This document summarizes the history and current state of small farm mechanization in Sri Lanka. It discusses: 1) The country's agricultural zones and history of peasant farming. 2) Past mechanization policies from 1940-1977 that promoted tractor pools and import incentives. 3) Increased demand for farm machinery beginning in the late 1970s as the economy liberalized. 4) Current trends showing declining imports of 2-wheel tractors but rising imports and use of 4-wheel tractors, combine harvesters, and other machinery. Labor shortages and higher wages are driving mechanization.

1. Small Farm Agriculture
Mechanization, in Sri Lanka: Its
growth and constraints:
Dr. Fredrick Abeyratne
Consultant Agricultural Economist
“South-South Knowledge Sharing on Agricultural Mechanization”
Hilton Hotel
Addis Ababa, Ethiopia.
31st October 2017.

2. Historical Background
• Agro climate: two Zones: Dry (<1750mm) and
Wet Zone (>2500mm)
• Peasant agriculture: Historically irrigated rice
cultivation and slash and burn agriculture mostly
in the DZ. Goes back to 3 centuries BC.
• Since 16th Century foreign colonization WZ
dominated by plantation crops and DZ neglected .
• Since 1940’s with restoration of DZ irrigation
systems and transfer of people from the WZ,
peasant agriculture in the DZ restored.

3. Past Mechanization Policies (1940-
1977)
• At the beginning mechanization limited to
irrigated rice farming: use of machines in non-rice
cultivation was limited since, it was mostly slash
and burn type
• To popularize mechanization: formation of state
run tractor pools for hire, hire services by
cooperative societies, preferential import duties,
low interest credit. 4 WT use for rice cultivation
became popular beginning 1940/50s’.
• Use of two wheel tractors started in late 1960’s

4. Change to a liberalized economy from
late 1970’s, gathered momentum
• Demand for machines increased in late 70’s for other Field crops
• Labour migration to service and manufacturing sector.
• Youth reluctant to engage in agriculture
• Other Field crops (OFC’s) allowed in irrigated lands, during minor
season (yala), & Slash and burn (“chena”) outlawed, resulting in the
beginning of mechanization for OFC
• Achieving rice rice-self sufficiency by mid 2000.
• Increased emphasis on other field crop production.
• Resulted in increased demand for mechanization for non-rice sector
as well.
• But no concessions in terms of taxes etc. for mechanization since
late 1970’s. But increased use of 2wt for both rice and OFC’s

5. 1940- 1950 1960 1970 1980 1990 2000 2010 2015
4wt Introduced/imported since late 1940’s and continue to today. Earlier mostly European
makes, presently mostly, Indian, Chinese machines. For both ploughing and threshing
(wheel treading) of paddy lands. Since 1980, It has been used to plough OFC fields as
well.
2wt Sri Lankan Designed British Land Master introduced in
later 1960’s. Thereafter Japanese, Chinese, Indian makes
became very popular. Used for ploughing, transportation,
threshing etc.
Threshers
(rice)/winnowers
2wt driven threshers for paddy introduced in 1970’s.
FMRC designed and locally manufactured.
Threshers (OFC) From early 2000, green
gram and maize threshing
machines introduced.
Combine
Harvesters
Introduced for
paddy after the
war ended
Water pumps Mainly driven by 2wt engines introduced in 1970’s and
has been used extensively since 2000 for OFC’s.
Timeline of Changes in Mechanization

6. 0
10000
20000
30000
40000
50000
60000
70000
1970 1975 1977 1978 1990 2002
Reigistratinoftractors
Year
Cumulative Registrations of Tractors
2WT
4WT

7. Tractors Imported
2005-2015
Tractor imports
Year 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
4w Tractor 3472 3351 3308 3308 5175 4338 7519 6291 3709 1580 4156
2w tractors 21758 20199 21603 25503 10993 14200 18336 12344 9990 4049 8109
Total 25230 23550 24911 28811 16168 18538 25855 18635 13699 12265
Registered 21346 34357 13751 17363 20073 18450 17772 7070 9977
Total Registered 221326 245683 259634 276997 297070 315520 326292 333362 343,263

8. Trend of using tractors
0
5000
10000
15000
20000
25000
30000
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
year
Trend of tractor usage in Sri Lanka
4w Tractor
2w tractors
Linear (4w Tractor)
Linear (2w tractors)

9. Year 2 wheel
tractors
4 wheel
tractors
Combine
harvesters
Sprayers Trans
planters
11/12 14,445 7184 2160 26093 N/A
12/13 9,664 5141 1099 6240 23
13/14 2783 1479 N/A N/A 87
Annual sales of farm Machinery
Source: Bandara (2013)

10. New trend of reduced 2wt imports
• Last decade, indicate a decline in 2WT tractor imports & 4WT shows
a slight upward trend in imports, along with the influx of combine
harvesters:
• (1) the massive increase in power needs (4WT) after the cessation
of the war in 2009, for both paddy cultivation and for OFC
cultivation
• Preference for 4WT for large paddy holdings, & use of 2 WT mostly
restricted to smaller holdings only at present,
• OFC: increasing trend in use of 4wt tractors for land preparation
and even for processing (case of maize)
• (3) Infrastructure development projects being undertaken, during
the last decade (road construction), 4WT use for haulage.
• (4) 2WT tractor needs for agriculture is approaching saturation
point ?. But 60% of paddy holdings are small holdings of less than 2
acres, hence its has a role, with varies uses.

11. Factors affecting use:
Demand Analysis:
1. Holding size: Reduced over time; For field crops varies from 0.5 to 2 acres and
scattered, whereas for irrigated paddy, it is around 2.6 acres, 60% of the small
holding agricultural operators in Sri Lanka, operated less than 2 acres.
2. Machinery use; (a) Paddy. Extensive from tractors, threshers to Combine
harvesters. (( 1977/78 Land prep: 18% Mammoty, 37% animal and 45% tractors, Now
(2009) mostly tractors: mammoty 6.9%, animals 6.9%, Tractors 87.3%
% Reporting*10
DISTRiCT 4WT 2WT
Combine
Harvesters
Av.Holding
Size Ac
Kalutara 2.6 7.4 4.2 0.9
Kurunagala 0 10 5 1
Gampaha 2 8 8 1.3
Kurunagala 3 7 9 1.6
Syastem H 3.2 6.8 6.4 2.1
Amapara W 6.4 3.6 9 2.2
Anuradhapura 6.2 3.8 6.6 2.4
System B 4.2 5.8 7.8 2.9
Pollonnanruwa 7.4 2.6 8 3
Trincomalee 6.2 3.8 10 3
Amapara E 10 0 10 4.9
Mannar 8 2 10 5
Source: DOA, Cost of Cultivation 2013/14 Maha, 2015

12. Drivers for machinery use in Rice
cultivation
• Introduction of tractors for rice cultivation
since 1940’s
• Machines (4wt & 2wt)easily could be use for
both ploughing and threshing.
• Large extents of contiguous lands in the
eastern province enabled use of combine
harvesters.
• Labour shortages met with mechanization.

13. Machinery use for OFC.
• Positive drivers:
a. Labour wages: Driving Force
b. Technology: maize (high yielding variety)
c. Cropping system: Mono crop/chena mixed crop, and
banning of Forest clearing.
d. High Value crops: maize
e. Versatility of 2 wt (use indifferent terrain, different
uses: ploughing, seeding, threshing, winnowing,
transportation, pumping water)
• Constraints
a. Import policies: Mung bean (quality and prices)
b. Terrain: Hilly areas, sparsely used
c. Different requirements: Lack of precision /Risk
averseness
d. Awareness about machinery

14. Table 5. Labour and Machinery costs for selected Crops
Year 1979/80 1990 1995 2000 2005 2010 2013
Paddy Area (irri) Apura Apura Apura Apura Apura SL SL
Labour (Hired) 384(29) 1050(31) 2121(32) 3462 (35) 4511(55) 7671(36) 5293(20)
Labour wage 20 66 135 213 347 697 945
Machine hire cost 552(Buff) 1199(22) 2132(34) 3163(32) 4883(38) 7955(38) 14830(55)
Total Cost (ex. FL) 1312 3413 6271 10021 12870 20763 26959
TC with FL 1694 5599 10654 15217 22535 35165 39917
Maize, Area (RF) Mgala Mgala Na Apura Apura Apura Apura
Labour, hired 235(92) Na Na 921(21) 3728(33) 11081(37) 9880(34)
Labour wage 17 185 335 693 988
Machine hire cost 0 0 3201(28) 5628(19) 8861(31)
Total Cost (ex FL) 253 1448 11146 29443 29011
TC with FL 597 8664 22087 42727 45814
Green Gram,
Area Kgala Mgala Mgala Mgala Putl H area
Labour, hired 667(68) 726(45) 2765(46) 3410(42) 9002(56) 17,730(54)
Labour wage 50 131 173 310 801 985
Machine hire cost 39(4) 0 2179(36) 3009(37) 2626(16) 4814(15)
Total Cost (ex FL) 754 1599 5932 7995 15968 24666
TC with FL 2500 6105 7583 15912 30707 38738
Chilli, Area Apura(dry) Apura(dry) Apura (dry) Apura(dry) Apura(GC) Apura(GC) Apura(GC)
Labour, hired 294(65) 3830(50) 1240(14) 1051(21) 8818(56) 21417(43) 27132(54)
Labour wage 16 66 126 191 309 449 969
Machine hire cost 0 0 0 0 0 4430(9) 7022(14)
Total Cost (ex FL) 448 6802 8406 4949 15636 50246 50116
TC with FL 1729 9927 20541 26247 42433 101925 117926
Red Onion Area Na Jaf Mgala Put Putl Putl Jaf
Labour, hired 7580(23) 8520(20) 15108 (20) 22535(26) 32160(23) 61133(30)
Labour wage 55 132 157 279 536 818
Machine hire cost 4767(14) 4790(11) 9161(12) 11854(13) 16603(11) 21628(11)
Total Cost (ex FL) 33343 41923 75524 86342 139737 203876
TC with FL 37672 52654 77385 93853 153956 239305
Potato Area(irri) Badul Badu Badul Badul Badul Badul Badul
Labour, hired 540(5) 6420(15) 9537(10) 17507(20) 23624 21488(12) 36000(17)
Labour wage 20 81 142 195 340 564 720
Machine hire cost 54(spray) 0 0 3600(4) 3506(2) 5273(2) 8094(4)
Total Cost (ex FL) 11745 44236 95081 87230 130154 178726 212799

15. 3. Labour Market
Driving force for mechanization
• Unwillingness of Youth: drudgery, low social status, higher
educational qualifications, migration, diversification of economy
• Labour wages rising: approx. Rs 1000/day (Rs 20/day in
1980)
• Labour, Land ratio: Decreasing favor mechanization
1. Arable land (He/person) Constant at 0.06 over the period, 2001 to 2015 (World Bank,
2016), but the population engaged in agriculture has reduced to 27% in 2016
compared to around 53% in 1953(DCS, various years).
2. Increasing ageing population: 2001 it was only 10.2 %, 12% in
2015, but by 2051 it will be 55.8%
3. Female labour less use: opportunities for employment outside

16. Supply Analysis
3 kinds of machinery available:
(a) Manufactured locally (Accessories)
(b) Imported, modified or fabricated versions of
imported equipment and
(c) Imported equipment modified by innovative
farmers themselves to suit their needs.
Of this, imported machinery is in the majority

17. (ii). Seeders: The FMRC, has introduced three types of seeders for field crops which are either manually or tractor driven. Several local manufactures have
producedtheseandarebeensoldtofarmers. Theseareshownbelow:
PhotoCredit:FMRCisphotosreproducedinKusumKumaraet.al2016.
(iii).Threshers: Several threshers have been introduced by the FMRC as well as imported types are available. In many instances, farmers themselves have
modifiedtosuittheirneeds. Butunfortunatelythesemodifiedmachinesarenotproducedinlargescale,mainlyduetothesmallmarketinthecountry.
Multiplecropthresher 2wtoperatedMaizethresher 4wtoperatedmaizethresher Fingermilletthresher Combineharvesteraltered

18. Cont.
• Import/purchasing Policies: Earlier there were
incentives, presently no. New Govt. proposed
some positive policies.
• Concerns of Quality and need: (land classes,
operations and types of crops, harvest losses)
1.Need for imports of quality tested machinery.
2.The need for regulatory mechanism for imports.
3.Legislative Provisions to safe guard all ; producers, suppliers and farmers
• Ownership: mostly private ownership,
Farmers Concerns: distribution skewed, hire
rates and availability not efficient.

19. Cont,
• Concerns of owners who hire:
a. Lack of awareness by farmers,
b. very high competition (in certain areas large numbers
concentrated , hiring rates reduced and low profit
margin.
c. introduction of new technology (Track type combines
are preferred over wheel type),
d. involvement of middle men (brokers).
• Local manufacturing: Concerns
a. Small market,
b. low tax imports; cannot compete,
c. Testing/certification takes time,
d. lack of skilled labor,
e. risk averseness of farmers on new technology.

20. Factors constraining the hire market
• Larger machinery: combine harvesters and 4 wheel tractors are
mostly owned by large farmers and businessman.
• Distribution and availability not in the best interest for the hire
market.
• Hire services by cooperatives or state owned enterprises have not
been very successful in the past.
• Needs methods to increase awareness.
How best the limited machinery available of the required quality can
be hired out at reasonable costs ?
Better organized hiring service need to be introduced, through:
individual or group ownership, PPP Models, soft loans to hiring
centers, and training of operators.

21. Way Forward: Policy Incentives
The Vision 2025: Policy Statement of The Government:
• Promote agri-business development and establishment of
large scale agro-enterprises and creating the background
needed to enter the global value chain system and an
incentive structure for SME agri-businesses.
• Promote private sector participation and PPP’s where ever
possible. Encourage small and large farmers and
enterprises to participate in the global economy
• Tax holidays for new technology (ex. drip irrigation, green
houses, tax removal for mechanization).
Hence, all these are incentives for mechanization, where
value addition is emphasised.

22. Additional Aspects
• Small Farms: Though consolidation is desirable, small farms
will exist, showing the importance of small machinery.
(support schemes, importance of owning land, farm income supplemented)
• Youth aspirations: Mechanization is an attraction: better
social status, higher wages, less drudgery
• Gender. Release females for other productive
employment, but need skills development and
opportunities.
• Productivity: better synchronization, incorporation of
organic matter
• Environment: soil compaction is an issue with large
machines.
• Others: Additional time to repair bunds, crop loss due to
mechanical harvesting by large machines

23. Conclusions
• Demand side: drivers: Labour wages, Technology: (high yielding variety),
Cropping system: Mono crop/chena mixed crop, and banning of Forest
clearing, High Value crops, Versatility of 2 wt.
• Constraints: small holdings, low market value of crops, low productivity of
crops, hilly terrain, unavailability of precision machines, and unawareness
about the available technology, had constrained the increased use of
mechanization.
• Supply side: low quality imports a major issue. Machinery production is
constrained by policies of low taxes on imports, lack of skilled workers,
and the small market for machinery.
• Machinery mostly owned by individuals, mechanisms are needed to
increase the hire market, which is constrained by factors such as, lack of
awareness on technology available, spatial concentration, ownership more
skewed towards large land owners resulting in an uncompetitive hire
market.
• The new government has acknowledged these problems, and have
formulated a policy to address many of the issues, especially with regard
land holding size, worker skills, incentives for SME Industries and
technology development.

24. • Thank you.