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Custom Hiring of Farm Machinery

Custom hiring of farm machinery is the rental delivery of tractors, harvesters, transplanters, drones and other implements through Custom Hiring Centres (CHCs) operated by rural entrepreneurs, FPOs, cooperatives, SHGs or panchayats. The model lets smallholders who cannot afford ownership access timely mechanisation on a per-hour or per-acre basis.

Principle

Modern agricultural machinery is capital-intensive and seasonal in use, leaving private ownership economic only on holdings above a threshold size. CHCs aggregate demand across many small farms and amortise each machine over a larger annual operating hour count. Per-hectare cost of operation falls below private-ownership economics for users below the breakeven holding size while operator income covers depreciation and finance cost.

Implementation

Under the central Sub-Mission on Agricultural Mechanization (SMAM), eligible entities receive 40 percent subsidy on machinery cost to establish a CHC, with up to 50 percent available for SC/ST applicants, beneficiaries in North Eastern Region states and small farmers. Rural entrepreneurs, FPOs, cooperatives, SHGs and panchayats are eligible. The NABARD model scheme circulated via TNAU specifies viable machinery mixes, financial projections and operating norms. ICAR-CIAE Bhopal anchors the engineering and economic studies on operating viability and equipment selection.

Adoption context

CHCs are dense in Punjab, Haryana, Madhya Pradesh, Maharashtra, Telangana and Andhra Pradesh where mechanisation demand is strong and FPO networks are mature. The format extends increasingly to high-tech equipment — combine harvesters, super seeders for in-situ residue management, and agricultural drones for spraying.

Limitations

Operational viability depends on machine utilisation rates above breakeven, which itself depends on local cropping calendars and competition from neighbouring CHCs. Maintenance discipline, operator skill and service-area logistics are recurrent failure points. Late delivery in peak season — when every farmer needs the same machine on the same day — is a frequent grievance.

See also In Situ Residue Decomposition for a residue-management practice that depends on CHC-rented super seeders.

References

  1. Sub-Mission on Agricultural Mechanization (SMAM). Department of Agriculture and Farmers Welfare.
  2. Custom Hiring Centre Model Scheme. NABARD via TNAU Agritech Portal.