Potential of mechanization in improving productivity, farmers income and reduction of sugarcane production cost in India - an ex ante evaluation

Sugarcane is a labour and inputs intensive long durational crop. This study envisages the prospective of sugarcane mechanization in cost saving, productivity gain, sugar recovery as well as farmers profitability and identify the potential of economic benefits of sugarcane mechanization technology adoption for producers, sugar mills and consumers in an ex-ante framework. This study is based on primary and secondary data. The economic surplus model and simple tabular analysis was applied as analytical tools. The findings reveal that sugarcane crop cultivation requires 121–225 labour days per ha. Planting, intercultural operation and harvesting are the main labour consuming operations in sugarcane cultivation. The adoption of mechanization in sugarcane and the expenditure on mechanical power is less as compared to other competing crops in India. However, there is a declining trend in human labour man day utilization in sugarcane production in U. P. and Haryana during last three decades since 1990s which indicates an improvement in mechanization in sugarcane cultivation. The economic surplus model indicates the total surplus (TS) generated through the adoption of mechanization technology amounts to Rs 71,464 crores at national y level. The maximum share of economic gains was accrued in Uttar Pradesh followed by Maharashtra, where crop productivity gains and adoption rate are more. The distribution of economic surplus amongst farmers, sugar mills and consumers reveals that the farmers are key beneficiaries with Rs 39924 crores (i.e. 60.5% surplus gained in UP). The economic gain in producer surplus amounts to Rs 903, Rs 3988, and Rs 2254 crores annually to the sugar consumers, sugarcane farmers and sugar mills, respectively at national level. The estimated internal rate of return (IRR) of 41% reveals that the financial expenditure on R&D of sugarcane machine and implements developed by the ICAR-IISR, Lucknow could repay higher economic benefits to the cane farmers and sugar mills and rural society. The benefit-cost ratio of 80.6, indicates that each rupee invested on sugarcane farm implements research and development work may give dividend of Rs 81. The expected NPV of net social gains was high enough to conclude that the R&D investments would be economically viable, productive and socially acceptable.