Driving by the side of a paddy field or walking through green leaves, one hears the sounds of machines used in farming. Farming has become now more mechanised than ever whether to lift ground water for irrigation or to till the land. Realising the growing importance of mechanisation, the finance minister in his budget speech for 2016-17, reduced customs duties on spare parts of locally produced agricultural machines. The step is welcome as local industry has been growing over time and needs some kind of protection. But the moot point of today's submission in this column is to say that machines have replaced draft animal and human labour in Bangladesh's agriculture. Let us then have some impressions about mechanisation derived from field visits.
The impacts of mechanisation on farm productivity and society in the 20th century are profound. At the end of the 19th century, it took, for example, 35 to 40 hours of planting and harvesting labour to produce 100 bushels of corn. A hundred years later, producing the same quantity of corn took only 2 hours and 45 minutes. With the passage of time, the theory of relative factor abundance dictated the intensity of factor used in crop production; the need of the comparative advantage has forced farmers to change their input package on the heels of relative change in prices of these inputs. It is, thus, no wonder that a labour-surplus economy like Bangladesh for most part of the 19th century witnesses massive mechanisation of farms in the late twentieth century onwards.
Mechanisation in Bangladesh was promoted in the 1960s with the introduction of tractors, deep tube-wells, and low-lift pumps on a limited scale. These were supplied mostly by BADC, the Water Development Board and the Comilla Academy. The main objective was to raise productivity through reaping economies of scale. The large-scale machinery was, however, 'inappropriate' in the context of small and marginal farm-dominated agriculture in Bangladesh. They had limited success in reaching farmers.
The First Five Year Plan of Bangladesh continued a positive policy on promotion of tractors under the umbrella of farmers' cooperatives, termed 'Cooperative Capitalism'. Many tractors were imported in the early 1970s and were fielded through the cooperatives, but their use for tillage remained limited. Social scientists here were against promoting larger machines because of the negative effect on employment of the landless and unequal distribution of income.
Faced with criticisms, small-scale equipment such as power pumps and shallow tube-wells, were found appropriate in the Bangladesh context. The machines started spreading since the late 1970s. Mechanisation of irrigation equipment got a boost in late 1980s with a broad-based policy change including liberalisation of markets for inputs, removing ban on imports of machinery by the private sector and reduction of tariffs. The policy promoted private sector investment due to reduction in the cost of imported agricultural machinery.
First, with growing scarcity of fodder, maintenance of farm animals for providing draft power became costly. This development promoted mechanisation of tillage operations and reduced dependence on draft power of animals. Take the supply side first. About 55 per cent of households owned cattle in recent years compared to 67 per cent in 1983-84, and the number of cattle per household also declined during the same period of time. This has raised the cost of hiring draft animals. Second, rapid expansion of a) paved farm-to-market roads, b) microfinance provided by NGOs, and c) marketed surplus of agricultural produce with diffusion of improved agricultural technology, created job opportunities for the landless in rural trade and transport operations. As a result and over time, the agricultural labour market became tight and with it agricultural wage rates started increasing rapidly. It provided incentives to farmers to go for labour-saving agricultural operations. As a result, a market for selling machine services developed.
The predominant source of investment on the machines is own savings. Micro-credit from NGOs and mutual support system with friends and relatives also play some roles. Only up to a quarter of shallow tube-wells and power threshers are exclusively used for operation of own farms. A rental market has developed for full utilisation of services of the machines. For power tillers, for more than 90 per cent of the machines, services are rented out.
The most common rental system is payment of rent in cash per season. Sharing of crop is still a significant rental arrangement. For shallow tube-well renting for use per hour is practised in 35 per cent of cases which is an efficient rental system.
Most of the income from rental services comes from the boro season, particularly for shallow tube-wells. For power tillers and power threshers, utilisation of services is also substantial in the aman season. The highest incomes come from power tillers, almost three times compared to shallow tube-wells, and double compared to threshers. To conclude the overall picture of mechanisation in rural areas, we may possibly highlight the following:
* To reap economies of scale, the government has long been promoting agricultural mechanisation through farmers' cooperatives. Except mechanisation of irrigation, the success remained limited till late 1980s,
* The policy of liberalisation of agricultural input markets in late 1980s gave a boost to private investment in irrigation equipment,
* Growing scarcity and high cost of fodder and increase in real wages gave a further boost to investment in agricultural machinery over the last two decades,
* Ownership of machines is mostly in the hands of medium and large landowners,
* Investment in machines is financed mostly by own savings. Micro-credit has played important role overtime,
* A rental market for machinery services developed to provide access to services to small and marginal farmers,
* Operation of the machines is highly profitable. Cost of investment is recovered within two years, and
* Mechanisation has led to timely and efficient farm operation, increased profit, reduction of drudgery, lowering of post-harvest losses and improved grain quality.
The writer is a professor of Economics at Jahangirnagar University.
