Global Agriculture Equipment Market is Estimated to Witness High Growth Owing to Increased Mechanization and Growing Export Demand
The global Agriculture Equipment Market is estimated to be valued at US$ 171.03 Bn in 2024, exhibiting a CAGR of 5.65% over the forecast period (2024-2031). Mechanization has picked up pace in both developed and emerging countries leading to increased demand for agriculture equipment. Furthermore, favorable government policies for farm mechanization and expansion of cultivated land are also boosting the market growth.
Market Dynamics:
The growth of the global agriculture equipment market is driven by the growing export demand for agriculture products and increasing focus on farm mechanization. Emerging countries are adopting advanced farming techniques and machinery to boost productivity and meet the rising food demand. Governments in various countries are also offering subsidies and low interest loans for purchasing agriculture equipment to encourage mechanization. This has prompted more farmers to procure high-capacity equipment such as tractors, harvesters, drones, etc. Furthermore, focus is shifting towards precision farming and smart agriculture using GPS, IoT and other technologies. Leading equipment manufacturers are developing autonomous and driverless tractors, harvesters, and other equipment with advanced embedded systems. Such innovations are expanding application areas of agriculture equipment.
Automation and precision farming are driving the adoption of advanced equipment
One of the major drivers for the global agriculture equipment market is the increasing adoption of automation and precision farming technologies. Advanced agriculture equipment comes equipped with technologies like GPS, sensors, and software that enables precision seeding, fertilizing, spraying and harvesting. This precision farming allows farmers to optimize resource use like water, fertilizers and weedicides. It helps increase yields while reducing costs. Agriculture equipment manufacturers are launching newer autonomous machines that provide automated steering and operation. This reduces labor needs and increases productivity. For example, John Deere's 8R tractor series launched in 2021 features auto-guidance and precision agriculture capabilities. Such advanced equipment is driving higher demand among large-scale commercial farmers globally.
Government subsidies promoting mechanization of farming activities
Government subsidies and financial support measures in many countries are another key driver propelling the agriculture equipment market. Several nations offer subsidies and low interest loans specifically aimed at promoting farm mechanization. This helps small and marginal farmers afford advanced machinery that was previously out of their reach. For instance, the Indian government allocated $16.5 billion in 2021 towards its farm mechanization program. This program offers 60% subsidy on purchase of agriculture equipment and tools. Similar subsidy programs exist in China, Brazil and European Union nations. Such financial assistance programmes by governments are encouraging higher rates of farm mechanization worldwide and boosting sales of agriculture equipment.
High initial costs restraining market growth in developing regions
One major restraint for the global agriculture equipment market is the high initial capital costs involved, especially for small and marginal farmers. Advanced agriculture machinery ranging from tractors to harvesters comes with substantial price tags which can run into several thousands of dollars. This poses affordability challenges for low-income farmers in developing regions of Asia, Africa and Latin America. Even used or pre-owned agriculture equipment available in these markets may not be cost effective for small landholding farmers. The high upfront investment requirement puts latest machinery out of reach for a large section of agriculture dependent populations globally. This cost factor limits faster adoption rates in the developing world.
Dependence on seasonal demand cycles
Agriculture equipment demand shows pronounced seasonality and is dependent on planting and harvesting cycles for major crops. The market typically witnesses peaks during sowing and harvesting seasons when there is substantial equipment requirement. However, off-seasons see subdued demand. For manufacturers, this uneven demand pattern poses challenges regarding production planning and efficient capacity utilization. It also risks oversupply during specific months. The seasonal and cyclical nature of agriculture production and corresponding equipment needs act as a restraint on stable growth prospects for suppliers in the long-run. They need to effectively manage inventories and sales forecasts based on crop-wise schedules.
Mechanization opening up new growth avenues
One key opportunity for agriculture equipment manufacturers lies in mechanizing farm activities still predominantly done manually in developing markets. Large parts of Asia Pacific, Africa and Latin America still rely on traditional farm equipment and manual labor for activities like weeding, plant protection and post-harvest handling. Mechanizing such operations presents a sizable untapped market potential. Agriculture equipment players can capitalize on this by launching affordable, customized machinery for smallholder farmers. Partnerships with governments and local agri-inputs companies will help penetrate rural agriculture dependent regions at scale.
Precision farming solutions presenting new revenue streams
Advanced digital technologies applied to farming activities are opening up new opportunity areas for agriculture equipment suppliers. Precision farming relies on integrated hardware-software solutions that collect field data, monitor crop health and optimize input use. Equipment manufacturers are well-placed to offer such data-driven precision solutions alongside their machinery lineups. This allows diversifying beyond traditional equipment sales into recurring software and service revenues over the lifecycle of farms. Companies investing in precision farming technologies can tap growing demand for such digitized approaches to commercial agriculture globally.
Link - https://www.coherentmarketinsights.com/market-insight/agriculture-equipment-market-1453
Key Developments:
- In May 2023, AMAZONE, a leading manufacturer of agricultural machinery, announced the addition of two new advanced trailed precision air seeder models to its Precea product line. The Precea 12000-TCC and 9000-TCC have been designed specifically for large-scale farms and contractors, featuring increased working widths of up to 12 meters and higher output capabilities to meet the demands of high-acreage operations.
- In April 2023, AGCO Corporation, a global leader in agricultural equipment and precision Ag technology, announced a strategic collaboration with Hexagon to expand its factory-fit and aftermarket guidance offerings. The new guidance system, named Fuse Guide, will be commercialized on Valtra and Massey Ferguson tractors, leveraging Hexagon's advanced technology to enhance precision farming practices.
- In April 2023, HORSCH, a leading manufacturer of agricultural machinery and implements, inaugurated its new plant in Curitiba, Brazil. The plant features the assembly lines for single grain seed drills and tillage machines, as well as a development facility for crop care technology.
- In February 2023, Kubota Corporation, a leading manufacturer of agricultural machinery, announced that it had taken an equity stake in Chouette, a Franch-based AgTech startup that uses artificial intelligence (AI) to analyze images captured by cameras in vineyards. Chouette's unique algorithms detect diseases and tree vigor, and then create prescription maps to optimize the use of inputs like pesticides and water, helping growers reduce environmental impact while improving vineyard management efficiency.
Key Players:
AGCOCorporation, Agromaster, Amazone Inc., APV GmbH, Bellota Agrisolutions, CLAAS KGaA mbH, CNH Industrial N.V., Deere & Company, Escorts Limited, HORSCH Maschinen GmbH, ISEKI & Co., Ltd., J C Bamford Excavators Ltd, KUBOTA Corporation, KUHN SAS, and LEMKEN GmbH & Co. KG
