Agricultural Machinery Market - Forecast(2024 - 2030)
Agricultural Machinery Market Overview:
The global agricultural machinery
market size is $227.5 billion as of 2023 and is forecast to grow at a CAGR of
around 6.1% going through 2024-2030. The
agricultural machinery market is experiencing a transformative evolution driven
by technological advancements, sustainability concerns, and a growing global
population. As per the Food and Agriculture Organization of the United Nations,
the global population will mark an astonishing 9.1 billion figure by 2050
witnessing a surge of 34%, and to feed these 9 billion mouths global
agricultural expenses in developing countries would amount to $83 billion per
annum. To enhance efficiency and
productivity in agriculture, the industry is witnessing a surge in the adoption
of smart and precision farming technologies. Automation and data-driven
solutions are becoming integral to modern farming practices, optimizing
resource utilization and reducing environmental impact. To counterpart such
unprecedented food production demand coupled with depleting arable land,
efficient and mechanized agriculture is the main objective, and agricultural machinery
is the tool to meet the objectives. Moreover, Sustainability is a key driver in
shaping the future of agricultural machinery. There is a growing emphasis on
developing eco-friendly equipment with reduced carbon footprints. Electric and
hybrid tractors, powered by renewable energy sources, are becoming increasingly
popular, aligning with global efforts to address climate change. Furthermore,
the agricultural machinery market is witnessing a shift towards integrated
farming systems. This involves combining various agricultural activities, such
as crop cultivation and livestock management, to create synergies that enhance
overall farm productivity, these are the factors propelling the agricultural
machinery market growth in the forecast year.
Report Coverage
The report: “Agricultural Machinery
Market Forecast (2024-2030)”, by Industry ARC, covers an in-depth analysis of
the following segments of the Active Wheelchair Market.
By Automation- Fully automatic, Semi-automatic, and Manual.
By Machinery Type- Tractor, Soil Cultivation, Planting, Irrigation, Fertilization, Harvesting, Hay Making, Loader and Agriculture Robots.
By Material Type- Structured steel, Alloyed Steel, Cast Materials, Light Alloy, Wearing Materials, Structured Material, Aluminum, Iron and Glass.
By Geography: North America (U.S,
Canada, and Mexico), Europe (UK, Germany, France, Italy, Spain, Russia and Rest
of Europe), Asia Pacific (China, India, Japan, South Korea, Australia & New
Zealand, and Rest of Asia Pacific), South America (Brazil, Argentina, Rest of
South America) and Rest of The World (Middle East, Africa).
Key Takeaways
In 2023, APAC's
Agricultural Machinery sector dominated with 43% revenue share, driven by
robust demand in India and China due to modernization needs, population growth,
fostering innovation and economic growth.
The global agricultural machinery market has been witnessing
steady growth due to the increasing demand for food and the need for efficient
and modern farming practices.
Tractors and harvesters
remain pivotal in the agricultural machinery market. Technological
advancements, such as autonomous tractors and smart harvesters, are gaining
traction.
Government initiatives and
subsidies for farmers to adopt modern machinery play a crucial role in the
market. Policies promoting farm mechanization and modernization contribute to
market growth.
Precision farming
technologies, including GPS-guided tractors, drones, and sensors, continue to
gain prominence. These technologies help farmers optimize crop yields, reduce
waste, and enhance overall efficiency.
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Agricultural Machinery Market Segment
Analysis – By Automation:
Manual Segment dominated the
Agricultural Machinery Market with a value share of approximately 43% in 2023.
The manual segment of the agricultural machinery market plays a crucial role,
driven by factors such as the utilization of natural forces, availability of
cost-effective labor, and enhanced precision in tasks. In sub-continent
countries like China and India, where manual labor is abundant, the demand for
manual agricultural machinery is expected to surge. The reliance on natural
forces and cost-efficient labor aligns with the economic landscape of these
regions, fostering market growth. Moreover, the emphasis on precision in
agricultural operations contributes to the increasing adoption of manual
machinery, especially in tasks that require a delicate touch or intricate
handling. As these factors converge, the manual segment is poised to witness
substantial demand, reflecting the symbiosis between traditional practices,
economic considerations, and the quest for operational accuracy in the
agricultural machinery market.
Agricultural Machinery Market Segment
Analysis – By Machinery Type:
Based on Machinery Type, the tractor
segment has the largest revenue market share of 29% in 2023. This surge is
primarily fuelled by the imperative need to address labor shortages and meet
the escalating global food demand due to a burgeoning population. Tractors have
emerged as a vital tool for enhancing agricultural productivity in response to
these challenges. Moreover, in 2022, Europe registered approximately 215,000
tractors, with 59,300 falling below 37kW (50 hp) and 155,700 at 38kW and above.
The European Agricultural Machinery Association (CEMA) estimates 165,200 of
these to be agricultural tractors, while the remainder comprises diverse
vehicles like quad bikes, side-by-sides, telehandlers, and other equipment. This
data underscores a thriving market, fuelled by a dynamic agricultural landscape
and a substantial demand for tractor production in the Machinery Market. Moreover,
the emergence of electric tractors presents a promising growth opportunity for
market participants. Electric tractors offer a range of benefits, including
cost-effectiveness, eco-friendliness, and high efficiency. These attributes
make electric tractors an attractive option for farmers looking to reduce their
environmental impact while boosting productivity. As the demand for
agricultural machinery continues to surge, the tractors segment is poised to
maintain its dominance in the market. With ongoing advancements in technology
and a focus on sustainable farming practices, tractors are expected to play a
crucial role in meeting the growing global food requirements.
Agricultural Machinery Market Segment
Analysis – By Geography
Based on Geography, the APAC
Agricultural Machinery accounted for the dominant revenue share of 43% in 2023.
The Agricultural Machinery Market in the Asia-Pacific (APAC) region is poised
for significant growth, driven primarily by the substantial agricultural
activities in countries like India and China. With a large portion of their
population engaged in agriculture, there is a heightened demand for advanced
machinery to enhance productivity and efficiency in the sector. China, with its
vast agricultural landscape, also exhibits a robust demand for agricultural
machinery. The rapid industrialization in the country has led to a shift in
labor dynamics, making the deployment of mechanized solutions imperative for
maintaining agricultural output. For instance, according to the National Bureau
of Statistics of China In 2022, China's agriculture and related industries
contributed 16.24% to the GDP, totaling $ 2724.91 billion an annual increase of
0.19 percentage points. In India, where agriculture plays a pivotal role in the
economy, the demand for agricultural machinery has surged due to the increasing
need to modernize farming practices. Factors such as rising population,
shrinking arable land, and the government's focus on agricultural mechanization
contribute to the heightened demand. The adoption of advanced technologies like
precision farming and smart agriculture practices further propels the need for
innovative machinery. Also, Indian
fiscal policy projects a 3.5% growth for the agriculture sector in FY 2022-23,
indicating positive economic prospects for the country's farming industry, as
per Invest India. Additionally, the increasing adoption of modern farming
techniques and the shift towards larger-scale commercial agriculture contribute
to the demand for technologically advanced machinery in the forecast year.
Agricultural Machinery Market Growth
Drivers:
Government Support and Subsidies
driving the market growth
Government support and subsidies have
become pivotal factors propelling the growth of the Agricultural Machinery
Market. Initiatives such as financial aid, tax incentives, and technology
adoption programs incentivize farmers to invest in advanced equipment,
enhancing productivity and sustainability. This support fosters a conducive
environment for market expansion, driving demand for modern agricultural
machinery as farmers seek to capitalize on these benefits to optimize their
operations and meet the increasing global food demand. Some of the other
factors indirectly but positively influencing the market are agriculture
finance and agriculture insurance initiated by The World Bank to aid the
financially fragile agriculture production sector participants. The World Bank
Group is a leading financier of agriculture, In FY 2023, approved IBRD/IDA
commitments for agriculture and related sectors reached $5.9 billion, with $3
billion dedicated to climate action within new agriculture and food projects,
reinforcing sustainable development and resilience. Moreover, according to the
Indian Directorate of Economics and Statistics, the Ministry of Agriculture's
number of subsidized machines and equipment given to farmers rose from
1,378,755 in January 2022 to 1,388,314 by December 2022, indicating increased support
for agriculture. Other prominent factors equipped with a tendency to support
the agriculture machinery market for exponential growth are a rise in research
and development by various economies sponsored by various organizations such as
The World Bank Group, rise in disposable income of the urban population
creating demand for higher quality and organic agricultural products, and
reduction in global farmland, which require advanced agricultural machinery to
meet copious loads of vigorous production.
Rising Agriculture Mechanization
Rates in Developing Countries
The rising trend of agriculture
mechanization in developing countries is significantly impacting the demand for
agricultural machinery. Faced with challenges such as diminishing land
availability, water scarcity, and a shrinking labor force, these nations are
increasingly adopting mechanized solutions to enhance productivity and
efficiency in agriculture. This shift is fuelling a robust demand for various
agricultural machinery, including tractors, harvesters, irrigation systems, and
precision agriculture tools. Farmers in developing countries are recognizing
the need for modern technology to overcome traditional constraints and optimize
resource utilization. The demand for tractors is surging as they become
essential for plowing, planting, and cultivating large expanses of land
swiftly. For instance, Sonalika International Tractors unveiled 5 new series,
including an e-model, at the Global Partners Summit 200 in Gurugram, featuring
compact designs and advanced emission control systems for global exports. With
compact designs and advanced emission control systems, these innovations cater
to rising agriculture mechanization rates in developing countries, driving
increased demand in the market. Additionally, there is a growing interest in
precision agriculture tools and irrigation systems, reflecting a desire for
optimized resource management and sustainable farming practices. As these
nations embrace mechanization, the agricultural machinery market is witnessing
a substantial upswing, driven by the imperative to secure food production in
the face of resource constraints.
Agricultural Machinery Market Challenges:
High Cost of Agriculture Machinery Limit the Market Expansion
The
high cost of agricultural machinery stands as a formidable impediment to the
growth of the agriculture machinery market. This cost factor encompasses the
initial purchase price, maintenance expenses, and the overall financial burden
on farmers. Small and medium-sized farmers, in particular, find it challenging
to invest in modern, technologically advanced equipment due to their limited
financial resources. Additionally, the evolving nature of agricultural
technology necessitates constant upgrades, exacerbating the economic strain on
farmers. High capital requirements for machinery contribute to a digital
divide, limiting access to innovative tools that could enhance productivity and
sustainability. Addressing this challenge requires concerted efforts from
policymakers, industry stakeholders, and financial institutions to develop
cost-effective solutions, subsidies, or financing options that can alleviate
the financial burden on farmers, promoting the widespread adoption of modern
agricultural machinery.
Agricultural Machinery Market Key
Players Perspective:
Market Landscape
Technology
launches, acquisitions, and R&D activities are key strategies adopted by
players in the Agricultural Machinery market. Major players in the Agricultural
Machinery Market are Deere & Company, Kubota Corporation, Mahindra and
Mahindra Limited, AGCO Corporation., Iseki & Co. Ltd, Escorts Limited
Source, Daedong Industrial Co. Ltd, JCB, Tractors and Farm Equipment Limited,
Sonalika, among others
Recent Developments
In January 2023, John
Deere commemorates its 25th anniversary in the industry by unveiling 7 new
tractors and 3 implements in India, showcasing the latest Power and Technology
4.0 edition. The celebratory launch includes a special limited-edition tractor,
the John Deere 5045 D Power Pro 4WD V3, alongside tailored solutions for
specific crops, promising Indian farmers enhanced efficiency and productivity.
In August 2023, Mahindra
and Mahindra unveiled 7 lightweight tractors under the OJA platform in Cape
Town, South Africa, in partnership with Mitsubishi Mahindra Agriculture
Machinery, Japan. Ranging from 20 hp to 40 hp, these models will soon be
introduced in India, with larger utility tractors expected next year
In September 2022, AGCO
Corporation introduced the latest Fendt 300 Vario tractors to North American
farmers in early 2022, enhancing agricultural efficiency with advanced
technology and performance.
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