The Total Addressable Market (TAM) for precision farming was valued at USD 6.4 billion in 2021. It is expected to reach USD 18.47 billion by 2030, growing at a CAGR of 12.50% during the forecast period (2022–2030). A farming management concept called "precision farming" is based on monitoring, measuring, and acting in response to crop variability within and between fields. Precision farming techniques are expected to become more widely used as they help farmers accurately manage field variations, increase productivity, and lower production costs. By examining real-time data about the state of the soil, the crops, and local weather forecasts, these practices assist in gathering pertinent information and give farmers actionable insights with recommendations for crop rotation, soil management, and the best times to plant. Precision farming technology is gaining traction in the agricultural sector due to its potential to boost crop yield by utilizing cutting-edge IT-based agriculture techniques.
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Growing Conscience of Precision Agriculture
Improvements in electronic technologies, such as GPS and GIS, are anticipated to impact the agriculture sector positively over the forecast period. Agricultural equipment includes various monitors, controllers, and sensors in addition to GPS and GIS. The increased need for crop health monitoring for yield production and the growing government support for modern agricultural techniques are expected to drive market demand. Yield monitoring, weed mapping, variable spraying, salinity mapping, variable rate fertilizer, yield mapping, guidance systems, and records and analyses are some of the significant applications of precision farming. With the rising global demand for food, farmers are benefiting from the trend of sustainably maximizing agricultural resources.
Rising Support from the Government for the Adoption of Modern Agricultural Methods
Governments in developing nations are under pressure to find ways to increase food production as the population grows because of the chronic water shortage there. The only way to address the sustainability challenge in the agriculture sector is to switch from ineffective traditional to modern agricultural methods. Given that the farming sector comprises impoverished self-sustaining farmers, the introduction of modern farming technology necessitates government assistance. Modern technology implementation calls for sound infrastructure, a compatible cultural background, capital-efficient equipment, and installation support services. Governments must design initiatives that will guarantee their implementation's success if they are to succeed. The government, micro-irrigation businesses, farmers, and banks must connect through an efficient administrative framework, training, design, and maintenance.
High Initial Capital Investments
Drones and robotics are frequently employed to improve e-commerce operations. Precision farming technology sales have increased due to technological innovation and robotics development. But over the forecast period, high initial capital investment is expected to limit the market growth. Robots in agriculture necessitate additional, specialized advanced processing equipment, which raises the required capital investment. The market requires a significant initial investment, but because it lowers overall production costs and boosts efficiency, there is a high return on investment. Robotic farming cannot entirely take the place of human-like dexterity. The acquisition cost for farmers rises in emerging economies due to inadequate administrative support and infrastructure development.
Developing Telematics Applications in Agriculture
Tracking devices that use the Global Navigation Satellite System (GNSS) to show the location of the equipment for management purposes are part of telematics services. Additionally, it provides a live view of the location, coolant temperature, ground speed, and the time frame before maintenance is necessary. To increase farm productivity, major agricultural equipment manufacturers are implementing telematics services for their equipment. The profitability of farming operations is increased by increasing the efficiency of agricultural machinery. Additionally, effective management may lessen the impact on the environment.
Telematics technology is being used more frequently by farmers to manage and collect data from their field equipment. Through sensors installed on tractors and other field monitoring equipment, telematics technology is used to collect and transfer data from farm equipment. The demand for precision farming is anticipated to rise as agricultural equipment manufacturers adopt telematics systems more frequently.
The global precision farming market is segmented by offering and application.
Based on the offering, the global precision farming market is bifurcated into software, hardware, and services.
The hardware segment is the highest contributor to the market and is expected to grow at a CAGR of 12.1% during the forecast period. Hardware elements like sensing equipment, drones, and automation and control systems play a significant part in assisting farmers. For example, the GIS guidance system is beneficial to growers because it can visualize agricultural workflows and the environment. In addition, VRT technology aids farmers in identifying regions that require more pesticides and seeds and then distributing them evenly across the field.
Precision farming software is divided into web-based and cloud-based segments. Cloud computing eliminates the high costs associated with maintaining hardware and software infrastructure by concentrating on shared networks, servers, and storage systems. Farmers are advised about crop rotation, soil management, and ideal planting and harvesting times using predictive analytics software.
Based on the application, the global precision farming market is bifurcated into yield monitoring, field mapping, crop scouting, weather tracking and forecasting, irrigation management, inventory management, and farm labor management.
The yield monitoring segment owns the highest market share and is expected to grow at a CAGR of 12.2% during the forecast period. Given that it helps farmers make field decisions, the yield monitoring segment had the highest revenue in 2021 and is likely to lead during the projection period. Farmers can create a historical-geographical database and get real-time data during harvest by using on-farm yield monitoring. This sector is anticipated to make up the largest share of the precision farming market because it offers fair landlord negotiations, evidence of environmental compliance, and a track record for food safety.
The irrigation management segment is anticipated to experience significant growth over the forecast period. The aim of irrigation management is to utilize water in the most advantageous manner while maintaining sustainable production levels. This typically entails using irrigation to supplement precipitation in production agriculture. Nearly the entire state has experienced drops in groundwater levels in recent years. In order to estimate the appropriate amount of irrigation water, smart irrigation uses various technologies, including rain sensors, weather-based controllers, sensor-based controllers, and water meters. The use of irrigation drones is likely to increase due to these advantages.
By region, the global precision farming market is segmented into North America, Europe, Asia-Pacific, South America, and the Middle East and Africa.
North America Dominates the Global Market
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North America is the most significant shareholder in the global precision farming market and is expected to grow at a CAGR of 12% during the forecast period. North America is a pioneer in implementing new technologies. The region's market has a high revenue due to expanding government initiatives that support adopting modern agriculture technologies and developed infrastructure. For instance, to raise awareness among farmers, the National Institute of Food and Agriculture (NIFA), a United States Department of Agriculture division, runs geospatial, sensor, and precision technology programs. In addition. NIFA collaborates with Land-Grand universities to assist farmers in creating reliable sensors, accompanying software, and instrumentation for simulating, observing, and evaluating various intricate biological materials and processes.
Asia-Pacific is expected to grow at a CAGR of 14.10% during the forecast period. The market for precision farming is expected to grow at the fastest rate in the Asia-Pacific region. The growing modernization of agriculture in nations like China, India, and Indonesia is a crucial factor fueling the expansion of the regional precision farming market. As pressure mounts on the agriculture sector to increase output due to population growth in the region's emerging nations, the demand for precision farming equipment is rising. In order to promote the use of contemporary precision farming technologies and increase yields, many government initiatives are implemented in developing nations like India, Sri Lanka, and Nigeria. Israel and China signed a USD 300 million trade agreement in September 2017 to encourage exporting Israeli eco-friendly technologies to China. Additionally, a strong administrative framework enables farmers to fully understand the use and upkeep of precision farming machinery.
The global precision farming market’s major key players are