Executive Summary:
This document answers questions raised in Lok Sabha regarding farm mechanization levels, the agricultural workforce, GST rates on agricultural machinery, and government plans to promote mechanization and increase workforce participation in agriculture. It clarifies the current status, contributing factors, and government initiatives in place. It highlights the role of state governments and support provided through various schemes and financial assistance.
Key Points / Main Content:
* **Farm Mechanization Levels:**
* India's overall average farm mechanization level is 45, based on 2020-21 ICAR estimates.
* Mechanization levels vary across different crops and farm operations: 70 for seedbed preparation, 40 for sowing/planting/transplanting, 33 for weeding, and 34 for harvesting/threshing.
* Adoption depends on socioeconomic factors, geographical conditions, crops grown, and irrigation facilities.
* **Agricultural Workforce:**
* The share of the workforce engaged in agriculture has shifted to secondary and tertiary sectors, as part of development.
* The percentage of workers engaged in agriculture and allied sectors: 46.5 in 2020-21, 45.5 in 2021-22, and 45.8 in 2022-23, according to PLFS data.
* **GST on Agricultural Machinery:**
* Hand tools and animal-driven tools are exempt from GST.
* Machinery for soil preparation and harvesting is taxed at 12.
* Machines for cleaning and sorting agricultural produce are taxed at 18.
* **Government Plans to Promote Mechanization:**
* The Government of India supports state efforts through policy, budgetary allocations, and schemes.
* Schemes support modern agricultural practices, technology adoption, diversification, market access, and entrepreneurship.
* The Sub-Mission on Agricultural Mechanization (SMAM) aims to increase farm mechanization for small and marginal farmers and in regions with low farm power availability.
* SMAM promotes Custom Hiring Centers (CHCs) to address the challenges of small land holdings and high machine costs.
* Financial assistance of 40-50 of machinery cost is provided for purchase of agricultural machines, depending on farmer category.
* Financial assistance for establishing CHCs is 40 of the project cost (up to Rs. 250 lakhs).
* Financial assistance for Farm Machinery Banks (FMBs) is 80 of the project cost (up to Rs. 30 Lakhs), and 95 for North Eastern States.
Impact Analysis:
* **Farmers:**
* *Impact:* Affected by the level of farm mechanization, access to machinery, and financial assistance for purchasing or renting equipment. Also impacted by job opportunities outside of agriculture.
* *Action Required:* Can avail financial assistance for purchasing machinery and establishing CHCs/FMBs and take advantage of government schemes to adopt modern agricultural practices.
* **State Governments:**
* *Impact:* Responsible for implementing agricultural policies and schemes.
* *Action Required:* Utilize policy measures, budgetary allocations, and schemes provided by the Government of India to support modern agricultural practices and technology adoption.
* **Manufacturers and Suppliers of Agricultural Machinery:**
* *Impact:* Impacted by GST rates on machinery and the demand for agricultural equipment influenced by government subsidies.
* *Action Required:* Stay informed on policy changes and schemes to better align business strategies.
* **Entrepreneurs, FPOs, and Startups:**
* *Impact:* Encouraged through government schemes for creating job opportunities in rural agriculture.
* *Action Required:* Participate in available schemes and initiatives to create job opportunities in agriculture and related sectors.
Key Entities Referenced
Ministry of Agriculture and Farmers Welfare: The Indian government ministry responsible for agriculture and farmers' welfare.
Lok Sabha: The lower house of the Parliament of India, where the question about farm mechanization was raised.
SHRI PRABHAKAR REDDY VEMIREDDY: The Member of Parliament who raised the unstarred question No. 299 regarding farm mechanization.
SHRI RAMNATH THAKUR: The Minister of State for Agriculture and Farmers Welfare who provided the answer to the question regarding farm mechanization.
Indian Council of Agricultural Research (ICAR): An autonomous organisation under the Department of Agricultural Research and Education (DARE), Ministry of Agriculture and Farmers Welfare, Government of India responsible for co-ordinating agricultural education and research in India.
National Statistics Office (NSO), Ministry of Statistics Programme Implementation (MoSPI): The statistical organization in India responsible for conducting surveys like the Periodic Labour Force Survey (PLFS).
Periodic Labour Force Survey (PLFS): A survey conducted by the National Statistics Office (NSO) to estimate the labour force statistics.
Sub-Mission on Agricultural Mechanization (SMAM): A scheme implemented to increase the reach of farm mechanization, especially to small and marginal farmers.
GOVERNMENT OF INDIA
MINISTRY OF AGRICULTURE AND FARMERS WELFARE
DEPARTMENT OF AGRICULTURE AND FARMERS WELFARE
LOK SABHA
UNSTARRED QUESTION NO. 299
TO BE ANSWERED ON THE 22ND JULY 2025
FARM MECHANIZATION AND AGRICULTURAL WORKFORCE
299. SHRI PRABHAKAR REDDY VEMIREDDY:
Will the Minister of AGRICULTURE AND FARMERS WELFARE कृ(cid:874)ष एव ं (cid:873)कसान क(cid:227)याण म(cid:287)ं ी
be pleased to state:
(a) the reasons that the country’s farm mechanization is only 45% when compared to US’s
95%; Brazil’s 75% and China’s 60%;
(b) whether it is a fact that the share of agricultural workforce has dropped from 60% in
1991 to just 39% in 2023;
(c) whether it is also a fact that a uniform GST rate of 5% or 0% on all agricultural
machinery and their components make mechanization affordable for small and marginal
farmers, stimulate demand in under-mechanized regions and encourage adoption of new
technologies; and
(d) if so, the details of the plans that the Government implement to push mechanization
and increase workforce in agriculture?
ANSWER
THE MINISTER OF STATE FOR AGRICULTURE AND FARMERS WELFARE
कृ(cid:874)ष एवं (cid:873)कसान क(cid:227)याण रा(cid:207)य म(cid:287)ं ी (SHRI RAMNATH THAKUR)
(a): The adoption of mechanization by the farmers of various States in India depends on
varying factors such as socio-economic conditions, geographical conditions, crops grown,
irrigation facilities etc. As per the estimates of 2020-21 of Indian Council of Agricultural
Research (ICAR), agricultural mechanization level varies across different crops and their farm
operation in the country. Overall, the operation-wise average mechanization levels across
crops are 70% for seed-bed preparation, 40% for sowing/planting/transplanting, 33% for
weeding and inter-culture, and 34% for harvesting and threshing, resulting in an overall
average mechanization level of 45%.
(b): The shift in workforce from primary (agriculture) sector to secondary and tertiary sectors
is a normal phenomenon of the development process experienced by countries across the
world and the same is true for India, as well. As per Periodic Labour Force Survey (PLFS)
conducted by National Statistics Office (NSO), Ministry of Statistics & Programme
Implementation (MoSPI), the percentage of workers in the usual status engaged in agriculture
and allied sector is given below:
S. No. PLFS Survey year Percentage of workers engaged in Agriculture
1 2020-21 46.5
2 2021-22 45.5
3 2022-23 45.8
Source: Annual Reports, Periodic Labour Force Survey, MoSPI. (2019-20 to 2022-23)(c): Agricultural implements like hand tools and animal-driven tools are exempt from GST,
while machinery for soil preparation and harvesting is taxed at 12%. Machines for cleaning
and sorting agricultural produce are taxed at 18%.
(d): Agriculture is a State subject and Government of India supports the efforts of States
through appropriate policy measures, budgetary allocation and various schemes/
programmes. Various schemes implemented by Department of Agriculture & Farmers Welfare
supports modem agricultural practices and technology adoption, boosting productivity,
promoting diversification into various agro-based sectors aiming to transform rural agriculture,
enhance market access, and improve the livelihoods of farmers, encourages
entrepreneurship among farmers, Farmers Producers Organization (FPOs), and start-ups for
creating job opportunities.
The Sub-Mission on Agricultural Mechanization (SMAM) is implemented with the
specific aim of increasing the reach of farm mechanization to small and marginal farmers and
to the regions where availability of farm power is low and promoting ‘Custom Hiring
Centers (CHCs)’ to offset the adverse economies of scale arising due to small land holding
and high cost of individual ownership of agricultural machines. Under SMAM, in order to
make farm machinery more accessible and affordable to farmers, financial assistance @ 40-
50% of the cost of machinery depending on the category of farmers is provided for purchase
of agricultural machines. With a view to make available machines and equipments to farmers
on rental basis, financial assistance for establishment of CHCs of the project cost up to Rs.
250 lakhs is provided @ 40% of the project cost and financial assistance for establishments
of Farm Machinery Banks (FMBs) of the project cost up to Rs. 30 Lakhs is provided @ 80% of
the project cost. The rate of financial assistance for establishing FMBs in the North Eastern
States is @ 95% of the project cost.
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