The global agriculture equipment market is disrupting traditional agricultural practices such as seeders, tillage, and plowing with the introduction of advanced machinery aided by digital technology. For instance, agriculture machinery manufacturers are now concentrating more on adoption of software and technologies including Google Earth, Global Positioning Systems (GPS), and robotic systems into present equipment in a bid to improve productivity. An increase in the global population is increasing demand for food, thereby placing pressure on agriculturists to innovate upon time and cost-efficient methods of production. According to the Food and Agriculture Organization (FAO) of the U.N., the demand for food will increase by 70% by 2050 and $80 billion annual investment will be required to meet the goals. The rapidly increasing demand for food coupled with growing adoption of technology-driven farm machinery is anticipated to propel the agriculture equipment market globally. The global Agriculture Equipment Market was valued at $145.89 billion in 2018, and is anticipated to grow with a CAGR of 7.56% throughout the forecast period 2019-2025.  

Growth in agricultural equipment manufacturing driven by technological advancements

Farmers are gradually becoming tech-savvy and adoption of GPS-enabled products and machinery equipped with telematics are anticipated to spur rapid growth of the agriculture machinery application. Advanced agricultural equipment such as autonomous tractors, flying drones, and agriculture robots aid farmers in producing food at low costs and fulfill the growing demand for food worldwide.

·     Autonomous Tractors 

Driverless or autonomous tractors use GPS and other wireless-enabled technologies to cultivate land without the need for a driver. These vehicles deliver a high torque rate at slow speeds and are mainly used for tillage in farming. Using GPS technology, automation software manages the path of the vehicle and controls farming implements. With the aid of positioning devices and computers, farmers could use tractors more efficiently, which in turn, increases the agricultural equipment market around the globe.

For instance, in September 2017, Mahindra & Mahindra Ltd. launched its first autonomous vehicle in the market. The tractor features remote engine start and stop options. These technological innovations are driving adoption of tractors in farming to increase productivity.  

·     Agricultural Drones 

Unlike commercial drones, an agricultural drone or unmanned aerial vehicle (UAV) is applied in crop production for digital imaging, multispectral images, and near-infrared view of crops. In order to increase crop production and monitor growth, agricultural drones are applied in the agricultural sector. Owing to their benefits in the agriculture sector, these drones find a gamut of applications for field mapping, agricultural photography, and crop analysis processes. The key application of agricultural drones is found to be crop scouting. Agricultural drones are also used for spraying insecticides and pesticides in farms, which in turn, reduces the time spent by farmers in inspecting insect growth, thereby boosting the agricultural equipment market.

·     Agricultural Robots

At the harvesting stage of crops, agricultural robots are deployed to the farms. Robots are mainly used for weed control, planting seeds, cloud seeding, soil analysis, and environmental monitoring applications. Robots can also be used to automate manual tasks in the farms, such as weed spraying. For attaining lower production costs and a decreased need for manual labor, agricultural robots are highly recommended in the modern age agricultural procedures

The APAC region held the largest share in the agricultural equipment market, accounting for 48.78% share in 2018. The agriculture equipment market is earning tremendous revenue due to the huge technological advancements in the agriculture sector. Countries such as India, China, and Japan are leading the market owing to remarkable growth in the industrial sector. According to the Federation of Indian Chambers of Commerce and Industry (FICCI), the Indian agriculture sector contributes nearly 14% to India’s GDP. In India, a rise in rural and urban incomes, diverse agricultural climatic conditions and a large presence of agricultural land are the key factors driving market growth.

The application segment that will be creating the most lucrative opportunities for agriculture equipment is harvesting, which is projected to grow at a CAGR of 9.23% over the forecast period. Harvesting machinery can decrease dependence on labor, prepare the soil for planting seeds and can meet the increasing demand from the urban population.

Factors Driving Agricultural Equipment Market

·     Farm Labor Shortage

There is a discernible dearth of farm labor worldwide. This labor scarcity is spurring farm owners to invest in technology-alternatives, and one of them is agricultural drones. As mentioned above, this alternative labor saves a lot of time and ensures reliable performance. Perceptibly, low-wages will further reduce the employment of labor in the agricultural sector, which will drive the agricultural equipment market.

·     Ease of Financing

The World Bank Group is a leading financier of agriculture worldwide, with $6.8 billion in new IBRD/IDA commitments in 2018. Agriculture finance and insurance initiated by the governmental and non-governmental organizations aid the financially fragile agriculture sector participants. This increases the capability of farmers for buying more agriculture equipment for their farming needs.

·     Rise in income

Rise in disposable incomes of the urban population is creating demand for higher quality and organic agricultural products, and a reduction in global farmland, which requires advanced agricultural machinery to meet numerous loads of vigorous production.

·     The Advent of Contract Farming

In contract farming, agricultural production is carried out on the basis of a contract between farmer and buyer. Additionally, it enables farmers to get the benefit of technology, financing, training with the contractor’s support. Contract farming is anticipated to facilitate adoption of mechanized farming procedures.

Major Players in the Agriculture Equipment Market:

Prominent players in the agriculture equipment market include AGCO, CNH Industrial N.V., Iseki & Co., Ltd., Bucher Industries, Claas KGaA Mbh, Deere & Company, Escorts Ltd., J C Bamford Excavators Ltd., Kubota Corporation, Mahindra & Mahindra Ltd., SDF S.P.A., Tractors & Farm Equipment Limited, and Zetor Tractors A.S. These companies are continuously focusing on R&D investments, mergers and acquisitions, and partnership strategies to gain ground in the global market.

Promising Mergers & Acquisitions

Mergers and acquisitions are among the other key strategies adopted by players to stay ahead of their competitors. AGCO, a U.S.-based agricultural equipment manufacturer, which manufactures Valtra and other farm machinery brands, accounted for revenues close to $10 billion in 2018. AGCO merging with Fendt, a German manufacturer of agricultural tractors and machines has embarked upon several milestones. Such joint ventures aid market players expand their geographical boundaries and accentuate their footprint in the global agriculture equipment market.

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Related Reports:

·     India Farm Equipment Market

·     Agricultural Drones Market


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