John Deere Green or Mahindra Red?

Small Farms Favor India’s Mahindra Tractors

Our eyes are on India this week, a nation perfectly poised for agricultural expansion into global markets. Farming practices have come a long way in since the drought and mass famine days of the 1960s.  India’s hard won lessons could serve to build solutions to many of the world’s current agricultural challenges.  From seed technology, to irrigation, to our topic today, small tractors, India’s Green Revolution was a catalyst for innovation and the kind of targeted problem solving needed nearly sixty years later. Will India’s farm equipment powerhouse, Mahindra, give John Deere a run for its money?

Mahindra Sales Grow in Emerging Nations

India’s Mahindra is making strategic partnerships in Africa, the Middle East and South America thanks to their small tractors. While some farmers here in the United States are willing to pay a premium for green, the majority of farmers around the world work just a few acres and have no need for high tech commercial sized equipment. What they do need is a small, reliable, durable, fixable and adaptable tractor. That’s exactly what Mahindra has to offer and it is why they are in over 50 countries.

In India, 86% of farmers farm less than five acres of land. Despite major strides in agriculture, farming in India is fragmented.  Small farms contribute to food security in the country, but operational costs, like equipment, have long been a challenge. Beyond just the cost of renting or purchasing a tractor, farmers want something that is easy to repair and usable in both dry and rainy seasons. Mini tractors can decrease labor dependency while increasing productivity. And for farmers aiming to maximize every inch of their property, small tractors make for easier navigation.

Labor, productivity and exaggerated seasons of drought and rain are not unique to India. Mahindra’s mini tractors are increasingly popular in Africa and the Middle East where food independence is the goal and achieving it involves equipping small farmers with durable tools. India went from being one of the most food insecure countries in the world to one of the biggest food exporters in the world by considering local soil, climate and weather conditions when designing practical affordable farm equipment. Those same designs that elevated their position in agricultural trade could afford emerging nations the same opportunity. Africa has the same potential that India did in the late 1960s and Mahindra could be positioned to take advantage of that development through equipment sales to smallholder farms.

Will Mahindra Encroach on John Deere Sales?

Mahindra’s mini tractors are quickly working their way into developed nations as well.  Understanding that global equipment needs are diverse, Mahindra has launched high tech models that offer the predictable durability and adaptability consumers associate with the brand, but also equip farms in Europe and North America to meet environmental goals and tackle current labor and productivity challenges.

The company has chosen to focus their research and development in the small tractor sector despite the fact that the United States has seen smallholder farms absorbed into larger consolidated operations. That focus could benefit them in the near future as more Americans are trying their hand at small-scale farming, but lack the capital for large equipment purchases or the funds to pay laborers. In 2021 Mahindra was the fastest growing farm equipment manufacturer selling around 200,000 tractors per year. We could see continued growth from the company even in the United States where farmers tend towards John Deere and it will largely be due to these small affordable models that provide niched solutions to regional challenges on multiple continents. 

Small Farms and Small Tractors

Surging sales of mini tractors begs the question, are more countries promoting regionally strong agricultural communities? Is this a post pandemic ripple effect we didn’t consider? For all of our talk about high tech, smart, and precision technology, shoring up food security and supply chains might involve a return to simpler equipment at an affordable price. And if it was developed specifically for the needs of the Texas plains, or with decreasing Germany’s carbon emissions in mind or able to navigate wet terrain in Thailand’s monsoon season, all the better.

The average American considering whether they want to try their hand at farming on a small scale might be more inclined to go for it if they believe they can easily repair their own equipment. The same holds true for the seasoned farmer who wants to diversify their crops without having to pour a lot of money into new technology. 

We like the idea of diversified farms producing multiple types of food and contributing to regional food security; however, that is a concept that at this stage of American agriculture is very risky for most farmers. It is highly unlikely that American soybean farmers will suddenly convert all of their land for growing cabbage or grapes, but it is possible that more grain farmers will look for ways to incorporate new crops on small land plots to test what else might grow well in their region. Doing so without adding labor expenses could certainly involve smaller investments in adaptable farm equipment.

Declining sales have prompted John Deere retailers to scale back inventories in the United States and the company has decreased manufacturing in an effort to adapt to market trends.  In general, farm incomes are down enough that purchasing new equipment isn’t a top priority. Mahindra could become the more financially approachable option, but the brand’s small tractors could also quickly become the smartest option for smallholder farmers looking to increase productivity. It certainly reminds us that bigger isn’t better. Considering that roughly 80% of the world’s food is produced on small farms by farmers in low income economies, Mahindra is smart to focus on supporting their needs.  Mini tractors could be crucial to increasing food production and enhancing food security around the globe and India’s strategic partnership with these food producers could make them a backbone of rural agricultural economies from South Africa to Afghanistan.