Impact of Custom Hiring Services for Costly Machinery on Punjab Agriculture

The agriculture in Punjab is characterized by high mechanisation. However, the farm machinery is mainly owned by the economically sound farmers. This has led to the development of custom-hiring services of farm machinery. It has helped the majority of smallholders to undertake farm operations with farm machinery without investmenting in it. In Punjab, about 40 per cent farm households own a tractor, but every farm household uses it. Human labour employment is higher on tractor-owning farms. The custom hiring system has provided nonfarm employment opportunities to poor/small farmers. Due to timely and sufficient availability of tractor services, the productivity of major crops has been found higher on the tractor-owning farms than on custom-hiring farms. Also, the net farm income is higher on tractor-owning farms than custom-hiring farms, but input costs are lower on custom-hiring farms. The custom-hiring farmers reported the problems of high cost of these services and lack of their timely and adequate availability. Therefore, the government should support the efficient delivery system of custom hiring services for costly farm machinery, especially by developing the Primary Agricultural Cooperative Societies as Agro-Service Centres. It would be particularly beneficial to the small farmers in reducing production cost and increasing their farm income.