What are the ground-level challenges associated with agricultural mechanization?
From ChatGPT to agricultural mechanization, the pursuit of efficiency is sought after in various aspects of life. Labor-saving technologies like agricultural mechanization can be indispensable for increasing productivity, reducing labor costs, and optimizing operations, particularly in the context of labor scarcity and rising wages in rural Bangladesh. Nevertheless, IFPRI’s recent field work in Tangail district in Dhaka division has highlighted notable challenges faced by local service providers related to agricultural mechanization.
On April 18, 2023, IFPRI conducted a field visit under the Climate Change x Agriculture investment, funded by the Bill & Melinda Gates Foundation to glean further insights on the use of and challenges surrounding agricultural mechanization.
Meet local service provider Taufiq*
Taufiq is an entrepreneur in Tangail with diverse sources of farm and nonfarm income. He owns land equivalent to 4 pakhi (224 decimals), where he produces different varieties of rice. He also owns retail shops in the local market. He has most of the necessary equipment for farming – a tractor, shallow machine, thresher, and a combined harvester.
Two years ago, Taufiq bought a combined harvester from a well-known agri-machineries importer for Tk 31 lakh (US$29,000) through a subsidy program, with the Bangladesh Government providing a 50% subsidy. Taufiq paid Tk 6 lakh ($5,600) as a down payment and took a loan from an agricultural bank at a 4% interest rate under the government stimulus package to purchase the harvester.
While labor-saving technologies like combined harvesters can increase productivity and efficiency, they also come with costs such as fuel, operator fees, and maintenance expenses. Taufiq generates extra income by not only using his combined harvester on his land but also renting it out to other farmers. However, the machine's usage is limited by the weather conditions. During the last season, Taufiq could only use it for 10 days due to the muddy soil caused by heavy rains. Additionally, an operator is required to run the machine, and the cost for an average of 25 days in a season is around Tk 50,000. While Taufiq's elder brother occasionally operates the machine, the cost of fuel has increased, with a combined harvester requiring at least 90 liters of fuel daily.
Taufiq and his combined harvester operator received a two-day long training from the seller, which covered basic machinery use and field demonstrations. The use of a combined harvester has reduced labor costs for Taufiq: he now only needs 5-6 laborers instead of the 25-30 previously required. It also takes less time to collect the harvest from the field, and Taufiq can now collect rice from the field in one day, which previously took one week.
Challenges facing local service providers like Taufiq
Despite some clear benefits of using a combined harvester, Taufiq and other local service providers still face several challenges. IFPRI’s conversations with Taufiq revealed six key challenges facing many local service providers:
- #1: Land sizes tend to be small: Taufiq’s observations about land tenure arrangements reflect IFPRI’s evidence. Specifically, in 2018/2019, IFPRI’s research in Bangladesh shows that large inequality in the distribution of land ownership in rural Bangladesh, with about two out of five farmers considered marginal, owning just 9% of the total land operated compared to only 8% of farmers who were classified as large farmers, owning about one-third (32%) of the total land. Likewise, IFPRI’s research also found that the use of certain labor-saving technologies like power tillers increases as farm size increases, leaving marginal and smallholder farmers with relatively limited access to these productivity tools (Ahmed et al. 2021).
- #2: Knowledge is power: Taufiq noted that farmers tend to not have enough knowledge about the benefits of combined harvesters, and hence do not take advantage of these productivity-enhancing tools. For instance, according to Taufiq, farmers (erroneously) believe that the use of machines will harm their straw production.
- #3: Lack of quality operators and limited popularity of the combined harvester rental market: Local service providers may face challenges when trying to rent out their machines beyond their immediate vicinity, as some brokers with a nationwide network may offer them lower prices than expected. Also, Taufiq heard about instances when local service providers find the agreement unsuitable and decide to return the machines, they may encounter security issues as brokers may attempt to damage the machines.
- #4: Time investment and willingness to pay: Many local service providers do not know farmers outside of their village or upazila (sub-district), so when they try to provide services in other locations, they face difficulties to accumulate their service charges as most of the farmers are not able to pay the charge in due time.
- #5: Lack of government monitoring: After purchasing the machines, various local service providers have had less interaction with government officers. There is no regular communication between owners and government officers regarding how they are using the machines or assistance in finding new customers.
- 6: Cost of doing business is high: These machines are usually imported from other countries and the cost of spare parts is high. The lack of quality in locally-produced spare parts also increases the cost of doing business. Before purchasing the machines, the selling agents showed them a promising figure to do business, but after purchasing, they are not seeing that promising figure as the machines are used seasonally, and the business viability is very much different.
What stands in the way of agricultural mechanization working for agricultural value chain actors in Bangladesh?
While local service providers like Taufiq have reduced labor costs and improved efficiency through using machineries such as combined harvesters, they still face several obstacles, including small land sizes, lack of farmer awareness about the benefits of mechanization, shortage of skilled operators, limited rental market, and limited support. Addressing these challenges may be critical in unlocking the full potential of labor-saving technologies to improve agricultural productivity and livelihoods in rural areas.
Prepared by Md. Aminul Karim and Julie Ghostlaw
Reference:
Ahmed AU, Bakhtiar MM, Abedin N, Anowar S, Hossain NZ, Quabili W, and Ghostlaw JG. Research-Based Evidence to Support the Formulation of the Country Strategic Opportunities Program (COSOP) for IFAD-Bangladesh. International Food Policy Research Institute; 2021.
Resources:
- Visit the Climate Change x Agriculture investment project page to learn more about the initiative and IFPRI’s work under this activity.
- Read IFPRI’s Field Notes - Exploring mechanization in agriculture: Insights from a field visit to Tangail District (March 2023)
- Read IFPRI’s blog - Supply- and demand-side barriers to reach uninsured farmers: Field-level insights on agricultural microinsurance in Bangladesh (February 2023)
*Taufiq is a pseudonym given to protect the confidentiality of the local service provider.