Government Subsidies under SMAM and Increasing MSP across Major Food Crops to Foster India Agricultural Implements Market Growth: Ken Research

Limited farm labor, easy credit availability and fund access, moderate penetration and shortening replacement cycle have been encouraging demand for agricultural implements in the country.
Under the Central Sector Scheme ‘Demonstration of Newly Developed Agricultural Equipment Including Horticultural Equipments at farmer’s fields’, newly developed agricultural machinery is procured and their demonstration is carried out at farms, aiding mechanization levels in the country.
Government initiatives and subsidies including the National Agriculture Development Program (NADP), Rashtriya Krishi Vikas Yojana (RKVY), Bringing Green Revolution in Eastern India (BGREI) and other programs have made agricultural implements more affordable to farmers

The development of agricultural mechanization in India has witnessed robust growth over the last six decades. The country has evolved from an economy that faced severe food shortages to an exporter of many food commodities and industrial products including agricultural tractors and implements. The country has achieved this despite a three-fold increase in its population and negligible increase to arable land area. While opportunities in Indian farm machinery are immense, this sector faces challenges on several fronts. Unlike agriculture and allied sectors, the machinery market has a far more complex structural composition. The sector’s performance depends on an interplay of factors including financial aspects (capital/rate of interest), lack of data and small and scattered land holdings. The Government has been encouraging mechanization through different subsidies and policy interventions. The technologies that have evolved in the farm machinery sector in last few years have enormous potential to grow in the future, especially with new initiatives like ‘Make in India’.

Promoting the establishment of organized custom hiring centers with advanced roles, provision of Micro-credit to small and marginal farmers and timely tendering process of farm equipment are some of the key factors that will have a positive impact on the agricultural implements market, according to Analysts at Ken Research.

Ken Research in its latest study, India Agricultural Implements Market Outlook to 2021- Government Subsidies in SMAM and Increasing MSP to Foster Growth suggests that VST Tiller Tractor Pvt. Ltd., Tirth Agro Technology Ltd., Kerala Agro Machinery Corporation Ltd. and Beri Udyog Pvt. Ltd. will continue to dominate this space. However, these major players will witness rising competition from Greaves Cotton Ltd., Honda Siel Power Products, Lemken India, Krishi Yantra Laghu Udyog, Bull Ago and SAECO Agrotech in the coming years.

India Agricultural Implements Market is projected to register a positive CAGR during the period FY’2016-FY’2021. Shift in government focus from food security to farm income security, increased coverage under the Fasal Bima Yojana Scheme (crop insurance) and waiving of farmer loans by state and central governments is expected to drive the sales of agricultural implements in the future.

The report provides information on Agricultural Implements including Rotavators, Cultivators, MB Ploughs, Harrows, Agricultural Sprayers, Seed and Fertilizer Drills, Tiller and other implements.

Topics Covered in the report