Analyzing the tractor market space from the perspective of purchasing intensity and exploring how to activate the market

In 2022, China subsidized the sales of 534400 tractors, setting a new historical high in recent years. This time, we will discuss the tractor market, development space, and ways and methods to activate the market in various provinces of China from the perspective of tractor purchase intensity, taking into account the cultivated land area in each province.

1、 The Role of Tractors and the Introduction of the Concept of Cultivated Land Area and Purchase Intensity in China

1. The position and role of tractors in agricultural production

Tractors, as the most important mobile power equipment for agricultural operations, are one of the most important varieties of agricultural machinery products. It is impossible for China to achieve agricultural modernization without tractors. At present, the agricultural machinery market has encountered a development trough, with low tractor sales, which is only a temporary phenomenon. The development space of the tractor market is very large, and the development prospects are very broad.

As a mobile power equipment for field operations, tractors can be connected to corresponding agricultural machinery for operations such as tillage, land preparation, sowing, field management, and harvesting of many crops.

The development of the large-scale tractor industry has been driven by new types of operating equipment in agricultural production, such as straw crushing and returning to the field, straw bundling and leaving the field, and peanut and potato crop excavation and harvesting; The development of large-scale tractors has in turn promoted the development of deep plowing, deep loosening, wide range operation, and compound operation machinery, and has also prompted China's agricultural machinery to continuously develop towards large-scale, efficient, high-tech, and high-performance, thereby making China's agricultural mechanization level more high-quality and efficient.

2. Cultivated land area and related situation in China

Since the main task of tractors is to cultivate and prepare land, the demand for tractors is closely related to the area of cultivated land. Therefore, let's first take a look at the relevant situation of arable land in China.

According to the data from the third national land survey, China has over 1.9 billion acres of arable land. Among them, 470.8797 million mu of paddy fields, accounting for 24.55%; 4817221 million mu of irrigated land, accounting for 25.12%; Dry land covers 965326100 acres, accounting for 50.33%.

From the distribution of arable land, 64% of the arable land is distributed north of the Qinling Mountains to the Huaihe River. Heilongjiang, Inner Mongolia, Henan, Jilin, Xinjiang and other five provinces have relatively large cultivated land areas, accounting for 40% of the total arable land in China.

From the perspective of crop planting system, there are 282.4368 million mu of arable land located in the three cropping system area, accounting for 14.73% of the national arable land; The cultivated land located in the area of one year double cropping system is 717.3985 million mu, accounting for 37.40%; The cultivated land located in the one cropping system area is 918.0926 million mu, accounting for 47.87%.

From the perspective of grain planting area and yield, China's grain planting area in 2022 was 2.66247 million mu, with a total grain output of 1373.1 billion jin that year.

3. Introduction of purchasing intensity index - number of tractors purchased per 10000 acres of farmland

It is difficult to compare which province has a stronger purchasing power for tractors by presenting the cultivated land area data and the annual number of tractors purchased in each province. In order to compare the purchasing intensity of tractors in various provinces and regions, two years ago I proposed the concept of purchasing units per 10000 acres of arable land. The so-called number of tractors purchased per 10000 acres of farmland refers to the number of tractors purchased per 10000 acres of farmland in the same year.

By introducing the concept of purchasing strength, it is more convenient to compare the sales markets of tractors in various provinces and regions during the same year. In this way, whether the tractor market is good or not, there is a digital indicator for reference.

According to the indicator of tractor purchase intensity, the number of tractors purchased per 10000 acres of farmland in China in 2020 was 2.32, and in 2022 it was 2.81.

2、 Strength and Analysis of Tractor Purchase in Various Provinces in 2020

1. Tractor purchasing intensity by province in 2020

Because the area of cultivated land is measured in provinces, when we calculate the number of tractors purchased per 10000 acres of cultivated land, both the area of cultivated land and the number of tractors purchased are changed to provinces. Therefore, we include the relevant data of reclamation areas and planned cities in the agricultural machinery accounting provinces and regions into their respective provinces. The purchasing intensity of tractors in various provinces in 2020 is shown in Table 1, with the cultivated land area using the data from the third national land survey.

2. Analysis of Tractor Purchase Intensity in Various Provinces in 2020

From the list of tractor purchase intensity in various provinces in 2020, it can be seen that Jilin Province had the highest tractor purchase intensity that year, with 4.783 tractors purchased on 10000 acres of farmland, followed by Ningxia and Xinjiang, with over 3 tractors purchased on 10000 acres of farmland. In 2020, the average purchase of 2.32 tractors per 10000 acres of arable land nationwide exceeded this average in 16 provinces, indicating a high intensity of tractor purchase; Another 15 provinces are lower than this average, indicating a lower intensity of tractor purchase.

It is worth noting that 8 provinces have purchased less than 1 tractor per 10000 mu of arable land, and even 2 provinces, Chongqing and Guizhou, have purchased 0.1 tractors, indicating that the purchasing intensity of tractors in these provinces is really too low.

3. Differences in purchasing strength of tractors in the north and south and their reasons

Tractors are located in the northern and central plains of China. Due to the large size of the land, there are many types of operations such as plowing, harrowing, sowing, and harvesting in dryland operations, and the role played by tractors is more obvious. Therefore, the purchase intensity of tractors is relatively high. In the main rice producing areas of the southern region, rice planting and harvesting are done using transplanters and harvesters respectively, without the need for tractors; In addition, the paddy fields and hilly and mountainous areas in the south are generally small, and tractors are mainly used for land preparation and transportation. The work items are relatively single, and farmers are more willing to use cheaper micro tillage machines to save costs. Therefore, the purchasing strength of tractors is relatively low in the long term.

3、 Strength and Analysis of Tractor Purchase in Various Provinces in 2022

1. Tractor purchasing intensity by province in 2022

The purchasing intensity of tractors in various provinces in 2022, i.e. the number of tractors purchased per 10000 acres of arable land, is shown in Table 2.

2. Analysis of Tractor Purchase Intensity in Various Provinces in 2022

From the purchase intensity values of tractors in various provinces in 2022, it can be seen that the purchase intensity of tractors in Tibet Autonomous Region is the highest, reaching 6.163 units per 10000 mu of farmland. Henan, Shandong, Hebei, Jilin, and Tianjin have more than 4 units per 10000 mu of farmland, while Inner Mongolia, Liaoning, Ningxia, Anhui, and Shaanxi have all exceeded 3 units per 10000 mu of farmland.

Among the 31 provinces, 12 have a tractor purchase intensity exceeding the average of 2.809 units, indicating that these provinces have a relatively high tractor purchase intensity; In addition, the purchase intensity of tractors in 19 provinces is lower than the average, indicating that the purchase intensity of tractors is relatively low.

3、 Changes in tractor purchasing intensity in relevant provinces compared to 2020

1. The purchasing intensity of tractors in various provinces will generally increase in 2022

Compared to 2020, the purchasing intensity of tractors in various provinces has generally increased. In 2020, only Jilin province achieved the purchase intensity of 4 tractors, while in 2022, it reached 6 provinces; In 2020, only 2 provinces achieved a purchase intensity of 3 tractors, while in 2022, it reached 5 provinces.

2. The decrease in purchasing intensity in some provinces is due to the fact that tractors are basically saturated

Compared to 2020, the intensity of tractor purchase in some provinces has decreased because tractors have basically become saturated. In major cities such as Beijing and Shanghai, due to the limited arable land area and the high intensity of previous years' purchases, tractors have been basically saturated. In addition, provinces such as Xinjiang, Jilin, and Heilongjiang have been purchasing tractors in large quantities for several years, and the current demand for purchasing machines is mainly for the renewal of old ones.

3. The purchase intensity of tractors in hilly, mountainous and small plot areas should be higher, but in reality it is very low

In plain areas, especially in large plots with concentrated operations, such as large farms in reclamation areas, large tractors account for a relatively large proportion and there is a trend towards large-scale development. Therefore, the demand for tractors will decrease, and the intensity of purchasing tractors for 10000 mu of farmland will also decrease. On the contrary, in hilly and mountainous areas and small plots of paddy fields in the south, due to the demand for small tractors, the number of tractors purchased per 10000 acres of arable land should be larger. For example, the Tibet Autonomous Region mainly sells small tractors with 25 or 30 horsepower. In recent years, the number of tractors purchased per 10000 acres of arable land has been relatively high and growing rapidly. In 2020, the purchase intensity was 2.924 units, and in 2022, it reached as high as 6.163 units.

From the perspective of tractor purchase intensity in various provinces in 2022, provinces with more paddy fields and hilly and mountainous areas in the south, although the tractor purchase intensity has improved compared to 2020, it is still at a relatively low level. For example, in provinces such as Guangdong, Sichuan, Yunnan, Guangxi, Fujian, Chongqing, and Guizhou, the number of tractors purchased per 10000 acres of arable land is still less than 1. Especially in Chongqing and Guizhou, where the number of tractors purchased per 10000 acres of arable land is just over 0.1, it can be seen that the tractor market still has considerable development space.

4、 Compared to India and Japan, the market space for tractors in China is still very large

In 2022, the sales volume of tractors in China reached 534400 units, and the purchasing intensity of tractors was 2.809 units per 10000 mu. What is the international level? Below, we will compare the same strength of tractor purchases from India and Japan in 2020.

1. Compared with India, the purchasing intensity of tractors in China is not high

India has 2.4 billion acres of arable land and produced 844000 tractors in 2020. Based on this calculation, the purchase intensity of tractors in India in 2020 was 3.517 units per 10000 acres. In 2020, the purchasing intensity of tractors in China was only 2.320 units per 10000 mu, and even by 2022, it was only 2.809 units per 10000 mu, which is still a significant gap compared to India.

2. Compared to Japan, the purchasing intensity of tractors in China is lower

Japan has 70.5 million acres of arable land, and in 2020, the output of tractors was 120000, including 29400 for domestic sales. The purchase intensity of tractors is 4.17 units per 10000 acres. Obviously, the gap between China and Japan is even greater.

5、 Ways and Methods to Activate China's Tractor Market

Compared to India and Japan, the market space for tractors in China is still very large. Especially in the southern provinces of paddy fields and hilly areas, the current intensity of tractor purchase is still very low, and there is great room for development. Below, we will discuss the ways and methods to activate China's tractor market from several aspects.

1. Develop and promote tractors suitable for use in southern paddy fields and hilly areas

When it comes to tractors suitable for hilly and mountainous areas, the first thing people think of is small tractors, but this is actually a misconception. So, what is a suitable tractor for hilly and mountainous areas? I just saw the news that China's Yituo hilly and mountainous tractor has passed the promotion and appraisal of agricultural machinery in Henan Province, and I feel that this may be the true hilly and mountainous tractor.

The Dongfanghong MH904M/MH804M/MH704M hilly and mountainous tractor developed and produced by China Yituo Corporation recently focuses on meeting the market demand for sloping farmland such as the Northwest Loess Hills and Shandong Hills, as well as the market demand after mechanized transformation. It adopts multiple new technologies such as engine front layout, folding steering, four-wheel and other large, bidirectional driving, and four-wheel drive, making the product stable and passable in hilly and mountainous operations It has unparalleled advantages in steering flexibility and safety compared to ordinary tractors, especially suitable for special working environments such as hilly and mountainous areas, sloping farmland, and orchards.

With the successful development and promotion of tractors with various horsepower ranges in hilly and mountainous areas, provinces with lower tractor purchasing intensity in China are expected to solve the current situation of inorganic availability and activate the tractor market in these provinces.

2. Promote the development of related farmland operations and drive the development of tractors

In some provinces, the purchase intensity of tractors is relatively low, mainly due to a single tractor operation project, and tractors have almost no other uses except for farmland and transportation. Increasing the use of tractors is undoubtedly the best way and method to increase the purchasing intensity of tractors.

The development of large and medium-sized wheeled tractors in the Central Plains region was triggered by the ban on straw burning, which initially stimulated the market demand for large and medium-sized tractors.

The southern paddy fields are mainly planted with rice, with transplanters or throwers for transplanting and harvesters for harvesting, almost without the use of tractors. In this situation, efforts should be made to promote the return and bundling of rice straw to the field, as well as the excavation and harvesting of potato crops such as peanuts, potatoes, and sweet potatoes. This will truly benefit farmers and stimulate the tractor market, increase tractor sales, and improve the degree and level of agricultural mechanization in these areas.

At the Yongkang Agricultural and Forestry Equipment Expo, a rice field grass burying device was exhibited. It is to remove the rear drive wheel of the tractor and install a grass burying device (grass burying wheel). When entering the paddy field for operation, the straw and weeds in the field can be deeply buried in the soil. Obviously, vigorously promoting this type of grass burying device has also led to the promotion of tractors in paddy fields.

3. Creating conditions for agricultural mechanization operations

The small size of the land is another practical factor that restricts the development of tractors. Provinces with low tractor purchasing intensity need to put in effort in creating mechanized operating conditions. Farmers can be mobilized to redistribute their arable land, transforming multiple plots of land from one household to another, so that each household can connect the arable land into one piece. Then, according to the actual situation of farmers, mechanized transformation and land consolidation can be carried out separately or uniformly, ultimately enabling large and medium-sized tractors to operate on the ground. After land integration and mechanized transformation and consolidation, operational efficiency can be improved, agricultural mechanization level can be improved, and farmers' income can also be increased.