Svilen Lozanov: Farmers are increasingly thinking about soil protection and its more efficient cultivation

- What is the trend that emerged in the agricultural machinery market in 2021? What are your observations?

Certainly, 2021 will be remembered as a record in many ways. We observed relatively decent yields on most crops in much of the country, as well as record production prices. On the other hand, the prices of machinery, seeds and preparations grew at a serious pace, which provoked farmers to invest, including in machinery. This led to record sales of most companies importing agricultural machinery, comparable to the years in which the various RDP measures were active.

- The COVID-19 situation has not disappeared yet. How has the pandemic affected and still affects the decision to buy machinery?

The COVID pandemic, combined with the lack of various components and raw materials (chips, rubber, iron), seriously affected delivery times, with delays of between 3 and 8 months for all manufacturers. This trend is still continuing, forcing farmers to plan to invest in machinery in no less than a year. So far, most of them were accustomed to the abundance of machinery, but personally I do not see in the next 12-18 months a resumption of regular production and supply.

- In this regard, how did you reorient your product presentation (the usual field demonstrations) to the COVID situation?

Surely, the COVID situation has negatively affected this type of event, but on the other hand, the interest of farmers is increasing due to their lack. Proof of this is the last year’s BATA Agro exhibition, which marked record attendance. Traditionally, Bulgarian farmers are innovators and definitely what they do is of world class. On our part, we plan to restore this type of activities in periods when the sick rate is low.

- Did the drought or other climatic characteristics of the year influence farmers’ decision to buy? In this context, were specific machines sought?

I do not think that in 2021 the drought was as serious a factor as in 2020. There were certainly regions in the country that were affected, but I think it was not as significant as in 2020. I think these climate anomalies reinforced the trend towards a shift to minimal tillage and direct sowing for many farmers, and, in general, I would say that we are already commenting much more on machines and technological lines helping to preserve water resources accumulated in the soil during the autumn-winter period.

- Did your expectations for the market in 2021 come true?

Definitely yes, they even exceeded all expectations and plans. As I have already mentioned, 2021 will certainly be remembered as a record in many aspects.

Did the open receptions under the RDP affect the market and is there any orientation of farmers towards specific technologies?

Certainly yes. The main inquiries and deals we concluded in connection with the last reception were focused on precision and direct sowing, navigation systems, and it is noteworthy that the interest in more and more precise sprayers is increasing despite their significantly higher price due to high fertilizer prices and preparations.

- What kind of machines – self-propelled and equipment – were bought the most this year? What do you think is the reason?

I would say that for both types of machines the demand was much higher than the possibility of delivery, but traditionally the requests for inventory were a little more. The reason, in my opinion, is that farmers are increasingly thinking about soil protection, more efficient treatment and minimal moisture loss. As I mentioned, the agriculture done in Bulgaria is world class.

- Does the increased price of steel affect the decision of farmers to buy?

The price of steel is only part of the problems machine manufacturers are facing. A bigger problem, in my opinion, is the lack of chips and the lack of tires, which mainly affects deliveries and delays. Certainly, the indexation of prices by manufacturers provokes farmers considering investing in machinery to do so, although they did not plan it, because in the future they will pay significantly more for the same machine. As I mentioned, this is one of the main reasons for the record sales of companies importing and offering equipment.

- Reduced production capacity of plants has led to poor market supply. Are you likely to run out of machines to offer to farmers?

In fact, the increased demand left ours, as well as most companies’ yards empty. Traditionally, we make orders to suppliers between 6 and 10 months in advance, so there is no risk of running out of machines, but certainly soon our yards will not be so full, because the high demand observed in 2021 is currently valid for this year.

- How will the reduced supply be compensated compared to the demand, because the farmers had a good year and there are real finances for buying machines?

In reality, at the moment there is no mechanism with which we can influence, because the production slots were allocated 6-8 months ago and the orders have already been placed. There is no possibility for new additional orders, with the possibility of delivery this year, and I do not believe that the situation is much different for most equipment importers. Currently, orders for all types of machines other than those already placed are to be delivered in 2023, and it is even more interesting that there are farmers who are willing to wait until then with the idea to buy the desired machine at a relatively decent price.

- Do digital solutions remain in focus and are they preferred to ordinary machines?

Definitely yes. The lack of manpower in agriculture and rising prices of basic raw materials require the need to make production more efficient, and digital solutions are an integral part of this process.

- What are your observations on the second-hand machine market? Is there a decline or growth in this segment, according to your data?

Certainly this is part of the market that will grow every year, and in 2021 it was significant for us. This process, in my opinion, is quite natural given the amount of new machines delivered over the last 10 years. In the future, the second-hand market is expected to occupy an increasing part of the agricultural machinery business.

- What is your forecast for 2022?

I expect it not to be much different from 2021. The fact is that the picture in terms of production prices, prices of various raw materials, machine deliveries, etc. has not changed significantly and there are no prospects for major changes in the next 12-18 months. I hope that 2022 will be at least as successful for farmers as 2021was, and we, as a company, will strive to facilitate their success as much as we can.