Farming equipment is one of the necessities that many farmers must consider if they want to grow their food. However, most people who are interested in farming, especially those who belong to the middle class cannot afford this type of equipment. Indeed, the price of farming equipment is quite high because it is highly specialized and requires a lot of maintenance. Here are some reasons why farming equipment is so expensive.
- First of all, tractors, combines, ploughs, and harvesters are major parts of farming equipment. Tractors, combines, ploughs and harvesters are pieces of machinery that make the production of farming products easier. As such, farmers cannot just get any type of tractor or any other piece of farming equipment. Under the law, section 179 is an itemized list of items that are subject to deduction; some of these include automobiles, boats and motorcycles, parts and accessories for tractors, boats and motorcycles, and tools and machinery for cultivating the soil.
- Secondly, farming equipment is highly specialized and is used for producing specific kinds of crops. So, farmers are not able to use common tractors and other farm machinery to harvest the fruits and vegetables that they need. As such, to increase production, farmers must also get special items that are specifically used in growing certain items.
- Thirdly, farmers normally spend more on farming equipment financing than they earn. This means that they are forced to invest in machinery that will help them increase production. Moreover, the amount that they can get from the government is limited. Because farmers are required to pay taxes on the income they receive, the amount they can borrow from banks and other financial institutions is relatively lower than what they could get from private lenders. As such most farmers usually avail themselves of farm equipment financing, instead of looking for other types of loans.
- Fourthly, farmers need a lot of money for purchasing tractors, fertilizers, pesticides and other farming equipment. To acquire these products, they need to find farmers who are willing to sell their old equipment to them at very low prices. Since the number of bankruptcies due to bad loans and other factors is very high in the agricultural sector, farmers find it difficult to find customers for their agricultural products. This is where farm equipment financing comes into play. When a farmer borrows money from a bank or a lender, he can easily obtain machinery without having to produce any type of collateral.
- Fifthly, since the farming industry requires tractors, trucks, ploughs and other major machinery, farmers must hire bookkeeping experts to ensure accuracy in their financial records. The bookkeeping records must be updated to make it easier for the bankers to make lending decisions. Bookkeepers can help farmers increase productivity by ensuring accurate information in the accounts. By increasing the production of each item, the profits of each farmer will also increase. Thus, by using proper farming equipment financing, farmers will be able to increase productivity.
- Lastly, many farmers would like to invest in modern farming equipment to increase productivity and minimize costs. There are many options available for them to choose from, such as integrated sprinklers, compact tractor ploughs, etc. Although these machines do not increase productivity instantly when properly maintained and used, they can greatly improve the quality of each product. For instance, if there are small gaps in the rows of crops, tractors can be used to plough the soil and remove any weeds. Thus, by using high-quality equipment, farmers will be able to increase productivity and minimize costs at the same time.
Indeed, the market has many types of farming equipment. However, a farmer needs to know how to choose the right equipment based on the type of crops he or she is dealing with. This way, farmers will be able to maximize the profit they can get from each investment. Besides, by making informed decisions when buying used equipment, a farmer will be able to make the most out of his or her investment. Therefore, investing in new equipment should not be seen as something risky; rather, it should be viewed as an investment that will help improve the quality of life and standard of living for the entire family.