The global smart farming market size was valued at USD 14.65 billion in 2021. It is projected to reach USD 66.8 billion by 2030, registering a CAGR of 18.40% during the forecast period (2022–2030). Smart agriculture is a concept that focuses on providing the infrastructure for the agricultural industry to use advanced technology. Additionally, wireless sensors, low-power wide-area networks, WiFi, Zigbee, and other connected technologies are a few of the tools that farmers can use to efficiently carry out tasks related to agriculture like harvesting, buying, planting, and inventory control.
Furthermore, farmers' increased adoption of IoT and artificial intelligence aid in crop field monitoring and irrigation automation. It provides farmers with cost-effective and optimal solutions with minimal manual intervention, boosting the growth of the smart agriculture market. From a service and product standpoint, smart agriculture is undergoing rapid transformation. The transformation of business models, technological disruptions, and organizational changes create an exciting but challenging opportunity. As a result, the global smart agriculture market is growing in value sales due to the increasing technology revolution in smart agriculture.
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Increasing Reliance on Modern Technology to Drive Market
Precision farming, also known as "smart agriculture," has the potential to generate high returns for the agricultural industry. By collecting geospatial data of the soil, livestock, and plants, as well as other inter-and intra-field information, this type of farming can help farmers combat the adverse effects of nature on crops. Precision farming provides information about required quantities of irrigation water, liquid fertilizers, nutrients, herbicides, and pesticides and also helps reduce resource waste. The incorporation of cutting-edge technologies boosts productivity and lowers the cost of farming.
The implementation of smart agricultural tools is primarily driven by several important factors, including increased business efficiency achieved through the automation of processes and improved output achieved with a reduction in the cost of farming. As a result, agriculturalists focused on business have begun adopting a variety of precision farming and smart agriculture tools to raise crop yields and improve profit margins.
Increased Access to Organic Foods Due to the Internet of Things (IoT) to Aid Growth
The rapidly expanding adoption of Internet of Things (IoT) technology in agriculture enables farmers to monitor the growth of their products better. Integrating the Internet of Things applications into conventional agricultural practices reduces the time and resources such as land, water, and energy, allowing farmers to focus on producing high-quality food for consumers. Various end users can now receive organic food due to the elimination of pesticides and fertilizers in precision farming techniques.
High Cost of Equipment to Hinder Market Growth
One of the most significant factors that hinder market expansion is the high cost of precision farming equipment. Precision agriculture employs cutting-edge technologies and costly equipment, including intelligent sensors, drones, VRT, GPS, GNSS, guidance tools, and receivers. These technologies and tools are highly effective but also quite expensive. Installation and operation of precision agricultural equipment also require qualified personnel. Farmers in developing countries with limited resources for agricultural practices, such as India, China, and Brazil, frequently choose traditional farming over new technology farming because the latter requires a more significant financial and time investment.
Global Smart Farming Market Opportunities
Increasing Use of AI-based Precision Farming Solutions to Boost Market Opportunities
AI-based applications and tools assist farmers in carrying out controlled and accurate farming by providing them with the necessary information or guidance regarding using fertilizers, water management, crop rotation, pest control, soil type, optimal planting, and nutrition management. Tools based on AI are used for pest control in agricultural settings. Using satellite imagery and AI algorithms to compare it to historical data, it can check if any insects have arrived on the farm and what species they are. AI is also used in weather forecasting to assist farmers in making decisions about what type of crop to grow and monitoring soil quality and nutrition levels. Precision farming techniques based on artificial intelligence assist farmers in keeping track of the health of their crops, resulting in a higher-quality harvest.
The global smart farming market is segmented by application and solution.
Based on application, the market is segmented into precision agriculture, livestock monitoring and management, indoor farming, and aquaculture.
The application segment of the smart farming market is driven by precision agriculture applications such as precision irrigation, yield monitoring and forecasting, variable rate application, crop scouting, and recordkeeping. As the global population grows exponentially, the total food supply must be increased. Methods of precision agriculture can help increase agricultural productivity, which has a substantial effect on total crop yield. A higher yield from the same resources will assist in addressing food security issues and reducing production waste.
Based on solutions, the market is divided into hardware systems, software, and services.
The hardware segment leads the smart farming market, followed by the services segment. The hardware includes sensors and navigation systems, automation and control systems, and equipment for indoor farming. Many hardware systems are available for applications such as automating and controlling farm machinery, sensing analytical data, and controlling and maintaining the desired climate in indoor farming facilities. Sensor technology is the most widely developed and commercialized hardware component globally. Sensors are an essential component of sensor-based farming solutions, and the hardware market for smart farming is expected to grow.
The global smart farming market is segmented into North America, Europe, Asia-Pacific, and Rest-of-the-World.
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North America is the most advanced region in agricultural technologies. North American countries are far ahead of the rest of the world in adopting digital technologies that go beyond traditional farm machinery and services for more efficient crop production. Farming practices that are more sustainable and profitable are gradually transforming the global agricultural industry. North America has been an early adopter of newer technologies to meet rising food demand.
Moreover, it is one of the most significant regions for the smart farming sector, as most of the revenue is generated by leading original equipment manufacturers there (OEMs). Due to the rise in urban population and year-round demand for agricultural products, indoor farming is gaining popularity in the region. Since then, the region has contributed significantly to the indoor farming industry.
The global smart farming market’s major key players are