Agriculture Equipment Market Growing by Rising Need for Operational Efficiency and Profitability

The ​Agriculture Equipment Market is projected to grow at a CAGR of 5.31% from 2017 to 2022, to reach a market size of USD 139.41 billion by 2022. The base year considered for the study is 2016, and forecast period is 2017 to 2022. With escalating demand for food owing to growing population, inadequate arable land, water scarcity, and degradation of soil fertility, the agriculture industry is facing concerns related to production. Due to industrialization, more agriculture lands are used for commercial purpose, resulting in population shift toward cities, limited availability of labor, and increased wages. To counter these concerns, mechanization trend is increasing to improve the efficiency of farmland. According to VDMA Economic Report 2015, China’s mechanization in agriculture increased to 61% in 2014 from 34% in 2004. The growth factors are a reduction in production time, improved quality, and cost saving.

Market Dynamics

Drivers:

  • Increasing mechanization trend in agriculture industry
  • Scarcity of skilled farm labor & increasing labor cost
  • Government subsidies for agriculture equipment
  • Rising need for operational efficiency and profitability

Restraints:

  • High cost of agricultural machinery
  • Growing market of used equipment and local/unorganized players

Opportunities:

  • Innovation in the field of autonomous tractors
  • Increased usage of telematics & GPS technology in advanced agricultural equipment
  • Autopilot technology
  • Swath control and variable rate technology (VRT)
  • Integration of smartphone with agricultural equipment

Challenges:

  • Lack of standardization in advanced agricultural equipment
  • Attracting small-scale farmers towards advanced agricultural equipment

Rising global population, mechanization level, and growing need of operational efficiency drives the global agriculture equipment market With rising global population, degradation of soil fertility and unpredictable climatic changes are continuously pushing farmer to increase the mechanization level in the agricultural industry. Farmers are increasingly using agriculture equipment to improve the yield, soil fertility, and food quality. The factors that drive the agriculture equipment market is increasing mechanization in the agriculture industry, lack of skilled farm labor, increasing labor cost, and increased need for operational efficiency and profitability. In addition, government initiatives of providing subsidies and other financial support that encourages farmers to adopt new advanced technologies to increase crop productivity. Such factors are likely to influence the agriculture equipment market.

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Major Market Developments

  • In April 2017, Mahindra & Mahindra launched its 24hp 4WD small tractor targeting the horticulture and row cropping applications. It is equipped with an Automatic Depth & Draft Control (ADDC) feature, 750 kg lift capacity, and high ground clearance. It is available in some parts of India from April 2017.
  • In March 2017, Massey Ferguson, a tractor brand by AGCO Corporation, introduced its new CornFlow header at the SIMA show in Paris. This new header range includes eight new models offering options in the number of rows, row spacing, along with rigid and folding models. These models allow faster harvesting, along with reduced header and cob loss
  • In January 2017, CNH Industrial acquired agricultural grass and soil business of Kongskilde Industries (Denmark). The agricultural grass and soil business segment develops, manufactures, and sells solutions for agricultural applications for Tillage, Seeding, and Hay & Forage under various brands such as Kongskilde, Överum, Howard, and JF. This move helped in extending the product portfolio of New Holland Agriculture brand.

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