Agriculture and Farm Machinery Market Continues To Grow As Government Bodies Are Providing Subsidy Schemes and Appropriate Interest to Farmers by Taking Part in the Farm Equipment Business
Market Dynamics
Mechanized
equipment help to reduce the relative operational time and operational cost.
Sensors provide detailed data about the climatic and soil conditions that aid
the farmers to plant the crops accordingly. Artificial Intelligence (AI)
technology has led to the enforcement of robotics in the agriculture and
farming machinery sector such as ground-based sensors, autonomous tractors, etc.,
that aids in producing crops at an affordable cost. For instance, in September In 2017, Mahindra and Mahindra launched a driverless tractor in India. The tractor
is equipped with a GPS based auto-steering technology that enables the vehicle
to travel along a straight line.
In
recent years, governmental bodies from all over the world are offering
low-interest rates, low import duties, and various other initiatives to make
the cultivation process and soil preparation process more fast and efficient.
For instance, in 2018, the World Bank Group invested around US$ 6.5 billion in
commitments related to The International Bank for Reconstruction and
Development (IBRD) and The International Development Association (IDA).
The
emergence of contract farming is also boosting the growth of the agricultureand farming machinery market by helping the farmers to rent equipment such as
tractors, combine harvester, zero-turn mover, etc.
The
main challenge that the market faces is the rapid urbanization across developed
and emerging economies, which has resulted in mass loss of lands. Growing demand
in construction sectors in countries such as China, Japan, Malta, Kuwait, the
U.S., Singapore, etc., has shifted the focus of employment from the agriculture
sector, hence there is a lack of manual labor force to operate agriculture and
farming machinery.
This
market is distributed in five regions that include North America, Europe, Asia Pacific,
Middle East, and Africa, and Latin America. Among these regions, Asia Pacific
is expected to witness significant growth owing to the strong economic growth
in regions such as India and China. For instance, according to the Ministry of
Agriculture and Farmers' Welfare, in India, around 15.96% of revenue was
generated in 2019 from the agricultural sector and 35% of the agricultural
business in India is mechanized. In December
2018, Deere & Company launched a tractor in India known as the 3028 En.
Europe is also expected to witness significant growth in the agriculture and
farming machinery market owing to the prevalence of key players such as AGCO
Corporation, Deere & Company in this region. These players are continually
expanding their services and launching new products. For instance, in March
2017, AGCO Corporation acquired the forage division of Lely Group aiming to
expand its product portfolio by launching loader wagons and balers in the
European market.
Competitive Analysis
Key
companies involved in the global agriculture and farming machinery market
include International Tractors Limited, Valmont Industries Inc., China National
Machinery Industry Corporation, Claas KGaA mbH, Iseki & Co. Ltd., Mahindra
and Mahindra, Kubota Corporation, Alamo Group Inc., AGCO Corporation, and Deere
& Company.
In 2019, Deere & Company launched a new upgraded N500C air drill for the small grain producers. Likewise, in March 2020, Kubota Corporation acquired 10% equity shares in Escorts Ltd., aiming to expand the product line in sourcing, manufacturing, and development for the global market, focusing mainly on India.
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