Indian Farm Equipments Market Report

--------------------------------2012

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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.

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Factors Driving Farm Equipments Market

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.

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.

Use of Power in Agriculture in KW/Hectare

Agricultural Machinery Market in India

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

KW

/Hecta

re

Farm equipments use in agriculture

Farm Machinery Current Market Prices

Various Farm Machineries Market Size in India

FY08 FY09 FY10 FY11

Un

its in

'000

Tractors Power Tillers Combine Harvesters

Power Sprayers Brush Cutters

Name of Farm Equipment US$

Power Tiller Mounted Terracer cum

Leveller

ΧΧΧ

Manual Paddy Transplanter ΧΧΧ

Paddy cum Daincha Seeder ΧΧΧ

Battery operated portable wetland

weederΧΧΧ

Battery Operated Low Volume Sprayer ΧΧΧ

Broadcaster ΧΧΧ

Self-Propelled Vertical Conveyor Reaper ΧΧΧ

Farm Machinery Current Market Prices

Type of

Assistance

Pattern of Assistance

Tractor upto 40 HP INR and ΧΧ% of the cost whichever

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 or ΧΧ% of the cost whichever is

less

Zero Till Seed Drill

/Multi Crop Planter/

Seed cum Fertilizer

Drill/ Power

Weeder

INR or ΧΧ% of the cost whichever is

less

Cono Weeder and

other farm

implements

INR or ΧΧ% of the cost whichever is

less

Power operated

plant protection

equipment

INR or ΧΧ% of the cost whichever is

less

Rotavator INR or ΧΧ% of the cost whichever is

less

Market share of major players in Tractor and Tillers Market

• 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.

Market Shares of Major Players in Indian Tractor Market Market Shares of Major Players in Power Tillers Market

FY08 FY09 FY10 FY11 FY12

Mahindra Tafe + Eicher Escorts Sonalika FNH JD Others

VST Tillers KAMCO Chinese/Others

Table of Contents

1. Introduction: Farm Equipment Market

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

List of Charts

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)

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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

4.8 Power Sprayers

4.8.1 Market Size

4.9 Brush Cutters

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

Tractors Import to India: By Value & Volume: 2006-07 to 2011-

2012

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 2011-

2012

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

List of Tables

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)

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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 TablesAverage 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): 2006-

07 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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Vikas Gupta

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