Original Article Journal of Biosystems Engineering

J. of Biosystems Eng. 38(4):248-254. (2013. 12) eISSN : 2234-1862

http://dx.doi.org/10.5307/JBE.2013.38.4.248 pISSN : 1738-1266

Demand and Supply Trend of Agricultural Machinery

1 1 1 1 1 2
Seung-Yeoub Shin , Chang Ho Kang , Byounggap Kim , Yu Yong Kim , Jin Oh Kim , Kyou-Seung Lee *
1
Department of Agricultural Engineering, National Academy of Agricultural Science, RDA, Suwon, Korea
2
Department of Bio-Mechatronic Engineering, Sungkyunkwan University, Suwon, Korea

Received: November 12th, 2013; Revised: November 17th, 2013; Accepted: November 18th, 2013

Purpose: This study was performed in order to obtain basic data for policy development and R&D to sharpen
competitiveness in domestic agricultural machinery industry by analyzing the recent status of demand and supply for
tractor, rice transplanter(riding type), and combine. Methods: Basic data from 199,275 units of tractor, rice transplanter
(riding type), and combine was offered by the National Agricultural Cooperative Federation and Korea Agricultural
Machinery Industry Cooperative. Those agricultural machines were supplied by the government’s loan support from 2003
to 2012. Results: Recent supply of tractor is only 13,000 units or so per annum, thereby being stagnated. Rice transplanter
and combine in 2012 corresponded to 3,810 units and 2,490 units, respectively. The domestic market share of the imported
agricultural machinery accounted for 60.0% in tractor, 99.5% in saddle rice transplanter, and 80.9% in combine, thereby
having been sharply increased 33.1%p, 42.0%p and 53.6%p compared to the ones in 2003. Life spans of tractor, combine
and saddle rice transplanter are 3.7, 3.7 and 4.2 years, respectively. Among the discontinued models, the one less than 300
units supplied was occupied up to 70~85%. Conclusions: The domestic demand and the export expansion are needed
through developing a model of agricultural machinery of having competitiveness to domestically activate agricultural
machinery industry.

Keywords: Agricultural machinery, Demand & Supply, Domestic & Imported product, Life span

Introduction for tractors has been stagnant, and that of rice planters
and combines has shown significant decreasing trend
Agricultural machinery has played an important role with an annual average of 9.3% and 5.0% respectively
in Korea's agricultural production. The decline in a sind 2000s. To make matters worse, the continued increase
base for agricultural machinery industry makes it difficult in domestic market share of foreign agricultural machinery
to implement smooth supply and follow-up service and from other countries, including Japan has contributed
causes difficulties in farming activities. In addition, the to the weakening of Korea's agricultural industry.
use of expensive imported agricultural machinery may The decline in domestic agricultural machinery is
lead to the increased burden of operating expenses on expected to continue for the time being with the aging
farmhouses and rise in rise in agricultural prices. of drivers, provision of large agricultural machinery
In recent years, the demand for domestic agricultural and imported agricultural machinery market share growth.
machinery has been stagnant. A look at the demand for Accordingly, there is a need for the expansion of domestic
combines, rice transplanters (riding-type) and tractors agricultural machinery market share in the domestic
which account for 75% of sales revealed that the demand agricultural machinery market, along with a more aggressive
effort to expand exports.
*Corresponding author: Kyou-Seung Lee Korea's agricultural machinery exports recorded an
Tel: +82-031-290-7823; Fax: +82-031-290-7830 average annual increase of 16.4% after achieving 100
E-mail: seung@skku.edu

Copyright ⓒ 2013 by The Korean Society for Agricultural Machinery

This is an Open Access article distributed under the terms of the Creative Commons Attribution Non-Commercial License (http://creativecommons.org/licenses/by-nc/3.0)
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 Shin et al. Demand and Supply Trend of Agricultural Machinery
Journal of Biosystems Engineering • Vol. 38, No. 4, 2013 • www.jbeng.org

million dollars of exports in 2000. The Unites States Cooperative for an analysis. The scope of analysis was
(43.5%) and Asia (18.4%) constituted 61.9% in exports limited to 199,275 units of agricultural machinery such
of 750 million dollars in 2012, and tractors accounted as tractors (112,207), riding-type rice transplanters
for 57.2% of total exports (Korean Society for Agricultural (51,369) and combines (35,699) supplied by the govern-
Machinery, 2012) ment's loan support in the recent ten years (2003-2012).
The amount of world trade in agricultural machinery The main content of the analysis includes the number
is expected to be 132.8 billion dollars in 2017. Looking of units by agricultural machinery, specification and
at it by region, Asia/Pacific region accounted for 44.8%, model, segment and number of units of domestic and
Europe 27.0%, and North America 19.0%, and tractors imported models, and discontinued models and number
constituted 28.5%, working machines 16.9%, and harvesting of the total units supplied (Table 1).
machinery 16.0% in terms of the kind of agricultural
machinery. The average annual growth rate since 1997 Data collection for domestic and imported
turned out to be highest in Asia/Pacific region with agricultural machinery by model
5.7%, followed by Africa/Middle East (5.3%), and Latin For investigation on the domestic and imported status
America (4.1%) in order (The Freedonia Group, Inc,. (finished products, imported engines) by model of agricultural
2008). machinery, data contained in the Annual Report on the
In 2010, Japan's agricultural machinery exports recorded Agricultural Machinery Test and Evaluation (FACT, 1992~
213.2 billion yen, showing a 69% increase from 2001, 2012) was utilized, and data on the models which are
and the amount of imports was 42.3 billion yen, which not included in the Annual Report on the Agricultural
constitutes only 19.8% compared to that of exports. In Machinery Test and Evaluation was collected by contacting
addition, 136 countries are included in its world the Practical Agricultural Technology Foundation and
export market, and 89% of exports come from tractors manufactures.
(64.3%), bush cutters (10.3%), sowing·transplantation·
transplanters (5.7%), chain saws (3.5%), combines and
parts (5.1%) (Shin-norinsha, 2011).
Results and Discussion
This study was carried out to obtain the basic data
for policy development and R&D to improve the com- Distribution and number of domestic and
petitiveness of domestic agricultural machinery industry imported agricultural machinery
by analyzing the status of demand and supply for tractors,
A look at the number of tractors, riding-type rice
riding-type rice transplanters and combines supplied
transplanters and combines supplied for the past 10
by the government's loan for the past 10 years.
years showed that the number of tractors increased by
51% with 12,246 units in 2012 compared to the one
in 2003, but it has shown a recent decline from the
Materials and Methods peak of 13,985 units in 2010. The number of riding-type
rice transplanters and combines was 3,810 and 2,490
Database of agricultural machinery by loan in 2012, showing a 15.6% and 20.0% decrease, respectively
support compared to the one in 2003 (Table 2). Thus, a decline
DB data related to agricultural machinery by loan in demand for agricultural machinery is expected to
support was offered by the National Agricultural Cooperative continue for the time being with the increased number
Federation and Korea Agricultural Machinery Industry of retired households of old farmers who drive agricultural

Table 1. No. of supplied agricultural machinery and model by loan support of Government

Class. Tractor Rice transplanter (riding type) Combine Total

No. of supplied agri.
112,207 51,369 35,699 199,275
machinery
No. of model for
296 55 70 421
supplied agri. machinery

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Table 2. Number of loan support for agricultural machinery by Government and ratio of the imported agricultural machinery (unit number)

Class. ‘03 ‘04 ‘05 ‘06 ‘07 ‘08 ‘09 ‘10 ‘11 ‘12
Tractor 8,059 8,195 10,121 10,350 11,085 12,894 12,381 13,891 12,985 12,246
Finisheda) (17.6) (11.5) (22.0) (23.1) (28.5) (29.5) (22.8) (15.2) (13.4) (13.2)
Imported b)
Engine (8.9) (7.7) (17.3) (21.9) (17.8) (19.7) (31.5) (46.2) (47.6) (44.8)
Rice transplanter 4,514 4,666 5,080 5,351 6,338 6,691 5,630 5,074 4,215 3,810
Finisheda) (26.0) (47.7) (60.6) (60.8) (50.8) (66.6) (52.2) (49.6) (52.1) (57.5)
Imported b)
Engine - - - (4.1) (31.6) (22.5) (35.1) (46.6) (45.8) (42.0)
Combine 3,099 3,638 3,804 3,669 4,291 4,309 3,842 3,565 2,992 2,490
a)
Finished (7.1) (6.9) (14.4) (17.3) (23.2) (27.7) (15.8) (18.5) (23.6) (27.3)
Imported
Engineb) - - (0.1) (0.2) (8.9) (43.0) 51.6) (53.2) (56.7) (53.6)
Notes, a) Imports of Finished products (%), b) Imported engine (%)

Table 3. Sales of agricultural machinery by year (Based on the agricultural machinery with the government's loan support)

Class. ‘03 ‘04 ‘05 ‘06 ‘07 ‘08 ‘09 ‘10 ‘11 ‘12
Sales(100 million won) 4,903 5,906 6,191 6,614 7,652 9,155 9,358 10,233 9,627 9,118
Tractor 38.4 38.6 42.7 43.4 41.5 43.3 45.7 49.1 50.0 51.3
Distri-bution Rice trans-planter 11.7 11.7 12.0 12.1 12.5 12.1 10.5 8.9 8.1 8.4
(%) Combine 21.5 22.6 22.7 21.3 15.3 21.4 19.8 17.5 16.9 15.5
etc. 28.4 27.1 22.6 23.2 30.7 23.2 24.0 24.5 25.1 24.8

machines and expanded supply of large agricultural enhance the competitiveness of domestic agricultural
machinery. machinery industry.
As for the domestic market share of imported agricultural Looking at the agricultural machinery sales (loan +
machinery (finished products), tractors decreased by self-funded) based on the number of units supported
4.4%p from 17.6% in 2003 to 13.2% in 2012, but riding- by government loan, it increased from 490.3 billion
type rice transplanters and combines increased by 31.5%p won in 2003 to 911.8 billion won in 2012 after reaching
and 20.2%p, respectively during the same period. In its peak in 2010 with 1,023.3 billion won. The distribution
addition, a look at the share of agricultural machinery of agricultural machinery sales in 2012 showed that
equipped with imported engines (finished products assembled three kinds of machinery such as tractors (51.3%),
in Korea or equipped with imported engines) apart from riding-type rice transplanters (8.4%) and combines (15.5%)
the finished products revealed that tractors increased accounted for 75.2% of total sales (Table 3).
by 33.1%p from 8.9% in 2003 to 42.0% in 2012, and
riding-type rice transplanters and combines significantly Distribution of the supplied number of units
increased by 42.0%p and 53.6%p, respectively during by specification of agricultural machinery
the same period. A look at the distribution of the supplied number of
As a result, the proportion of imported agricultural units by specification of tractors showed that the small
machinery (finished products, assemblies, engines, etc.) size (less than 29 kW) and middle size (less than 29~44
was very high in domestic market with 58.0% (tractors), kW) of tractors constituted 5.1% and 46.9% in 2012,
99.5% (riding-type rice transplanters) and 80.9% (combines), but they decreased by 18.1%p and 10.6%p respectively
and the problem is that the domestic market share of compared to the ones in 2003. However, the large size
imported agricultural machinery increases over time. (less than 44~74 kW and more than 74 kW) of tractors
In recent years, domestic agricultural machinery industry constituted 40.2% and 7.8% in 2012, showing a 23.2%p
has suffered from difficulties due to the reduction in and 5.4%p increase respectively in 2012 compared to
domestic demands and expanded supply of imported the ones in 2003 (Figure 1). That is, demand for small
machinery, so there is an urgent need for measures to and middle size (less than 44 kW) of tractors decreased,

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Figure 1. Distribution of supplied unit number by specification of Figure 3. Distribution of supplied unit number by specification of
Tractor. Combine.

Figure 4. Supply ratio of imported tractor.

Figure 2. Distribution of supplied unit number by specification of
Rice Transplanter.

and that of large-size tractors increased, reflecting

polarization between them.
In recent years, there has been higher demand for
riding-type rice transplanters, and the distribution of
the number of riding-type units by specification showed
that the unit with more than 6 rows accounted for
93.2% in 2012, showing a slight decrease compared to
the one in 2003, but it still constitutes the majority of
the number of supplied riding-type rice transplanters
(Figure 2). In the case of combines, the unit with less
Figure 5. Supply ratio of imported Rice- transplanter and Combine.
than 4 rows was mostly supplied in 2003 with 89.2%,
but the number of the unit with more than 5 rows
increased by 49.6%p to 60.4% in 2012, reflecting a size of attached working machines, and ease of operating
recent large-scale trend in agricultural machinery, which performance and handling operations (Figure 3).
is attributed to the expansion of business scale resulting Looking at the supply ratio of imported agricultural
from the abandonment of purchasing agricultural machinery machinery (finished products, assemblies or units equipped
of framing operation due to the aging population, large with imported engines) by specification, the supply ratio

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Journal of Biosystems Engineering • Vol. 38, No. 4, 2013 • www.jbeng.org

of imported tractors with less than 29 kW was 46.5%, of supplied models was 32 in 2012, which was increased
that of less than 29~44 kW 32.3%, that of less 44~74 by 88% compared to the one in 2003, and the number
kW 81.4%, and that of more than 74 kW 100%, showing of models with less than 6 rows and more than 8 rows
a higher supply ratio of imported tractors in middle were all significantly increased. However, the number
and large size with more than 44 kW. As a result, the of supplied modes for combines was 24, which was
supply ratio of domestic tractors tends to increase in increased by 33% compared to the one in 2012. In
units with less than 29~74 kW. However, those with particular, the number of models with more than 5
less than 29 kW greatly decreased, and those with rows significantly increased, whereas a 69% decrease
more than 74 kW turned out to be 100% dependent was found in the unit with less than 4 rows that has
on imported tractors (Figure 4). In addition, the market a large number of models (Table 4).
share of imported riding-type rice transplanters and
combines was 96.6~99.7% and 81% respectively in Number of models by supplied unit of
2012, showing a growing dominance of the domestic agricultural machinery
agricultural machinery market (Figure 5) Looking at the distribution of models by supplied
unit of agricultural machinery in 2012, that of models
Number of supplied agricultural machinery with which less than 20 units were provided was 45.9%
models in tractors, 31% in riding-type rice transplanters, and
In 2012, the total number of supplied tractor models 33.3% in combines. The proportion of models with
was 148, which was increased by 33% compared to which less than 100 units per year was 66~74%, and
the one in 2003. Looking at it by specification, The that of models with which more than 300 units was
model with less than 29 kW decreased, but large model slightly higher with 21.9%. However, the proportion of
with more than 44 kW showed a significant increase. tractors and combines turned out to be only 7~8%
In the case of riding-type rice transplanters, the number (Table 5). In other words, the number of models are

Table 4. Unit number of supply model with a loan support by government

Number of supply model with a loan support by government

Class. Scale
‘03 ‘04 ‘05 ‘06 ‘07 ‘08 ‘09 ‘10 ‘11 ‘12
Total 111 111 114 111 133 147 152 157 152 148
Under 29 kW 19 21 17 18 16 14 15 16 14 15
Tractor 29~44 kW 44 45 43 39 47 51 48 52 50 50
44~74 kW 31 34 43 35 44 47 55 57 52 50
More than 74 kW 17 11 11 19 26 35 34 32 36 33

Rice Total 17 19 19 22 23 24 29 27 28 32
transplanter Under 6 row 13 14 14 15 16 15 17 17 18 21
(riding type) Over 8 row 4 5 5 7 7 9 12 10 10 11
Total 36 32 31 31 30 29 27 22 26 24
Combine Under4 row 29 24 24 22 20 18 15 11 14 9
Over 5 row 7 8 7 9 10 11 12 11 12 15

Table 5. Unit number of supplied agricultural machinery (in 2012)

Number of agricultural machinery(unit number, %)

Class.
Under 20 units ~ 50 ~100 ~200 ~300 Over 300 Total
Tractor 68 (45.9) 20 (13.5) 22 (14.9) 17 (11.5) 11 (7.4) 10 (6.8) 148 (100)
Rice transplanter
10 (31.3) 6 (18.8) 5 (15.6) 3 (9.4) 1 (3.1) 7 (21.9) 32 (100)
(riding type)
Combine 8 (33.3) 5 (20.8) 3 (12.5) 3 (12.5) 3 (12.5) 2 (8.3) 24 (100)

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Table 6. Life span of agricultural machinery

Tractor Rice transplanter Combine

Class.
Domestic Imported Avg. Domestic Imported Avg. Domestic Imported Avg.
No. of model 26 48 74 4 6 10 7 4 11
Life span (year) 3.7 3.7 3.7 2.8 5.2 4.2 3.8 3.5 3.7

Table 7. No. of model and supply by discontinued agricultural machinery

No. of model and average supply by agricultural machinery

Class.
Under 50 units ~100 ~200 ~300 Over 300 Total
No. of model for dis-continued agri. machinery 34 9 13 7 11 74
Tractor
No. of Average supply per model 14.3 70.2 136.7 251.3 610.2 153.6
Rice No. of model for dis-continued agri. machinery 3 3 0 1 3 10
trans-planter No. of Average supply per model 20.7 70 0 201 1,554 513.6
No. of model for dis-continued agri. machinery 5 1 2 0 3 11
Combine
No. of Average supply per model 11.2 94 130 0 658.3 216.8

adjudged to be excessive compared to the size of domestic 14. The number of models with more than 300 units
agricultural machinery market in consideration of post- in the total number of supplied units was 11 (15%)
management, including parts supply according to the whose average number of supplied units turned out to be
number of supplied agricultural machinery. about 610. In the case of riding-type rice transplanters,
the average number of supplied units from 10 discontinued
Life span and number of supplied units by models was 513, and 6 models had less than 100 units
agricultural machinery with average supply of 45 units. As for combines, the
An analysis was conducted with 74 models of tractors, average number of supplied units from 11 discontinued
10 models of riding-type rice transplanters and 11 models was about 217, and 6 models were found to
models of combines whose supply was started from have the number of supplied units with less than 200
2013 and completed by 2012 among models of agricultural (Table 7).
machinery. The analysis results showed that the average In general, agricultural machinery manufactures estimate
life span of th models was 3.7 years in tractors, 4.2 the minimum number of supplied units to prevent economic
years in riding-type rice transplanters and 3.7 years in damages due to the development of new modes to be
combines. Looking at the life span of domestic and 300 to 400 for tractors and riding-type rice transplanters,
imported agricultural machinery models, there was little and 600 to 700 for combines. However, since the total
difference between tractors and combines, but the life number of discontinued agricultural machinery models
span of imported riding-type rice transplanters was about is less than 300 in most cases, there is a need to
two times longer than that of domestic ones (Table 6). develop competitive models suitable for the agricultural
Overall, the life span of domestic agricultural machinery field.
turned out to be shorter, and it can lead to great concern
about supply of spare parts for repair of agricultural
machinery, which in turn can cause the reduction in Conclusions
life span for agricultural machinery replacement and
increase in the cost of using agricultural machinery This study analyzed the status of demand and supply
due to the rise in prices of parts for repair. status for tractors, riding-type rice transplanters an
Looking at the average number of discontinued models combines supplied by the government's loan support in
supplied, tractors constituted 46% of 74 discontinued the recent 10 years to obtain the basic data for improving
models with 34 models (less than 50 units), and the the competitiveness of domestic agricultural machinery
average number of supplied units by model was about industry.

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Journal of Biosystems Engineering • Vol. 38, No. 4, 2013 • www.jbeng.org

(1) Looking at the number of supplied agricultural agricultural machinery has shown a increasing
machinery, the number of tractors was 12,246 in trend over time, which poses a difficulty in domestic
2012, which has been stagnant since 2008 with agricultural machinery industry. In addition, the
less than 13,000, and that of riding-type rice life span of agricultural machinery models is short,
planters and combines was 3,810 and 2,490 in and the total number of supplied units by model is
2012, which decreased by 15.6% and 20.0%, less than 300 in most cases, which makes it hard to
respectively compared to the one in 2003. meet the economic efficiency standards and poses
(2) A look at the distribution of supplied units by a burden on the post-management.
specification (2012) showed that small size of (7) Accordingly, there is a need for expansion of
tractors with less than 29 kW was 5.1%, and exports and domestic market to activate domestic
middle size of tractors with less than 29~44 kW agricultural machinery industry. Towards this end,
was 46.9% in 2012, which was decreased by it is required for manufactures to make efforts for
18.1%p and 10.6%p respectively compared to the research and development to develop competitive
one in 2003. However, large size of tractors with models of agricultural machinery, and the government,
less than 44~74 kW and more than 74 kW was academia and research institutions to provide
40.2% and 7.8% respectively, which was increased active support for collaboration.
by 23.2%p and 5.4%p compared to the one in
2003.
(3) The market share (2012) of imported agricultural Conflict of Interest
machinery (imported finished products, assemblies,
units equipped with engines) was 60.0% for tractors, No potential conflict of interest relevant to this article
99.5% for riding-type rice transplanters and 80.9% was reported.
for combines, which was significantly increased by
33.1%p, 42.0%p, 53.6%p, respectively compared
to the one in 2003. Acknowledgement
(4) The number of domestic agricultural machinery
models supplied in 2012 was 148 for tractors, 32 This study was supported by Research Program for
for riding-type rice transplanters and 24 for Agricultural Science & Technology Development (Project
combines, which was increased by 33% and 88% No. PJ009584), National Academy of Agricultural Science,
compared to the one in 2003 as for tractors and RDA.
riding-type rice transplanters but decreased by
33% in the case of combines. In addition, it turned
out that the number of models for small size References
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