AR in Agriculture Market

Market Overview

The global AR in agriculture market size was valued at USD 1.24 million in 2022. It is estimated to reach USD 21.36 million by 2031, growing at a CAGR of 37.2% during the forecast period (2023–2031).

The immersive technology known as augmented reality (AR) enables data and virtual objects to be displayed or superimposed on real-world items known as displays. Agricultural practices are one of the most primitive forms of industry operation, as some of the practices within the spectrum are the same as they used to be centuries ago. Augmented reality (AR) is one of the primary technologies that could increase agriculture's overall efficacy.

AR is expected to act as a tool in reshaping modern agricultural practices. It can combine other tools and technologies, such as the Internet of Things (IoT), automated machinery, predictive analytics, precision algorithms, and artificial intelligence (AI). It brings all the information and data from other technologies under a single platform. Therefore, AR can enhance the capabilities of different technologies deployed in agriculture. AR can also be deployed at every node in the agricultural supply chain, starting from manufacturing and maintaining equipment, agricultural production, development of seeds and chemicals, storage and warehousing, livestock monitoring, agricultural marketing, and education.

Highlights

• Indoor farming dominates the application segment
• Software dominates the solution segment
• North America is the highest shareholder in the global market

Market Dynamics

Global AR in Agriculture Market Drivers

Growing Necessity to Increase Efficiency in Farm Operations

According to the report published on Global Food Crises 2019 by Food and Agriculture Organization (FAO), across 55 countries, almost 155 million people in 2020 were in a crisis due to food scarcity. Nearly 28 million people were in an emergency and worse situation, mainly in Afghanistan, the Democratic Republic of the Congo, Sudan, and Yemen. Therefore, increasing food demand has been a concern for many governments worldwide. As a result, one of the largest socioeconomic issues the world is currently facing is food security.

Technology advancements in augmented reality, data analytics, autonomous machinery, and artificial intelligence are predicted to improve agricultural productivity. This might help in improving food security globally. Additionally, as per the projection made by the FAO, 9.2% of the world population, amounting to 700 million people, faced food insecurity in 2018. Besides reducing the availability of food grains and animal products, climate change and natural disasters/pandemics such as COVID-19 also increase food insecurity. Therefore, the factors mentioned above propel the market growth.

Growing AR Adoption Amid Digitization

Industry 4.0 led to an increase in the adoption of all possible digital technologies across sectors worldwide. Industry 4.0 gradually became an umbrella term for almost all the digital technologies that contribute to the development of modern enterprises. This led to the formation of various research and development programs, which started the integration of Industry 4.0 technologies into non-industrial or non-mechanical economic sectors such as agriculture, banking, financial, services, and insurance (BFSI), and education and entertainment. Amid the increased adoption of Industry 4.0, agricultural practices were facing inevitable challenges that led to the increased adoption of digital technologies in agricultural practices. Apart from this, the growing influence of Industry 4.0 has led to the development of a term called Agriculture 4.0, which is foreseen to represent Industry 4.0 in agriculture. Growing digitization is expected to impact the adoption of AR in agriculture significantly.

Global AR in Agriculture Market Restraint

Limited Focus on Agriculture Applications

Since 2008, immersive reality has been commercially produced, including augmented reality. These technologies have grown over the previous five years and are anticipated to continue growing over the next five due to the ongoing trends of digitalization and Industry 4.0. However, the development is limited to specific applications only. For example, gaming is the largest industry where immersive technologies, especially AR and VR, have a considerable impact.

Nevertheless, specific industries and applications have huge potential, but developers must focus more on them. Agriculture is one such industry where augmented reality has enormous potential; however, the market has yet to reach 1% of its potential. This is because digital technologies in agriculture are still relatively unpopular worldwide, leading to limited investment, a shortage of relevant enterprises, and slow market expansion.

Global AR in Agriculture Market Opportunities

Growth in the Adoption of Precision Farming and Smart Farming Methods

One of the key trends the agricultural industry is currently witnessing is the growth in the adoption of precision and smart farming methods globally. These methods employ IoT, AI, drones, robots, sensors, and variable rate applicators. Augmented reality can also be deployed with precision agriculture methods, independently or integrated with the solution. Precision agriculture has recently witnessed a tremendous investment increase, evident from the patents filed since January 2017. The total number of patents filed in the market between January 2017 to July 2021 is 2896. This suggests that the industry is putting much effort into adopting these methods.

Furthermore, augmented reality only applies in agriculture if it provides substantial returns. Augmented reality is just a means to relay computer-generated information into the real-world using display screens. However, regarding agriculture, computer-generated information could be data collected from various sensors, live feed from drones and autonomous machines, or weather forecasts. Augmented reality has more value when integrated with information production technologies; thus, the growing demand for precision agriculture and smart farming techniques will act as an opportunity for AR in the agriculture market.

Regional Analysis

Based on region, the global AR in agriculture market is bifurcated into North America, Europe, Asia Pacific and Japan, the U.K., China, Asia-Pacific (APAC), and Rest-of-the-World (RoW).

North America Dominates the Global Market

North America is the most significant global AR in agriculture market shareholder and is anticipated to exhibit a CAGR of 39.8% over the forecast period. North America is one of the most well-known regions for digital technology adoption in the agriculture market. The region is one of the largest markets for the entire immersive reality ecosystem leading the world in development due to the presence of market-leading AR development companies such as Microsoft and Google. It is also home to some of the largest agricultural original equipment manufacturers (OEMs), such as John Deere, AGCO, and Massey Ferguson. In addition, John Deere and Massey Ferguson have launched AR applications for consumers to experience their products in real life without needing a physical machine. AGCO has implemented AR smart glasses in its production lines and has reported a 25% reduction in production time on low-volume and complex assemblies. Such case studies suggest that these companies are willing to invest in the technology, which will also impact farmers' adoption. Further, the growing popularity of agricultural technology among farmers in the region is a key growth enabler for the market.

Europe is estimated to exhibit a CAGR of 30.9% over the forecast period. Europe has a mature industrial and commercial ecosystem and is a pioneer in adopting Industry 4.0 technologies, including AR. The Europe market also enjoys support from EU initiatives. The European Union started various projects with a total budget of USD 27.4 million in 2019 under the XR4all initiative. This will eventually lead to multiple new developments and boost the entire spectrum of extended reality, including AR. The European Union has recognized the advantages of implementing technology in the agricultural sector, and through consistent policy implementation, it has somehow positively fostered a culture in EU countries. Simultaneously, many companies and universities continuously develop products that increase knowledge among growers and cultivators. Therefore, the region is expected to see enormous demand for AR in agriculture with government backing and increased awareness in the coming years.

The Asia-Pacific and Japan region has one of the biggest economies in the world, with more than one-third of the total population living in the region. Historically, the region has always been an opportunity for new technological advancements. Due to the high population and diversified demographics, adopting any technology would mean a widespread acceptance of products amongst one-third of the world's population. In addition, the region has some of the very fast-growing economies in the world. The growing purchasing power and standard of living in the region have led to the widespread adoption of smartphones, which could have a massive impact on the market in the future.

The Rest-of-the-World includes countries in South America and the Middle East and Africa. Since the past decade, the Middle East and Africa region has been developing as a global economic hub, especially the Middle East. The region is the leading oil and gas producer, among other mined minerals. However, the entire Middle East expects Iran to have agricultural capabilities, and they mostly rely on exports from other countries. That is why AR in agriculture has minimal scope in the Middle East. In addition, Africa has some of the most agriculture-dependent economies, such as Ethiopia, Liberia, Sierra Leone, Chad, and the Central African Republic. Almost all these countries have a high dependence on agriculture, which accounts for more than 40% of the GDP. These countries have a better future in the AR in the agriculture market.

Furthermore, South America is one of the laggards regarding infrastructure and technological developments; however, it is one of the high-potential markets. The region has been facing an economic slowdown for the past couple of years. Countries such as Brazil, Argentina, Columbia, and Chile have all witnessed an economic recession. Nevertheless, governments are putting a lot of effort into modernizing agriculture practices in the region, enhancing market growth.

Segmental Analysis

The global AR in agriculture market is segmented by application and solution.

Based on application, the global AR in agriculture market is bifurcated into outdoor farming and indoor farming. 

The indoor farming segment dominates the global market and is predicted to exhibit a CAGR of 36.0% over the forecast period. Outdoor farming is a collection of practices performed outside containment or on large fields and land. These farming practices are very conventional, and in some parts of the world, still practiced in a way that is centuries old. Most of these farming practices have stayed the same except for adopting mechanized agriculture equipment such as tractors, combines, and harvesters. However, the agriculture industry has a massive potential for digital transformation as agriculture is a trillion-dollar industry, as per Goldman Sachs, which suggests the enormous size and potential of prospects. In addition, augmented reality can integrate with other digital technologies such as big data analytics, IoT and sensors, AI, and other relevant technologies. This gives augmented reality an edge in terms of operability. Apart from this, augmented reality can be deployed in the entire value chain of agriculture, supporting various crucial operations such as batching, input/feed calculation, and harvesting.

Indoor farming is referred to as the future of urban agriculture, or it can also be seen as an alternative conventional commercial farming practice. As the global population increases exponentially, the total food supply must be increased; otherwise, food shortages could cause significant sociopolitical problems. Many indoor farming techniques include vertical farming, aquaponics, hydroponics, and terrace farming. These farming techniques offer a wide range of benefits over commercial farming techniques. In addition, AR could play a significant role in indoor farming practices. Since farming is a labor-intensive operation, AR can reduce the dependence on labor by increasing the efficiency of a single person. Time-consuming jobs like monitoring the health of plants could become more effective using AR because it expands the region under surveillance. It can help fetch necessary information from sensors and help immediately deploy essential input/feed.

Based on the solution, the global AR in agriculture market is segmented into hardware, software, and service. 

The software segment owns the highest market share and is predicted to exhibit a CAGR of 35.2% during the forecast period. AR software and platform tools play a supportive role in visualizing computer-generated experiences through dedicated hardware. AR can be directly deployed through these platforms and tools on various mainstream devices such as smartphones and tablets. These platforms play a huge role in the growth of AR adoption and popularity. In addition, the evolution of platforms and tools, such as ARcore and ARkit developed by Google and Apple, have led to the mass development of applications and tools dedicated to smartphones and tablets, becoming a pivotal contributor to AR in agriculture market. AR development packages include tools and platforms, also known as software development kits (SDKs). Further, many investments are also driving the development of SDKs, which will further push the growth of the augmented reality market and eventually become a driving force for the adoption of AR in agricultural practices.

AR, unlike virtual reality, does not require specialized hardware. AR applications can be deployed on mainstream smartphones and tablets. However, specific applications, such as field monitoring, equipment handling, and maintenance, require more interaction. This makes AR hardware crucial for such applications. Almost all dedicated AR hardware has transparent lenses, as the objective of AR is to overlay virtual information into the real world. In addition, AR devices include displays, sensors, and various haptics components that allow users to interact with the 3D holographic content and information displayed. AR hardware includes head-mounted displays, such as smart glasses and near-eye display headsets, and AR-based head-up-display that have a wider field of view.

Recent Developments

• March 2023- Raven Industries announced that it would commence the strategic integration of Augmenta following the acquisition of the machine vision business by Raven's parent company, CNH Industrial. This innovation substantially expands the company's comprehensive automated technologies by introducing Sense & Act capabilities for variable rate crop spraying applications.

• March 2023- CNH Industrial, an Italian-American heavy machinery manufacturer, acquired Augmenta, a France-based company that automates agriculture, to accelerate the development of its innovative Sense & Act technology.