“India is tractorised, but not mechanised”
The Mahindra Group is a $19.4 billion federation of companies that enables people to rise through innovative mobility solutions, driving rural prosperity, enhancing urban living, nurturing new businesses and fostering communities. Mahindra has been India’s topmost tractor brand and the world’s largest tractor manufacturer by volume. With a presence in over 40 countries, Mahindra has leveraged on its quality, as the only tractor brand in the world, to win both the Deming Award and the Japanese Quality Medal. It holds a leadership position in utility vehicles, information technology, financial services and vacation ownership in India and is the world’s largest tractor company by volume. It also has a strong presence in renewable energy, agribusiness, logistics and real estate development. Headquartered in India, Mahindra employs over 2, 56,000 people across 100 countries. Hemant Sikka, President, Farm Equipment Division, Mahindra & Mahindra shares his views on the future of farm mechanisation industry in India with Agrospectrum. Edited excerpts;
How did COVID-19 impact the farm mechanisation industry in India?
The pandemic has triggered increased adoption of mechanisation on farms due to factors like labour migration, which has resulted in very good growth in farm machinery sales in FY'21.
In terms of tractors, for the first time ever, in FY’21 the tractor industry has touched the highest-ever volume of 9-lakhs. This is in spite of the industry having lost April and May last year in terms of production due to lockdowns. So, in spite of working only for 10 months, the industry has grown by 27 per cent.
At Mahindra, we clocked over 3.54 lakhs tractors of domestic and exports sales combined. This growth has been on account of several positive factors in the rural economy leading to growth of the domestic tractor industry and farm mechanisation. Successive bumper Rabi and Kharif crop harvest, coupled with timely procurement of crops, have ensured seamless circulation of money in the rural economy.
Government spending on Agriculture & Rural Development, via the Mahatma Gandhi National Rural Employment Guarantee Act (MNREGA) outlay was increased substantially. While we’ve seen bumper and record crops output, the
price realisation for the farmer has also been very good. Between June and September, the monsoons were also higher than the Long Period Average (LPA) by 9 per cent. It is noteworthy that this year we have had the 3rd highest cumulative rainfall in 25 years, with good temporal and spatial distribution. It was also the first time since 1960 that we had back-to-back, above average monsoons. Good Monsoons have also led to high reservoir levels. As a result, the Rabi sowing is also very good.
What are your growth strategies and plans for the upcoming years?
While we have a strong tractor portfolio, we are building technology skill sets beyond it. The company is working on introducing a range of farm machinery, with the idea of taking technologies used in large land holding farms around the world and making them affordable and accessible to small land holding farmers. A step in this direction are alliances and acquisitions in Agri Technology and startups in the last few years.
Based on these acquisitions and partnerships, Mahindra has launched new agri machinery such as potato planters and rice transplanters. Beyond hardware, Mahindra has also rolled out Krish-e Centres in nearly half a dozen states so far.
With the tag line – ‘Expert Takneek. Naye Upay. Parinaam Dikhaye’ – Krish-e is a new business vertical that provides technology-driven services which are progressive, affordable and accessible to farmers. Krish-e aims to increase farmer income through digitally enabled services, across the complete crop cycle.
These include agronomy advisory, access to advanced farm equipment rentals and newage precision farming solutions, all focused on bringing down overall farming costs and improving crop output and consequently the farmer’s income.
How would you envisage the future of the farm mechanisation industry in India by 2030?
Farm Mechanisation has been identified as a key tool to increase agri production globally. Several studies suggest a direct correlation between increased yield and farm mechanisation, which also leads to several other economic and social benefits for farmers.
While India is amongst the largest tractor markets in the world, it is also highly organised. However, India has a low level of mechanisation compared to developed countries. While a tractor is a prime mover, the agriculture machinery value chain involves mechanisation right from land preparation to sowing to harvesting and post-harvest. At every step in the production lifecycle, the use of farm equipment enhances the efficiencies, not only in reducing labour time and post-harvest losses, but also helping cut down on production costs over the long term.
While there is some level of mechanisation (beyond using tractors), it is skewed towards land preparation. For many other operations, simple implements are used or the work is done by manual labour. Also this level of mechanisation varies greatly by region. From a global perspective the tractor industry is worth around $60 billion, and the farm machinery industry is worth an additional $100 billion. In contrast, the Indian tractor industry is at around $6 billion and the farm machinery industry is at just $1 billion. Looking at these numbers it is clear that India is tractorised, but not mechanised.
Looking at India from a broader lens, over 85 per cent of Indian farmers are small and marginal ones, having less than two hectares of land, but they own just 47.3 per cent of the total crop area. These small farmers are simply unable to afford these mechanisation technologies due to cost and low income issues. As a result, there is a low overall rate of mechanisation in Indian farms.
While farm mechanisation in India has made strong strides in recent years, there is still a long way to go. Countries like the United States and European nations are completely mechanised, while places like China and Japan have also seen higher penetration of farm machinery. In comparison, the Indian agricultural sector still lags behind and requires an increase in farm mechanisation. And, we at Mahindra, have one of the widest range of farm machinery offerings and are working towards the introduction of newer ones, based on the expertise from our Global Centres of Excellence (COE). We will soon launch new rice planer technology in collaboration with Mitsubishi of Japan.
Mahindra’s Global COE are located in Japan (Rice Agri Machinery Value chain & Light
Weight Tractors), Finland (Harvesters & Forest Machinery) and Turkey (Farm Implements).
What is Mahindra's involvement in Artificial Intelligence, Machine learning, and data analytics deployment in the agriculture industry?
Digital and Data drive farming is definitely the future, and at Mahindra, we have introduced Krish-e in Oct 2020, a new business vertical. It provides technology-driven services which are progressive, affordable and accessible to farmers. It aims to increase farmer income through digitally enabled services, across the complete crop cycle. This is through agronomy advisory, access to advanced farm equipment rentals and new-age precision farming solutions, all focused on bringing down overall farming costs and improving crop output and consequently the farmer’s income. It is an innovative new business vertical conceived with the idea of ushering in a new digital age of farming in India. It aims to transform the lives of farmers, by helping them to adopt better more effective farming techniques powered by Artificial intelligence
(AI), IOT and digital solutions that are affordable and accessible, paving the way for increased productivity and profitability. Through Krish-e, we are engaging with our farmers more deeply and creating stronger relationships. To enable this, M&M has made strategic investments across the globe including in Resson – a Canadian predictive analytics company, Gamaya – a Swiss hyperspectral image analytics company and Carnot – an Indian Ai-enabled Agri IOT Company.
Krish-e centres are being rolled-out across the country in a phased manner. We rolledout Krish-e stores in nearly half a dozen states so far and are rolling out Krish-e centres in Karnataka as well. Krish-e Precision Farming solutions use a variety of sensors and cameras on the farm, on drones, on satellites and on farm equipment to collect soil, crop and machine data. AI algorithms transform this data into user friendly and insight rich field maps, enabling farmers and agronomists to run variable rate farming operations, using intelligent machines. Such operations are already helping potato, grape and sugarcane farmers reduce their costs of cultivation and improve their yields. Through Krish-e, we are working to create a nation of Champion Farmers.