The Global Agriculture Equipment Market is projected to register a CAGR of 5.55% and reach a value of USD 3,24,306.18 million by 2030.
The Global Agriculture Equipment Market size is projected to register a CAGR of 5.55% and reach a value of USD 3,24,306.18 million by 2030.
Agriculture equipment means a device, part of a device, or an attachment to a device designed to be principally used for an agricultural purpose. The increasing need for agricultural productivity is the key factor driving the growth of the global agriculture equipment market. Additionally, easy credit and subsidies availability, especially in the Asian market, boosts the market growth. However, fluctuating weather conditions and high costs of farm equipment hamper the market growth. Nevertheless, rising demand for precision agriculture tools is estimated to emerge as a lucrative market for farm equipment vendors operating in both developed and developing economies.
The COVID-19 pandemic has adversely affected and is expected to continue to pose risks to the agriculture machinery business. There are numerous risks related to the outbreak of the COVID-19. The pandemic spread across the globe during 2020 and continues to impact economic activity around the globe. COVID-19 caused disruption and volatility in the global capital markets, resulting in an economic slowdown in 2020. The COVID-19 pandemic and its associated economic uncertainty negatively impacted the agriculture equipment market in most regions and across a variety of customers. Governments worldwide have introduced certain measures, such as travel prohibitions, shutdowns of certain businesses, bans on group events and gatherings, shelter-in-place orders, curfews, and recommendations of practicing social distancing. These restrictions have resulted in weakening activity and temporary closures of manufacturing facilities. COVID-19 has affected the agriculture equipment market in many ways.
The Global Agriculture Equipment Market is projected to register a CAGR of 5.55% during the forecast period. The increasing need for agricultural productivity is the key factor driving the growth of the global agriculture machinery market. Additionally, easy credit and subsidies availability, especially in the Asian market, boosts the market growth. However, fluctuating weather conditions and high costs of farm tools hamper the market growth. Nevertheless, rising demand for precision farm machinery & tools is estimated to emerge as a lucrative market for agriculture tools vendors operating in both developed and developing economies.
Easy credit and subsidies availability in Asian markets
Whether a farmer operates on a large-scale or small-scale, they require credit facilities to purchase expensive farm equipment through a well-developed financial market. Thus, the equipment is more commonly used by large farmers who can afford the high cost of installing and maintaining the farm equipment. The easy availability and accessibility of equipment are of utmost importance to the users and attract the market prospects. The scope of machines and tools eligible for subsidies has been expanded manifold under these policies to help drive the market towards growth. In addition to the specific subsidies on agriculture tools, farmers are also eligible for support in other agriculture processes, increasing the demand for specialized machinery and equipment.
For instance, in India, a few subsidy schemes that are in favor of farmers owning the necessary machinery are Rashtriya Krishi Vikas Yojana (RKVY), National Food Security Mission (NFSM), Sub-Mission on Agricultural Mechanization (SMAM), and NABARD loans. NABARD loans are the scheme that offers every farmer the opportunity to purchase necessary machines, importantly, tractors. However, they expect a down payment of 15% of the tractors or machinery cost. Nonetheless, NABRAD provides 30% of the cost as a subsidy for tractors and 100% for other transport machinery.
In China, as per a guideline jointly released by the Ministry of Commerce, the Ministry of Finance, and the Ministry of Agriculture and Rural Affairs in 2020, the government will offer subsidies to farmers to scrap and replace aged machines and guide local governments to equip more modern farming tools. Under the new policy, aged and highly polluting farm tools, including tractors, combine harvesters, paddy transplanters, feed and grass shredders, and motorized sprayers and threshers, are eligible to be replaced with the help of government subsidies.
Fluctuating weather conditions & farming calendars
Climate changes and farming calendars have a negative effect on agricultural production. Crop yield is determined by the weather conditions in a particular region, affecting farming tools buying decisions. The developing countries suffer from food insecurities during unpredictable weather conditions, which results in these countries' slow adoption of farm machinery. The demand for agriculture tools varies by region and product. The demand for tractors and planting, seeding, and application tools in the Northern hemisphere is typically witnessed from March to June; and from September to December in the Southern hemisphere. Dealers from the Northern hemisphere demand harvesting machinery, mainly near the late winters, so that they can keep hold of the inventory before the peak selling season, which is March to June, whereas the same tools is ordered between August and October in the Southern hemisphere to keep inventory for peak season from November to February.
Demand for precision agriculture machinery & tools
Precision farming is a technique where farmers are focused on producing more with limited resources. Through this technique, farmers observe, measure, and respond to inter and intra-field variability of crops to make precise decisions according to their farming goals. Furthermore, the agricultural industry is under constant pressure to produce higher yields due to the rising demand. Precision farming is expected to improve operational efficiency and increase production, reducing the gap between supply and demand. The farming technique is expected to effectively tackle the issue of high demand for farming products in all types of geographies during the forecast period.
Precision farming enables farmers to use water, land, seeds, and fertilizers optimally, leading to a higher and improved yield. For instance, OEMs have developed drones for large farms, enabling farmers to monitor large fields and plantations efficiently. The increasing initiatives by government bodies to promote precision tools and the increasing presence of precision agriculture equipment distributors are expected to boost the growth of the agriculture equipment market. Thus, the increasing demand for precision farming techniques is expected to create lucrative opportunities for the global agriculture equipment market players during the forecast period.
Based on Product Type, the global agriculture equipment market has been segmented into tractors, harvesters, cultivation & soil separation equipment, and others. The tractor segment accounted for the largest market share of 39.39% in 2020 while the others segment is expected to exhibit the highest CAGR of 5.78% during the review period.
Based on Function, the global agriculture equipment market has been segmented into harvesting, planting & fertilizing, haying, plowing & cultivation, and others. The harvesting segment accounted for the largest market share of 28.29% in 2020, while the others segment is expected to exhibit the highest CAGR of 5.75% during the review period.
Based on Sales Channel, the global agriculture equipment market has been segmented into OEM and aftermarket. The OEM segment accounted for the largest market share of 69.20% in 2020, while the aftermarket segment is expected to exhibit the highest CAGR of 5.66% during the review period
Sources: MRFR Analysis
By region, the Global Agriculture Equipment Market has been divided into North America, Europe, Asia-Pacific, and the Rest of the World. Asia-Pacific accounted for the largest market share of 38.18% in 2020. Europe was the second-largest market with a share of 26.61% in 2020 and is projected to exhibit a CAGR of 5.55% during the review period. Whereas the Rest of the World is expected to register the highest CAGR of 5.87% during the forecast period.
Asia-Pacific is one of the largest markets for agricultural equipment, as many countries in the region are highly dependent on the agricultural sector. The increased demand for agricultural tractors in the region can be credited to factors such as the growing harvesting, seed sowing, irrigation, and cultivation activities in farm fields. Asia-Pacific is an abundant source of crops and vegetables, low labor costs, and favorable government guidelines in countries such as India, China, Japan, and South Korea. These countries also have a strong focus on agriculture, and hence the demand for agricultural equipment in the agriculture sector is also expected to be high.
China and India are the leading markets for agricultural products such as crops and vegetables. Asia-Pacific is one of the most attractive markets for agricultural equipment as there is the availability of agricultural fields, especially in India, China, Vietnam, and Indonesia. According to the India Brand Equity Foundation, the agricultural sector is the primary source of livelihood, as nearly 58% of the country’s population is dependent on the sector.
The rising investments in the agricultural industry are expected to drive the growth of the agricultural equipment market in North America. Furthermore, the rising demand for modern agricultural equipment is expected to offer lucrative opportunities to the agricultural equipment market during the study period. The increase in agricultural activities across the region is also expected to contribute significantly to the growth of the regional market during the forecast period. According to the US Department of Agriculture, the authorities aim to increase agricultural production by 40% by 2050. This is expected to further boost the demand for the agricultural tractors market in the US during the forecast period. Moreover, Canada is one of the largest agricultural producers and exporters globally. As per Invest in Canada, Canada ranked as the 7th largest food exporter globally.
The market comprises tier-1, tier-2, and local players. The tier-1 and tier-2 players have a global reach and diverse product portfolios. Companies such AGCO Corporation (US), Deere & Company (US), CNH Industrial N.V. (UK), Kubota Corporation (Japan), and Mahindra & Mahindra Ltd. (India) dominate the global market due to brand reputation, product differentiation, financial stability, and diversified regional presence.
Prominent players in the Global Agriculture Equipment Market include AGCO Corporation (US), Deere & Company (US), CNH Industrial N.V. (UK), Kubota Corporation (Japan), Mahindra & Mahindra Ltd. (India), ISEKI & Co., Ltd. (Japan), JC Bamford Excavators Limited (UK), Daedong Industrial Co. (South Korea), Escorts Limited (India), and CLAAS KGaA mbH (Germany).
Few developments that occurred in recent times influencing the market growth of gardening tools are listed below:
In October 2021, Mahindra & Mahindra’s Ltd. launched a new-age advanced tractor range called the Yuvo Tech+. The tractors will be available in three models, including Yuvo Tech+ 275 (27.6 kW-37 HP), Yuvo Tech+ 405 (29.1kW 39 HP), and Yuvo Tech+ 415 (31.33 kW-42 HP).
In June 2021, CNH Industrial N.V. acquired Raven Industries, Inc., a US-based leader in precision agriculture technology. The acquisition helped enhance CNH Industrial’s position in the global agriculture equipment market by adding strong innovation capabilities in autonomous and precision agriculture technology
Global Agriculture Equipment Market, by Product Type
Global Agriculture Equipment Market, By Function
Global Agriculture Equipment Market, by Sales Channel
Global Agriculture Equipment Market, by Region
Rest of World
|Market Size||USD 3,24,306.18 million|
|Historical Data||2019 & 2020|
|Forecast Units||Value (USD Million)|
|Report Coverage||Revenue Forecast, Competitive Landscape, Growth Factors, and Trends|
|Segments Covered||Product Type, Sales Channel|
|Geographies Covered||North America, Europe, Asia-Pacific, and Rest of the World (RoW)|
|Key Vendors||AGCO Corp. (US), JC Bamford Excavators Limited (UK), Deere & Company (US), CNH Industrial NV (UK), Kubota Corporation (Japan), Daedong Industrial Co., Ltd (US), Iseki & Co., Ltd (Japan), CLAAS KGaA mbH (Germany), Mahindra & Mahindra Limited (India), and Escorts Limited (India)|
|Key Market Opportunities||Government support towards farm mechanization and subsidies|
|Key Market Drivers||
The agriculture equipment market can thrive at 5.55% CAGR to be worth USD 3,24,306.18 million by 2030.
AGCO Corp., JC Bamford Excavators Limited, Deere & Company, CNH Industrial NV, Kubota Corporation, Daedong Industrial Co., Ltd, Iseki & Co., Ltd, CLAAS KGaA mbH, Mahindra & Mahindra Limited, and Escorts Limited are some of the reputed organizations in the agriculture equipment market.
Adoption of modern agriculture practices can boost the growth of the global agriculture equipment market.
APAC is rich in agricultural resources. The adoption of advanced agriculture equipment for effective farming can prompt the regional market.