Marketing of Agricultural Inputs

Agri-marketing has two aspects: (1) Input market, and (2) Output marketing. For producing agricultural products, a large number of inputs are needed. These include seeds, fertilizers, pesticides, agricultural implements (tractors, pump sets, etc.), cattle feed, poultry feed, etc. Input marketing also includes marketing of services such as diesel engine, repair, and health care services. These agricultural inputs are going to be the focus of this chapter. On the other hand, output marketing includes marketing of food grains, vegetables, milk, etc. (Ramkishan Y, 2002, p. 128-129).

In the Indian marketing literature a dominant theme is agricultural marketing, focusing mainly on the marketing of agricultural produce and that of agricultural inputs. In terms of products the focus is limited to food grains, cash crops and inputs like fertilizers, pesticides, seeds and farm machinery (Jha, 1998).

Agricultural inputs can be categorized into two types: Consumable and capital inputs as shown in diagram below. The former include manures and fertilizers, seeds, insecticides/pesticides, diesel oil and electricity. On the other hand, capital inputs include tractor, trailers, harvesters and threshers, pump sets, and other implements.

Output marketing is an aspect of agricultural marketing. A timely and adequate supply at fair prices of farm inputs - seeds, chemical fertilizers, plant protection chemicals, farm equipment and machinery, labor, electricity, diesel oil and credit are of great importance in the production of output. The importance of purchased farm inputs has significantly increased in the recent past with the technological break-through in Indian Agriculture (Varshney, 1997, p. 251).

According to Varshney (1997, p. 251), the importance of an efficient marketing system for farm inputs may be judged by the following:

• Farm products are produced in the countryside. The effect of change in production methods can, therefore, be realized only if the farm inputs reach the farmers in time at the least cost.

• The use of modern inputs by farmers largely depends upon the spread of information about them. The marketing system has to perform this function.

• An efficient marketing system for farm inputs is essential for the development of the inputs - manufacturing and supplying industries in the country.

Agricultural inputs are at the heart of rural marketing and rural development. They support farm production which is the source of income to a large rural population and help create market for other consumable and durable products in rural areas. Being industry processed, manufactured, packaged and branded products; they are vehicles of modernization and rural development. But they differ in their market as they have a derived demand, are less frequently brought, and are expensive.

Summing up, Singh (2001, p. 5) noted that “the importance of rural or agricultural marketing can be understood from the fact that today modern inputs, i.e. diesel, electricity, fertilizers, pesticides, seeds account for as much as 70 per cent of the total cash costs and 23 per cent of total costs incurred by farmers in the 'Green Revolution' areas. Further, these percentages were higher at 81 per cent and 38 percent for small farmers owing 1.85 hectares of land (Singh, 1997, quoted by Singh, 2001, p. 5). In major crops like wheat and paddy, fertilizers alone accounted for a significant part of the total cost of production in the mid 1980’s itself. It varied from 7.4 per cent in M.P. to 19.4 per cent in Punjab in case of wheat and 5.7 per cent in M.P. to 15.4 per cent in Punjab in case of paddy" (Gulati and Sharma, 1992, as quoted by Singh, 2001, p.5)

Marketing environment of inputs-a framework for understanding

The growth of input markets is influenced by a large number of price as well as non-price factors. A more comprehensive framework can be used for understanding the market environment for agricultural inputs in the developing countries. The major components of this framework are (1) The Agronomic Potential, (2) The Agro-economic Potential, (3) The Effective Demand, (4) The Actual Consumption. The market environment can be conceptualized as unfolding, through the developments within the inter-relationship between these components (Singh, 2001, p. 10). This framework is shown with the help of following diagram.

Agronomic potential

Agricultural inputs can be considered to be primarily yield saving or yield raising units. Their basic usefulness to the farmer and therefore their potential comes fundamentally from the quantity of yield they are able to raise or save. This gives the 'Agronomic Potential'. They may also help to improve quality'. They also help to reduce the uncertainty or risk' of obtaining good yields, especially if they are used at the onset or for prevention of disease, e.g., pesticide. Research and development is typically necessary for the creation of new agronomic potential for inputs. Expansion of irrigation raises the agronomic potential (Singh, 2001, p. 10).

Agro-economic potential

Inputs are typically expensive units. Unless the output that is gained due to the use of inputs or lost due to it's non-usage which is of substantial value, else farmers will not use inputs. the price of the output must be significantly high relative to the price of the input for agronomic potential to be transformed into 'agro-economic potential. Thus, output markets and demands become important determinants of agro-economic potential. Inputs to be used are typically more in high value cash crops and commercialization of agriculture which expands the potential for input use. (Singh, 2001, p. 12).

Actual consumption

Even when effective demand has been created, it's actual consumption may be strongly restricted unless there is :

(a) Aggregate supply: either through 'production or import. Factors that determine this are: investment in production, the investment environment, government policies, foreign exchange situation and other factors such trade barriers and intellectual property rights protection, among other things (Singh, 1997, p. 12).

(b) Distribution: A large effective distribution system is developed for catering to small farmers scattered over a large area. This is especially difficult in the early stages when the volumes are small (Desai, 1997, as quoted by Singh, 2001, p. 12).

Demand, media and competition

Unlike consumer products, agricultural inputs are 'derived demand products'. The inputs are demanded not individually but a package because one input decides the need for other inputs. Thus their demand complements each other. For example, a local or hybrid seed will determine whether to use a fertilizer or a pesticide, in the required quantity and quality. Further, the demand for inputs are dependent upon: (i) weather in a season; (ii) cropping pattern changes; (iii) nature and health of the crop; and (iv) other facilities like government price policy. subsidies, loans and physical facilities for the product (Singh, 2001, p. 8). The demand keeps changing from season to season, month to month and even week to week (Yadav, 1993, quoted by Singh, 2001, p.8).

Opinion makers/leaders are a good promotional media. They are relatively experienced users and influencers who prevail in these markets for various reasons (Karunakaran, 1993). The retailers play an important role in pushing the products as they hold the faith of farmers who themselves are not too familiar with the product and it's usage. Therefore, the retailers become the ultimate sellers of the product. A good quality product may fail, if it does not get the support from retailers. Kisan Melas' and other rural fairs, which are increasingly becoming important means of marketing, give the farmers an opportunity to do comparative analysis of products' and 'brands'. The farmers are always in a receptive mood to learn and try new products. The companies can get feedback on products, channels and promotional tools. Now sales leads can be generated and new product ideas can be obtained from the farmers in terms of need and local innovations (Singh, 2001, p. 9).

The Multi National Companies (MNCs) are placing new demands before the farmers in terms of the crop varieties and quality required, luring them to work with them, and make money out of farming. This is done through contract farming, joint ventures, leasing of land, and extension to the loosely contracted farmers in a given area. The MNCs are directly competing with the farmers, in some crops, forcing them to become agribusinessmen who use modern and better inputs. Globalisation of rural production processes and privatisation of various systems is bringing about this change in the whole approach to farming. There is also competition from substitutes like bio-fertilisers and bio-pesticides in fertilisers and pesticides markets respectively. (Singh, 1997, p. 9-10).

Marketing of consumable inputs

1. Marketing of Seeds

Historically, the importance of seed has been recognised since the Vedic times for increasing food production and quality. However, organised production of supply of quality seed at the national level started in 1963 as a consequence of the introduction of hybrid technology during 1961-65. The release of high yielding dwarf varieties of wheat and rise by the mid 1960s gave further impetus to the growth of the seed industry. During this period Seed Review Team was constituted and Seeds Act, 1966, was enacted, and National Commission on Agriculture was formed. During this period, the private sector took significant steps into seeds business. In 1987 MRTP/FERA companies were granted permission for investment in seed sector. In 1988 New Policy on Seed Development was introduced. This new policy encouraged global seed companies to enter the seed business in India (Barwale, 2002, p. 213).

2. Seed Companies

Around 1997 there were more than 150 seed firms in India (Shiva and Crompton, 1998). Barwale (2002, p. 213) noted that there were approximately 140 seed companies only in the private sector, that included national, global, regional and other seed producing and/or selling companies. Besides, there are about 10,000 dealers and distributors of seeds across the country (Singh, 2001, p. 15).

Following major categories of seed companies operate in India:

a. Seed Firms without R & D

Which only multiply certified seed of superior varieties/ hybrids developed by public sector R & D systems;

b. Seed Firms with R & D

Which have initiated plant breeding research to involve superior hybrids, through their own R & D programmes, while still primarily engaged in multiplication of seeds developed by the public sector;

c. Multinational Company (MNC) Subsidiaries

Which obtain breeding material from their parent companies, isolate adaptable lines, make crosses and develop superior hybrids, without disclosing their pedigree;

d. Joint Sector Firms

Involve both private and public capital, that multiply seeds of only publicly bred hybrids/varieties; and

e. Public Sector Firms

Government seed enterprises which primarily play the role of developing seed trade, maintain foundation seed stocks for sale, and Inter-state marketing of HYV seeds. These include National Seeds Corporation and various seed agencies (Basant, 1995, quoted by Singh, 2001, p. 15-17).

Private sector companies takes away large chunk of seed business. These companies are more customer/market oriented innovative, qualitatively and in managerial terms. for instance see (Cromwell (1996), and is playing a lead role in developing plants through biotechnology and tissue culture (Chauhan, 1997).

Marketing of seeds is an area that needs careful analysis based on following four parameters: (1) Production, (2) Pricing, (3) Distribution, (4) Promotion. Based on the comprehensive survey by Singh (2001) these aspects are elaborated as under:

3. Production

Production of seeds is carried out in a decentralized manner on individual farms. The certified/truthfully labeled seeds are produced by contract growers, either selected from a number of villages scattered over a large area, or a few villagers are selected for intensive coverage. The seed companies enter into a contract with the growers for production and supply of quality seed. The growers bear all costs and all risks. They are paid at a pre-agreed price only after the quality of seed is tested and for quantity that passes through these tests. If germination of parent seed/foundation seed goes down to 70 per cent or lower, the growers are advised to 'plough down', for pursuing the production till the end would be uneconomical. No compensation is paid for this plough down' of the crop. The land facility for contract production of seeds is obtain in following ways:

1. Lease System: In which seed company takes land on lease, supplies all inputs, and undertakes risk of seed production;

2. Collaboration: In which one company collaborates with another for procurement of raw seeds;

3. Seed Grower: Under which a seed grower for procuring raw seed; and

4. Seed Production Organisers (SPOs): In which companies appoint commission agents called SPOs to identify growers and secure their area commitment for seed production of variety hybrid during the season.

Following are the trade practices in seed industry involving the growers, the SPOs (Seed Production Organisers), and the seed company. They are as follows:

• Foundation seeds are supplied to growers; by the seed company, cost of which is borne by growth.

• Growers bears all operational expenses, generally (except under lease system of production.

• Financial inputs (in form of credit, loan, etc.) is provided to grower.

• Technical inputs and guidance is provided by the SPO (Seed Production Organisers).

• Transport is arranged by the grower, generally.

• Processing facilities are fixed by the SPOs.

• Packing material is also arranged by the SPOS.

• Quality testing is done by the company.

• Cost of rejection of seed (after quality testing) is borne by the grower.

• Processing expenses are borne either by SPO or the grower.

• Procurement (minimum) price is decided collectively by Seedsmen Association, SPOs and growers.

• Procurement and payment is as per pre-agreed terms (Kumar and Baarua, 1998, Quoted by Singh, 2001, pp. 28).

4. Pricing

Pricing strategies depend on (uncertainties) in demand and government intervention (in pricing of seeds produced by public sector organisations) which varies from state to state, Pricing strategies of private sector are also influence by the pricing structure following by the public sector. However, the final marketing price of certified seed is the result of components as follows:

• Seed Price

• Price paid to the seed growers for raw seeds

• Storage and processing costs

• Transport, distribution and marketing costs. Supply and demand obviously influences pricing. Time trend and prices of other farm products also need to be considered prior to pricing. Shiva and Crompton (1998) have provided some insights into pricing strategies in seeds sector.

5. Distribution

Companies have a network of distributors and dealers. Public sector markets through

• dealers in private sector

• dealers in cooperative sector

• sale points and depots

• departmental sales

The distributors, dealers and retailers are paid commission by the companies on sale. Demand of seeds fluctuates depending on season, monsoon, etc. Therefore, seed marketing at the micro level involves matching of farmers needs with timely seed supply, and ensuring adequate supply much ahead of the season. Storage at distribution points close to distributors/dealers has to be ensured. Singh and Seetharaman (1990) provide insights into how important is management of seed distribution. Proper storage of seeds is necessary. Hence, buffer godowns with proper storage condition is a must in end-use area.

6. Promotion

The demand for hybrid seeds is largely dormant and has to be awakened by creative use of promotional tools that reach the cultivators. Customer contact programme has to be launched. Promotional media has to be effectively used to encourage purchase and to stimulate awareness, free samples of seeds can be distributed to farmers. Video shows, exhibition, 'Krishi Melas', mobile vans, and wall trolley painting are the most commonly used promotional tools by seed marketing firms. Many companies resort to advertising on TV. Advertising in radio is a cost-effective way of reaching farmers. Newspapers also can be given. Cinema slides can focus on local conditions, local dealers and seasonal crops. Hoardings in bazaars, bus stands, etc. can be put up. Effectiveness of glow signboard, dauglers, calendars and stickers can also be explored. Posters, hand-bills can also be used for IEC (Information, Education and Communication).

Post-sales service, including technical help should also be provided and follow-up of complaints about seed quality, etc., should be done. Farmers behavior should be understood. Seed Replacement Rae (SRR) is very important for a seed firm, for more time the farmers goes for replacement of seed that he uses, more will be the demand for that firm's seed. Singh and Ashokan (1994) has dealt with SRR in length. Demand Forecast is also an essential element to estimate the production requirements. Companies undertake forecasting exercise for each crop district-wise. Forecasting can avoid over or under production, maximizing net returns, and helps arranging logistics, working capital and decisions on payment. Forecasts can be short-term, medium-term, or long-term forecasts.

Fertilizers marketing

The fertilizer industry is perhaps the most controlled industry in India. The government fixes the selling price the industry is extremely efficient in areas where it can control costs. However, the areas such as feedback, are not within the industry's control and area arguably high. Since the selling price is invariably less than the reasonable cost of production and distribution, the government has to reimburse the fertilizer units the difference between the cost of production (as determined by the government), and the selling price (which is also determined by the government). This reimbursement of uncovered cost constitute the subsidy on fertilizers, which is passed on to the farmer. Over the years, the gap between the selling price and cost of production has been increasing, requiring the government to pay heavy reimbursements to fertilizers units. In the light of the government's anxiety to reduce the reimbursement/outgo, several adverse decisions, mostly on a piece-meal and adhoc basis, have been taken which have severely impacted the financial performance of the fertilizers companies and threatened their long term viability (Mosilamani, 2002). However, present level of fertiliser consumption in India is still very low. On the 70 percent of fertiliser is consumed in irrigated areas only in states of U.P., AP, Maharashtra, Punjab, West Bengal and Karnataka. Besides this, about 2/3rd of the fertiliser consumption is in cereal crops mainly rice and wheat (Chauhan, 1997). Only about 25-30 percent of fertiliser used, goes to small and marginal farmers. It is important to note that more than 70 per cent of holdings in India are below 2 hectares (Singh, 2001, p. 57). Hence, there is enormous potential of marketing of fertilisers in the unexplored areas.

1. The Product

In efficient and imbalance usage of fertilisers by farmers, due to over or under-usage and method of application, is a problem in the products that creates problems for the soil and the crops in the relatively longer term. Other ill effects of the product area; pest growth, weed growth, soil fertility decline, and soil texture damage. According to Shah and Sah (1996) all this because the recommended practices for fertiliser use and cropping methods are not followed by the farmers.

2. Distribution

In the total channel of fertiliser distribution in India, private dealers and distributors play a prominent role, and distribute (perhaps largest amount of fertilizers) through 70 per cent or more of private sale points. Cooperative institutions have 30 per cent or less sale points (presumably selling less fertilizers compared to private dealers and distributors). Further, each dealer distributes products of many companies. It is, therefore, clear that the share of cooperatives in fertiliser distribution has been declining.

Obviously, the cooperative marketing system suffers from several constraints leading to this result, which are as follows:

• low and inadequate distribution margins to lower level societies

• unable to compete with private trade

• high rate in interest on fertiliser credit

• high cost of operation due to locational disadvantages

• lack of single window approach

• poor management and lack of professionalism

Channels of distribution adopted by private sector, cooperatives and agro-industrial corporations, is shown in figure below.

The total domestic production and imports in distributed: (1) by Apex-level cooperative federation through district level, Taluka level and village level. Primary Agricultural Cooperative Societies (PACS), the ultimate units in cooperative structure; (2) by apex level Agro-Industrial Corporations, through district agro centres, and private trade; (3) by private marketing companies, either through wholesalers and retailers, or through company agro-services centre, ultimately reaching the farmers.

The pattern of fertilizer distribution in cooperative sector varies from state to state. Generally the cooperative network operates through a 3-tier system (in some states 4-tier or even 2 tier system). The village level Primary Agricultural Cooperative Societies (PACS) are the ultimate units in the cooperative structure, adding as retail sales points. Fertilizer business of State Agro-Industrial Corporations (SAICs) still contributes a significant percentage to the total turnover. These SAICs market the fertilizer’s (a) either exclusively through private trade, (b) or through Agro-Service Centres (ASCs), either owned by the corporation or run by the entrepreneurs/dealers promoted by SAICs; (c) or a combination of (a) and (b). Gujarat State Fertilizers Company (GSFC) first released the importance of promotion of package input and improved agricultural practices and started 22 Farm Information Centres (FICs) in 1968, acting as the nucleus of all extension, promotion and rural development activities of the company. IFFCO and KRIBHCO, major producers in the cooperative sector, operate a total of 227 Farm Service Centres (FSCs), which are 60 per cent of total in the country. Out of these 175 belong to IFFCO and rest to KRIBHCO. The 40 Shaktiman Krishi Sewa Kendras (SKSKS) of Indo-Gulf Fertilisers and Corporate Bulists Chemicals Ltd., are owned and operated by the selected dealers and not by company staff. The SPIC Agro-Service Centres are run by franchise agents. SPIC also has rural development centres. All of these helps in promotion activities.

Promotion and extension

While sales promotion aims at increasing sales of goods and services, fertilizer extension encompasses all tools of persuasive communication to

a) create awareness about fertiliser,

b) develop and strengthen their use, and

c) make potential buyers (farmers) and service them.

They are also extension education programmes'. The conventional methods of fertiliser extension used by different companies are of two kinds:

1) Direct communication (with contact programmes), and

2) Indirect communication (by use of all traditional and non-traditional media).

An array of almost all of these fertiliser promotion media had been in use during the 1970s (Singh, 1997, p. 71). A look at the milestones listed by Tandon and Narayan (1990) showed that fertiliser promotion and extension activities in India have had an excellent progress, and have shown results.

Sales promotion helps converting potential buyers into actual consumers. The basic components of a promotional programme are:

a) the communication,

b) the message,

c) the media, and

d) the target audience.

In case of fertilisers in India, following agencies make communication with audience:

1) the government (both at the centre and the states),

2) fertiliser industry,

3) university extension services,

4) non-governmental (voluntary organisations), and

5) ICAR (India Council of Agricultural Research) Institutes.

Following are the various methods of fertiliser extension and promotion:

1. Direct Communication

With farmers by way of crop demonstrations (methods and result), farmer's meetings' (training programmes (crop seminars), field days, farmer's conducted tours, farm advisory services, exhibitions, etc. and

2. Indirect Communication

Through press, radio, TV, slides, films, literature, posters, charts , ready reckoners, balloon hoisting, dealer's training, product display and other displays at dealer's premises, drama or one act plays, puppet and magic shows, folklore and music , audio-visual vans, etc. (Singh, 2001, p. 68).

Marketing of pesticides

Pesticides are a group of chlorine agents used in:

a) Plant Protection: For treating the soil against nematodes before sowing, treating the seeds against seed-born diseases; and for treating standing crops against damage from pests, insects, rodents, etc.;

b) Public Health Programmes: The origin of the pesticide industry can be traced back to World War II. In 1948, the country imported DDT for malaria control. The agricultural use of pesticides began a year later when BHC was imported to control the locusts (EIW, 1996); and in

c) Fumigation of storage godowns for protection of agricultural crops. The agricultural use of pesticides grew steadily between 1965 and 1990, when it had a share of 60 per cent of the total consumption, leaving the remaining 40 per cent for non-agricultural uses. The consumption level of pesticides is much lower i.e. 0.47 kg./hectare per annum, and at around 90,000 tonnes (Bog, 200, quoted by Singh, 2001). Accordingly, pesticides are divided into five broad groups;

1) Insecticides,

2) Herbicides/weedicides,

3) fungicides,

4) fumigants, and

5) rodenticides/others.

Large part of pesticides are used for cotton, paddy, and also for fruits and vegetables (Gopalaswamy, 1997, p. 57, quoting from 1984/85 figures). The demand for pesticides is also concentrated largely in the two states of Andhra Pradesh and Punjab, together accounting for 43 per cent of total consumption (Chauhan, 1999). Of the total consumption followed by 22 per cent for fungicides, for the rest little for other categories (Bog, 200, quoted by Singh, 2001, p. 8687). This is the profile of the market in India.

Distribution

Like the fertilisers, the distribution of pesticides is carried out through state departments, cooperatives and private outlets. As would be seen from the figure below, the distribution system of pesticides is such that out of the total production for domestic sale and import, at least 50 per cent is sold through non-associated formulators, and less than 50 per cent of it sold through associated formulators. From this channel, through the wholesaler, and retailer, the pesticides reach the end user/farmer. As has been made clear by Singh (1992), the supply side is characterised by Technical Grade Manufacturers (TGMs) and Formulators. A TGM is supposed to supply at least 50 per cent of it's produce to non-associated formulators. This makes a single technical grade available under separate brand names. Sometimes there may be over 50 brands for a single technical material. On the demand side, a single pest could be treated by several technical compounds and therefore, total options available to the buyer could be quite large. The small sector is only engaged in making formulations. Whereas the large scale sector is only engaged in making formulations. A formulator is generally in a metoo category, an entrepreneur, has a low technology of milling ingredients, is small scale, with low financial resources, sells in limited area of a state, has wide range of product linkages, has tremendous production flexibility, and does not get affected seriously by discontinuation of product (Singh, 1992).

Production

Following activities can be undertaken for market development and promotion of pesticides for agricultural use:

1) Field demonstrations: to educate the farmers of practical aspects of new application;

2) Exposure trips: to research farms;

3) Meetings of/with farmers;

4) Training camps for farmers;

5) Kisan Melas (fairs);

6) Television and Radio programmes;

7) Video Shows: considering the illiteracy among farmers;

8) Pamphlets, handbills, leaflets;

9) Wall paintings;

10) Local media; such as street plays (Nukkad Natak), dramas, festivals and religious fairs, for advertising the products.

Bio – pesticides

Bio-pesticides available in India are mostly "Neem"-based products. Neem is available in plenty and is a part of Indian culture. They are less costlier, have larger shelf-life, and can be used as broad-spectrum pest control agents. Bio-pesticides are mostly Agro-biotech products. Regional companies are predominantly active in bio-pesticides business. None of the big players of pesticide industry are present in Bio-pesticides business. Most of these (regional) bio-pesticides companies cater to specific markets requirements and distribution is limited to state. They are more closer to customers and have flexible operating structure. However their resources are limited. Table below lists major bio-pesticides players and their products.

Marketing of tractors

The application of modern technology to various agricultural operations has now come to stay. In many important agricultural operations, the use of outdated technology such as bullock-driven ploughing and manually operated sowing, reaping, transplanting, threshing, harvesting, etc. has given way to user friendly machines such as tractors, power-tillers, threshers, sprayers, transplanters and other power driven equipments and implements. The draft of the National Policy of Agricultural Mechanisation, prepared by the Central Council for Agricultural Mechanisation, set up by the Ministry of Agriculture, 1998, observed that with the emphasis on timeliness precision and general improvement in the quality of work, farm mechanisation has resulted in increase in employment. In fact, tractorisation has been recognised as a vehicle for removing the drudgery and increasing the level of farming so as to improve the life and work environment of farmers (Nair, 2002).

More than 95 per cent of the farmers avail of bank credit for the acquiring tractors and implements. Only a small portion of the annual sale of tractors (5-10 per cent) takes place without credit support and the same is accounted for the tractors purchased by Government agencies, corporate bodies and non-agricultural users. The demand for tractors from industrial farmers is highly elastic to bank credit (Nair, 2002).

The tractor market segments can be in terms of the power configuration. In India there are five categories based on engine horse power (HP) - Under 20 HP, 21-30 HP, 31-40 HP, 41-50 HP and over 51 HP. Of all these, as much as 61 per cent (some say, even 80 per cent) of the total sales is accounted for the 31-40 HP segment (Table 2.13, 2.14, 2.15, 2.16, 1.17 and 2.18) capacities of tractors and the collaborations with foreign firms are shown in table 2.19, 2.20. Till recently, maximum number of tractors have been sold in the belt consisting of Punjab, Haryana and Uttar Pradesh (60 per cent). The Indian tractor industry has been traditional dominated by six major players:

1) Mahindra & Mahindra,

2) TAFE,

3) Escorts,

4) Eicher,

5) HMT, and

6) Punjab Tractors Limited.

Besides there are other small players, viz.

7) Gujarat Tractors, and

8) Haryana Tractors.

The overall market leader is Mahindra & Mahindra with it's market share of 27.52 percent, in three major categories, viz., 25 HP, 35 HP, 45 HP.