The government of Maharashtra state has thus decided to assist in the purchase of mechanical sugarcane harvesters by individual producers, groups of farmers, or cooperative sugar mills.
THIS REPORT CONTAINS ASSESSMENTS OF COMMODITY AND TRADE ISSUES MADE BY
USDA STAFF AND NOT NECESSARILY STATEMENTS OF OFFICIAL U.S. GOVERNMENT
GAIN Report Number: IN2041
Post: New Delhi
Procurement of Sugarcane Harvesters in Maharashtra
Policy and Program Announcements
Facing a labor shortage during sugarcane harvesting for the last few years, the state government of
Maharashtra is encouraging individual producers or groups of farmers to purchase mechanical
sugarcane harvesters during current fiscal year 2011/12 (by providing an over 40 percent back-end
subsidy of Rs 5 million per harvester). Following release of the federal budget for 2012/13, imports of
sugarcane harvester should turn more attractive as the central government has slashed the import duty
from 7.5 percent to 2.5 percent.
Most sugarcane in India is harvested manually. Due to a shortage of manual labor in the last few years,
the harvesting of sugarcane is often delayed, leading to low recovery of sugar from cane. The
government of Maharashtra state has thus decided to assist in the purchase of mechanical sugarcane
harvesters by individual producers, groups of farmers, or cooperative sugar mills during current fiscal
The Commissioner of Sugar in Maharashtra is implementing agricultural mechanization  as one of the
proposed activities eligible for project-based assistance under Rashtriya Krishi Vikas Yojana (RKVY).
The RKVY is an additional central assistance scheme administered by the Indian Ministry of
Agriculture to stimulate states to draw up plans for their agriculture sector more comprehensively,
taking agroclimatic conditions, natural resource issues and technology into account, and integrating
livestock, poultry and fisheries more fully. With the aim of achieving 4-percent annual agricultural
growth during the 11th five-year plan, funding is provided to the eligible states as 100-percent assistance
by the Central government.
The Maharashtra State Agriculture Plan (SAP) had set physical targets for various agricultural and
allied sectors during the 11th five-year plan period (now ending) using a proposed outlay of Rs 305
billion (about $6.1 billion), which included a Rs 123.2 billion  (about 40 percent) under
RKVY . The state government of Maharashtra aims to purchase sugarcane harvesters with ancillary
equipment worth Rs 2 billion. The Commissioner of Sugar of Maharashtra has in principle approved Rs
1 billion for mechanization of harvesting sugarcane in Maharashtra. Assuming the average cost of a
harvester is Rs 11.7 million, around 170 such units can be bought with the state government providing a
subsidy of Rs 5 million per harvester wherein the down payment (15 percent of invoice price) is borne
by the buyer. The first installment, a sum of Rs 500 million, was already released last September. The
project deadline is March 31, 2012.
A single sugarcane harvester working 8 hours a day and covering 2 to 2.3 acres of sugar fields will
harvest 18,000 tons of sugarcane per season; working 180 days a year. Considering there is no
significant change in area planted to sugarcane in Maharashtra, the state would continue to produce an
average 8 million tons of sugarcane. Complete mechanization of sugarcane fields in this state would
require 445 harvesters. Given the allocated outlay, an estimated 38 percent of sugarcane production in
Maharashtra would come from mechanized harvesting, indicating timely harvesting of cane for
improved sugar recovery. However, the current target for mechanical harvesting is 40,000 hectares of
sugarcane, approximately 4 percent of total area planted to sugarcane in Maharashtra. The state to its
credit enjoys the highest sugar recovery rate in India of 11.4 percent.
Industry observers believe that implementing the project in Maharashtra would reduce the cost of
sugarcane production, ensure timely and reliable supplies of fresh cane to sugar mills, overcome labor
problems, ensure timely harvesting for maximum yield and sugar recovery, and improve soil structure.
Following release of the federal budget for 2012/13, imports of sugarcane harvester should have turned
more attractive as the central government has slashed the import duty  from 7.5 percent to 2.5
 Assistance would be provided for farm mechanization efforts especially for improved and gender friendly tools, implements and machinery. Specific agricultural
mechanization projects oriented toward enhancing farm productivity can be considered under this scheme. However, tractors are not covered under the scheme.
 The total outlay for Normal RKVY for Indian Fiscal Year (IFY) 2011/12 was Rs 53.1 billion, of which State government of Maharashtra was allotted Rs 4.8
 National Agriculture Development Plan
 S. No 399 of Customs notification No 12/2012 dated 17/3/12