DARE - Because Entrepreneurs Do

This big farm equipment offers manufacturing and rental opportunities even as large multinationals are looking at India as a manufacturing hub

The farm equipment market in India is now growing at a fast pace after a brief period of decline between 1999 and 2002.

The main reasons for revival of this industry include easy availability of finance schemes and reduction in interest rates. Farm equipments are often costly for a small-scale farmer and loans are preferred to buy tractors, combine harvesters, threshers, etc. However, with increased awareness of benefits of these machines and various schemes, the market is looking upward.

What is a combine harvester?
Combine harvester is a farm equipment that can do multiple tasks such as harvesting multiple crops, threshing, winnowing, and collection of grains. The market for combine harvesters is still in its nascent stage but it is growing fast. Farmers in Western and Southern states of the country are looking to buy this equipment.

The manufacturing of combine harvesters started around 1970 when Punjab Agricultural University, Ludhiana (PAU) helped locals to manufacture farm machinery. But It was around 9-10 years back when the demand for combine harvesters increased at a fast pace.

The market
There are two main models for combine harvesters based on their working principles: self-propelled and tractor mounted. Tractor mounted combine harvesters are cheaper as compared to self-propelled combines and are often preferred by farmers who have smaller holdings of lands.

Benefits of combine harvesters

Reduces crop losses.

Tackles peak time labor shortage.

Saves time

Helps in maintaining the turn-around time for taking up the next crop.

The demand of tractor mounted combines is estimated at around 3,500 and for self-propelled combines is around 1,500. The heartening factor for this segment is that only 10-15% farms use these machines for harvesting. The growth rate for the demand of combines is expected to be around 12% annually. This is where opportunity lies.

Claas Industries from Germany is already into business of manufacturing these combines since 1991, and Kubota from Japan is also looking to start assembling these machines in India.

Export opportunities are also increasing and lots of countries in Africa like Burkina Faso, Zambia, Madagascar, and in Europe like Germany are opening their market for Indian players. Pakistan is also becoming a considerable importer of these machines.

Models and Variations

Tractor mounted or Self-propelled combines

Maize combine harvester

Track Combines specifically used in wet lands

Combines for soybean and gram

Constraints for the market
The major constrain for the market of combine harvester is its price. The rate varies between Rs 5 lakh to Rs 22 lakh depending upon the models and functionality. Fragmented land holding, poor rural transport facilities, inaccessible farms and lack of local manufacturers and repairing facilities are some of the factors that have kept this industry mainly focused in North India especially in Punjab. Lack of proper knowledge about farm equipments and shortage of diesel in the country are some of peripheral constraints.

Commercial banks and institutions like NABARD are opening up financing facilities to farmers and the segment is seeing some sort of incremental demand.

The Way Out
The panacea for this constraint of cost is custom hiring of farm equipments and it fits quite interestingly for combine harvesters. Tractor mounted combines could cost 20-30% less than self-propelled combines, and self-propelled combines are owned by contractors or farmers holding big fields. During the harvesting seasons, these machines are sent to different states and areas for custom hiring. Farmers having small holdings hire these machines on contract basis and let them harvest the crop for them. Contractors or owners of these machines send their groups in different states for harvesting season that could go on for around 2 months.

The cost of combine harvesting of wheat and paddy is around Rs. 3000-4000/- per ha. If done manually, it takes around 20 laborers to harvest one hectare charging around Rs. 150/- per day (this could vary state-wise). Apart from that, there is a cost of Rs. 1000/- per ha for threshing also. The total cost of harvesting comes almost equal in both the cases but the time saved and labor-shortage-issues are solved quite nicely by opting for combine harvesting.

In last 2-3 years, Punjab has faced acute shortage of labor coming from Bihar and Uttar Pradesh. The situation was so drastic that farmers used to sit at railway stations at Ambala and Rajpura and wait for laborers to alight so that they could be picked right from there. However, due to industrial initiatives by Bihar government, lots of laborers prefer to work in those units avoiding traveling and costs of living in different state. This is where farm equipments especially like combine harvesters that have multitasking functionality come to the aid of agriculture sector. Other states are also facing labor shortage and state governments are encouraging R&D and innovations in farm equipments.

Institutes Involved in Testing and Evaluation

Bureau of Indian Standards

Farm Machinery Training and Testing Institute, Budni (Madhya Pradesh), Hissar (Haryana)

Regional Research Laboratories under CSIR

Areas of Improvement in Combine Harvesters
Due to slow development of this segment in India, research and improvement in the functionality and efficiency of combine harvesters have been slow till now. Only cereal crops are harvested using these machines. Most of the straw is left in the fields and burned which has many environmental issues. Apart from this, farmers are losing valuable animal feed material.Extending these machines to different crops like sorghum, cotton, sugarcane, sunflower, safflower, and pulses through design modification can be done.

Harvesting of fruits is one more area where these machines can be extended for functioning but it requires a lot of design modification and quality enhancement measures.

One major concern of improvement is the usage of combine harvesters during off-season. Capital investment in purchasing combine harvesters is huge, and there is great need of developing some jobs where these machines can be used during non-harvesting season.

Scope and opportunities
The scope of this segment of farm mechanization is huge. Interestingly, till now, Punjab is the only state where almost all the manufacturers of combine harvesters are clustered. Manufacturers like Swaraj, Preet Combines, Kartar Combines, Standard Combines, and Deshmesh Combines are all from Punjab. There are number of smaller players in Punjab that manufacture low-cost combines that are suitable for farmers having small land holdings.

States like Madhya Pradesh, Andhra Pradesh, Tamil Nadu, and Uttar Pradesh often seek supply of these combine harvesters from Punjab. Therefore, there are great opportunities for new start-ups in different parts of the country.

For new start-ups, there is no big challenge in terms of market. Intelligent selection of material, improvements in design, and offering quality post-sales repair services could be the factors that could help them stamp their presence in the marke.

Dr. Gyanendra Singh, Vice Chancellor, Mahatama Gandhi Chitrakoot Vishwavidyalay, Madhya Pradesh

Why is the production of Combine Harvester concentrated in Punjab when other states also use these machines? Manufacturer of farm machinery in Punjab in general is very high compared to other states. PAU Ludhiana in 1970s helped the local industries in establishing farm machinery industries. Even the first thresher which was designed at Allahabad Agricultural Institute, Naini Allahabad was taken up for manufacture by Martin Burn in Calcutta but became popular only when the same was taken up for manufacture by the manufacturers in Punjab. Thus, Punjab has better infrastructure for the manufacture of farm machinery compared to other states. What regulations the government imposes on production of Combine Harvester for standardization? The BIS prepares standards for the agricultural machinery, and Farm Machinery Testing and Training Institute Budni, MP conduct tests to ensure quality. But these are not mandatory unless the farm machinery is to be purchased through Bank loans. What could be the set-up hurdles if somebody wants to start a business of Combine Harvester production? There are no hurdles in the manufacture of combine harvesters or any other farm machinery by small scale units. They must follow industrial laws and labor laws. Is there any promotional policy or incentives from the government to boost agricultural machinery industry in India? The Government of India provides financial incentives to the farmers through State Government in terms of Centrally Sponsored Implement subsidy Scheme.

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