1.1 Introduction and definition
Agricultural machines and equipment gradually appeared at the end of the 19 th century as a result of the agricultural revolution in France (replacement of animal traction by motorized traction to modernize French agriculture). The term characterizes all the machines and equipment used in agriculture (tractors, combine harvesters, etc.) that aim to increase the agricultural productivity. Agricultural machinery can be used for different purposes, such as:
- Soil tillage
- Livestock farming
The global market is expanding rapidly due to a larger demand for food as result of a growing population, together with a decrease in arable land. This puts pressure on farmers to increase productivity, which is facilitated by agricultural equipment and machines.
The French market is a market leader globally in terms of equipment. For instance, it is Europe's third largest producer of agricultural equipment, and the largest spender in aggregate terms on agriculture in the EU.
Nevertheless, France's agriculture is heavily dependent on government subsidies. Moreover, in light of COVID-19, the pace with which technological advancements in equipments occur will slow down.
1.2 The global market's growth driven by Asia-Pacific
In ****, the global market for agricultural equipment was valued at $*** billion. This value is expected to grow at a CAGR of *.*% to reach $***.** billion in ****. This growth is driven by a larger demand for food globally in relation to an increasing population, together with a shrinking agricultural work force, which ...
1.3 Domestic market is significant and stable
France is a European giant when it comes to agriculture. Indeed, France holds one third of all agricultural land in Europe [***]
Moreover, **% of the land in socio-economic use in metropolitan France belongs to agriculture and **% to forestry. [***] This implies that agriculture makes up a significant share of arable land in ...
1.4 International Trade
In this section we use UN Comtrade to obtain trade data for France. In particular, we use the code **** – "Agricultural, horticultural, or forestry machinery for soil preparation or cultivation; lawn or sports-ground rollers".
The data above shows France's trade of agricultural equipment between **** and ****. By analysing the coverage rate (***), we ...
2.1 Profile Analysis: The French Consumer
The graph above illustrates the value of different production categories in the agricultural sector in France. This graph is important because it gives an indication of which equipment in particular are in demand with regards to agriculture in France. For instance, poultry farmers need equipment such as hatches, water equipments ...
2.2 Cyclicality in industry revenue
The sector for agricultural equipment in France is cyclical, which is obvious when looking at the graph above. It shows the revenue index, based on ****'s value of ***. For instane, if the value increases to ***, this implies that overall, the revenue of the industry has increased by *% (***). Following this logic, ...
2.3 Demand Trends
The graph above represents the proportion of searches for a given term in a given region during a specified amount of time, compared to when it was the most searched (***). Thus, a value of ** means that the keyword has been used less often in the region concerned, and ...
2.4 COVID-19's impact on the industry
Agriculture's impact on the world and in particular on food supply chains is crucial. The International Labour Organisation (***) reports that in many low-income countries, agriculture accounts for more than **% of employment.
For France, a food shortage is less likely than in developing economies. Nevertheless, France remains a vital agricultural producer in ...
3.1 Market Overview
The production of agricultural equipment in France is significant for the domestic market as well as internationally. In ****, France was the third largest producer of agricultural equipment in Europe, after Germany and Italy. In ****, France placed fifth in Europe when measured through number of companies producing agricultural equipment. In ...
The French market for agricultural equipment is fragmented in terms of companies, but highly concentrated in terms of sales. [***] Indeed, there were *** companies registered in France in ****, with ***** employees. This is a slight decrease in both components since ****, however overall the industry has remained stable. In ****, there were ** employees per ...
3.4 Sectorial dependency on the French government
Farmers in France rely heavily on government support and subsidies for survival. Indeed, in **** France had the highest spending on the CAP (***) of all EU member states, valued at close to €*.* billion. In comparison, Germany had the second highest spending with around €*.* billion. [***]
Of this money, **% constitute direct payments and **.*% of ...
4.1 Product Overview
In this section, a product overview is provided, as defined by agricdemy. It should be noted however that the items below include equipment and not machinery such as for example tractors. Nevertheless, such equipment often relies on tractors or similar machines which are powered by steam or electricty.
The seven broad ...
4.2 Price Analysis
To obtain an understanding of the industry's price evolution, the graph above shows the input costs of components to agricultural equipment from **** to ****. The base value of *** occurs in ****; in ****, the value is ***.* which means prices have increased by *.*%. This can be traced back to several reasons, including higher demand, ...
4.3 Supply Trends
Arable land is decreasing
A crucial factor for the usage of agricultural equipment is arable land. Indeed, this determines the size of the industry, but also the volume of equipment needed.
The graph above shows that arable land in France has decreased from ***,*** square kilometres in ****, to ***,*** in ****, mainly due ...
Regulation of agricultural equipment in France comprises several layers.
First, the country is subject to EU legislation through regulation and directives. For agricultural equipment, the main framework which applies is the following:
Regulation No ***/**** which touches upon the manufacturing of forestry and agricultural vehicles; Regulation ****/**** regarding the Common Agriculture Policy.
5.2 Nomenclature and Harmonized System of World Customs
The Harmonized System is an international nomenclature for the classification of products. It allows participating countries to classify traded goods on a common basis for customs purposes. At the international level, the Harmonized System (***) for classifying goods is a six-digit code system. [***]
The HS comprises approximately *,*** article/product descriptions that appear ...
- Deere & Co
- CNH Industrial
- Exel Industries
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