Has the golden age of the agricultural machinery industry already ended?

In 2014, the growth rate of the agricultural machinery industry slid from its position as the "front-runner" of the machinery industry to below the average line, but the industry believes that softening data does not mean the "golden age" of development is over. At present, the main conditions supporting the industry's rapid growth still exist, and the softening data is a manifestation of structural adjustment and concentrated product consolidation, indicating that the domestic agricultural machinery industry needs to shift its growth drivers.

According to the latest information from the China Agricultural Machinery Industry Association, in 2014, the growth rate of the agricultural machinery industry fell below 9%. Among the national machinery industry, the agricultural machinery industry slid from being the front-runner for many years to below the average line of the machinery industry. Does the softening of data mean that the "golden age" of agricultural machinery industry development has already ended?

Chen Zhi, president of the China Agricultural Machinery Industry Association, said in an interview with an Economic Daily reporter that the main conditions supporting the rapid growth of the agricultural machinery industry still remain, and the softening of the main economic data of the agricultural machinery industry is a manifestation of structural adjustment and concentrated product consolidation, indicating that the domestic agricultural machinery industry needs to shift its growth drivers.

For the agricultural machinery industry, the past 10 years were the "golden decade" of China's agricultural machinery industry development, and the total output value of the agricultural machinery industry has reached more than 350 billion yuan. However, the rapid development of the agricultural machinery industry in the past was mainly based on extensive quantitative growth, including irrational consumption growth brought about by non-market-oriented stimulus.

The real problem is that although the structure of China's agricultural machinery products has been continuously optimized, the product structure is still unreasonable, and high-end products are lacking, resulting in structural shrinkage in the industry. On the whole, China's agricultural machinery has already formed a product structure combining large, medium and small sizes, and the variety and supply quantity can basically meet the needs of most domestic markets, but homogeneous competition is severe. For example, the output value of tractors accounts for about 18% of the agricultural machinery industry, and "agricultural and horticultural machinery and implements," including harvesting machinery, accounts for 31%. These two categories of products carry the greatest weight in the agricultural machinery industry, while products such as tractors above 200 horsepower, grain combine harvesters with a feed rate above 10 kg, cotton pickers, and sugarcane harvesters are lacking. The lack of competitive products is a chronic problem in the agricultural machinery industry.

"With the transfer of rural labor, the expansion of agricultural scale, the improvement of people's living standards, the development of agricultural machinery service organizations, and the strengthening of market competition, demand for low-end products is weakening, while demand for advanced, user-friendly, high-tech and large agricultural machinery will continue to increase. The previous excessive pursuit of growth in the quantity of agricultural machinery will gradually shift to the pursuit of agricultural machinery quality," said Chen Zhi.

For many years, the state has issued a series of policies to support and promote the development of agricultural mechanization, especially the agricultural machinery purchase subsidy policy, which has driven the continuous growth of the total agricultural machinery market and the continuous upgrading of the industrial structure, and also created the "golden decade" of agricultural machinery industry development. However, as an administrative means of stimulating the development of the agricultural machinery industry, the agricultural machinery subsidy policy is constrained by non-standard operation at the implementation level and, to a certain extent, has amplified the influence of non-market behavior. "The transformation of agricultural machinery industry development from policy-driven to innovation-driven is an inevitable trend, and this plays a major role in advancing the structural adjustment and industrial upgrading of China's agricultural machinery industry, rapidly raising the industry's technical level, and realizing the entry of Chinese agricultural machinery into the world," said Wang Jinfu, general manager of Zoomlion Heavy Machinery.

Insufficient innovation capacity is the weak spot in the current development of China's agricultural machinery industry. In recent years, although China's agricultural machinery industry has made major breakthroughs in independent innovation, the gap with foreign agricultural machinery manufacturing remains very large. For example, large tractors represented by those above 200 horsepower, large self-propelled grain combine harvesters, large combined seeders, remote-controlled unmanned pesticide-spraying machines, low-volume pesticide spraying, mechanical cotton picking, and mechanical sugarcane harvesting remain difficult problems that need to be tackled in the future.

The reality of the huge gap between domestic and foreign agricultural machinery products has led some domestic agricultural machinery manufacturing enterprises with a global perspective to turn their eyes to countries such as Europe and the United States. In 2011, YTO Group successfully acquired the French tractor manufacturer McCormick, greatly improving the research and development level of power-shift tractors. In recent years, Foton Lovol Heavy Industry has further enhanced its scientific and technological innovation capacity by establishing research and development centers in Europe and Japan. While advancing product technology upgrading, it focuses on breakthroughs in high-end new technologies and new products. Domestic agricultural machinery manufacturing enterprises establishing research and development centers in Europe and the United States is an important path for Chinese agricultural machinery enterprises to build an intellectual engine and gradually shift their focus to global research and development, and it is an important strategic direction for Chinese agricultural machinery enterprises to go global in the future.