Procurement News Notice |
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| PNN | 5542 |
| Work Detail | Across the world, farm machinery outsells tractors two to one, but the availability of abundant and cheap labour has confined farm mechanisation in India to tractors, largely. That's changing now as village youths head for the cities to find better paying work in services and factories. Experts say the shortage of farm labour and its rising cost are among the main reasons for the increasing mechanisation of Indian farming. "This is not restricted to pockets but spread all across," said T R Kesavan, chairman of the technical committee and immediate past president of Tractor Manufacturers' Association. While tractors still outsell other farm equipment like power tillers and combine harvesters, the gap has closed in recent years. The market for specialised machinery, such as threshers, rotavators, transplanters, reapers, zero till drills, laser levellers and power weeders, is worth Rs 32,000 crore now, said Surendra Singh, technical adviser to industry body Agricultural Machinery Manufacturers' Association (AMMA). He added that the industry could touch the Rs 37,000-40,000 crore level in three-five years, growing at its present yearly rate of 5-8%. That will make it as large as the tractor market is now. "Currently, the tractor market is around Rs 40,000 crore while the implements market is around Rs 32,000 crore," said Singh.While local players like Tirth Agro Technology that makes Shaktiman brand of implements have cornered 85-90% of the market in the initial shift to mechanisation, the organised players have started paying closer attention to this segment. "Till recently, the segment was reserved for the small-scale sector," said Kesavan. "Now that it has been thrown open, technologically superior implements and equipment will be introduced." Tractor market leader Mahindra & Mahindra, for instance, has acquired 33% stake in Mitsubishi Mahindra Agri-Machinery and 35% stake in Finland-based Sampo Rosenlew, which, analysts say, will increase its presence in the agri-implements business in India. Similarly, tractor major Escorts is considering a more significant presence in this market. Ravi Menon, CEO of Escorts' agri-machinery business, said, "Currently we have tie-ups to pick up implements as part of the total solution package we offer our customers, but we are evaluating options." German company Lemken and Italian Maschio Gaspardo have set up manufacturing facilities in India. Grimme India, another MNC subsidiary, is offering implements for potato crops. Experts say it's a matter of time before other big global players enter the field as India is a vast opportunity. The size of the global implements business is estimated to be $131 billion in 2018. The migration of unemployed village youths to cities is unlikely to stop now. "The younger generation is shunning farming because it feels it is a menial job and the remuneration is not commensurate with the effort put in," said Kesavan, adding that, "Studies have shown that 50% of India's population will live in urban areas by 2030. This migration from villages to cities will lead to a lot of proxy farmers taking care of multiple plots of land. When you have large landmasses, you have to mechanise." Farmers' push for higher crop density is also driving the increasing use of farm implements. It is expected to increase yields by 25-30% in states with a low level of mechanisation at present, and by up to 10% in states like Punjab that are already highly mechanised. |
| Country | India , Southern Asia |
| Industry | Food & Agriculture |
| Entry Date | 15 Oct 2016 |
| Source | http://timesofindia.indiatimes.com/business/india-business/Costly-labour-boosts-farm-machine-sales/articleshow/54009461.cms |
