and demonstrations of newly developed equipments: Through this scheme, State Governments organize demonstration of improved/newly developed agricultural/horticultural equipment as identified by them at farmers' fields. In the year 2012-13, an outlay of Rs. 12.08 crores has been made. Out of total outlay, Rs. 4.00 crores is earmarked for North Eastern States.

Macro management of agriculture (MMA): under this a level of 25-50% subsidy on procurement cost is made available on the models approved by the department under institutional financing. Self Help Group of farmers (SHGs), user groups, cooperative societies of farmers etc are also made eligible for assistance under the programme.

- By Dept. of Agriculture and Cooperation

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The Farm Machinery Training & Testing Institutes (FMTTIs) located at Budni (Madhya Pradesh), Hissar (Haryana), Garladinne (Andhra Pradesh), and Biswanath Chariali (Assam), have been imparting training to farmers, technicians, retired/ retiring defence personnel etc., in the selection, operation, maintenance, energy conservation and management of agricultural equipments. During the year 2011-12, 6422 persons were trained till 31st March, 2012 against the annual target of 6000 in different courses.

Promotion and Strengthening of Agricultural Mechanization through Training, Testing and Demonstration: implemented during the Eleventh Plan. It conduct of demonstration of improved/newly developed agricultural/ horticultural equipment, identified by the State Governments/Government Organizations at farmers' fields. During the year 2012-13, the number of demonstrations conducted by the State governments were 16022 .

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State agro – industries corporations: act as catalysts in providing access to industrial inputs to farmers. Thus, 17 SAICs were set up in the joint sector with equity participation of the Government of India during 1965 to 1970.

Gender friendly equipment for women: Under the Central Sector Scheme –Promotion and Strengthening of Agricultural Mechanization through Training, Testing, and Demonstration, and under the scheme for Outsourcing of Training and Demonstration of Newly Developed Agricultural Equipment at Farmers’ Fields, separate physical targets have been fixed and 10 per cent of the funds have been allocated for women farmers. A list of about 30 identified gender friendly tools and equipment developed by the Research and Development Organization has been sent to all states and UTs.

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SUB MISSION ON AGRICULTURAL MECHANIZATION

1. Increasing the reach of farm mechanization to small and marginal farmers and to the regions where availability of farm power is lower.

2. Offsetting adverse economies of scale and higher cost of ownership of high value farm equipments by promoting cooperative based ‘Custom Hiring Centres’ for agricultural Machinery.

3. Passing on the benefit of hi-tech, high value and hi-productive agricultural machinery to farmers through creating hubs for such farm equipments;

4. Promoting farm mechanization by creating awareness among stakeholders through demonstration and capacity building activities;

5. Ensuring quality control of newly developed agricultural machinery through performance evaluation and certification at designated testing centres located all over the country.

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FINANCIAL ASSISTANCE OR PROCUREMENT SUBSIDY FOR SELECTED AGRICULTURE MACHINERY AND EQUIPMENTS

Sub Component Pattern of Assistance Implementing Agencies

Beneficiaries

Tractor upto 25 hp

50% of cost of procurement subjected to a ceiling of Rs. 1.75 lakh. Additional 20% assistance to small and marginal farmers

State Government

Individual farmers

Tractor above 25 hp

50% of cost of procurement subjected to a ceiling of Rs. 2.0 lakh

State Government

Individual farmers

Power Tiller with implements


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


State Government

Individual farmers

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Components of Sub-mission on agricultural mechanization

Pattern of assistance Implementing agencies

Beneficiaries

Establishment of farm Machinery Banks for Custom Hiring

50% of the total cost of procurement subject to a limit of Rs. 0.30 Crore per

Centre.

State Govt. Individual Entrepreneurs/Self Help

Group (SHG)/ User Groups (UG) of farmers, Cooperative Societies of

Farmers

Establishing Hi-Tech Productive Equipment Centres to Target Low Productive Agricultural Regions

40% of the total cost of procurement subject to a limit of Rs. 1.0 Crore per

Hub.

State Govt. ----do----

Enhancing Farm Productivity at Village Level by introducing

appropriate farm mechanization in selected villages.

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

Creating ownership of appropriate farm equipments among small and

marginal farmers in the eastern /north eastern regions

100% of the total cost of procurement upto a limit

of Rs. 1.25 lakhs per farmers.

State Govt. Small/Marginal farmers in eastern/north eastern

region

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INCREASE EFFICIENCY OF MECHANIZATION

High yielding medium maturing Narma variety HS 6 in cotton. Being synchronous in flowering and boll opening, less number of pickings are needed. This makes it suitable for mechanized picking.

1. Improving the architecture and suitability of crops through Seed Technology

2. Improving the suitability of equipment being used through indigenization

Mahindra came up with a modern multi-utility tractor called the Shaan with a 23.5 HP engine and a 750 kg payload trolley and can be used for a range of activities. With a top speed of 40 kmph and a 23.5 HP engine, the Shaan is especially suited to small and medium sized farms. In 2007, the Shaan was recognized by the American Society for Agricultural & Biological Engineers Award as one of the 50 Outstanding Innovations of the Year.

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THE WAY FORWARD

State Government initiatives: Free up land lease market:Suggested tenancy reforms:- Prolonging the lease period to 10-15 years and removing any ceiling on

size of lease.- It will help farmers and private sector companies to aggregate

agricultural land and invest in farm technology, drip irrigation and best practices.

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CENTRAL GOVERNMENT INITIATIVES MGNREGA reforms:1. Recommendations for Gram Panchayats: The introduction of seasonal calendars. It will lead to implementation of activities relevant to increasing agricultural

productivity.2. Recommendations on modifying current structure of MGNREGA to

improve convergence with Agriculture: Inclusion of some agricultural activities (such as weeding, irrigating ,

sowing and cutting for harvesting) into the MGNREGA shelf of works. It will ease some of the pressure on the farmers due to increasing wage

rates and at the same time provide employment to the landless labourers. large farmers can pay a percentage of the wages paid to the labourers for

work done on agricultural activities.

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The belief of surplus labour, zero marginal productivity and opportunity cost of labour does not seems valid today.

There has been a net reduction of 30.57 million agricultural labour from 2004-05 to 2011-12.

In this UP (28%) contributes most followed by Karnataka (15%) and West Bengal (20%).

The states having higher share of agricultural workforce shifted i.e. Maharashtra, AP, UP, WB, Punjab also having more area under labour intensive crops -paddy, wheat, cotton, groundnut, sugarcane.

Reasons: lesser remuneration in ag. Sector, shifting to a permanent job in the non-farm sector, migration and MGNREGA.

Impact: changes in cropping pattern, reduction in crop yield and cropping intensity.

SUMMARY AND CONCLUSION

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So adequate measures to reduce labour requirement need to be taken up, otherwise productivity of farms may get affected and this may have spiralling effects on output prices.

In this context, farm mechanization seems to be the best possible solution. However, it has shown only 2.2% growth rate from 2001-2010. Reasons for non-adoption of labour-saving technologies: higher cost, lack of

skill and small landholdings etc. Hence, in 12th FY plan, Govt. has initiated an integrated scheme “Sub-mission

on Agricultural Mechanization”. Improving the efficiency of mechanization: improve suitability of crop

through seed technology or of machinery through indigenization. Central Govt.- MGNREGA reforms, state Govt.- free up land lease market. Hence if required actions are implemented for eliminating all the constraints

against farm mechanization, “then increased farm mechanization is the best among all the possible solutions”.

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THANK YOU

Labour scarcity and farm mechanisation

Economy & Finance

Transcript of Labour scarcity and farm mechanisation