The agricultural sector is one of the few industries in India that witnessed a robust growth rate of ~3.4 % at constant prices during FY’21 despite the COVID lockdown. Also, there is an advent of farm mechanization in the agricultural industry due to the rising labor costs in the country. These agricultural equipment are helpful for farmers at many stages of farming. However, due to the high cost of new equipment, most farmers opt for used farm equipment which is pushing the demand for used agricultural equipment in India. Currently, the Used Agriculture equipment sector is growing at a CAGR of ~16% between 2016 and 2021.
However, the adoption of farm mechanization is still low in the country as compared to other countries like China, Brazil, and more. But in the past years, several policies have been framed in order to improve farming infrastructure and focus on smaller land-holding farmers.
Here we have thrown light on the major initiatives of the Indian government that will enable the used Agricultural Equipment Market in India to grow by a CAGR of ~23% in the next five years.
1. Agriculture and Allied Sectors are a major contributor to the Indian Economy, with a Gross Value Addition share of 20.2% in FY’21 to the Indian economy
2. Farm mechanization has been witnessing acceptance due to its benefits such as savings in Agri-inputs, increasing efficiency and yield in farms, and combating the increasing cost of labor in Indian Farms
3. At each stage of the agricultural cycle, there are targeted requirements for farm equipment; tractors are the most versatile and are used to fulfil multiple requirements at every step
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4. Farm mechanization in India is still in its nascent stages due to the high cost of farm machinery and equipment, insufficient policy framework
5. However, recent years have seen the greatest amount of policies and reforms aiming at improving farming infrastructure and focusing on smaller land-holding farmers
6. The Sub-mission on agricultural mechanization aims to provide subsidies of 40%-60% to small and marginal farmers, to enable mechanization at a granular level
7. Other initiatives such as National Food Security mission and Rashtriya Krishi Vikas Yojna have announced substantial subsidies for purchase of farm equipment
8. Trickle effect of the growing new farm equipment market and the rise of contract farming among small & marginal farmers will further support the growth of the Used Agri-Equipment Market in India
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India Used Agricultural Equipment Market
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