There is strong advocacy for agricultural machinery appropriate for smallholder farmers in South Asia.\nSuch ââ?¬Ë?scale-appropriateââ?¬â?¢ machinery can increase returns to land and labour, although the still substantial\ncapital investment required can preclude smallholder ownership. Increasing machinery demand has\nresulted in relatively well-developed markets for rental services for tillage, irrigation, and post-harvest\noperations. Many smallholders thereby access agricultural machinery that may have otherwise been\ncost prohibitive to purchase through fee-for-service arrangements, though opportunity for expansion\nremains. To more effectively facilitate the development and investment in scale-appropriate machinery,\nthere is a need to better understand the factors associated with agricultural machinery purchases and\nservice provision. This paper first reviews Bangladeshââ?¬â?¢s historical policy environment that facilitated the\ndevelopment of agricultural machinery markets. It then uses recent Bangladesh census data from\n814,058 farm households to identify variables associated with the adoption of the most common\nsmallholder agricultural machinery - irrigation pumps, threshers, and power tillers (mainly driven by\ntwo-wheel tractors). Multinomial probit model results indicate that machinery ownership is positively\nassociated with household assets, credit availability, electrification, and road density. These findings\nsuggest that donors and policy makers should focus not only on short-term projects to boost machinery\nadoption. Rather, sustained emphasis on improving physical and civil infrastructure and services, as well\nas assuring credit availability, is also necessary to create an enabling environment in which the adoption\nof scale-appropriate farm machinery is most likely.
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