After the economic slowdown caused by the pandemic, there is good news coming out of India’s farm sector. Tractor sales continued to grow with Mahindra’s Farm Equipment Sector havingsold 35,844 tractors in the domestic market during June 2020, a growth of 12% over last year.
The timely relaxation of the lockdown for the agricultural sector helped in ensuring a speedy recovery of tractor demand.Post pandemic, agriculture has taken on new significance as a way resuscitate the economy.
Since a healthy and growing agriculture sector may provide a much-needed boost to markets and allied industries, it is worth looking at the underlying factors that have aided demand.
Good Rabi output
Amidst the lockdown, government allowed farm activities to continue, which has resulted in minimum disruption in harvesting activities of winter crops. The rabi prospects looked up this year mainly because of the excess monsoon rainfall the country received last year, with reservoirs filled in most parts of the country. This has led to higher disposable incomes and hence increased spending.
Timely arrival of the south west monsoon
The south-west monsoon started on a good note and India is likely to receive "normal" rainfall this year. With 60 percent of the country’s fields being rain-fed, the south-west monsoon -- which accounts for more than 70 per cent of annual rainfall --, is critically important for farming and economic growth.
Government support for Agri initiatives
There are several government initiatives that supported the agri sector. These initiatives are wide-ranging and cover income support, infrastructure, market linkages, etc. These measures are also in line with the government’s ambitious programme to double farmers’ income by 2022.
Good progress in the sowing of the Kharif crop
The on-time onset and steady advance of the monsoon have resulted in timely sowing of the summer crop. Surplus rains have resulted in a larger sown area, which is an early sign of ample harvests.
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