Power Tiller – best for small and marginal farms

In the new agriculture, the mechanization and technology is having significant role. There are appropriate machinery and equipment as per land holding, size and crop. The Department of Agriculture, Cooperation & Farmers Welfare, Government of India, has been implementing various schemes and programmes for the benefit of farmers through State Governments.  Let us see the financial assistance for procurement of agricultural machinery and equipments.

The major category of the agricultural machinery is tractors and on the secondary side, the Power Tillers.  In case of the SC, ST, Small & Marginal Farmers, Women and NE States` beneficiaries, the maximum permissible subsidy per machine/equipment is Rs.50,000 and the Pattern Assistance is 50 percent for the Power Tiller (below 8 BHP) and Rs.75,000 for the 8BHP & above).  Similarly for other beneficiaries, the maximum permissible subsidy per machine is Rs.40,000 and Rs.60,000 respectively with the pattern assistance of 40 percent.

Power Tiller is one of the multi-utility devices which are ideal for small and marginal farms. About 86% of the farm holdings are small and marginal in the country. However, the use of power tillers is confined mainly to a handful of crops such as paddy and sugarcane and that too mainly in the Southern and the North-Eastern States. The tractor industry has grown substantially, reaching a production capacity of over 600,000 tractors a year. On the other hand the power tiller industry has remained under-developed, producing only about 35000 - 40,000 units annually. Power tillers, which are essentially mini-tractors with two wheels and rotary tillers, should logically be preferred over tractors by Indian farmers particularly the small and marginal farmers. In Japan, where the average farm size is smaller than India, power tillers are extensively used for paddy cultivation. But this is not the case in India. Even small and marginal farmers prefer to own or hire a tractor than the easily affordable power tillers. 

The Power Tiller market is serviced by two Indian companies i.e. VST Tillers Tractors Limited, Bangalore & Kerala Agro Machinery Corporation (KAMCO) Ltd., Athani (Kerala). These two companies are collectively catering to more than 68 percent of the market. The remaining market is catered by power tillers mainly imported from China. The power tiller industry is expected to grow in the future owing to the good monsoons, availability of easy financing and non-availability of labour in the agriculture sector. However, the Indian Power Tiller Companies are facing a stiff challenge as many new manufacturers/traders assemble Chinese power tillers completely for marketing in India. Imports from China now accounts for about 30 per cent of the total industry sales, compared with the 10 percent market share enjoyed by imported tillers a few years back. The demand for power tillers imported from China is growing on account of it being about 10-20 percent cheaper than its Indian counterpart.  

The two Indian manufacturers of power tillers have manufacturing capacity of 90000 power tillers per annum. However, they are not able to utilize their full capacity due to competition from the Chinese power tillers. The Indian power tiller manufacturers provide direct and indirect employment to many  people of this country.  

There are only two indigenous manufacturers of power tillers in the country viz. VST Tillers Tractors Limited (VST), Bangalore (Karnataka) & Kerala Agro Machinery Corporation (KAMCO), Athani (Kerala). As per the data supplied by these two manufacturers, the manufacturing cost (raw material cost) of power tiller on an average is Rs. 92,000/-. The average selling price of their power tillers is Rs. 1,65,000/- which includes cost towards overhead expenses such as cost of consumables, assembly, pre-delivery inspection etc. (average Rs. 23,500/-), VAT on basic cost (average Rs. 2400/-), cost of accessories (average Rs. 7550/-), dealers margin (average Rs. 10,000/-), company profit ranged from Rs. 1970/- to Rs. 5000/- and other charges such as freight, insurance, PDI expenses, marketing expenses, finance charges, local transportation, octroi and other levies on an average Rs. 26,000/-. 

The selling price of indigenous power tillers range from Rs. 1,40,000 to 2,15,000 and that of imported (Chinese) power tillers range between 1,08,500 to 1,95,300. There is wide gap in the selling price of power tillers among States. Thus there is selling price difference of around Rs. 20,000 to Rs. 32,000 between indigenous and Chinese power tillers in different States. Chinese power tillers are around 10-20 percent cheaper than the indigenous power tillers.