The Financial Express

Financial support for farm mechanization

| Updated: May 31, 2021 21:32:37

Financial support for farm mechanization

The government's plan, as disclosed by the agricultural minister late last week, to provide 'soft' bank loans to farmers to buy farm machinery is a move in the right direction given the acute shortage of farm labourers in the countryside. Banks have been extending loans to buy farm machinery such as power tillers, tractors and irrigation pumps for decades. The loan that is being talked about lately is for a few bigger and expensive farm machinery, including harvesters and reapers.

The introduction of farm machinery in Bangladesh on a bigger scale is now desired most for a variety of reasons. Power tiller was the first machine to enter the farmers' fields in the early eighties. Its use got pace in the later years as the shortage of draught animals gradually turned acute. Other small and less expensive types of farm machinery that are produced locally were introduced in some major rice-growing areas long ago.

Yet farm mechanisation in the country is well below the desired level.  One of the main reasons is the question of affordability on the part of small and marginal farmers who produce the bulk of the food grain in the country. However, they take the services of a section of people who operate power tillers and some other farm machinery commercially. In the initial years, the fees charged by the operators were exorbitant. But with the entry of too many parties, the fees have come down much to the benefit of the farmers.

The government has been rightly emphasizing the local production and extensive use of farm machinery to help boost farm output and make farming easy. It has taken up a Tk. 30-billion project to speed up farm mechanisation.  Besides, to achieve the goals, the subsidy is being provided to the farmers to buy farm machinery.  In April last year, the government rolled out Tk. 1.0 billion in subsidy programme for the purpose.

The good intention of the government, however, may not yield the desired result, finally. The subsidy money or loans instead of going to the farmers might end up in the hands of the groups who are out to exploit the small and marginal farmers through their commercial ventures. Farm machinery like combined harvesters and reapers are expensive, but they are very useful during the harvesting time because of their huge capacity. They are particularly useful for emergency use. 

 Even after receiving subsidy at rates between 50 and 70 per cent, the cost of a harvester ranges between Tk.1.0 and Tk. 1.5 million. Small and marginal farmers cannot afford that. Even they will not be interested in low-interest loans to buy the same. Under the circumstances, agriculture cooperative societies could be the best vehicle to ensure the use of such machines by these categories of farmers. Unfortunately, such societies are almost non-existent these days. 

The agriculture ministry can make the best use of the services of its field-level officials in forming groups comprising small and marginal farmers who would collectively buy farm machinery of all types employing their funds and bank loans for their use and also for renting out the same to others. 

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