Agricultural Mechanisation: Profitable or Not?

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As technology propels the world forward, few can imagine a time when messages were sent by pigeons. Yet, while communication has evolved, agriculture in many parts of the world remains rooted in outdated, labour-intensive methods passed down through generations. 

With the global population continuing to rise, securing food for all depends on embracing mechanised farming. But with the high costs of agricultural machinery, how can farmers ensure profitability? In this article, we’ll delve into the economic realities of mechanised farming and explore its potential for transforming agriculture.

Why Mechanised Farming?

Agricultural mechanisation simply refers to the use of machines and equipment to perform agricultural tasks, replacing or significantly reducing manual labour. A study conducted by Wngeningen university and Olam Rice Nigeria confirmed that mechanised threshing prevents approximately 479 kg of food loss per hectare. Mechanization was found to have the potential of increasing farmers income by 200%.

How To Make Agricultural Mechanisation Profitable

Like every business owner, the dream of every farmer or agribusiness person is to maximise profit. However the upfront cost of agricultural mechanisation has deterred many from acquiring machineries to boost productivity. Let’s explore some ways we can enhance profitability with mechanisation in spite of this challenge:

Proper Equipment Selection: 

Optimising equipment selection is crucial for maximising profitability in mechanised farming. Farmers must consider factors such as farm size, crop types, and local conditions when choosing machinery. The success of this approach is evident in the Jessore District of Bangladesh, where a group of 50 small-scale rice farmers, each with an average farm size of 2.5 acres, formed a cooperative to invest in shared mechanised equipment. By carefully selecting versatile, multi-purpose machines suitable for their small plot sizes – including power tillers, transplanters, and combined harvesters – these farmers achieved remarkable results. They reduced production costs by 30%, increased rice yield by 25%, decreased post-harvest losses by 40%, and saw an average income increase of 35% per farmer. This case study underscores the importance of tailoring equipment choices to specific farming contexts.

Implement Precision Agriculture

Implementing precision agriculture is another key strategy for optimising mechanised farming. This approach utilises technologies like GPS-guided tractors, drones, and sensors to optimise resource use, significantly reducing input costs by ensuring efficient application of water, fertilisers, and pesticides. The effectiveness of precision agriculture is exemplified by a large-scale corn and soybean farm in Iowa, spanning 5,000 acres. By implementing GPS-guided tractors, variable rate technology for applying inputs, and integrating data from soil sensors, weather stations, and satellite imagery, this farm achieved impressive results. 

Collaborative Ownership Models

Collaborative ownership models offer a promising solution for small and medium-scale farmers facing the high initial costs of mechanisation. These models, such as machinery rings or cooperatives, allow farmers to share both the costs and benefits of expensive equipment, making mechanisation more accessible and profitable. A successful example of this approach can be seen in Germany, where machinery rings have been popular since the 1950s. Today, there are over 240 machinery rings in Germany, serving approximately 192,000 members.

Diversify Farm Income

Diversifying farm income through custom hiring services is another effective strategy for maximising the profitability of mechanised farming. This approach not only helps offset the cost of equipment but also promotes mechanisation in the local farming community. A case study from Kenya illustrates the potential of this model. The Hello Tractor platform, often described as the “Uber for tractors,” connects tractor owners with farmers in need of mechanised services. Since its launch in 2014, Hello Tractor has served over 500,000 farmers and reports that tractor owners can recoup their investment within three years through custom hiring services.

Proper Maintenance and Training

Proper maintenance and training are crucial elements in ensuring the profitability of mechanised farming. Regular equipment maintenance prevents breakdowns, extends machinery lifespan, and optimises performance.Investing in proper training for farm operators and maintenance staff is equally important.These practices not only improve profitability but also contribute to the sustainability of farming operations by extending equipment life and reducing resource waste.For instance,  Brazil’s largest sugar and ethanol producer, Raízen, implemented a rigorous maintenance program that reduced their overall maintenance costs  and increased machine availability over a long period.

Government Support and Subsidies

Government support and subsidies play a vital role in promoting farm mechanisation and enhancing its profitability. Many countries offer financial incentives, low-interest loans, or tax benefits to farmers adopting mechanised farming practices. In the United States, the USDA’s Farm Service Agency provides loans specifically for farm equipment purchases.In developing countries, government support has been instrumental in accelerating farm mechanisation. For example, India’s Sub-Mission on Agricultural Mechanization (SMAM) provides subsidies on various farm implements and machinery.China’s experience also demonstrates the impact of government support. The Chinese government’s subsidy program for agricultural machinery, initiated in 2004, has been a key driver of the country’s rapid agricultural mechanisation. In the European Union, the Common Agricultural Policy (CAP) provides support for farm modernization, including mechanisation. 

Agricultural Mechanisation: The Path to Boosting Productivity and Profitability

As demonstrated by numerous case studies and statistics from around the world, the future of agriculture is mechanised, efficient, and profitable. By leveraging the right technologies, collaborative models, and supportive policies, farmers of all scales can unlock new levels of productivity and economic success.