Category Archives: BRICS

Tractors are Changing Agriculture in India

India faces a challenge for mechanization of farming due to the fact that the percentage of farmers with land sizes of less than 2 hectares have tripled, and those with 2-10 hectares have increased more than 70 percent, in the past forty years. These small and marginal farms are operated by 92 million farmers, compared to only a million farmers in India who have large holdings. With India’s smallest farm numbers ever-growing, the economics of mechanization are difficult. Forty-four percent of the total operated area in India is on farms less than 2 hectares. Fifty percent of its farms are still ploughed by animals.

The chief marketer for India’s equipment maker, Mahindra & Mahindra, has written an article for The Hindu Business Line which is chock-full of interesting information and gives us pause for what we take for granted here in the U.S.

Sanjeev Goyle describes India’s rural transition due to the adoption of tractors on farms. He tells us that India accounts for one-third of global tractor production and that more than half of its domestic tractor sales are for tractors having 50HP or less.

He lists reasons why tractors can increase the productivity of farms, and are better than animal labor: two bullocks take about five days to plough one hectare, a tractor can do it in five hours; modern machinery helps keep the younger generation on the farm; and, the tractors can also be used for purposes other than in the field, for water pumps, as alternators, and for hauling.

Mahindra is responding to its nations’ smallest farmer needs by making a 15HP, fuel-efficient, lower cost tractor which it hopes is as affordable as owning a pair of bullocks. Called Mahindra Yuvraj 215, it costs about Rs 2.5 lakh, and farmers are encouraged to rent it out to help pay for it. This tractor should help meet the needs of small land holder farmers with vineyards, apple and other orchards, hillside farms, vegetable farms for working fields and transporting vegetables to market, and even for garbage collecting in narrow city lanes.

Goyle goes on to say that India’s government is helping to subsidize the mechanization of rural India and is offering the opportunity to “hire” tractors through Samriddhi centers which help to educate the farmers about the latest technologies.

Mahindra is also trying to expand its tractor sales here in the U.S. and other developing nations to take advantage of better growth opportunities. In a recent earnings report the company states that they are dealing with weak macroeconomic conditions which have affected sales.

Sources: No longer in bullock-cart age; Domestic tractor-makers roll on, have global greens in sight.

Notes from the Kansas City Fed Agricultural Symposium July 2013

This is one of the slides that Mike Boehlje of Purdue showed during the July KCFRB agricultural symposium. There was a global cropland expansion of 147 million acres in the past eight years. Most of these acres came from South America, the FSU, and East Asia, and most of those acres went into growing corn, followed by soybeans. Note that some of the added acres are from double cropping.


In mid-July, the Federal Reserve Bank of Kansas City hosted its annual agricultural symposium titled, “The Shifting Nexus of Global Agriculture.” I considered attending but did not, so instead I read the twitter feeds of those who tweeted the event and there are some good nuggets in the (modified) tweets which follow.

1) From speaker Mike Boehlje, Professor at the Dept. of Agricultural Economics, Purdue:

• Citing a new report he had just seen in the WSJ, Boehlje said that the IMF had decreased projections for world economic growth for the 4th quarter in a row. He said that this article has huge implications for agriculture including in China, India, and Brazil, too.

• Don’t drink the Kool-aid that the agribusiness sector is feeding. Growth in INCOME counts, not population growth. (K.M. Note: This was my favorite quote from this whole post, as I about go ballistic every time I see that “How are we going to feed… ” headline, which is far too often and gets the question wrong! …there are many other things that count besides growth in income, too, but it most certainly isn’t just about production.)

• Boehlje said he’s a pessimist on long-term U.S. livestock industry competitiveness, which was based on cheap feed. The U.S. demand for animal protein is “mature at best and probably declining.” Larger multinationals may well off-shore production.

He named 12 things to watch:
• EU debt crisis
• U.S. economic recovery
• changing value of the USD
• unpredictable Asian growth
• current short crop supplies – weather supply shocks
• livestock regulations
• increased global acreage for crops
• farm policy uncertainty
• interest rates
• fertilizer, seed, chemical, energy prices (input costs)
• farm income and land values
• counterparty risk

2) Univ. of Missouri’s Pat Westhoff:

• Don’t count on $7 corn “unless the world changes in very fundamental ways.” He sees sub-$5 corn the next 10 years.

3) Gavilon’s Ray Wyse:

• The FAO food index has tripled since the RFS was implemented, and land prices have increased five fold.

• There are still more acres to be had in the FSU region, and double cropping is growing steadily around the world.

• Some people are now looking at the People’s Republic of Congo as “the next Brazil.”

• Is it possible to double-crop corn in certain regions of the U.S. as Monsanto develops shorter season varieties?

• We will miss our corn export market when its gone.

4) Texas A&M economist Joe Outlaw:

• You don’t write a farmbill for the good years, you write it for the bad years. Policy makers have to focus on that reality.

5) Next, are a few tweets about farmland. Sorry, I don’t have all of the sources of the quotes.

• In fiscal 2012, Farmers National Company has sold more than 600 farms, for over $450 million. Active farmers continue to dominate the buy-side of the market.

• Investors purchased between 25-30% of FNC’s 2012 sales. Traditional investors about half, non-traditional investors growing.

• Jim Farrell: A new phenomenon we’re seeing is the 80+ year old cash buyer. He’s doing this since there’s no return on investment in CD’s or other “safe” investments. (K.M. Note: I’ve also seen this going on with home purchases where I live here in Boulder, Colorado. You’d think 75 year olds would downsize, but instead they upsize – presumably for a place to safely invest with a better chance of return on their investment.)

• Joseph Bond: Ag expansion in the Black Sea region will require billions of dollars of investment in modern agriculture techniques.

• William Mott: More concerned about infrastructure and logistics costs with international farming operations than cost of production.

6) Informa’s Kenneth Eriksen:

• There are “center pivots going up all over the map” in central and southern Illinois.


(Thanks to @Feedstuffs @ianberry and @HoardsDairyman for tweeting the event.)

The KCFRB’s links to talks and slides from the event may be found here:

3 Picks: Brazil Agriculture, PBS NOVA on GMOs, Chickpeas

The Nelore breed of beef cattle grazes in a field in the Itapebi County of Bahia, Brazil.
USDA photo by Scott Bauer.

Below, are today’s three chosen agricultural-related news picks.

1) Brazil continues to increase agricultural yields and exports: Erica Sullivan quotes Marcos Fava Neves, “Brazil’s crop this year will be 15 percent bigger than last year. This year, the agribusiness exports in Brazil will be $100 billion U.S., and in 2000 it was $20 billion. It’s saving the Brazilian economy.”

2) PBS Nova on the Advantages of GMO Technology: This is well-said by Amy Maxmen. “He (Walter DeJong) was shocked at how people who don’t live near farms feel entitled to advise farmers, especially on environmental matters. “There is a romantic notion of environmentalism, and then there is actual environmentalism,” De Jong says. “Farmers are very conscious of the environment. They want to hand off their operation to their kids and their kids’ kids, so they maintain the land the best they can while doing what they need to do in order to sell their harvest,” he says. “My guess is that the majority of people who are anti-GM live in cities and have no idea what stewardship of the land entails.” “I find it so tragic that, by and large, crop biotechnologists and farmers want to reduce their pesticide use, and yet the method we think is most sustainable and environmentally friendly has been dismissed out of hand.” He pauses as he recalls the event and says, “There is no scientific justification for it—it is just as if there is a high priest who decided, ‘Thou shalt not be GMO.’ ”

3) Why farmers are swapping tobacco for chickpeas: The demand for chickpeas to make hummus is growing as the demand for tobacco is decreasing, so farmers in tobacco growing areas are finding that this new crop has value and requires less costly inputs.