Banks not keen to finance farm supplementary machines: Lemken

Indian banks are not ready to finance certain agri-supplementary machines despite the government push for mechanisation of farms, German farm equipment maker Lemken said today.
Despite various hurdles, the company said it aims to double its sales to 1,000 units in India this year.
Lemken India, the wholly-owned subsidiary of the world's largest pre-harvest equipment manufacturer Lemken GmbH, sells reversible ploughs that are attached to tractors. It plans to launch new products by end of this year.
"Banks are not identifying our farm implements as supplementary machines. We are still struggling on this aspect," Lemken India Managing Director Arvind Kumar told PTI.

"If farmers want to get finance along with the tractors, banks are okay with that. They are not ready to finance separately for supplementary machines," he said, adding there is no such RBI rule but banks are not confident to lend.
In the absence of bank loan, Kumar said that farmers are finding difficult to buy the Lemken farm equipments which are normally priced twice as much as local machines.

The company is in talks with a dozen banks on this issue. It has also made a representation with the industry bodies and the government, he added.
This apart, Kumar mentioned that the current system of giving government subsidy to farmers to buy farm machines based on the lowest price, is also preventing farmers from using high-end farm machineries.

He said the company has approached Maharashtra, Karnataka, Andhra Pradesh and Punjab governments for subsidy support for its equipments. "Probably in the next financial year, we shall be in a position to get some response."
On company's sales target for this year, Kumar said: "Last year, we sold 500 reversible ploughs. This year, we are trying to double the sale or more than double the sale if we get some subsidy support from government."
He said the company has been showcasing new products -- Power Harrow, Cultivator, Sub-Soiler -- in various parts of the country to get the feedback from farmers and experts so that the machines are redesigned for Indian conditions.

Cultivator would be priced at Rs 1.5-1.75 lakh per unit, while Sub-soiler and Power Harrow will be priced at Rs 3.25 lakh and Rs 3.5 lakh per unit, respectively, he added.
The agro equipment market in the country is unorganised with a total size of about Rs 2,500-3,000 crore.