Market Overview
The global smart agriculture market size is expected to reach a valuation of USD 54.75 billion by 2030, growing at a CAGR of 13.5% during the forecast period (2023–2030).
Smart agriculture is a farming method that uses information technology to manage, analyze, and identify variability on a farm to increase crop production while reducing human effort. Smart agriculture allows farmers to determine the exact quantity of nourishment crops require to improve production by accessing real-time data about weather, yields, and soil quality.
With smart agriculture systems, farmers may use advanced automation techniques to cut labor and materials costs. Smart farming approaches use sensors and monitoring equipment to help farmers make better decisions regarding water management, soil management, inventory control, and harvesting schedules.
Irrigation control, management of water resources, crop planting, and production monitoring are all examples of smart agriculture applications. The use of smart agriculture in yield monitoring will allow users to map and record agricultural output and humidity information in real-time, allowing them to assess how often the crop fared quickly.
Market Dynamics
Market Drivers
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Surging Adoption of Advanced Technologies in Agricultural Products
When used to its peak capability, smart agriculture can assist farmers in combating the adverse consequences of climate on crops by gathering geospatial data on planting, soil, livestock, and other inter-and intra-field data. Smart agriculture also offers information on how much pesticides, herbicides, liquid fertilization, and irrigation are needed, decreasing resource waste.
In agricultural products, modern technologies such as data management software, global positioning system (GPS), yield mapping software (YMS), variable rate technology (VRT), and mapping software help increase profit growth and soil fertility and reduce farming costs, and promote sustainable agriculture. Two significant aspects of smart agriculture tools are growing business productivity through automated processes and more outstanding production with lower farming costs.
Agribusiness is expected to be more profitable than ever because of smart agriculture techniques. Thus, business-oriented farmers have begun to use various smart agricultural instruments to enhance crop yields and profitability. Thus, business-oriented farmers' surging adoption of advanced technologies in farm products will likely drive the global smart agriculture market growth during the forecast period.
Market Drivers
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Surging Adoption of Internet of Things (IoT) in Agriculture
The growing use of Internet of Things (IoT) technology in agriculture aids farmers in monitoring product development by giving real-time assistance through IoT applications. IoT applications in traditional agriculture practices reduce the amount of time and money spent on farming resources such as land, electricity, and water, allowing farmers to focus on delivering high-quality food to their customers.
IoT-based devices in the agricultural sector reduce the usage of pesticides and fertilizers by adopting precision farming techniques, which enhances the health of soil and crops, allowing organic food to be delivered to diverse end-users.
The agricultural sector's high deployment of IoT technology aids farmers in responding to significant changes in air efficiency, humidity, and weather. It drives automation in traditional farming processes through various management systems & solutions, visualization, and data analytics. Implementing IoT technology in agriculture increases farm output while lowering carbon emissions by conserving energy and water resources through advanced sustainable technologies.
Growing internet coverage in the agricultural sector assists farmers in staying informed about using information and communication technologies to maximize profits and assure resource conservation under varying climatic circumstances. For example, in March 2021, John Deere, a major player in the smart agriculture sector, teamed up with Solorrow to offer new site-specific software that uses variable application maps to execute fertilizing and other field activities.
Thus, the growing adoption of the Internet of Things (IoT) in the agricultural sector is likely to drive the global market growth during the forecast period.
Market Restraints
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Fragmented Agriculture Industry
The agriculture business is scattered, with a large number of minor players. It is not dominated by a particular player or a few large ones. Due to the industry's fragmentation, implementing a uniform machine-to-machine (M2M) solution is challenging. Land fragmentation causes inefficient input and resource distribution, leading to high expenses. Since administering, overseeing, and gathering data from scattered farms is challenging, deploying smart farming techniques in scattered lands consumes time, money, and resources. Due to this, farmers will also find it challenging to gain the benefits of scale for M2M systems.
Future Key Opportunities
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Agritech Startups Increased the Adoption of Smart Agricultural Practices
With the global pandemic, there has been a significant increase in the usage of artificial intelligence (AI) and the Internet of Things (IoT) in agriculture. Agritech startups are pushing new ideas to the table. They are combining remote sensing, data analytics, IoT, and AI technologies to offer farmers rapid solutions to their challenges. During the COVID-19 constraints, these innovations assisted in the creation of systems that enable growers to choose their marketplace and sell their goods at higher rates.
There are almost 450 Agritech firms in India, according to the Federation of Indian Chambers of Commerce and Industry (FICCI), and the sector is developing at a rate of 25% per year. Farmers, particularly in nations like India, face enormous expectations. Agricultural startups have developed precision-based seeding solutions. AI-based programs can help forecast weather patterns and decide the best time to plant the seed for more remarkable outcomes and less waste. The outbreak has given Agritech startups a new opportunity to develop and assist farmers with their challenges.
Emerging Key Trends
Massive amounts of farm data are created every day, none of which is helpful unless examined. Big data and analytics approaches turn this information into useful information. Crop disease statistics, weather forecasts, agricultural prices, irrigation, land use, crop area, crop production, and crop projections are all used to establish the following farming season. Analytical tools collect information pertinent to farm operations from data on weather events, farm equipment, water cycles, crop quality, and quantity.
This aids in the discovery of patterns and linkages that could otherwise go undetected. Many businesses are working on farm analytics tools to help farmers make the most of their field data. For example, analytical data helps farmers understand fertilizer requirements, soil acidity and alkalinity, soil nutrient levels, and other characteristics, allowing them to make the best decisions for their crops.
For example, AgriData Innovations, a Dutch firm, makes it easier to collect, analyze, and visualize farm data, particularly greenhouse data. ADI creates data transfer and control software for embedded systems. They specialize in compartmentalizing data from an image to a specific crop leaf, allowing farmers to make more informed decisions. In addition, the company uses neural networks and image processing to assess crop health, leaf size, and other factors. Their data analytics and visualization insights help greenhouses improve their overall production and operations.
Regional Analysis
Supremacy of North America Over Others
The global smart agriculture market share has been segregated into North America, Europe, Asia-Pacific, South America, and the Middle East and Africa.
North America is expected to be the most prominent smart agriculture market. Increasing government activities and regulations to improve the region's agriculture business will fuel regional demand in North America over the forecast period.
The North America Climate Smart Agriculture Alliance (NACSAA), a stage for educating and equipping cultivators for sustainable agricultural productivity, has been formed by agrarian organizations. Governments in North America are aggressively giving incentives to expand the implementations of smart irrigation in response to the rising perceptions regarding water conservation. The state of California, for example, has provided reimbursement for smart controllers.
Europe is expected to be the second-largest smart agriculture market during the forecast period due to many investments under management for smart agricultural purposes. The growing support from the regional authorities of Germany, France, Italy, and the United Kingdom and the increasing awareness among the business-oriented farmers are likely to drive the regional demand during the forecast period.
Impact of covid-19
Due to the proliferation of COVID-19, the smart agricultural market was expected to fall in 2020. Since some of the prominent participants in the smart agricultural industry are situated in the United States and China, and these countries were the hardest affected by the outbreak in the first half of 2020, the outbreak had a detrimental effect on the supply chain.
During the first half of 2020, major smart agricultural companies such as AKVA Group, The Climate Corporation, DeLaval, Ponsse, and John Deere halted their typical commercial activities. Companies were hit the worst at the end of the second quarter (June) of 2020 when vast North America and Europe areas were shut down completely.
On the back of new orders and contracts, the smart agricultural sector began to gain traction in the second half of 2020. With the increased demand for equipment and automation products in various applications such as horticulture, smart greenhouses, precision forestry, precision livestock, and precision farming, the market was predicted to have a U-shaped recovery in 2021. As a result, the demand for automation and the implementation of modern technologies in agriculture was likely to drive the growth of the smart agriculture market forward.
Market Recovery Timeline and its Challenges
The post-pandemic period will be crucial for the global smart agriculture market. The market's growth is likely to be hampered due to a lack of skilled farmers to use advanced technologies and the high initial cost of adoption. On the other hand, factors like the rising adoption of advanced technologies like AI and IoT will likely continue to drive the market growth over the forecast period.
