1. Richard Vokes Senior Advisor Agrifood Consulting International Sept 2013

2. The What and Why of Mechanization Mechanization. The use of powered machines to replace or augment human labor or animal power. Why mechanize? To boost agricultural production and/or productivity through: Cultivation of a larger area More timely cultivation Better water management Improved efficiency of resource use Improved post-harvest processing Non-production reasons: Ease drudgery Non-farm uses ( family transport, etc) 3. Mechanization in Smallholder Agriculture Common characteristics of smallholder agriculture Small and declining farm size; Unequal access to land and other factors of production; Labor surplus with seasonal shortages; High incidence of landlessness Gender division of labor; Poor and difficult access, e.g bunds in case of wet rice; Soil bearing capacity limited (wet rice) 4. Typology of Mechanization in Asian Agriculture Tractors: two wheel (2W) and four wheel (4W); Water pumps: large and small Transplanters Combine Harvestors: Conventional and mini Threshing and winnowing machines Drying, Milling, Processing Multipurpose Prime Mover: 2W or 4W tractor and tractor engine also used as water pump, for threshing and for transport. Importance of Mechanization: Annual expenditure on mechanization often largest single cost for farmers. 5. Mechanization and Productivity in Smallholder Agriculture Technical change associated with Green Revolution has been the main driver of increased production and productivity. Green Revolution: A seed-fertilizer-irrigation revolution.but also a mechanization revolution. Mechanization of land preparation critical to double/multiple cropping. Mechanization increasingly used in harvesting and other key stages of cultivation Water pumps also critical in many areas to provide adequate water management. 6. The Many Green Revolutions Pattern of mechanization has varied between countries and also within countries. Different technologies for land preparation and water management. Degree of mechanization. Key factors influencing the chosen path: Role of government and policies; Socio-economic and cultural factors; Access: what is available and how to finance. 7. Historical Spread Smaller Rural Machinery (Biggs and Justice 2013) Tech Country 1960 1970 1980 1990 2000 2010 Nepal 4WT 2WT Small Engines Threshers ------------------------------------------------------------------------------------------------------------------------------------50% sales for transport------------ Japanese KTM & PokharaKorean--Chinese--------------------------------------Chinese spread to the terai and hills Small hp Indian irrigation pumpsets --------------------------------------------------------------------------Chinese diesel pumpsets Wheat threshers---------------------------------------------------------starting rice threshers----------- Viet nam Small Engines Small USA engines pumps and long tail boats --------------------Switch to Chinese Engines ---------------------------------------------------------------- Bangla desh 4WT 2WT Small Engines Threshers -------------------------------------------------------------------------------------------------------------------------------------------------large% sales for transport--- Japanese------------------------------------------- Chinese only-------------------------------------------------------------------------- Mainly Indian/Japanese irrigation pumpsets -----------Rapid expansion of Chinese engines for pumps boats etc------------------------- Wheat threshers---------------------------------------------------------and then Rice Threshers------- India 4WT 2WT Small Engines Threshers -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- Japanese-Indian--------------------------------------------------------------------- Chinese -------------------------------------------- Indian/ Listeroid --------------------------------------------------------------------------------------------------------------Expansion of Chinese engines--------------- Wheat threshers-----------------------------------------------------------------and then Rice Threshers-PTO Driven------------------------------- Sri Lanka 4WT 2WT Small Engines -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- Sri Lankan Designed British Made------- Chinese----------------------------------------------------------------------------------- ?-------------------------------------------------------------------------------------------Chinese diesel for pumpsets/threshers-------------------------------- Thai Land 4WT 2WT Small Engines Threshers -------------------------------------------------------------------------Imports of Japanese used --------Japanese brand manufacturing------------------------------- -----Thai developed with Japanese Engines only-----------Japanese Engines licensed manufacturing in Thailand------------------------------------------- ?American? ---------LT Boats----------------Japanese-----------Centrifugal and axial flow pumps-------------------------------------------------- --------IRRI axial flow manufactured---------------------------------------------------------------------------------------------------------------- 8. Composition of Mechanical HP by Engine Size- Bangladesh/India/Nepal 2012 (Biggs and Justice, 2013) Bangladesh India Nepal Energy Source No Units Total hp % of total hp No. units Total hp % of total hp No. units Total hp % of total hp 2WTs* 500,000 7,500,000 53% 300,000 4,500,000 2% 16,000 240,000 13% 4Wts** 35,000 460,000 3% 3,500,000 122,500,000 55% 30,000 900,000 51% Irrigation shallow tube well pump Diesel *** 1.2 M 6,000,000 42% 9,000,000 45,000,000 20% 120,000 600,000 34% Irrigation pumpsets Electric**** 100,000 200,000 1% 12,000,000 48,000,000 21% 10,000 40,000 2% Total 14,160,000 100% 220,000,000 100% 1,780,000 100% Estimates of the numbers of power sources (and their horsepower ratings) used primarily in agricultural and processing uses, including groundwater irrigation pumps. It does not for example include the many engines used in Bangladesh to power riverboats, rice mills, processing, etc, although these are a major part of the Bangladesh agriculture and rural economy * Average of 14 hp per 2-wheel tractors (2WT ** Average of 30 hp per 4-wheel tractor *** Diesel / petrol irrigation pumpsets are average 5 hp. 5 10 % of the pumpsets are petrol/kerosene **** Average electric tubewell is 4 HP 9. Bangladesh: Changing Structure of Farms (Mandal, 2013) Farm holdings 1983/84 1996 2008 No. of marginal farms (LT 0.5 acre) million 2.42 3.35 4.10 No. of small farms (0.5 - 2.5 acres) million 4.65 6.07 8.43 No. of medium farms (2.5- 7.5 acres) million 2.48 2.08 2.11 No. of large farms (GT 7.5 acres) million 0.50 0.30 0.23 No. of absolute landless holdings (million) 1.20 1.81 3.68 Small & marginal farms are dominating. Medium & large farms are declining Timely delivery of inputs, credit & extension services becomes more challenging Market linkages for dispersed small production become more important Ag. labor market is getting tighter, pushing up wage rates Mechanization for crucial farm operations is becoming important (i.e., power tillers, transplanter, irrig. pumps, fert.applicators, harvesters, thres hers) 10. Bangladesh Rice Production (Mandal,2013) Productions of other crops e.g., maize, potato, jute, vegetables & fruits have also increased. 11. Mechanization in Muda, Malaysia: A Case of Progressive Mechanization Adoption of Green Revolution from mid-1960s with Muda Irrigation Project. Promotion of 4W tractors for land preparation initially through Farmers Associations. With double cropping, net effect was increase in labor input and incomes of farm labor. Increasing cost of labor led to introduction of combine harvestors ((late 1970s )and subsequent displacement of labor. But rural labor also increasingly mobile and migrating to urban areas and non-farm work. Growth of private sector provision of mechanization services 12. The Promotion of Mechanization and Big Machine Bias Why the bias? Traditional smallholder agriculture: belief among many policy makers that it suffers from low productivity and is inefficient. Mechanization seen as key part of the process of modernization. Efforts to promote have mainly focused on 4W tractors due to superior technical efficiency; Until recently FAO only counted 4W tractors as tractors; Provision of mechanization services through state agencies using 4W tractors; 13. The Promotion of Mechanization and Big Machine Bias (cont) Over-valued exchange rates favor larger more capital intensive and imported equipment; Subsidies on fuel; Research and teaching in engineering departments generally focused on larger machines; Role of agri-business companies/equipment manufacturers. Growth of smaller rural technologies has occurred despite implicit and explicit bias towards the promotion of big machines (4WT vs 2WT; large pumps vs small pumps, etc.) due to socio-econ and cultural factors or where there has been a more benign policy environment (either by design or practice) 14. The Mechanization Debate Early Controversies (after Ellis 1988) Substitution View: Displacement of labor through factor substitution; Favors larger farmers and leads to increase in equality and landlessness; Negative impact on women Net Contribution View Enables unutilized land to be brought into cultivation; Overcomes seasonal shortages and allow more timely cultivation; Essential for land preparation in double-cropping areas; 15. The Mechanization Debate (cont) Re. 4W vs 2W tractors: Empirical evidence (as of mid 1980s) mixed if slightly in favor of substitution view. (Ellis, 1988) Impact varies in different locations: Muda a case where initially labor captured much of benefit of mechanization. For Mechanization in general: Cannot generalize about impact of mechanization. Some substitutes for and some complements labor. As rural economy evolves, so impact of same technology may change; 16. The Mechanization Debate (cont)_ The Debate Today: Increasingly a context of labor shortage. General consensus that more mechanization needed; Choice of Technology remains important and impacts who gains and who loses; Need to go beyond technical efficiency and focus on economic efficiency; Large machines, like large farms, not necessarily more efficient, whether at financial or economic prices. Land consolidation not necessary for mechanization 17. Lessons and Policy Implications Be cautious over claims of superior efficiency for big machines; Avoid policy bias in favor of big machines; Rental market for mechanization services can allow access for all, even for larger machines; Rental market best left to private sector (limited public sector participation to maintain competition 18. Lessons and Policy Implications (cont) Demand driven approach needs different technologies to meet needs of different farm sizes; Smaller-scale technology more backward and forward linkages and may can contribute more to growth of non-farm sector; Expansion of credit necessary for access; non collateral credit could help landless and smallest farmers gain access; R&D programs need to look at improving smaller-scale equipment. 19. Mechanization and Sustainability Sustainable intensification, e.g. Conservation Agriculture, requires new equipment .machines; Zero-tillage/direct seeding amount and power requirement; Use of organic fuels and renewable energy; Pollution controls; Need to boost efficiency;