1Division of Agricultural Economics, ICAR-Indian Agricultural Research Institute, New Delhi, 110012, India
2ICAR-National Institute of Agricultural Economics and Policy Research, New Delhi, 110012, India
As wages escalate, farmers are opting for mechanization to overcome labour scarcity and the rising cost of production. This paper attempts to assess the status of mechanization in different crops. Factor demand elasticity for machine labour and its substitution with human labour and fertilizer is estimated with iterative seemingly unrelated regression (SURE) for paddy and wheat using the panel data translog cost function. The results show that extent of mechanization is not uniform across crops and states. Wheat is the most mechanized crop and Punjab shows the highest level of mechanization. The SURE results suggest that a change in the market prices of inputs significantly influences the usage of machinery in the cultivation of paddy and wheat. The estimates of substitution elasticities also indicate substitution between machine labour and human labour.
