China Agriculture Machine Market Growth Seen 10%-15%/year To 2020
February 23 2011 - 01:10PM
Dow Jones News
Agricultural machinery sales in China are forecast to grow
10%-15% a year over the next decade as the country's agriculture
sector becomes more mechanized and diversified, officials from the
Chinese Agriculture Ministry said Wednesday.
Over the past five years the Chinese agricultural machinery
market, which includes all equipment needed for farm work from
sowing to irrigation and harvesting, grew to CNY280 billion in
value from CNY70 billion, said Liu Xiaowei, deputy director of the
farm mechanization division at the Chinese Agriculture
Ministry.
Xiaowei spoke at the Sima international agribusiness show
here.
Around 52% of Chinese farm jobs are now performed by machines,
against 36% in 2006, and the government targets a 70% rate by 2020,
said Zecheng Liu, president of the Sichuan Research and Design
Institute of Agricultural Machinery.
The Chinese government has strongly supported the increased use
of farm equipment through tax breaks and subsidies, the officials
said. Subsidies, they said, represent up to 30% of the price of
high-technology machinery.
Though most machines are produced locally, several foreign
companies are active in China, mostly through joint-ventures,
including U.S.-based Deere & Co. (DE), the world's largest
maker of farm equipment by sales. Another is CNH Global NV (CNH), a
unit of Fiat Industrial SpA (FI.MI) and the world's number-two in
the farm equipment market, which makes the Case IH and New Holland
marques.
Martin Richenhagen, chief executive of Agco Corp. (AGCO), the
world's third-largest agricultural equipment maker, said earlier
that his company plans to build a plant in China as part of a
strategy to accentuate the sale of combine harvesters. Agco owns
the Massey Ferguson and Challenger brands.
The Chinese are eager to receive foreign technology to boost
farm output and productive diversity, said Laure Elsaesser, a
representative of France's foreign investment agency UbiFrance,
particularly seeking higher-end equipment that consume less energy
and disseminate less water and fertilizer an acre.
-By Angeline Benoit, Dow Jones Newswires; 33-1-40-17-17-66;
angeline.benoit@dowjones.com
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