Custom hiring centers - Opportunities

Appropriate mechanization is very critical for reducing drudgery and for meeting the shortage of labour. The main objective of custom hiring centers is to supply of farm implements to small and marginal farmers at nominal rates on hire. This enables the small and marginal farmers to take up farm operations on time.  Small equipment like weeders, markers, sprayers, drum seeder etc should be available in custom hiring centers.

Study is conducted in three districts viz Medak, Mahabubnagar and Ranga reddy. Following are the outcomes of the study in Budda samudram village of Mahabubnagar district:

Total farmers: 425

Area in Acres: 1000 Acres

Bore wells: 180

S.No	Crop	Khariff Area in Acres	Rabi Area in Acres
1	Cotton	600
2	Paddy	350	400
3	Chillies	50
4	Fodder	50
5	Vegetables	50

Equipment required for rain fed crops:

S.No	Operations	Equipment required
1	Sowings	Manual
2	Ploughing	Tractor
3	Land preparation	Ploguh bullocks/Tractor
4	Weeding	Ploguh bullocks/Manual labour
5	Fertiliser /organic manure application	Seed drill/Plough bullocks
6	Botanical extracts/Pesticide application	Power sprayer /Tractor mounted sprayer
7	Picking	Labour
8	Drying	Trapalin
9	Transportation	Tractor

Paddy:  

S.No	Operations	Equipment
1	Ploughings	Tractor
2	Transplantation	Manual/Drum seeder
3	Weeding	Weeder/Manual
4	Botanical extracts/pesticides	Power sprayer
5	Harvesting	Harvester/Manual
6	Threshing	Tractor/Plough bullocks
7	Transportation	Tractor

Economics:

Tractor:

	Investment required
S.No	Component	Amount
1	Engine	500000
2	Trailer	100000
3	Discs	50000
4	Cultivator	20000
5	Cage wheels	20000
6	Gorru	7000
7	Rotavetor	100000
8	12 Discs set	30000
9	Sprayer	15000
10	Total cost	8,42,000

Expected income from 1000 Acres (Scope):

S.No	Expected income for 1000 Acres
1	Operation	Rent per Acre	Area in Acres	Expected income
2	Ploughing	500	1500	750000
3	Gorru	750	600	450000
4	Puddling	400	650	260000
5	Spraying (three times)	200	400	240000
6	Rotavetor	200	600	120000
7	Manure/Tank silt application (Trips)	250	2000 trips	500000
8	Transportation	1400	100 trips	140000
9	Total income expected			2460000

Costs and returns:  

Four tractors are working in the village. As these four tractors are not able to meet the demand on time one more tractor is proposed by SHG members and farmers. Costs and returns for four and five tractors are as follows

	Costs and Returns
S.No		Four tractors	Five Tractors
1	Installments	5,60,000	7,00000
2	Driver salary	2,16,000	270000
4	Disel	8,80,000	8,80,000
5	Maintainance	40,000	50,000
6	Total cost	16,96,000	19,00000
7	Net income	7,64,000	5,60,000
8	Net income for each tractor	1,91,000	59,333

Power tiller:

Power tiller is useful for following operations:

A.      Ploughing

B.      Puddling

C.      Transportation (30 bags)

It is useful for in case low-lying lands and for small holdings. Business is available for one power tiller in spite of availability of tractors.

Engine - 12 HP	95,000
MB plough, tiller etc	25,000
Trailer	15,000
Total cost	1,35,000

Expected income for a power tiller:

 

S.No	Operation	Rent per acre	Area in Acres	Expected income
1	Ploughing	300	150	45,000
2	Puddling	300	250	75,000
3	Transportation	500	50	25,000
4	Total income			1,45,000

Costs and Returns:

 

S.No	Componet	Amount
1	Installments	12,000
2	Disel	58,000
3	Maintainance	3,000
4	Total cost	73,000
5	Net income	72,000

 

Combine harvester:

 

Chain type	17,00,000
Tyre type	20,00,000

Expected income:

Area in Acres	Rent	Expected income
400	1700	680000

Costs and Returns:

S.No	Component	Four tractors
1	Installments	80,000
2	Driver salary	60,000
3	Disel	1,20,000
4	Maintainance	10,000
5	Total cost	2,70,000
6	Net income	4,10,000

Taiwan sprayers:

Cost: Rs.17,000/-

Expected income:

Area in Acres	No of sprayings	Rent	Expected income
600	3	50	90,000

Costs and Returns:

There eight sprayers available in the village. SHG members suggested five more sprayers will meet the demand:  

Cost of sprayer	17,000
Petrol	45,000	(1lt for four acres
Maintenance	1500	Engine oil etc
Total cost	63,500
Net income in first year	26,500
Net income from second year	43,500
Net income from existing sprayers	5,437
Net income from 13 sprayers	3,346

Tarpaulins:
	Nos	Expected income
Tarpaulins	100	1500

Equipment for custom hiring center in the village:

S.No	Equipment	Nos required	Approximate cost in Rs.
1	Tractor with all attachments	One	8,42,000
2	Power tiller	One	1,35,000
3	Power sprayers	Five	85,000
4	Tarpaulins	100	10,000
5	Markers	3	1,800
6	Weeders	10	6,500
	Total cost		10,80,300

Aggregation model for marketing of vegetables

Scope for aggregation:

There is a huge scope for aggregation of vegetables for marketing. There are very few successful models existing across Andhra Pradesh and of late few entrepreneurs are coming with these models.  Currently these aggregators are dealing with approximately 100 tons/day (this includes aggregation done by retail markets) and reaching few hundreds of vegetable growers from less than 50 villages.

Investment:

 Investment is required Transport vehicle, crates, grading table etc.  Approximately Rs.25 to 30 lakhs investment is required, and this excludes land.

Key components in aggregation:

Identifying producers and buyers:

 The first step for establishing an aggregation model is identifying buyers and producers. Connecting to potential buyers and getting orders is crucial for success, further building confidence among the producers is even more critical as the producers are connected to merchants in the market for a long period. Confidence building measures like giving advances, credit, seeds, prompt payments and  transparency in weighing etc are required to build confidence among the producers.

Collection centre:

 Collection center is the nerve center for aggregation. Currently there are two types of collection centers i.e  farmers bring their produce to one centre place from there the produce goes to warehouses like in Vontimamidi and the other one is farmer’s produce will bring to one place for grading and sorting like fresco.  Collection center requires infrastructure support like transport vehicle, weighing machine, crates etc. Fresco is doing grading at collection center and then t goes to customers.

Distribution center:

Distribution center is required if scale of operations is increased and if the produce reaches from different places. Distribution center process the orders and distribute the products to customers.

Key factors for success:

Trusted suppliers:

 Aggregation agency should have trusted customers to ensure regular supply and who is willing to change their cropping pattern to meet the demand from customers.

Price fixation:

Agency should have robust market intelligence to fix price. Even though entire marketing activity and price revolves around “Bionapally market” getting right price at right time is critical as the prices fluctuates from time to time.  As a thumb rule all the agencies paying 10% less than the bionpally market.  

Payment mechanism:

Prompt payment is one of the confidence building measures. Different agencies adopt different payment schedules. For regular suppliers they are adopting weekly payment and online money transfers. Spot payment is also done for occasional suppliers. Transparency and uniformity in payments will attract more suppliers.

Production plan:

Demand from buyers is for about forty commodities, meeting this demand is a big challenge as farmers in any given area grows almost same varieties. To meet this challenge agency should develop a production pan and should ensure different farmers grow different crops in the required area. Further this production plan should fetch maximum price i.e farmers should harvest their produce when price is maximum in the market.  

Coping in lean season:

 Supplying required quantities in lean season is very critical to maintain the buyers. The agency may require investing or supporting farmers to grow crops in lean season i.e summer

 Reducing wastage:

 5-10% of wastage is common while handling vegetables. Anything more than this leads to losses. To avoid wastage agency should focus on transport, grading and moving the produce to customers as quickly as possible. More the number of handling points more is the wastage, so one should reduce handling points.

Professional support:

The agency should have professional support in key areas like price fixation, grading, getting orders from buyers, developing production plans, building relationships with farmers etc.

 Risks:

 A.      Breaks in supply

 B.      Cancelation of orders by buyers
 C.      Price fluctuations

House Hold Nutritional Security Model (36ftX36ft models)

This model is unique as it promotes nutritional security and round the year income to the family, in the smallest land extent possible.

 This model is developed based on the following principles:

1.       Different plants require different Photo candle light 

2.       Monocot – Dicot crop combination to maintain equilibrium for soil fertility

3.       Companion crops 

4.       Multi storied structure to harvest maximum sun light

5.       Crop diversity to manage pests

 The crops are arranged in six tiers based on the canopy and photo candle requirements.  As the crops diversity ranges from tuber crops to fruit crops, from vegetables to pulses, all the nutritional requirements for a family are met.

First tier: Root or tuber crops such as carrot, beetroot, zinger etc comes under this category. These plants require minimal sunlight.

 Second tier: Creepers, which cover the soil such as bottle gourd, cucumber etc. Creepers will act as live mulch.

Third tier: Leafy vegetables such as surrel leaves, spinach, coriander, amaranthus etc.

 Fourth tier: Vegetables such as Brinjal, Tomato, chillies etc

Fifth tier: Perennial Castor and Perennial Red gram etc

 Sixth tier: papaya, drumstick , clustered apple, guava etc

    

Plants and crop arrangement in 36X36 model:

Sufficient space should be given between fruit plants, Redgram, Castor, drumstick etc. In between fruit plants, tuber crops, vegetables etc should be grown in blocks. Care should be taken that all the plants get enough sunlight for photosynthesis. Crop arrangement should also be in such a way that monocots and dicots are placed adjacent to each other. Mono cot and dicot crops should be rotated in the blocks. Companion crops such as Maize and Cucmber, Citrus and osmium, Tomato and Carrot should be grown close to each other. Entire field should be covered either with creepers or with mulch. Creepers can be allowed to grow on the fruit plants.

1.       Four corners : Fruit plants such as papya, drum stick, guav etc

       2. For every 4.5 ft there should be a irrigation channel across the model

3       For every 90 cms P.Red gram and P.Castor alternatively can be grown starting from Mango or Cashew etc

4       On Red gram – creepers such as Bitter gourd can be allowed to grow

5.       On Castor  - Creepers like beans can be grown

6.       Between two fruit plants  or Red gram/Castor –  vegetables such as Tomato, Chillies, Onion etc can be grown

7.       Along the irrigation channels Creepers such as cucumber, bitter gourd etc can be grown

8.       Along the border green leaf manure crops such as Gliricidea, Subabul, Casiasemia etc can be grown

 Economics:

The incomes from this model range from Rs.4000-Rs.12000.

 The variation is due to the cropping pattern.

 The models where leafy vegetables were grown extensively are on the higher side incomes earned.

 The highest income so far from 36*36 models is Rs.19000.

Cost involved in developing this model is for seeds, layout preparation and preparation of dung based inoculants and botanical extracts for pest management.

Total cost per year ranges between Rs. 700- 12,000/-.

Over view of Agriculture in Andhra Pradesh in 2011

Extreme drought:

 2011 witnessed one of the worst drought situations. All most all crops dried up due to extreme drought condition. Paddy, Groundnut and Cotton crops are the worst sufferers. According one estimation farmers incurred around Rs.7,000 crores loss in this Khariff season. Situation is aggravated with regular power cuts.

 Many farmers ploughed the crop or fed their cattle. Initial rains created hopes among the farming community and they sown huge areas but after one month i.e from mid July there are no rains. Farmers tried several ways like pumping water from tanks with diesel pump sets,  hired generators to run electric bore wells, carried water in head loads, hired water tankers to irrigated their fields, but none of these efforts saved farmers and their crops. 

Hikes in Fertiliser prices:

Fertilsier prices were hiked thrice in the Khariff season. Urea prices were hiked by almost three times and DAP prices were hiked by two times. This raise in prices leads to increase in costs. Further there is a huge gap between supply and demand. Many farmers depend on block market for fertilsiers.

Crop holiday:

Farmers in Konaseema region of East Godavari, parts of west Godavari and Khammam announced crop holiday. The main factors contributing to this includes increase in labour costs, low minimum support price particularly in case of Paddy, credit cards to tenants etc.  Crop holiday resulted in loss of more than on lakh tones of Paddy. Govt commissioned a study headed by Shri.Mohan Kanda,IAS farmer chief secretary of Andhra Pradesh but the recommendations of committee are not accepted by many farmers. 

Failure of minimum support price operations:

Lack of infrastructure facilities coupled with institutional inefficiencies is the main reasons for failure in providing minimum support price to farmers. Farmers able to get minimum support price where Women SHGs operated procurement centers.

Tenancy act:

Government announced prestigious tenancy act. The main objective of the act is to recognize tenant farmers as “Farmers” and to provide them institutional credit. East Godavari district administration is able to issue tenancy cards to farmers on a large scale but other districts are failed to issue cards to all tenant farmers. This act neither created confidence in the bankers nor in the tenant farmers.

Farmer’s suicides:

 Many farmers particularly cotton farmers committed suicides due to crop failure and debts. Cost of cultivation is increased tremendously due to increase in labour costs and fertilsier prices. Crops failed due extreme drought. Increase in costs, poor institutional credit and extreme drought are the main reasons for farmer’s suicides.

 Overall the situation is pathetic. Farmers are in distress, they are looking for support from governments. Failure of institutions, failure of support systems, failure in monsoons created distress in the farming community.