Tractor sales drop
Tractor sales declined 10 percent year-on-year to 6,287 units in the January-October period this year mainly because of the falling prices of farm produce and a government bar on such vehicles’ movement on highways.
In 2018, sales of the vehicle widely used in ploughing of farmlands and carrying construction loads had fallen 3 percent year-on-year to 8,971 units, according to data of the top three tractor sellers.
Tractor prices range between Tk 10 lakh and Tk 22 lakh and the farmers can also purchase it on credit.
The economic life of a tractor is at least 12 years, according to the manufacturers.
“It is shocking to see the falling trend in sales,” said FH Ansarey, managing director and CEO of the agribusiness division of ACI, which meets the country’s 40 percent of annual demand of the vehicles and markets Indian Sonalika branded tractor.
He said low paddy prices earlier this year were a major reason for the falling sales.
Low prices of agricultural products, especially paddy, have pushed many farmers to leave the sector, affecting the earnings of people who provide the growers with tilling and other cultivation services on rent, he said.
“If the tractor owners suffer from a shortage of money, how will they invest for mechanisation?”
Most of the tractors are purchased on credit, Ansarey said.
“If the tractor owners depend only on earnings from ploughing farmlands—a seasonal activity—they will fail to pay the instalments of loans that they have taken to purchase the vehicles.”
That is why the tractors are used in multipurpose activities in the village economy, he said. In October 2017, the government asked Bangladesh Road Transport Authority to restrict vehicles on highways that are incapable of running at 60 kilometres per hour, to reduce road accidents.
Though the highway bar was imposed for the vehicle’s slow pace, it could reach speeds of up to 40 to 50 km/hour.
Sadid Jamil, managing director of The Metal, whose TAFE and Eicher branded tractors have around 38 percent market share, attributed the sales decline to the stagnancy of the sector, which is an outcome of the falling prices of agri products.
He too spoke of the growers not getting fair prices, which was prompting many to lose interest in farming.
Moreover, banks do not provide loans for tractor purchase and while The Metal does make sales on credit, he said.
AK Sarkar, executive director of Karnaphuli, the distributor of India’s Mahindra tractors, said the charge for ploughing has dropped to around Tk 800 or Tk 900 an acre from Tk 1,500 four to five years back.
This drop has caused some tractor owners to miss instalment payments, he said. The tractor owners are now struggling to earn enough money from just ploughing land because of the higher availability of tractors in the market, Sarkar said.
The government could impose the highway ban just on tractors which are carrying loads, he recommended.
