Tractors are having a area day. In September, even earlier than the pageant season started, India’s home tractor gross sales witnessed A sharp 23% progress y-o-y. Even when That is dismissed as an anomaly, the quantitys out there for April November have registered a strong 9% progress and level in the direction of a potential milestone for the tractor enterprise —home gross sales, which have already touched 678,869 models, might cross 900,000 models a yr for The primary time. Tractor exports, which account for roughly 15% of home gross sales, have been excluded from this estimate.
India’s home tractor gross sales have doubled in a decade — from 480,431 models in FY2011 to 899,683 in FY2021, leveling to rising mechanisation of agriculture Inside the nation. The Covid yrs didn’t drag down tractor gross sales. One set off Could be that agricultural income was not hit exhausting by the pandemic. The sector, Truly, registered A delicate progress Whilst a Outcome of the nation’s Gross Domestic Product (GDP) progress price plummeted in FY2021.
However there are completely different set offs for the uptick in tractor gross sales. Policymakers, agricultural economists, enterprise specialists and farmers whom ET has spoken to say the rising value of sustaining oxen and bullocks and the non-availability of Low price farm labour in rural stempos are two Reason why farmers, even these with comparatively smaller landholdings, choose to shift from bullocks to tractors.
“Aaj kal bail palna haathi palne ke barabar hain (These days, primarytaining a bullock is like primarytaining an elephant),” says Lala Ram Chandrakar, a farmer in Dhamtari, Chhattisgarh. “A pair of bullocks value Rs 40,000 to Rs 1 lakh. Their upkeep All yr prolonged May even be costly. Fodder is neither Available nor Low price anyextra.”
Policymakers in Delhi and enterprise analysts in Mumbai echo Chandrakar’s view. “A speedy shift from bullock to tractor is a actuality. I’ve empirical knowledge on this enhancement,” says Professor Ramesh Chand, agricultural economist and member of NITI Aayog. “A bullock is used for farming simply 80 days a yr. However the proprietor has to Look after the animal for The Reprimaryder of the yr. Maintaining a tractor is Low priceer. Additionally, what bullocks can do in eight hours, a tractor does in half an hour,” he provides. Chand says that By way of The peak Covid interval, many farmers postponed their choice To buy a pricey merchandise like tractor As a Outcome of their non-farm income had eroded considerably.
A tractor with Decrease than 20 horsepower (HP) prices Rs 2.8-3 lakh the placeas the extra properly-appreciated ones with 40-50 HP value Rs 5.5-6.9 lakh. The latter accounts for 57% of complete gross sales So far this fiscal yr. So far as upkeep Is apprehensive, a tractor wants servicing solely after 300 hours of working and that prices simply Rs 2,500-3,500.
Hemant Sikka, president of Tractor and Mechanization Affiliation (TMA), says tractors are also used for haulage in rural India, a enterprise that fetches further income to tractor-proudly owning farmers. “Additionally, farm labour is turning into scarce, making tractors A lot extra useful to farmers.
A bullock Should be fed twice a day And launched care of frequently with bathing and cleansing. One particular person is required to be at house (On A daily basis),” says Sikka, who also heads Mahindra & Mahindra’s Farm Gear Sector (FES). He says the placeas a bullock Is notably deployed for tillage, a tractor performs a quantity of farm and non-farm features.
This shift from bullock to tractor Is occurring at a time when the inhabitants of oxen and bullocks has dwindled, contributing to A requirement-current mismatch. Based mostly on India’s 2019 livestock census, the inhabitants of male cattle was 47.4 million, a 30% drop from the earlier census of 2012, Whilst a Outcome of the inhabitants of cows enhanced by 18%. The inhabitants of male buffaloes dropped by 42% to 9.2 million.
Significantly, it was all through This period that tractor gross sales rose speedyly. The home tractor gross sales rose by 125% from FY2010 to FY2021. However, in FY2022, Inside the midst of Covid, there was A Lightweight dip to 842,196 models primarily As a Outcome of Of greater base influence of FY2021. The gross sales have bounced again this yr although the graph seenoticeded Inside the preliminary months earlier than establishing primary positive elements forward of the festive season.
Based mostly on enterprise analysts, the delay Inside the withdrawal of the southwest monquickly by about three weeks is a set off for the gross sales progress in September-October. Higher moisture content material Inside the soil means greater rabi sowing And sure greater rabi crop, says Sikka. Higher crop prices At first of this fiscal yr coupled with an anticipation Of fantastic festive gross sales added sparkle to the tractor gross sales since September. The 45-day festive interval noticed large gross sales, with a quantity of tractor corporations clocking their extremeest month-to-month quantitys.
Based mostly on enterprise estimates, Mahindra with a 41% market share in home gross sales is the enterprise chief So far this fiscal yr (April-November), adopted by TAFE (18%), ITL (12%) and Escorts (10%). Bhapricendu Kapoor, president, gross sales and advertising, TAFE, says tractor sale volumes in October and November Are typically huge beset off kharif harvest coincides with pageant season. “Money circulate on kharif crops comes Inside the palms of farmers In the meantime,” he says.
Union finance ministry in its month-to-month report for October time durations the rise in tractor gross sales (in September and October) as An indication of “enhanced sentiments”, including that such decides level out “an anticipated enhance in crop stempo sown”, SK Pattanayak, former Union agriculture secretary, seconds it, saying tractors do acceleprice The tactic of sowing. So An enhance in gross sales level outs A rise in complete sown stempo. “Higher than that, greater tractor gross sales means farmers are turning prosperous, investing extra on mechanisation and transportation,” he says.
This enhancement might proceed — greater wheat procurement by The fedperiodl authorities and greater crop exports might guarantee a healthful farm income, Ensuing in A strong demand for tractors All yr prolonged, says Hemal Thakkar, director, Crisil Market Intelligence & Analytics. Higher minimal assist worth for key rabi crops, greater moisture content material in soil, extreme reservoir levels and good progress Inside the sowing of wheat and completely different winter crops might see the momentum of tractor gross sales sustaining.
In a extreme Rate of curiosity regime, which the Reserve Financial institution of India is unlikely to reverse anytime quickly, farmers might spend cash on tractors Rather than two-wheelers as time period loans For buying for agri-equipment, collectively with tractors and power tillers, are Low priceer than car loans. Numerous state authorities schemes subsidise and encourage such borrowings. On this fiscal yr, from April 1 to October 5, 5 states — Uttar Pradesh, Madhya Pradesh, Rajasthan, Maharashtra and Karnataka — accounted for 60% of tractor gross sales. Madhya Pradesh also noticed an uptick in demand of tractors on the again Of fantastic harvests And greater income from wheat exports earlier this yr.
Tractor has many potential markets. Rajasthan, For event, reprimarys an beneathpenetpriced state. “We anticipate tractor gross sales in Rajasthan to develop at A greater tempo, since solely 58% of land is held by small and marginal farmers (Decrease than 2 hectares) in contrast with the nationwide common of 85%,” says Thakkar of Crisil. With fewer bullocks and oxen, mechanised beasts might take their place, and extra tractors might chug into the areas.
Rapid shift from bullock to tractor is a actuality: Prof Ramesh Chand, NITI Aayog
Edited excerpts from an interview with Prof Ramesh Chand, member of NITI Aayog, by Shantanu Nandan Sharma:
How do you explaInside the spurt in tractor gross sales in September and October this yr?
There have been A pair of beneficial elements. First, Many people postponed their choice To buy tractors due to Covid. It’s a pricey merchandise and therefore people weigh a quantity of elements earlier than buying for it. During the Covid interval, progress in agriculture was intact and there was no antagonistic influence on agricultural income. However farm households reprimaryed cautious as half of their incomes come from non-agricultural sources, a half influenceed by the pandemic. Second, prices of agricultural commodities went down (By way of the Covid). However this yr, farm prices are comparatively greater. In a quantity of commodities Similar to paddy and wheat, farmers Aren’t even asking for MSP (minimal assist worth) as They’re receiving greater prices Inside the open market.
Are The fedperiodl authorities incentives enough To enhance mechanisation?
There are A lot of schemes. Many states are offering incentives for mechanisation. Additionally, in an genperiodl inflationary state of affairs the place Rate of pursuits have been developing, it Is sensible to Spend cash on belongings like tractors As a Outcome of the borrowing price in agricultural time period loans is low primarily due to incentives from states.
How do you see mechanisation Inside the Indian agricultural sector hereon?
There has already been A strong enhancement in the direction of mechanisation. A speedy shift from bullock to tractor is a actuality. I’ve empirical knowledge on this enhancement. It level outs prosperity in agriculture. Farmers have also realised that the opperiodtion through bullocks has turned very pricey. A bullock is used for farming for a most of 80 days a yr. However one has to Look after the animal for The Reprimaryder of the yr. Maintaining a tractor is Low priceer. Additionally, what bullocks can do in eight hours, a tractor does in half an hour.
We’re shifting in the direction of intensive agriculture. Earlier we had one crop, now in most farmlands we do two crops. One extra set off for mechanisation is that members of More and more extra farming households have been withdrawing from agriculture due To various set offs — be it greater financial standing or migration to metropolis stempos. And tractors have many completely different utilities. For event, it’s extensively used for transportation in rural stempos.
Based mostly on this yr’s crop sown stempo, what’s your forecast on meals inflation?
Food inflation rose to an unset offable diploma earlier than modperiodting a bit Over the previous couple of months. I really feel it ought to Calm down By way of The subsequent two-three months. Prices of some greens Similar to onions have been cooling down. The sown stempo for mustard crops is greater this yr. So We will anticipate its prices To relax down subsequent yr. Additionally, stempo beneath wheat cultivation this season is greater. So We will hope for wheat prices To return down.