Can a cab aggregator model help solve the stubble burning problem?
Lakhs of farmers across Punjab and Haryana are suddenly the bad guys. They are bent upon burning paddy stubble, unmindful of the intense pollution it causes. They are also refusing to heed the pleas of the authorities and are ready to pay fines.
The government wants to give the farmers 50% subsidy to buy farming equipment to deal with paddy stubble. Punjab has appointed nodal officers at block and village level to check stubble burning. Government employees who own agricultural land and grow paddy have been instructed not to burn stubble.
But the farmers remain aggressive and say they won’t buy the machines. Why?
QUESTION OF ECONOMICS
The collective wisdom of farmers across two states is not wrong. The whole issue is not a question of subsidies or of technologies. It is a question of economics. Will you buy a vehicle for using it just for six hours in a year? It costs ₹1.50 lakh and the government is ready to give you a subsidy of ₹75,000 for it. Are you ready to purchase it?
The government is telling the farmers to buy the Happy Seeder for in-situ management of paddy stubble. The in situ option includes incorporation of paddy stubble in the soil, or its retention on the surface. Happy Seeder plants the wheat seed in the fields without getting jammed by the rice stubble.
Now look at the economics of the machine that the farmers are being told to buy.
The Happy Seeder costs ₹1.50 to ₹1.70 lakh. The government is offering a 50% per cent subsidy to individual farmers to purchase it. So the farmer should invest ₹75,000 in a Happy Seeder. But the machine will be used only for six hours (considering small land holdings) in the whole year after paddy has been harvested and the farmer needs to plant wheat. Won’t the hardearned capital of the poor farmer be locked up in a machine?
Who is gaining here? Let us split the gains where purchase of the Happy Seeder is concerned. The machine is priced at ₹1.55 lakh to ₹1.70 lakh in the market. The cost for building it, however, is ₹50,000 to ₹60,000 approximately. Labour and other costs for production can be capped at ₹20,000.
GETTING THE PRICE RIGHT
After cost price of ₹80,000, the manufacturer can look for a good profit margin of ₹20,000, which totals ₹1lakh. The logistics of moving it to the dealer’s premises can be taken at ₹5,000. The dealer can add a margin of ₹10,000 on each purchase. Even after good profit margins, the Happy Seeder should be priced at ₹1.10 lakh to ₹1.15 lakh.
After the government announced the subsidy, the cost/price of the Happy Seeder (for the farmer) increased to ₹1.50-1.70 lakh. Who is pocketing ₹55,000 which is still unaccounted for in the price of each Happy Seeder?
AREN’T MAKERS BEING SUPPORTED?
The days of individual purchase of farming equipment are over. Admittedly, the government is offering 80% subsidy to a group of farmers buying the Happy Seeder. But the resolution of the problem lies elsewhere.
UBER/OLA MODEL FOR FARMING MACHINERY
Think Uber/Ola model in the agriculture community. Or a farming equipment bank, where a farmer rents the machine he wants.
Paddy is grown on about 28 lakh hectares in Punjab. The state produces about 20 million tonnes of paddy stubble each year. Haryana sees paddy cultivation over approximately 13 lakh hectares, and produces about 12 million tonnes of paddy stubble. Farmers in the two states burn rice stubble to quickly get their fields ready for the wheat crop.
Farmers need a service. But selling them a product is not the solution. Custom hiring service is specially designed for farmers to use machinery suited to their specific needs such as crop or land size.
When suitable machines are made available to farmers at affordable rates, they can use the money saved to conserve water, manage crop stubble and adopt other good practices.
EMPLOYMENT GENERATION AT VILLAGE LEVEL
Custom-hiring farming equipment centres generate employment within the village. As demand during crop season goes up, the service provider engages more village youth to provide the service to farmers round-the-clock.
With the high demand generated for agricultural equipment, each village will need more than one equipment rental bank. This leads to more employment generation at the village level, which in turn will galvanize the rural economy. Major role of government The custom-hiring equipment centre benefits farmers directly. It leases equipment to farmers for mechanised agricultural services. Simply offering subsidy on modern farming equipment will not get the desired results.
These private service providers need training, financing, mentorship and regular hand holding before they become part of the agriculture extension network of the state. The state governments can ably fulfill this role.
The campaign for paddy stubble management needs logical consent and positive action by all stakeholders. With the support of new technologies, it is important for us to reach out to farmers with common sense economics.
CUSTOM HIRING SERVICE IS DESIGNED FOR FARMERS TO USE MACHINERY SUITED TO THEIR SPECIFIC NEEDS