Who Is Using Tractors?
India along with other major agriculture production nations of Asia is facing the problem with falling sizes of farmland holding. A small farmland size makes it very difficult for a farmer to bear any heavy farm machinery like a tractor but the tractor industry is all set to touch new heights. Even tractor tyre industry is expected to touch 8.2 billion USD mark by the end of 2022. Reports suggest that growth drivers will be Asian nations and tractor sales projection for India will drive on the states that hold small and marginal farmland holdings.
India is in the continuous limelight for deteriorating farmland sizes, the story is similar with almost every major agriculture producing nation in Asia (including China). A small farmland holding means that there may be less demands for heavy equipment or farm machinery like tractor but the industry reports are having an entirely opposite tune.
Department of agriculture’s last census report for India says, In overall irrigated farmland, some 48.16 per cent is accounted by Small and Marginal holdings, 43.77 per cent by Semi-medium & Medium holdings and 8.07 per cent by large holdings’. It is a data which shows that its only 8.07 per cent of farmland along with a little possibility of additional 43.77 per cent of semi-medium farmland with feasibility to opt for heavy farm equipment like tractor.
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Tractor Industry Projection
An earlier report in India Brand Equity Foundation which quotes CRISIL research says, "domestic tractor sales are expected to close fiscal 2017 with impressive 16 per cent to 18 per cent growth, riding a monsoon-led surge in demand that was enough to offset the impact of demonetisation in the latter half. The previous two fiscals had seen double-digit de-growth as monsoons played truant and farm sentiment wilted. Sales revived as the southwest monsoon came in normal’.
IBEF further quotes Binaifer Jehani, Director, CRISIL Research, he said "Maharashtra, Madhya Pradesh and Uttar Pradesh are expected to drive demand. Growth in the peninsular region would be driven by Andhra Pradesh and Telangana, though Karnataka and Tamil Nadu could experience stress for a while, the overall region should perform well, given normal monsoons and consistent pace of rural development activities." All of these states are known for small and marginal farmland holding sizes.
The Latest Global Angle
A latest report by TechSci research named ‘Global Agriculture Tire Market by Vehicle Type, By Region, By Demand Category, By Region, Competition, Forecast and Opportunities, 2012–2022’ has made another interesting projection. It says that ‘the global agriculture tire market is forecast to reach 8.2 billion USD by 2022, on account of rising agriculture vehicle sales and expanding agriculture vehicle fleet size. In 2016, tractor agriculture tire segment dominated the global agriculture tire market, followed by trailers and combine harvesters vehicle tires. Tractor tire segment is anticipated to continue its dominance in the global agriculture tire market through the forecast period owing to expanding the fleet size of tractors, especially in developing countries.
Asia Pacific Likely to Drive Growth
Among all the regional markets, the global agriculture tire is dominated by Asia-Pacific. With a volume share of more than 60 per cent in 2016, Asia-Pacific region is anticipated to continue its dominance in the global agriculture tire market during the forecast period. The second largest regional market for agriculture tires in 2016 was Europe & CIS, which was followed by North America, South America, and Middle East & Africa. Over the last few years, the presence of various multinational companies like Michelin, Titan, BKT Trelleborg, etc., has intensified the competition in global agriculture tire market. Moreover, the widespread presence of a well-established network of dealers and distributors is expected to further increase the market share of the above-mentioned tire companies across the globe in the coming years.
Who is using tractors?
There is no way to ensure that a tractor once purchased is used for the farming purpose. Even if a farmer buys tractor he may well lease it for commercial uses. Tractor manufacturing association (TMA) of India quotes ‘strong governmental focus on the availability of finance for agriculture mechanization tools and on rural development and high irrigation potential will drive the overall growth of the tractor industry’.
The real angle comes with another statement mentioned by TMA which says ‘In addition, government initiatives such as the implementation of National Rural Employment Guarantee Act (NREGA) and increased usage in non-agricultural domains such as haulage in construction and infrastructure projects will further increase demand of tractors’.
This is the time when the government should revisit the mechanism of agriculture subsidies, to make sure that tractor will not become another Urea.
