Tractors are the lifeline of agriculture. These machines are multi-purpose and apt for rough terrains in all weathers. Recently, we have experienced an impressive boom in the tractor industry in 2021-22. We will delve deeper and explain five significant reasons for the same.
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Here is the List of Five Reasons for the Phenomenal Growth of the Tractor Industry in 2022
Tractor sales registered an impressive sales figure of 614.5 thousand units in 2021. It was the highest in the world and backed by bumper crop production and favourable monsoon of 2019 and 2020. According to market experts, the shipments of tractors are projected to grow at a CAGR of 5.78 per cent.
Apart from favourable crops and weather, the Indian tractor industry is witnessing growth because of some other traditional and contemporary factors too. Let us explore those in the following section.
Government Subsidy, Farm Loans, etc
The government of India and State Governments are running several welfare schemes for farmers. They are getting subsidised farm loans, high minimum support prices, online marketplaces to sell crops inter-state, and many more.
These initiatives caused higher disposable income and led to high demand for mechanised farming. Hence the demand for new and second-hand tractors grew.
Mechanised Farming and Migration
The study says, around 60 per cent of people were engaged in agriculture and farming during the 1990s. It came down to 40 per cent currently and will further shrink to around 25 per cent by 2030. Low people on the farm mean higher integration of machines. It led to high demand for tractors over the years.
Even at 40 per cent of mechanisation, we are way behind China (70 per cent) and the Developed economies of Europe and the Americas (90 to 100 per cent). It suggests demand for tractors will only go upwards.
Uberisation Effect
Pay per hour system is becoming popular in our agriculture. Custom hiring for the particular job will fuel demand for tractors in 2022. In addition, with the high prices of new tractors, you can check Truckbazi.com for second-hand tractor sellers and buy at competitive prices.
With the uberisation effect, people have inclined towards the mechanised option for farming than manual. The impact of urbanisation also led to an increased demand for tractors.
Demand for Arable Land
Despite the majority of the Indian population depending upon agriculture, a vast swathe of land is still not arable. Indian Agri-land is around 189 million hectares out of which only 159 million hectares are arable. With the ever-increasing population and demand for farming, the tractor is playing a vital role in transforming these 30 million hectares of land into arable land.
Multiple Players and Competition
Indian tractor industry has several traditional and modern entrants. Significant players in 2022 are Mahindra Tractors, TAFE, Escorts, Sonalika, Deere & Company, and CNH Industrial. Competition is always beneficial for consumers, and agriculturists are getting attractive deals to buy new and used tractors.
We hope these five reasons will clarify and justify the rapid demand for tractors in 2022. You can visit Truckbazi.com to buy, sell, and rent tractors from top companies. Explore now
