Market Trends of China Agricultural Tractors Industry
This section covers the major market trends shaping the China Agricultural Tractors Market according to our research experts:
Growing Preference For Farm Mechanization
- Agricultural mechanization is essential to increase farmers' income in modern agriculture. However, the use of machinery for crop production in China is quite inefficient. According to a study conducted by China Agricultural University (CAU), Beijing, in 2020, the national crop planting and harvesting mechanization rate reached 71%.
- The comprehensive mechanization rate of planting and harvesting exceeds 95%, 85%, and 90% for wheat, rice, and maize, respectively. To accelerate agricultural mechanization, the Chinese government issued a series of policies to encourage farmers to use machinery, including financial subsidies for machine purchases and machine operations and support for cooperatives to provide machinery for individual farmers.
- There is a growing need for farm mechanization in the region, as farmers' income has not been able to keep pace, such as to cater to the increasing cost of production, including labor wages. Farm mechanization, such as using tractors in agriculture, will reduce the wage-labor costs as less manpower is used for farming, besides enhancing manpower productivity. There is an urgent need for farm mechanization in crops such as rice, wheat, corn, potato, oilseed rape, cotton, and sugarcane to boost production.
- Tractors (25-100 HP) dominate the market due to the low purchase cost compared to high-end tractors. Several regional regulatory bodies, such as China Agricultural Industry Mechanization Association (CAIMA), promote farm mechanization by educating cooperatives and individual farmers about the benefits of using high-horsepower tractors in larger farm areas. Thus, the rapid increase in farm mechanization by farmers across the region drives the sales of tractors, promoting the market growth.
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Row Crop Tractors Dominate the Market
- With the growing unavailability of farm laborers and the growing farm mechanization of agriculture, the demand for row-crop tractors boosts the sales of the China agricultural tractor machinery market. The increasing demand for low power under limited arable land, precision, handling, and efficiency has shaped the development of the modern planter tractor, and it continues to drive the development of these tractors.
- The row-crop tractor is specifically tailored to grow crops that meet all agricultural demands, such as plowing, harrowing, leveling, pulling seed drills, weed control, and running various machines, like water pumps and belt pulley threshers. These tractors are provided with replaceable driving wheels of different tread widths.
- Due to low-end production capacity, China needs a more effective supply of agricultural machinery, including tractors. It cannot meet the full-scale agricultural diversification needs due to inadequate technologies supporting product growth.
- To boost the domestic production of farm machinery, the Chinese government framed a new agricultural machinery subsidy policy to purchase agricultural machinery, including tractors. The types of subsidy equipment cover 45 items in 23 categories and 11 categories, including farming and land preparation machinery, planting and fertilizing machinery, and field management machinery. The buyers of tractors above 60 HP and above can enjoy a subsidy of CNY 150,000 (USD 21563.81).
