TOPICS

Crops, Gender, Rural Finance

SOLUTION TYPE

Financing Scheme, Technology

REGION

Asia and the Pacific

"Local tool banks rent out mini tractors, grass-cutters, threshers, sprayers and more." 

Murugaiyan Manivannan, President of a fish marketing society in Tamil Nadu

BACKGROUND

For many farmers in India, equipment is difficult to access and too expensive to buy. Smallholders can benefit most from hiring tools as needed, but standard hiring arrangements are often too costly.

Local tool banks rent out mini tractors, grass-cutters, threshers, sprayers and more at affordable rates.

WHAT’S INVOLVED

Access to equipment and resources

Tool banks are run through Village Organizations (VOs) which acquire and rent out equipment to their members at affordable rates.

Empowering women and marginal farmers

The project aims to bring women-headed households and smallholders inside the remit of the VOs and reduce drudgery through automation of labor, while increasing yields and income. 

EXPLORE THIS SOLUTION

The tool bank project can offer:

  • A successful model for community-managed resource sharing in rural agricultural communities

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Countries involved

India

Project partners

State Department of Rural Development, IFAD

Project dates

2007 - Present

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Summary

Tool banks, or Agricultural Machinery Custom Hiring Centres, are designed to give poor farmers access to modern agricultural technology and machinery on a pay per use basis. This helps reduce drudgery, enhance the speed of work, and improve productivity at a nominal fee. Through the Tejaswini Rural Women’s Empowerment Programme, a variety of farming equipment was made available to smallholder farmers whose holdings were too small to allow the purchase of equipment, or found the cost of hiring machinery from the market too high and lacked access to credit. The tool banks helped farmers overcome these constraints.  

Challenge

Lack of access to farm machinery is widespread in India (it is limited to about 25 per cent of the potential market). Even when farmers are able to purchase a farming tool, it is generally limited to a single activity such as field preparation, and ties up a considerable amount of the farmer’s surplus cash. Improved access to machinery can, for example, considerably reduce the high level of post harvest losses. A key challenge faced by the programme was how to enlist marginalized, small, poor, and disadvantaged farmers into village organizations that can acquire farming equipment and make them available to members at affordable prices.

Solution

Along the lines of  IFAD supported  Convergence of Agricultural Interventions in Maharashtra’s Distressed Districts Projects (CAIM), which provided farmers access to farm machinery, a similar concept was developed under the IFAD-supported Tejaswini Rural Women’s Empowerment Programme. The resulting solution was to provide access to a broad range of farming equipment and tools by hiring them when needed at affordable rates. This was done primarily through tool banks set up and managed by the communities themselves.

The tool banks – or Agricultural Machinery Centres –  are owned and managed by Community Managed Resource Centres (CMRCs) or by village organizations (VOs) that appoint a member to manage and monitor the operations, with both setting rental charges. Each center has a range of machinery such as mini tractors, rice trans planters, thresher machines, grass cutting machines, grinding machines, battery operated spray pumps, and sprayers.

 

The overall project aim is to provide poor women with choices, spaces and opportunities in the economic, social and political spheres for their improved wellbeing. It is designed to support the State Government’s commitment to the social and economic empowerment of women through improvements in income and material conditions, participation in decision-making processes, and control over their lives and livelihoods.

 

Results

The first tool bank was established under the project in March 2012 and to date a total of 84 tool banks are operating in four districts, with an a total of about 17,200 members. Village Organizations (VOs) operate more than 90 per cent of these tool banks, and the rest are operated by Community Managed Resource Centres (CMRCs). The average cost of tool banks operated by VOs is US$11,700 while for CMRCs the cost ranges between US$5,600 and US$7,600. Most of these tools are purchased through convergence with various government schemes which provide anywhere between 50-90 percent subsidy on the machineries. In terms of financial results, the average annual income earned by a tool bank ranges from US$1,550 and US$3,100, while older tool banks are earning between US$6,200 and US$8,540.

Following the introduction of tool banks, the benefits accruing to smallholders and marginal farmers and to women-headed households include:

  • ready access to a wide range of farm machinery to meet a variety of farming needs
  • reduction in the costs of various farming activities such as labor utilization and farm inputs (in some cases by as much as 50 per cent)
  • increase of 150 per cent in rice yields following the introduction of rice trans planter
  • increases in the overall effectiveness of field operations
  • salvaging of farm residue through the use of machinery (e.g. balers)
  • improved water conservation through use of technologies such as laser leveling.

In addition, several of the technologies being used by the tool banks are women-friendly; for example, the trans planters used in rice cultivation, which are frequently operated by SHG (self-help group) women, save time and reduce drudgery.

As an indication of the programme's sustainability, 2 CMRCs have achieved 100 per cent cost recovery, and four of them more than 50 per cent cost recovery. To date the impact of the tool banks (along with other project activities) on the income of participating women has been modest (only 30 per cent of SHG members have registered more than 50 per cent increase in income compared to baseline, and the change in income for the other 70 per cent of members is yet to be determined). However, the potential for improved productivity and reduced drudgery is incontestable. 

Lessons learned and potential for replication

A number of lessons emerge from the introduction of tool banks:

  • A concerted educational effort is required to ensure that beneficiaries understand the potential benefits of using farm machinery and the desirability of creating tool banks even if members have to contribute 10 per cent of the cost.
  • Rapid scaling up of tool banks requires close monitoring of outcomes associated with the introduction of farm machinery, and sharing the information readily with all members of the group and other farmers in the district.
  • The long-term financial viability of tool banks requires a carefully constructed strategy (possibly including the introduction of providing technical advice to members).
  • For successful outcomes, farming support activities should be supplemented with vocation and business skills training programs (e.g. exposing adolescent girls and young women to market-driven skills training and secondary education).   
  • To ensure long term sustainability, machinery charges should be set at a rate that will cover not just operating costs but also equipment depreciation. 

Solution Image

Rice Transplanter

Image Author:MAVIM

Rice Transplanter

Image Author:MAVIM

Rice Transplanter

Image Author:MAVIM

Rice Transplanter

Image Author:MAVIM

Tool Bank including mini tractor, power reaper, brush cutter, spray pump, Diesel pump, Paddy Threshe...

Image Author:MAVIM

Tractor

Image Author:MAVIM

Last update: 09/08/2018