Agriculture Equipment Market

Market Overview

The global agriculture equipment market size was valued at USD 2,43.77 billion in 2021. It is expected to reach USD 4,16.08 billion by 2030, growing at a CAGR of 6.12% during the forecast period (2022–2030). Increased mechanization in the agriculture sector and rising demand for agricultural products stimulate market growth.

The presence and viability of the global agriculture equipment market on a global scale determine its share value and dominance. Subsidies on seeds, fertilizers, loans, equipment improvements, etc., support global agriculture. The global farm equipment market has a bright future due to contributions from diverse economies, which fund sales and recognize the necessity for a flexible market. Local retailers balance the market with income and relationships, and top businesses improve these marketplaces' competitiveness and desirability.

Market Dynamics

Market Drivers

Increased Mechanization in Agriculture Sector

Increased mechanization benefits the agricultural industry and the global agriculture equipment market. Tractors, harvesters, bullock-powered mechanisms, hand tools, and power-driven equipment have revolutionized agriculture and contributed to the growth of the global market. Mechanization of agriculture would make it easier to produce and consume food while maintaining a suitable and palatable level of quality. Therefore, the mechanization of the agricultural market and industry aids in the forecasting of future growth.

Rising Demand for Agriculture Products

The increased demand for crops and food due to the growing world population forces farmers to produce as much as possible with minimal labor. The need for agricultural equipment is driven globally by unfair pressure and land ownership disputes. The global agriculture equipment market assists farmers in increasing crop productivity and profit through tools, innovations, and technology.

Technological Advancements

Massive innovation, investment, and dispersion of varied agricultural technologies drive the global market. Big Data, Artificial Intelligence, the Internet of Things, and other advancements in planting and harvesting machinery benefit farmers. Farmers are informed about the benefits and uses of these technologies. Farmers are encouraged and instructed to adopt technology-enabled farming tools like tractors with GPS software, telematics, and sales forecasting.

Restraining Factors

Financial Crises Faced by Farmers

Despite an improvement in agriculture, the economy remains lagging.

The financial struggles of the farmers hamper the global market for agriculture equipment. Farmers sometimes struggle to pay their taxes and obligations, and they battle with pricey equipment, high-tech solutions, and integrating technology into their present equipment. The government subsidizes farmers, but their regional structure inhibits market growth. The COVID-19 outbreak and restrictions prompted massive agricultural, cultivation, and perishable item losses, leading the global agriculture and farm equipment market into a short but brutal downward spiral. Costs of raw materials are rising, which is another source of increased concern.

Lack of Skill in Operating and Maintaining the Agricultural Equipment

Farmers struggle with handling, portability, use, maintenance, and general upkeep of technology-driven and embedded equipment. This equipment adds to farmers' complexity, and their reluctance stems from expensive maintenance and damage recovery. The government is developing in-house training. The ability of training programs to reach rural areas and farmers' resistance to newer, technologically dependent products and services are significant barriers to the global agriculture equipment market.

Market Opportunities

Positive Government Initiatives Across the Globe

Government support for agricultural equipment could help the sector grow. China's economic, social, and governmental development are driven by mechanized agriculture. Foreign-Chinese joint ventures work to close the gap between imported and domestically produced items. China's market profitability has increased due to encouraging private investment and providing subsidies for purchasing agricultural equipment. Regional government programs enhance agricultural equipment markets as agricultural equipment emphasizes efficiency, yield, and quality. It provides mechanized solutions to boost agricultural productivity and profitability, maintain food supply, and boost farmer wages. Food production, agricultural product demand, and government promotion will raise demand.

Rising Demand for Agricultural Rental Equipment

There must be sufficient harvests and an increase in supply in both quantity and quality to satisfy rising food demand. Agriculture equipment improves yield and quality. As small farmers fear crop prices, several governments rent these items from businesses globally. Kwipped Inc., JFarm Services, Mahindra & Mahindra Ltd. (TRRINGO.com), and Macallister Rentals rent agricultural equipment. Several startups are introducing agricultural applications and facilities that let farmers rent reliable, economical equipment. These applications let farmers connect with local rental suppliers.

Regional Analysis

Asia-Pacific Dominated the Global Agriculture Equipment Market

The global agriculture equipment market is segmented into five regions, namely North America, Europe, Asia-Pacific, Latin America, and the Middle East and Africa.

Asia-Pacific holds the most significant market share and is expected to grow at a CAGR of 6.63% during the forecast period. Farmers receive subsidies from governments opting for mechanization. The subsidy offer involves all stakeholders such as the central and state government, state agriculture industries, machinery manufacturers, dealers, importers, and farmers. Easy credit availability is feasible for farmers via many financial institutions, supportive government policies, and subsidy programs. Various concessions from regional governments, such as the exclusion of excise taxes on tractors, have aided small farmers in purchasing agricultural machinery.

Europe is predicted to grow at a CAGR of 5.34%, generating USD 60,240.02 million during the forecast period. Britain, Germany, France, Italy, the Netherlands, Spain, Denmark, and Russia constitute the global agriculture market in Europe. Government initiatives to encourage agricultural equipment usage will support the regional market development. The UK and other European nations have an FTA with zero tariffs and quotas. The local market benefits from producing local and specialized items by Horsch LLC and Maschio Gaspardo S.P.A. As a result of Brexit, Britain will trade with the EU under WTO regulations rather than EU norms, imposing substantial import and export levies on farm equipment, which will benefit British enterprises.

The abundant availability of farmland in North America is mainly driving expansion, which has resulted in a significant need for agricultural mechanization. Growing livestock farming in the area is also expected to add to market demand during the forecast period. Furthermore, the area is seeing a rise in intelligent combine harvesters outfitted with monitoring equipment to boost agricultural production. The rising labor costs, incorporation of robotic and global positioning systems (GPS) in tractors and harvesters, increased demand for high-capacity machinery due to large farms, and the growing popularity of self-propelled machines are all expected to drive market growth during the forecast period.

Segmental Analysis

The global agriculture equipment market is segmented into product and application.

Based on product, the global market is classified into tractors, harvesters, planting equipment, irrigation and crop processing equipment, spraying equipment, hay and forage equipment, and others.

The tractors are expected to hold the highest market share and grow at a CAGR of 6.74% during the forecast period. The rising need for food has made tractors necessary in agriculture to increase production. Farm mechanization and precision farming in Asia-Pacific and Latin America have boosted the tractor industry. Electric tractors are expected to boost the farm equipment industry as they are cost-effective, eco-friendly, and highly efficient. Companies are developing technologically sophisticated solutions to these problems and encouraging electric tractor usage. Consumer understanding of electric tractors' long-term advantages should boost their uptake.

The adoption of harvester helps farmers to increase their farm production in a short time at low costs. Farmers are turning to agricultural mechanization as a result of the workforce crisis in agriculture caused by rapid urbanization worldwide. Innovations in harvesting equipment are anticipated to favor market growth over the next few years. The rising popularity of smart combine harvesters and the integration of smart actuators into existing combine harvesters are also contributing to market growth. Smart combine harvesters enable farmers to monitor the grain flow rate and better control harvesting applications. In light of these factors, farmers and contractors are inclined toward smart combine harvesters over conventional harvesters. However, the high initial and maintenance costs are anticipated to hinder their adoption during the forecast period.

The planting equipment segment is further categorized into row crop planters, air seeders, grain drills, and others. The paradigm shift from conventional tillage to no-tillage practices has led to the growth of planting equipment. No-tillage refers to farming practices wherein seeds are directly planted into the soil. This practice is expected to favor the growth of the planting equipment segment.

Sprayers are essential equipment used in agriculture to spray pesticides and herbicides on crops. Large farmers extensively use blowers, truck-mounted sprayers, and self-propelled sprayers in developed regions where the size of the farm is more than 10,000 hectares. However, the adoption of sprayers is expected to be lower in Asia-Pacific due to the high cost of ownership and financial constraints of farmers. More than 80% of farms are less than 10 hectares in Asia-Pacific, indicating that small and marginal farmers dominate agricultural lands. These farmers are primarily equipped with conventional or legacy sprayers and are reluctant to adopt sophisticated products.

Based on application, the market is divided into land development and seedbed preparation, sowing and planting, weed cultivation, plant protection, harvesting and threshing and post harvesting, and agro-processing.

Land development and seed bed preparation hold the highest market share and are expected to grow at a CAGR of 6.63% during the forecast period. The land development and seedbed preparation encompass tractors with several other implements such as levelers, plows, dozers, ditchers, and others. Rapid urbanization across the economies leads to a shortage of laborers, increasing the demand for sophisticated agricultural machinery on farms. Moreover, the promotion of farm mechanization and rising adoption of precision farming in the regions such as Asia-Pacific and Latin America favor the market growth.

Recent Developments

• May 2022- AGCO Corporation acquired JCA Industries.
• April 2022- Green Tech, a subsidiary of JLD Lagu, is Fliegl Group's news sales partner.
• April 2022- The Centaya-C is a new pneumatic harrow-mounted seed drill by AMAZONE.
• March 2022- In Illinois, Agrisolutions purchased Chicago fastener manufacturing.