Joint Farm Machinery Ownership in Indian Agriculture-Need of the Time

Agricultural mechanization helps in increasing production, productivity and profitability in agriculture by achieving timeliness in farm operations, bringing precision in metering and placement of inputs, reducing input losses, increasing utilization efficiency of costly inputs (seed, chemical, fertilizer, irrigation, water etc.), reducing unit cost of production, enhancing profitability and competitiveness in the cost of operation. Machinery and production costs represent a major cost factor and one that has been on the rise in recent years. Proper management of these costs represents a key area where farmers can effectively and efficiently recapture gross margin. The average farm size in India is small (1.15 ha) which accounts for 85% of land holdings. Mechanization of small farms or individual ownership of farm machinery is uneconomical as per Indian scenario. Many farmers have reduced their machinery costs by owning equipment jointly. This helps smaller operators utilize machinery more efficiently and still enjoy the convenience of owning a full line. It also helps younger operators get started with less capital tied up in machinery. The key to successful joint machinery ownership is for the partners to be able to agree on when and how to use each piece of equipment. Depending on weather and crop conditions, decisions may have to be made on day-to-day basis. The objective is to complete field work for all partners in a timely manner while minimizing the time spent in transporting machinery. Due to decreasing land holdings in India, farmers need to opt the joint machinery ownership options so as to reduce initial heavy cost burden and at the same time they can run these machines on custom hiring basis. The paper is focused on joint farm machinery ownership models, supported by results of a survey which shows reduced initial cost burden due to joint ventures of ownership.