The measurement of the returns to adoption of mechanised practices is of first order relevance to understanding the effect of policies directed towards capital intensification on overall productivity. Using a randomised controlled trial, we measure the impact of mechanisation on farmers’ income and labour supply decisions, as well as on labour demand. Family labour supply and hired labour declines both during land preparation, when mechanisation use increases, and other stages, when treatment has no effect on mechanisation. The magnitude of the effects is quite different by types of labour, with the greatest effect on hired labour. The experiment induced no changes in agricultural labour wages, the price of capital from private providers, and the price of output. Our results provide novel estimates of the impact of mechanisation access on agriculture.
