Factors associated with small-scale agricultural machinery adoption in Bangladesh : census findings

Abstract

There is strong advocacy for agricultural machinery appropriate for smallholder farmers in South Asia. Such ‘scale-appropriate’ machinery can increase returns to land and labour, although the still substantial capital investment required can preclude smallholder ownership. Increasing machinery demand has resulted in relatively well-developed markets for rental services for tillage, irrigation, and post-harvest operations. Many smallholders thereby access agricultural machinery that may have otherwise been cost prohibitive to purchase through fee-for-service arrangements, though opportunity for expansion remains. To more effectively facilitate the development and investment in scale-appropriate machinery, there is a need to better understand the factors associated with agricultural machinery purchases and service provision. This paper first reviews Bangladesh’s historical policy environment that facilitated the development of agricultural machinery markets. It then uses recent Bangladesh census data from 814,058 farm households to identify variables associated with the adoption of the most common smallholder agricultural machinery – irrigation pumps, threshers, and power tillers (mainly driven by two-wheel tractors). Multinomial probit model results indicate that machinery ownership is positively associated with household assets, credit availability, electrification, and road density. These findings suggest that donors and policy makers should focus not only on short-term projects to boost machinery adoption. Rather, sustained emphasis on improving physical and civil infrastructure and services, as well as assuring credit availability, is also necessary to create an enabling environment in which the adoption of scale-appropriate farm machinery is most likely.

There is strong advocacy for agricultural machinery appropriate for smallholder farmers in South Asia. Such ‘scale-appropriate’ machinery can increase returns to land and labour, although the still substantial capital investment required can preclude smallholder ownership. Increasing machinery demand has resulted in relatively well-developed markets for rental services for tillage, irrigation, and post-harvest operations. Many smallholders thereby access agricultural machinery that may have otherwise been cost prohibitive to purchase through fee-for-service arrangements, though opportunity for expansion remains. To more effectively facilitate the development and investment in scale-appropriate machinery, there is a need to better understand the factors associated with agricultural machinery purchases and service provision. This paper first reviews Bangladesh’s historical policy environment that facilitated the development of agricultural machinery markets. It then uses recent Bangladesh census data from 814,058 farm households to identify variables associated with the adoption of the most common smallholder agricultural machinery – irrigation pumps, threshers, and power tillers (mainly driven by two-wheel tractors). Multinomial probit model results indicate that machinery ownership is positively associated with household assets, credit availability, electrification, and road density. These findings suggest that donors and policy makers should focus not only on short-term projects to boost machinery adoption. Rather, sustained emphasis on improving physical and civil infrastructure and services, as well as assuring credit availability, is also necessary to create an enabling environment in which the adoption of scale-appropriate farm machinery is most likely.