Abstract
Farmers in Bhutan trend to own agricultural machineries though the individual area under farm mechanization is not enough. Hiring out or in of farm machineries as a business enterprise need to be advocated. Therefore, an effort was made in this study to generate some parameters regarding farm machinery business at farm level based on practical experience. Bhutanese Government has endorsed some users’ parameters including cost and return which are used to guide the custom rates for different machineries for farmers and service providers. The study’s objective was to generate different empirical formula for different farm machineries which shall help to propose varying custom hiring rates based on the projected operation days based on the government endorsed parameters. It is also to ascertain whether the present rates charged by Farm Machinery Corporation Limited bring a positive return to its custom hiring business for different machines. The study revealed that the operation cost of farm machinery includes both fixed cost and variable cost. Cost, return and break-even data for different farm machineries give a confident opinion for the owners and Farm Machinery Corporation Limited (FMCL) to take up the hiring scheme as a profitable business. The custom hiring rate also gives a good guide on the custom hiring rates to be charged based on the operating days in the country. On endorsed hiring rates and parameters by government, FMCL shall be able to make a huge profit annually especially on tractors and mini combine harvesters as compared to other machineries by Nu 0.51M and 0.39 M respectively. All other machines are also making a profit annually under the government endorsed parameters. However, there is also an opportunity to reduce the custom rates to bring down the overall cost of cultivation of respective crops using the machines.
 SAARC J. Agri., 17(2): 93-101 (2019)
Highlights
Bhutan is an agrarian country with 62.2% rural population (PHCB, 2017)
Still huge demand is there and farmers in majority trend to have their own machines though the individual area under farm mechanization is not high
The empirical formula for different machines in above Figures provide a guide to project different custom rates based on the operating days which can be possible based on individual convenience by private hiring entrepreneurs
Summary
Bhutan is an agrarian country with 62.2% rural population (PHCB, 2017). only 7.8% of the total area is under agriculture which is again driven predominantly by animal draft due to rugged terrains and unavailability of farm machinery in the country. There is huge demand for farm machinery like power tiller, tractors to be used in the primary and secondary tillage operations in the country. Still huge demand is there and farmers in majority trend to have their own machines though the individual area under farm mechanization is not high. This trend can be delinked through hiring system and important to let the machineries owners understand that hiring their machines to others is a business and to educate other farmers that hiring is more advantages than owning if their individual land holdings are less. There is limited and fixed time available for each operation in each season which makes it all the more imperative to calculate the machines requirement and cost of operation
Sign-in/Register to view highlights & summary Sign-in/Register to access full text options 
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a callDisclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.
