Agricultural Equipment in ChinaFreedonia Group Inc
March 1, 2012
205 Pages - SKU: FG3811536
Additional InformationPRESS RELEASE
Demand for Agricultural Equipment in China to Reach 225 Billion Yuan in 2015
Demand for agricultural equipment in China reached 135 billion yuan in 2010, accounting for 18 percent of the world market. Demand is projected to grow 10.8 percent annually to 225 billion yuan in 2015. Growth will be supported by favorable government policies, rising income levels, improved access to equipment through agricultural machinery co-operatives, and healthy expansion of agricultural activity. These and other trends are presented in Agricultural Equipment in China, a new study from the Beijing office of The Freedonia Group, Inc., a Cleveland-based industry research firm.
A large population and shrinking rural labor force, combined with limited arable land and low farming efficiency, create a potential risk of food shortage in China. Enhancing farming mechanization is not only important to the development of the industry but also vital to increasing agricultural production. The Chinese government’s Twelfth Five-Year Plan calls for the development of large, multi-function, higher-value products, signaling its intention to boost the country’s mechanization rate. Furthermore, the Chinese government’s subsidies for equipment purchases have leapt from 70 million yuan in 2004 to 17.5 billion yuan in 2011 and are projected to continue to rise through 2015.
Tractors are the most significant type of agricultural equipment in China, accounting for 30 percent of total agricultural equipment demand in 2010. Large, high powered tractors have greatly benefited from the Chinese government’s subsidy policies and will continue to see strong growth over the forecast period. However, small tractors, because they are more affordable and practical for the average farming household, will continue to account for a greater share of demand. Harvesting machinery’s high average price per unit has largely been responsible for it having the lowest penetration rate of all agricultural equipment. Improving the mechanization rate through developing the rice and corn harvester market will be a key strategy of manufacturers. Planting and fertilizing equipment will see the fastest growth as Chinese farmers continue to adopt a wider range of farming equipment. Harvesting equipment is the only other type to see above average growth through 2015, driven by increases in farmers’ incomes.
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