AGRICULTURE AND FARM MACHINERY MARKET ANALYSIS

Market Challenges And Opportunities

Global Agriculture and Farm Machinery Market Drivers:

Increasing demand for food worldwide is expected to drive growth of the Global Agriculture and Farm Machinery Market during the forecast period

The demand for food is increasing across the globe significantly. This is due to rising global population and growing disposable income. Increased demand for food has encouraged farmers to adopt modern farming practices, in order to increase crop yields thereby boosting the demand for agriculture machinery globally. In Asia Pacific, countries such as India and China are witnessing the shift in overall population. Growing population is responsible for increasing food demand in Asia Pacific, which in turn will fuel the demand for agricultural machinery for farm production in this region. Thus, these factors are expected to drive growth of the Global Agriculture and Farm Machinery Market during the forecast period.

Growing mechanization of farming operations is expected to propel to Global Agriculture and Farm Machinery Market growth over the forecast period

Many farmers across the globe are adopting advanced machinery for farming operations. The mechanization of farming operations results in increased production and profitability by achieving timelines in farming operations. Farm mechanization also helps to preserve the farm produce thereby increasing profitability and cost-effectiveness by reducing post-harvest losses. These processes reduce wastage, increases shelf-life, and results in value addition and higher-income transfer to the farmers from different classes of consumers. According to Agrievolution VDMA, the sales of new tractors in Asia Pacific for India and China collectively in 2011 were 840,000 units. Hence, these factors are expected to propel the market growth in the near future.

Global Agriculture and Farm Machinery Market Opportunities:

Availability of subsidies to by government to promote adoption of farm machinery can present business opportunities

Since these equipment are substantially expensive and farmers alone cannot afford it, many government authorities are offering subsidies to encourage its adoption. For instance, the Government of India initiative for promotion of agriculture mechanization includes a subsidy of 25% to 50% of the cost of equipment/machine. The subsidies are available to all categories of farmers under various schemes of Department of Agriculture and Cooperation such as the Rashtriya Krishi Vikas Yojana, National Horticulture Mission, and Macro Management of Agriculture.

Innovations in the field of autonomous tractors can provide lucrative growth opportunities

Many manufacturers are focused on technological advancements. Advanced technologies are being incorporated in tractors and harvesters. Advent of autonomous tractors has provided numerous opportunities. Autonomous tractors are GPS-directed and hence can perform extensive applications with improved accuracy.

Global Agriculture and Farm Machinery Market Restraints:

High cost and low purchasing power is expected to restrain growth of global agriculture and farm machinery market during the forecast period

Farming and agriculture machinery is significantly expensive. Machineries such as cultivators, tractors, harvester, crop spray, and trailers require significant capital investment. Not all farmers can afford such heavy equipment due to low purchase power, especially farmers from emerging economies such as India, Brazil, Indonesia, and South Africa. As a result of this, the demand for these machineries is low in emerging regions such as Latin America and Middle East. Thus, these factors are expected to restrain growth of the market during the forecast period.

Rising urbanization and decreasing farmlands is expected to hinder the global agriculture farm machinery market growth over the forecast period

Over the years, farmlands have been turned into commercial properties due to rising urbanization across the globe. These farmlands are being used for business investments such as housing, hotels, and shopping centers. This has an indirect impact on the use of agriculture and farm machinery. It has become challenging for individual farmers to own heavy equipment due to diminutive size of farmlands since return on investment takes a considerable amount of time. Hence these factors are expected to hinder the Global Agriculture and Farm Machinery Market growth in the near future.