PESTLE Analysis – Mechanical Sugarcane Harvester

CATEGORY ANALYSIS/NOTES RISK IMPACT

POLITICAL  Crop Development Programme: Special initiatives taken for • Loans for imported harvesters, Positive/
encouraging the cultivation of the sugarcane crop Minimum Support Price being costly and not well tested in Favourable
(MSP) including additional incentives (Bonus) on procurement of crop Indian conditions could be
produce from the states (Director of Sugarcane Development 2013) restricted to maximum of two
machines per project and could
 Support: IISR may provide training to the manufacturers and the users at
either be for the identified private
their cost for the proper operation and maintenance of the equipment.
entrepreneurs by the sugar mills
(vision 2030, IISR 2010)
or for the sugar mills themselves
 Funding: 1. The state government provides subsidies up to Rs. 25 lakh (Director of Krishi Bhawan 2013)
per machine in an attempt to make them affordable and increase acreage
under farm mechanization. The subsidy may get increased to Rs. 50 lakh
per machine within coming year (Director of Krishi Bhawan 2013).
2. Private Sugar Factories provide the mechanical harvester at interest free
loan while signing long term contract from farmer (Bhokare 2012)

ECONOMIC  The production of sugarcane is spread across the country.  According to GM of New Holland Favourable
Fiat in an interview with Business
 The CARG (Compound Annual Rate of Growth ) of sugarcane production
Line, judging the instability in the
of Maharashtra, Gujarat, Karnataka and Tamil Nadu is more than that of
Rupee during 2013 and in
the country’s rate of growth (CMIE Report 2012).
adequate subsidy from the State
 Employment: the majority of labour, about 75 -80 are required for Government resulted in a major
harvesting, that is about 33 % of the total labour requirement of total slump in the sales of all the
 CATEGORY ANALYSIS/NOTES RISK IMPACT

Sugarcane cultivation. Harvesting sugarcane is the least preferred job harvester manufacturing
among agricultural labour because it is a hard and time consuming job companies (Wadke 2013)
performed in poor working conditions with poor monetary returns. The
 Loans for imported harvesters,
lack of agricultural labour has made harvesting a costlier affair in
being costly and not well tested in
sugarcane farming (Sakthisugars.com 2014).
Indian conditions could be
 Government’s employment guarantee schemes such as National Rural restricted to maximum of two
Employment Guarantee Act (NREGA) and road building projects have machines per project and could
attracted the agricultural labours (Wadke 2011) either be for the identified private
entrepreneurs by the sugar mills
 Due to shortage of labour the companies selling harvesters saw 100 per
or for the sugar mills themselves
cent increase in the sales in 2011 (Wadke 2011)
(Director of Sugarcane
Development 2013)

SOCIAL  Consumer Buying Patterns: At present 2% cane is harvested in the  The prices of harvesters range Positive/
country is by machine harvester, and the target is Mechanical harvesting from Rs. 90 lakh - Rs. 1.84 crore, Favourable/
up to 10% in near future (Director of Krishi Bhawan 2013). depending on the model. Opportunity
 Demographic factors: Increasing per capita income in rural regions, Therefore the Cost of harvesting
shortages of farm labour due to population migration to urban areas are for Mechanised Harvester comes
indirectly driving demand in the region (Oecd-fao Agricultural Outlook to be INR 273/ MT – 10 hrs/ day
2011-2020). harvesting. And if the labours are
considered instead it costs around
 Scattered, Fragmented land which makes it unaffordable for farmer to buy INR 163/MT- 20 hr/ day
the mechanical harvester.
(Indian Sugar Mills Association
2012)
 CATEGORY ANALYSIS/NOTES RISK IMPACT

TECHNOLOGICAL  Technological Development: A worldwide survey conducted in 2012 Positive

revealed that in the usage of agriculture equipment’s, India contributes
only 10% (IJMERR 2013)
 Research & Development: Due to scattered land and in order to make
the harvester affordable for most of the farmers many companies are
developing machines which are smaller in size.
 Government is helping by funding various projects in this sector. And has
provided subsidies on imported components of mechanised harvester
 Access in to Technology: Technically advanced country with availability
of skilled workers at lower cost.

Legal  Government has made Longer duration for Cane Area Reservations Positive
 For speedier adoption of Mechanical Harvesters State Governments
have started to give funding under ‘RKVY for harvesters’ (Director of
Krishi Bhawan 2013).

ENVIRONMENTAL  Environmental Issues: Unpredictable environment.  The correlation between Indian Unfavourable
agriculture and monsoon: Only
 Extreme conditions in sub-tropical states may sometimes hurt the
40% of farmland in India is
harvesting process.
irrigated, which means majority
 Small scattered land. In tropical area (specially mountain areas) there are of the farmers depend on the
places where mechanical harvester’s may prove unusable. monsoon to water their farms.
 In 2012, due to the drought like
situation across Maharashtra,
marginal framers and farm
CATEGORY ANALYSIS/NOTES RISK IMPACT

labourers were forced to migrate,

which resulted in higher labour
availability in the sugar growing
areas. This situation affected the
harvester manufacturers at large
and had an effect on the next
years demand too (Wadke 2013).