What is CHC Farm Machinery: For farmers to get machinery

Due to the rising animal-care costs and a growing scarcity of human labour, Indian agriculture is gradually shifting away from reliance on human and animal power and toward mechanical power. Aside from lowering drudgery and enhancing the timeliness of agricultural activities, the usage of mechanical power has a direct impact on crop output. As a result, there is a considerable need for farm mechanisation.

However, farm power distribution varies greatly among states, with the maximum use of mechanical power in Punjab being around 3.5 kW/ha and less than 1kw/ha in states such as Bihar, Orissa, and Jharkhand.

Mechanical power is predominantly utilised in large landholdings and remains out of reach for small/marginal holdings, which account for roughly 80% of total landholdings. This is because small/marginal farmers, due to their economic circumstances, are unable to purchase farm machinery on their own or through institutional credit. As a result, communal ownership or Custom Hiring Centres must be heavily promoted in order to bring farm machinery within the grasp of small/marginal estates. This model plan is designed to show banks that financing for the creation of Custom Hiring Centers is a financially feasible unit.


  1. To make varied farm gear and equipment available to small and marginal farmers
  2. To compensate for the negative economies of scale caused by the high cost of individual ownership
  3. To boost mechanisation in areas where agricultural power is scarce
  4. To provide hiring services for a variety of agricultural machinery/implements used in a variety of applications.
  5. To extend mechanised activity in vast regions during cropping seasons, particularly in small and marginal holdings.
  6. To provide employment services for a variety of high-value crop-specific machines used in a variety of applications.

Location of CHCs

Ideally, the CHC should be located in an area where small landholdings are concentrated within a 5 to 7-kilometre radius. This reduces the cost and time required to transport agricultural machines. In other words, because one CHC is intended to serve 4/5 communities, a common location equidistant from the villages served is recommended.

CHCs Unit

CHCs are essentially a unit that consists of a collection of farm machinery, implements, and equipment available for bespoke hire by farmers. Though some tools and equipment are crop-specific, traction units such as tractors, power tillers, and so on, as well as self-propelled machinery such as combine harvesters, are employed in all crops. As a result, an ideal model for this project would include agricultural machinery that is routinely used for tillage operations on all crops, multi-crop equipment, and a minimum of crop-specific machinery.


While custom hiring generates the majority of the revenue, recurring costs include machine fuel/lubricant costs, driver fees, repair maintenance fees, labour, interest on bank loans, and insurance.

Scope of CHCs

Farm power availability is lowest for small/marginal landholdings. Because small/marginal holdings account for 80% of overall landholdings, the opportunity for CHC to meet the farm machinery needs of such a large area is enormous. Recognizing this potential, the Government of India plans to boost farm electricity availability from 0.93 kW/ha to 2kw/ha over the 12th plan period.

The Sub Mission on Agricultural Machinery (SMAM) is one such endeavour aimed at achieving the goal. Subsidy programmes are also being developed to encourage entrepreneurs and agricultural graduates to establish custom hiring centres. Keeping in mind the importance of agricultural farm machinery and the need to bring farm machinery within the grasp of small/marginal farmers, institutional credit for CHCs should be made available.

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