Overview
In the last few years, the agriculture sector in CIS countries especially Russia has witnessed significant development. Governments are encouraging domestic production and offering subsidies / incentives to farm equipment manufacturers to invest in production for local markets as well as to boost exports. This development has seen several leading domestic & international brands of tractors and harvesters invest in markets like Russia and Kazakhstan.
CIS (Commonwealth of Independent States) –
These are countries of the former USSR namely: –
Azerbaijan, Armenia, Belarus, Georgia, Kazakhstan, Kyrgyzstan, Moldova, Russia, Tajikistan, Turkmenistan, Uzbekistan and Ukraine
The GDP of the CIS region is 2.07 trillion USD which is nearly 3% of the global GDP
The CIS countries while maintaining their own respective diversities have common factors like – Russian language (which is spoken by large population in these countries), literacy rates (>99%), technology, etc.
Agriculture
The CIS region is amongst the leading producers of agriculture products like cereals (wheat, barley, oats, etc.), vegetables (cabbage, chickpea, potato, carrots, etc.) and Fruits (berries & currants)
The total arable (i.e. land ploughed or tilled regularly, generally under a system of crop rotation) of the world is 15.75 million square km.
4 of the largest CIS countries (namely, Russia, Kazakhstan, Belarus and Uzbekistan) cover 13.20% of the world’s top land mass and 9.98% of its total arable land.
Out of these countries Russia is the largest (and the 3rd largest in the world) with arable land at 1.24 million sq. km (7.6% of the worldwide arable land) followed by Kazakhstan at 0.22 million sq. km (1.27%).
Tractor & farm equipment market
Primary market for tractors is Russia followed by Kazakhstan, Belarus and Uzbekistan
Import of tractors in Russia in 2020 was 90500 tractors. Out of this market share of European tractor brands was 66% in the total imports
Sales of small and medium powered tractors is approx. 70% of the total sales
One of the most popular and highest selling tractor brands is “Belarus” from the Minsk tractor plant in Belarus. Other popular brands of tractors are – PTZ (Brand Kirovets), John Deere, Rostselmash and New Holland
Market for combine and forage harvesters is nearly 7000 units in Russia & Kazakhstan. The leading brands are – Rostselmash, Gomselmash, Claas, John Deere and New Holland.
The potential of selling tractors is high in CIS countries due to the following reasons:
- Large area of farm lands operated with few tractors. The CIS region is one of biggest producers of wheat worldwide. The capacity to produce more is limited due to low penetration of mechanization and food processing
- A large percentage (nearly 50%) of the tractor fleet is more than 10 years old, outdated and needs replacement
- Governments in Russia and other CIS countries are increasingly focused on ramping up domestic agriculture produce which will increase the need for mechanization
- Subsidies offered by governments for local production
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