Tax changes could drive tractor sales, says Norfolk agricultural engineer
16:18 11 January 2013
Archant Â© 2011; 01603 772434
Farmers bought tractors last year with total horsepower of more than two billion, according to the latest statistics from the Agricultural Engineers’ Association.
The final total of agricultural tractors of more than 50hp was 13,951 – a dip of 1pc on the previous year.
But Norfolk agricultural engineer, Ben Turner, of Ben Burgess & Co, said that tractor sales fell back slightly after the chancellor’s autumn statement last December.
The welcome announcement of a ten-fold increase in capital allowances to £250,000 covered sales from this month and alredy made a big difference, he said.
The AEA, based at Peterborough, reported that the average size of tractor sold last year was 148hp – an increase of 2.6pc on the previous year. It noted that the total power sold increased 1.6pc to nearly 2.1 billion horsepower.
Chris Evans, chief economist, said that the early months saw high levels of registrations buoyed by confidence from the 2011 farming season when incomes rose by about 20pc. In March last year, a peak 2,164 units were sold before allowances were reduced to £25,000 in April last year.
Since 2000, annual tractor sales in Britain have ranged between a low of about 10,000 units and a peak of more than 17,000. In 2011 14,094 units were sold. In terms of total power sold, this was some 13pc above the average, he added.
While the industry had faced headaches, not least with the weather, it is estimated that total farm income may have fallen by as much as 20pc.
“The problems associated with establishing crops, plus the costs of feeding livestock have been compounded by reduced single payments and the prospects of tax bills from better times falling due,” said Mr Evans.
Mr Turner, who is president of the Norfolk Farm Machinery Club, said that “tractors are all getting larger and one new tractor is doing the work of two smaller models.”
After the chancellor’s announcements, sales dipped, he added. “Initially it had a little negative effect because buyers held back. We had a disappointing December because buyers decided to wait to confirm orders until this month,” said Mr Turner.
He was now expecting a very busy year. “The increase in allowances was excellent news for the agriculture and farming. For agricultural engineering, it is a great thing.
“It is across the board and covers any investment on new or second-hand equipment – that’s the important thing; anything that farmers spend on machinery or plant. It will help people to run their businesses more efficiently,” he added.
The family company, which is based at Norwich and celebrated its 80th anniversary last year, also has branches at Aylsham, Beeston, near Dereham, and Newmarket.
Mr Turner said that farmers recognised that they had to have the right machinery. “With the price of grain and the value of food to the country, farmers are making sure that they’ve got the capacity whatever the weather conditions to grow their crops and get them harvested.
Also, a large part of East Anglia had fared better than many other parts of the country.