Market Trends of Southeast Asia Agricultural Tractors Industry
Shortage of Skilled Farm Labor is Driving the Market
The cost of farm labor is directly related to the percentage of the country's total population employed in agriculture, considering simple demand-supply economics, thereby affecting the agricultural tractors market in Southeast Asia. On average, developing economies have larger percentages of the population dependent on agriculture. However, the percentages have decreased over time as many people migrate to urban areas yearly. Farmers are increasingly adopting agricultural mechanization as a substitute for manual labor with a more cost-effective, readily available, and more efficient means of agricultural operation. The reduced workforce in agriculture, increasing adoption of precision farming, and advancement in tractor technology reduce the cost of spending on work labor in the countries. Furthermore, government initiatives promoting mechanization and modernization of agriculture through subsidies, loans, and other incentives to encourage farmers to adopt new technologies and increase farm productivity are driving the market.
Increasing Usage of Tractors in Thailand
The agricultural sector is crucial to Thailand's economy, making it a Southeast Asian powerhouse. As a result, the Government of the Kingdom of Thailand implemented various initiatives, provisions for agricultural investment strategies, and policies to modernize and mechanize the farm sector. Through such initiatives, including the Thailand 20-Year Strategic Plan 2017-2036 and the Thailand 4.0 for Smart Farmers, the government aims to enhance the welfare of farmers by transforming agriculture into a viable activity that will positively impact the Thai agricultural machinery market. Moreover, the increasing food security concerns due to rapid population growth are driving the demand for agricultural tractors to substantially increase production and per-hectare yield and meet food demand. Major companies are also launching new products to establish their presence in the Thai market. For example, Mahindra is set to debut in the ASEAN region in 2024, starting with Thailand with Oja.
