Numerous Government Interventions will shape India Used Agricultural Equipment Market to Grow to More than INR 135 Crores by 2026: Ken Research

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Initiatives like SMAM and the National Food Security Mission are aimed to provide financial aid when acquiring agricultural equipment, paving the way for the Used Agricultural Equipment market In India to reach over 3500 units sold by 2026, with a CAGR of 22.7%, as per findings released by Ken Research.

1. 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.

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The scheme of SMAM (Sub mission of Agricultural mechanization), revised for 2020-2021, got implemented in all the states, to promote the usage of farm mechanization and increase the ratio of farm power to cultivable unit area up to 2.5 kW/ha. The financial assistance being provided is up to 40% of the total value of implementation, with added 10% aid to SC, ST, Small & Marginal farmers, Women and NE States beneficiary.

2. The Availability of Used Agricultural Equipment at Reasonable Prices Enables the Indian Economy's Agriculture and Allied Sectors to Add 20.2% More Gross Value in 2021.

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Agriculture is the primary source of livelihood for about 58% of India’s population. Gross Value Added by agriculture, forestry, and fishing was estimated at Rs. 19.48 lakh crore (US$ 276.37 billion) in 2020. Share of agriculture and allied sectors in gross value added (GVA) of India at current prices stood at 20.2% in 2021. Used agricultural equipment supports farmers in maintaining farm and turf area at affordable rates. While the difficulties created by COVID induced lockdowns adversely affected the performance of the non-agricultural sectors, the agriculture sector came up with a robust growth rate of 3.4 % at constant prices during 2021, with increasing adoption of used farm implements among Indian farmers.

3. Other initiatives such as National Food Security mission and Rashtriya Krishi Vikas Yojna have announced substantial subsidies for purchase of farm equipment.

National Food Security Mission (NFSM): Assistance (up to 50% the cost of machinery) to be provided for machinery such as pump sets, tractor mounted sprayers, seed drills, zero till seed drills to varying degrees.

 

Rashtriya Krishi Vikas Yojana (RKVY): Farm mechanization comes under production growth stream of RKVY – with 35% of the outlay. Assistance for large equipment (tractors, combine harvesters, sugarcane harvesters, cotton pickers, etc.) is available for establishing custom hiring centers (CHCs).

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India Used Farm Equipment Market

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India Used Agricultural Equipment Market Reached More Than INR 45k Crores by 2021, as More Small & Marginal Farmers are Opting for Agri-Equipment Purchase: Ken Research

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India Used Agricultural Equipment market has grown from nearly INR 19k Crores in 2016 to being valued at approx. INR 45k Crores in 2021, as per findings released by Ken Research.

1. India is No Farther Behind in Comparison to Major Producers in the World, in Terms of Mechanization: Share of Farming Entities Employing Mechanical Support in India Stands at Nearly 46% as of 2020.

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This South Asian nation (India) ranked second in the world for both rice and wheat production. Farmers are being pushed into farm mechanization by the additional farming operations needed to sustain the output. Also, due to the shifting manpower preference from purely farm-oriented activities to allied industries, there is a persistent scarcity of labor-intensive agricultural operations in India. Given that the labor in agriculture is shrinking and migrating to urban regions, rapid urbanization is also one of the main causes of the growth in agricultural mechanization. For instance, according to World Bank data, the proportion of individuals who are employed has been declining for a while. Agriculture accounted for 44% of all employment in 2017 but dropped to nearly 41% in 2020. Hence, it is projected that during the future years, the manpower scarcity would fuel and raise the need for farm equipment.

2. Small land holding area makes the renting of equipment more practical for most farmers; farmers having access to higher machinery capacity are the suppliers.

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India has a majority land holding size of area below 0.5 hectares, which is continuously decreasing. Rental market for agricultural equipment, is a viable option for the marginal holding farmer to allow mechanization due to its lower capital requirement and being cheaper than individual ownership. Rental sector is almost entirely unorganized, with local players dominating the market with their established connections. A majority of farmer co-operatives and association also pool their resources to rent equipment on need basis.This is because farmers in need of renting equipment also fall in the lower income group, with those renting out equipment being large farmers themselves, forming a symbiosis among farmers.

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India Used Farm Equipment Market

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