Agricultural Equipment Business Essay

Agricultural Equipment Business Manufacturing, export and distribution opportunities in post-harvest equipment beckon entrepreneurs even as other spring up products also hold great promise In the last decade, Buhler, a global manufacturer of grain milling, sorting and handling products, has been witnessing a geographical release in demand for its products. While the US and Europe remained the mainstay for long, it is China and India that be now the demand hubs for its products.The company, which launched its India operations in 1992, has since expanded its facility in India and ramped up the workforce. Another equipment firm, Satake, a Japanese major, has been witnessing similar trend. But the presence of big firms such as Satake and Buhler has not had much effect on local manufacturing. Many small and medium enterprises operate at full capacity across the country. Take for instance, S P Khandelwal of S S Milling and Engineering. He sells grain cleaning and sorting equipment to f lour mills, energy foods producers and snacks companies.He boasts of clients such as Bikanerwala, Priya Gold and Modi Flour Mill. It is the price factor that helps entrepreneurs such as Khandelwal get through the onslaught of the global majors. Products sold by organized players are expensive while my products are low-cost, he says. Farm equipment companies, both big and small, are fight tooth and nail to grab the larger share of the lucrative India market, despite the fact that the agriculture sectors share in the GDP has fallen all over the years.This notwithstanding, the farm equipment sector, that is a key support for agriculture, has been growing at a brisk pace and is projected to touch $7. 9 billion by 2012, concord to The Freedonia Group, a US-based market research firm. pic Growth Drivers A couple of factors are driving the growth of this sector. These are mechanization of agriculture, increase in contract farming, unaffixed availability of farm loans at low interest r ates, and migration of laborers from villages to cities.Mechanization of Indian agricultural has been a major booster. The continuous increase in the consumption of tycoon for farm sector and the corresponding reduction in the use of animal and human index is a clear indication that more and more machines are being deployed. A study by KPMG, done for India Brand Equity Foundation (IBEF) throws up some interesting observations. It says the share of animals as the source of power for the agriculture sector declined sharply from 45% in 1971-72 to less than 10% in 2005-06.