Indian Agricultural Equipment Market: Segment Analysis

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Indian Farm Equipments Market Report -------------------------------2012

View Report Details Executive Summary In India, farm mechanization has played a critical role in improving agricultural production as well as productivity by enabling proper and efficient use of inputs. Demand for farm equipments such as power tillers, tractors, combine harvesters, rice transplanters etc has been rising over the past few years, with the increase in income level of farmers. Additionally, with acute shortage of labor resources and continued subsidy scheme by government to encourage farmers to buy farm equipments has further increased farm equipments demand.

As compared to other Asian countries such as China, Thailand, Korea; use of power in agriculture in India is still underpenetrated. Presently, India is the largest manufacturer of tractors in the world, accounting for about one-third of the global production. Power tillers are becoming popular in lowland flooded rice fields and hilly terrains. Northern States such as Punjab, Haryana, and Uttar Pradesh achieved a faster growth in mechanization due to growing awareness among farmers.

Pace of mechanization in North-Eastern States is slow due to constraints such as hilly topography, socio-economic conditions and high cost of transport. With continued shrinkage in average farm size, custom hiring of farm machinery is being increasingly practiced.

Mahindra & Mahindra is the market leader in Indian tractor market whereas VST Tillers Tractor Ltd is the leader in power tiller market. Other major farm equipments manufacturers include Escorts Group, TAFE, John Deere, Greaves Cotton and KAMCO. The rapid use of mechanization by Indian farmers has prompted many Chinese and Japanese farm equipment makers to enter the Indian market. These companies generally form joint ventures with Indian firms and manufacture equipments at a lesser price.

The current report covers the overview, market size and segmentation of farm equipments market in India. Product prices of various farm machineries, Government subsidies, standard certification system, and current details of major companies are also discussed in detail. Data on import and export of farm machinery by country and by product category has also been provided.

Factors Driving Farm Equipments Market Agricultural Machinery Market in India

 The agriculture sector in India has undergone significant structural changes….……….decrease in share of GDP from …………………in 1990-91 to …………………...……………………………………………… in 2011-12 (as per advance estimate released by CSO on 07.02.2012) indicating a shift from the traditional agrarian economy towards a service dominated one.  With acute shortage of labor resources and continued subsidy scheme by government ………………………….........................to encourage farmers to buy ……………………………………………Farm Equipment in order to improve productivity …………………………………………… ………..has further increased the Farm Equipments demand. The overall Indian agricultural machinery market was valued at US$............................................................. billion in 2010.

KW/Hectare

Use of Power in Agriculture in KW/Hectare

1971-72 1981-82 1991-92 2001-02 2005-06 2009-10

 The Department of Agriculture and Cooperation, Ministry of Agriculture, has been providing financial assistance……………………. …………………………..on agricultural equipment and implements to all categories of farmers under its various …………………………………….Central Sector Schemes.

Farm equipments use in agriculture Various Farm Machineries Market Size in India

Farm Machinery Current Market Prices

Units in '000

Type of Assistance

FY08

FY09

FY10

Tractors

Power Tillers

Power Sprayers

Brush Cutters

FY11

Combine Harvesters

Farm Machinery Current Market Prices

and ΧΧ% of the cost whichever

Tractor upto 40 HP

INR is less

Power Tiller

INR or ΧΧ% of the cost whichever is less for 8 BHP and above.

INR or 40% of the cost whichever is less for less than 8 BHP

Self Propelled Reaper, paddy transplanter

INR less

or ΧΧ% of the cost whichever is

Zero Till Seed Drill /Multi Crop Planter/ Seed cum Fertilizer Drill/ Power Weeder

INR less

or ΧΧ% of the cost whichever is

Cono Weeder and other farm implements

INR less

or ΧΧ% of the cost whichever is

INR less

or ΧΧ% of the cost whichever is

INR less

or ΧΧ% of the cost whichever is

Name of Farm Equipment

US$

Power Tiller Mounted Terracer cum Leveller

ΧΧΧ

Manual Paddy Transplanter

ΧΧΧ

Paddy cum Daincha Seeder

ΧΧΧ

Power operated plant protection equipment

Battery operated portable wetland weeder Battery Operated Low Volume Sprayer

ΧΧΧ

Rotavator

Broadcaster

ΧΧΧ

Self-Propelled Vertical Conveyor Reaper

ΧΧΧ

ΧΧΧ

Pattern of Assistance

Market share of major players in Tractor and Tillers Market Market Shares of Major Players in Indian Tractor Market

Market Shares of Major Players in Power Tillers Market

VST Tillers

FY08 Mahindra

FY09 Tafe + Eicher

FY10 Escorts

Sonalika

FY11 FNH

KAMCO

Chinese/Others

FY12 JD

Others

•

In FY12 Mahindra & Mahindra (M&M) was the clear leader in the Indian tractors market with …………………………………… ………………………………………. of market share. The market share of TAFE & Eicher increased from ……………………..to ………………… in the same period.

•

Government subsidy is the single largest factor driving Power Tiller sales in India. The magnitude of subsidy is state specific. For instance Chattisgarh is providing INR ……………………./tiller subsidy, while Jharkhand & Bihar provide INR ………………./tiller.

Assam Government in its FY10 Budget stated that …………… power tillers will be provided to each assembly constituency at ……………. discount. Central Government subsidy on Tillers is INR ……………………. .VST is the largest manufacturer of Power Tillers in India with about …………………………….market share.

View Report Details Table of Contents

List of Charts

1. Introduction: Farm Equipment Market

Agricultural Equipment Industry – Value Chain Global Turnover of Agricultural Machinery (2005-2011) GDP of Agriculture and Allied Sectors and its Share in Total GDP: India (2007-08 to 2011-12) Gross Capital Formation (GCF) in Agriculture and Allied Sectors at 2004-05 Prices: (2004-05 to 2010-11) India Agricultural Machinery Market: (2008-2010) Number of Advanced Agricultural Equipments in India: (1992-2010) Use of Power in Agriculture in KW/Hectare: (19971-72 to 2009-10) Comparison of Usage of Power in Asian Countries: (2010) Percentage Share of Different Farm Power Sources in Agriculture: (1971-72 to 2009-10) Total Tractor Sales in India: (FY05-FY12E) Segmentation of Tractors by Power: (FY10 vs FY12 9M) Region-Wise Sales of Tractors (9M FY12) Trend in Domestic Tractor Sales across Geographies (9M FY11 vs 9M FY12) Trend in Addition of Tractor Manufacturing Capacity by Key OEMs (FY09-FY13E) Market Shares of Major Players in Indian Tractor Market: (FY08-FY12) Power Tiller Sales in India: (FY05-FY12) Market Shares of Major Players in Power Tillers Market: (FY11) Total Annual Sales of Combined Harvesters in India: (FY08-FY11) Total Annual Sales of Power Sprayers in India: (FY08-FY11) Total Annual Sales of Brush Cutters in India: (FY08-FY11) Market Size of Threshers in India: (1994-2010E) Market Size of Levelers in India: (1994-2010E) Market Size of Reapers in India: (1994-2010E) Total Funds Released to States for Mechanization and Technology Updation: (FY08-FY12) Total Funds Released for Components of Demonstration, Training and Distribution of Post Harvest Technology Equipment: (FY08-FY12)

1.1 Types of Farm Equipments 1.1.1 Farm Tractors 1.1.2 Primary Tillage Machine 1.1.3 Secondary Tillage Machine 1.1.4. Sowing and Planting Machine 1.1.5 Harvesting Machines 1.1.6. Crop Processing Machine 1.2 Agricultural Equipment Industry- Value Chain

2. Global Farm Equipments Market 2.1 Market Size

3. Indian Agriculture Scenario 3.1 Performance of Agricultural Sector 3.2 Flagship and Major Programmes of Department of Agriculture

4. India- Farm Equipments 4.1 Level of Farm Mechanization 4.2 Major Farm Equipments used Cropwise 4.3 Farm Equipment Market Size 4.4 Farm Power Sources used in Agriculture 4.5 Indian Tractors Market 4.5.1 Overview of Tractors Market 4.5.2 Market Size

View Report Details 4.5.3 Market Segmentation 4.5.4 Market Players 4.6 Power Tillers Market 4.6.1 Overview

4.6.2 Market Size 4.6.3 Economics of Power Tillers 4.6.4 Market Players 4.7 Combined Harvesters 4.7.1 Overview 4.7.2 Market Size

Tractors Import to India: By Value & Volume: 2006-07 to 20112012 Agriculture/Horticulture/Forestry Machinery Import to India by Value and Volume: (2006-07 to 2011-12) Harvesting/Threshing Machinery Import to India by Value and Volume: 2006-07 to 2011-12 Tractors Export from India: By Value & Volume: 2006-07 to 20112012 Agriculture/Horticulture/Forestry Machinery Export by Value and Volume: 2006-07 to 2011-12 Harvesting/Threshing Machinery Export from India by Value and Volume: 2006-07 to 2011-12

4.8 Power Sprayers 4.8.1 Market Size

List of Tables

4.9 Brush Cutters

Global Sales of Agricultural Machinery: (2011) Area under Cultivation: India (2008-09 to 2011-12) Production of Major Crops in India: (2008-09 to 2011-12) Yield of Major Crops in India: (2008-09 to 2011-12) Level of Mechanization of Different Operation in Indian Agriculture 2010 Major Farm Equipments used Cropwise Capacity Enhancement Projects Announced by Market Players Economics of Power Tiller Hire charges of Land Development Machinery Hire Charges of Minor Irrigation Machinery Farm Machinery Current Prices in India Pattern of Assistance (Government Subsidies) Financial Status of Funds Released to States and Implementing Agencies: (FY08-FY12) Funds Released for Components of Demonstration, Training and Distribution of Post Harvest Technology Equipment (FY08-FY12) Minimum Support Prices of Major Crops: (FY11 vs FY12)

4.9.1 Market Size 4.10 Threshers 4.10.1 Market size 4.11 Land Levelers 4.12 Reapers 4.12.1 Market Size

5. Market Trends and Drivers

5.1 Custom Hiring of Farm Machinery 5.2 Farm Machinery Current Market Prices 5.3 Government Subsidies 5.4 Funds Released To States/Implementing Agencies 5.5 Increased Wealth of Indian Farmers Due To Growth in Minimum Support Prices

View Report Details 5.6 Declining Availability of Labor for Agricultural Activities

6. Trade of Agricultural Machinery 6.1 Import of Agricultural Machinery 6.1.1 Tractors (HS Code: 8701)

6.1.2 Agriculture/Horticulture/Forestry Machinery (HS Code: 8432) 6.1.3 Harvesting/Threshing Machinery (HS Code: 8433) 6.1.4 Import Duty on Farm Machinery 6.2 Export of Agricultural Machinery 6.2.1 Tractors (HS Code: 8701) 6.2.2 Agriculture/Horticulture/Forestry Machinery (HS Code: 8432) 6.2.3 Harvesting/Threshing Machinery (HS Code: 8433)

7. Standard Certification System 7.1 Institutions Involved in Testing and Evaluation 7.2 Testing of Agricultural Machinery

7.2.1 Tractor Test 7.2.2 Power Tiller Test 7.2.3 Combine Harvester Test 8. Competitive Landscape 8.1 Company Profiles of Farm Machinery Manufacturers 8.2 Production and Sales of Tractors by Company 8.3 Production and Sales of Tractors by Horsepower 8.4 Details of Foreign Farm Machinery Companies

List of Tables Average Daily Wage Rate for Farm Labour (Jan 07 vs Apr 11) Import of Major Tractor Categories to India- (Value & Volume Terms) Top Countries from Which Tractors are Imported to India (In Value Terms US$ Million) Import of Agriculture/Horticulture/Forestry Machinery Categories to India- (Value & Volume Terms) Top Countries from which Agriculture/Horticulture/Forestry Machinery HS Code 8432 are Imported to India (In Value Terms) Import of Harvesting/Threshing Machinery Categories to India- (Value & Volume Terms) Top Countries from which Harvesting/Threshing Machinery HS Code 8433 are Imported to India (In Value Terms) Basic Custom Duty for Agricultural Machinery in India (2011-12) Export of Major Tractor Categories from India- (Value & Volume Terms)- 2006-07 to 2011-12 Apr-Jun Top Countries where Tractors are Exported (In Value Terms): 200607 to 2011-12 Apr-Jun Export of Agriculture/Horticulture/Forestry Machinery Categories from India- (Value & Volume Terms): 2006-07 to 2011-12 Apr-Jun Top Countries to which Agriculture/Horticulture/Forestry Machinery are Exported HS Code 8432 (In Value Terms): 2006-07 to 2011-12 Apr-Jun Export of Harvesting/Threshing Machinery Categories from India(Value & Volume Terms): 2006-07 to 2011-12 Apr-Jun Top Countries to which Harvesting/Threshing Machinery HS Code 8433 are Exported from India (In Value Terms: 2006-07 to 2011-12 Apr-Jun Profiles of Major Farm Machinery Manufacturers in India Production and Sales of Tractors by Major Manufacturers (2011 vs 2012) Production and Sales of Tractors by Horsepower and by manufacturers (FY11 vs FY12) List of Foreign Farm Machinery Companies

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