Farm Equipment Market

The instruments that farmers use to carry out various agricultural operations and activities are known as agricultural or farm gear. The most common types of equipment and machinery used by farmers include tractors, balers, combines, plows, mowers, planters, and sprayers. The use of such automated agricultural equipment has enhanced productivity in the agricultural sector in recent years as a result of an increase in the amount of automation in these types of equipment. The market has benefited from the usage of tools that have boosted automation. The integration of GPS solutions and the Internet of Things applications in agricultural machinery will boost the amount of production in this business. All of these instruments are employed for numerous purposes like harvesting, threshing, and land development. The importance of the agriculture industry is going to increase in the next few years. According to the UN, by 2050, World’s population going to be around 9.7 billion, and ultimately it is going to impact global agricultural production to grow.

Current Market & Growth Drivers

The Global Farm Equipment Market accounted for $111.8 billion in 2022 and is projected to reach $162.98 billion at a CAGR of 4.8% for the forecast period of 2023-2030.

According to Agricultural Policy Monitoring and Evaluation, 2019, conducted by the Organisation for Economic Co-operation and Development (OCED), farm policies in 53 countries which include EU countries, and the top 12 emerging economies had provided the direct benefit of an average of $728 billion to support farmers from 2018 to 2020. A major part of it was for the loan waiver schemes to encourage farmers to buy agriculture equipment for farm mechanization.

The growing population, increasing purchasing power of people, the rapid pace of industrialization, and demand for high-quality packaged foods are some factors that are boosting the market outlook in the coming years.

In countries like India, farm mechanization has become more common among farmers as a result of labor scarcity. There is a labor shortage in rural areas as a result of widespread migration from rural to urban areas and several rural employment programs. For instance, the National Rural Employment Guarantee Agency (NREGA) has caused a cascade effect that has resulted in farm mechanization in several locations due to a lack of labor.

The current Farm Equipment Market is being led by established players like John Deere, AGCO, CNH Industrial, Kubota corporation, and CLAAS. John Deere revealed a fully autonomous 8R tractor in January 2022. Chisel plow, GPS guidance, TruSet-enabled, and six pairs of stereo cameras were the key features of it. New Holland Agriculture designed a Straddle Tractor for premium wine-growing regions in December 2021.

Market Segments

 Based on equipment type market is segmented into tractors, Trailor, Harvesters, planting equipment, irrigation, crop processing equipment, spraying equipment, hay, and forage equipment. The tractor segment is expected to show the highest growth as the tractor is used to operate others equipment like Trailor, planting equipment, crop processing equipment, etc. which provide tractors a vital role in agriculture. The 31-70 HP tractors are projected to hold the largest market share of the farm equipment market. 31-70 HP tractors segment was estimated to contribute approx. 33% of total sales of 2022.

The four-wheel drive tractors demand is projected to grow in the future due to the changing requirements in farming activities like covering a large acre of land or the need to pull large-size implements.

Based on application, the market is divided into land development, threshing and harvesting, plant protection, and after-agro-processing. The land development segment is expected to register noteworthy growth. Focus on uplifting soil quality to increase farm yield and farmland conversion are some factors substantiating the market growth prospects.

Major Regions

Throughout the predicted period, the Asia-Pacific area will hold a leading position. Due to the region's recent strong economic expansion, the demand for these equipments is expected to rise throughout the projected period. Several countries, including Taiwan, India, and China, have experienced significant growth.

Because of the government's rising subsidies, India is one of the marketplaces in the Asia Pacific area that is expanding the fastest. Because that agriculture accounts for a sizable portion of the nation's GDP, the government is putting a lot of effort into mechanizing agriculture through a variety of programs. For instance, the Indian government announced a 50% to 80% subsidy on buying agricultural machinery through the “PM Kisan Samman Yojana” program. This will support the nation's market expansion. India will show itself to be a country that will offer the most prospects for the expansion of this sector in the years to come. In India, the need for agricultural tractors has increased significantly, and this demand will only increase throughout the projection period. The need for these tools will expand as farmers in this area look for ways to boost productivity.

 For a variety of crops, including rice, wheat, corn, potatoes, oilseed rape, cotton, and sugarcane, the Chinese government is improving farm mechanization. More than CNY 20 billion (USD 2.87 billion) in central government subsidies for the purchase of agricultural machinery were provided by the Chinese Ministry of Finance in 2020. By 2025, China wants to have fully mechanized the tillage, planting, and harvesting of its crops.

Conclusion

The use of automated agricultural equipment has enhanced productivity in the agricultural sector in recent years as a result of an increase in the amount of automation in these equipments. The global farm equipment market accounted for $111.8 billion in 2022. Increasing population, demand for quality food, and Government schemes like loan waivers for farm mechanization are the major market drivers. 31-70 HP Tractors and four-wheel drive tractors are the fast-growing segments on basis of equipment segmentation. Based on application segmentation land development is the largest segment. The Asia-Pacific area will hold a leading position in the predicted period. Due to the region's recent strong economic expansion, the demand for these equipments is expected to rise throughout the projected period.