Mechanisation and the Future of Indian Agriculture

With the right investments, policies, and innovations, India has the potential to become a global leader in sustainable agriculture
Mechanisation and the Future of Indian Agriculture

India’s agricultural sector has long been the backbone of its economy. However, despite its significance, farming practices in the country remain largely traditional, limiting productivity and efficiency. This is particularly concerning as agriculture still provides employment to around 50 per cent of India’s population and contributes approximately 20 per cent to the national GDP1. As the global population grows and climate change introduces new challenges, India’s agricultural sector faces increasing pressure to innovate. Mechanisation, combined with smart farming technologies, offers a path forward, and by 2029, India's agricultural landscape could undergo a revolution akin to the Green Revolution of the 1960s.

Smart farming – using data-driven insights to optimise agricultural operations at a micro level – would play a crucial role. Precision farming, enabled by AI, sensors, and satellite imagery, empowers farmers to monitor crop health, predict weather patterns, and make real-time decisions. Research suggests that precision farming can boost crop productivity by 30-40 per cent2, fostering sustainable, high-yield farming. India can learn from global leaders in smart farming. In the U.S. and Europe, precision agriculture leverages Global Positioning System (GPS), sensors, and satellite technology to manage resources like water and fertilisers efficiently3. In Japan, automated tractors and IoT solutions tackle labour shortages4, while the Netherlands excels in vertical farming and precision irrigation, optimizing resources and conserving water5. Drawing from these models, India can fast-track its own transition towards technology-driven agriculture by 2029.

However, smart farming alone is not enough to meet future demands. Mechanisation – using machinery to streamline farming processes – minimises manual labour and enhances efficiency. While U.S. and China have mechanisation rates of 95 per cent and 57 per cent6 respectively, India's level lags at about 40 to 45 per cent7. Regional disparities further highlight this gap - states like Punjab and Haryana, where agriculture is more industrialised and farms tend to be larger, have embraced mechanisation at a faster pace. Meanwhile, some states have much lower mechanisation rates due to smaller average landholdings, limited resources, and a lower maturity in adopting agricultural technology. This intra-country disparity underscores the need for region-specific approaches to make mechanisation accessible and effective for all farmers across India. 

Addressing these regional disparities requires not only technology and financial support but also strategic policies that consider the unique challenges faced by each state. While programs like the Sub-Mission on Agricultural Mechanisation (SMAM) and Pradhan Mantri Kisan Samman Nidhi (PM-KISAN) have already made strides, a more targeted approach could prioritise regions with smaller, fragmented farms. Offering higher subsidies or tailored loan schemes for machinery in these regions can enable small and marginal farmers to afford essential equipment.

Promoting cooperative models and Farmer Producer Organisations (FPOs) is vital for pooling resources in states with small and fragmented landholdings. FPOs can enable farmers to jointly purchase and share expensive machinery, such as tractors and harvesters, reducing the per-farmer cost of mechanisation. Additionally, support for community-operated Custom Hiring Centers (CHCs), where farmers can rent equipment as needed, could be expanded. This solution provides small farmers in under-mechanised states with access to modern equipment without the financial burden of ownership.

Leveraging digital technology, a platform similar to ride-sharing models could be established specifically for hiring farm machinery. Such a platform would allow farmers, especially in remote areas, to book equipment on-demand. Several pilot programs in India have shown the viability of this concept, where mobile apps and digital hubs connect farmers with equipment owners nearby, bringing transparency and accessibility to the leasing process. This model could be scaled up to include a broader range of equipment and regions, ensuring that even the smallest farmers can access the latest machinery.

Addressing digital and physical infrastructure gaps is critical for any mechanisation solution. While the Digital India initiative has made significant progress, increasing rural broadband and mobile network penetration remains essential to support digital platforms for equipment sharing and smart farming solutions. Expanding rural electricity and ensuring reliable power supply is equally important, as much of the modern machinery relies on consistent energy. Government investment in rural infrastructure can make mechanisation and technology-driven farming viable for farmers across all states.

Education and awareness programs are equally crucial to help farmers understand the benefits of mechanisation and adopt new technologies confidently. Expanding the scope of the National e-Governance Plan for Agriculture (NeGPA) to include region-specific training programs can empower farmers with the skills needed to use mechanised tools and interpret the data generated by smart farming technologies. Additionally, awareness campaigns highlighting successful mechanisation models in similar-sized farms or regions can demonstrate the potential benefits and encourage adoption among hesitant farmers.

Finally, sustainable practices must guide the shift to mechanised, smart farming. Technologies such as precision agriculture and water-efficient irrigation techniques — used in countries like the Netherlands and Australia — can conserve resources and protect the environment. Indian agriculture must similarly adopt methods that boost productivity without compromising soil, water, or biodiversity.

In sum, with the right investments, policies, and innovations, India has the potential to become a global leader in sustainable agriculture, ensuring food security for its population and contributing to global agricultural supply chains. The journey to 2029 will require a concerted effort from the government, private sector, and farmers alike, but the rewards for Indian agriculture and its future generations are well worth the pursuit.

A version of this article appeared in the December 2024 Print issue of Agriculture World magazine

[1] Labour and Employment Statistics 2022, Ministry of Labour and Employment, Government of India
[2] Automation and AI in Precision Agriculture: Innovations for Enhanced Crop Management and Sustainability, Asian Journal of Research in Computer Science, October 2024
[3] Summary of the Annual Report on Food, Agriculture and Rural Areas in Japan, Ministry of Agriculture, Forestry and Fisheries (MAFF), 2021
[4] Summary of the Annual Report on Food, Agriculture and Rural Areas in Japan, Ministry of Agriculture, Forestry and Fisheries (MAFF), 2021
[5] How the Netherlands Feeds the World, The National Geographic, September 2017
[6] Climate-Smart Technology Based Farm Mechanization for Enhanced Input Use Efficiency, Indian Council of Agricultural Research, July 2020
[7] Mechanization and Technology Division, Department of Agriculture & Farmers Welfare, accessed on 23 October 2024

Author

Nilachal Mishra

Partner and Head of Government & Public Services

KPMG in India

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