Global Farm Equipment Market: Making Farming More Efficient

Global Farm Equipment Market: Making Farming More Efficient

By Knowledge Sourcing Intelligence Blog

farm equipment market

With continuous increase in global population, which is being driven by continuous improvement in fertility rates and decline in mortality rates in many countries coupled with ongoing improvements in healthcare infrastructure, increasing burden on many resources is not surprising. Improving life expectancy due to availability of better healthcare services in many countries is one of the major contributors to the growing global population. Limited availability of many resources, coupled with growing global population, is increasing the number of individuals or consumers per unit of such resources. This is increasing the pressure on such resources thus mounting concerns among many governments. Agriculture sector is one of the sectors which clearly reflect the relation between growing global population and the burden on resources. As global arable land area continues to shrink, and demand for food continues to increase with growing population, farmers are witnessing a continuously increasing pressure on them to increase their productivity. The figure given below shows the pace at which arable land available per capita is declining across the globe:

Arable Land, Global, in Hectares per Person

 farm equipment market

Source: The World Bank Group

The pressure on farmers, added to by continuous shrink in arable land per capita, eventually increases the pressure on per unit area of arable land since farmers, now, have to meet the demand of a wider population base by squeezing out as much productivity as possible from the limited land available for farming. This is increasing the demand for smarter solutions which can efficiently improve farmers’ yields per unit of area. This is increasing the demand for advanced farm equipment among farmers, thus propelling the market growth. Improving farm income across countries is increasing the number of machines being used across farms. China, for instance, is witnessing a continuous increase in the number of tractors across farms nationwide. The figure given below shows the trend:

Number of Agricultural Tractors in China at Year-End, 2012 to 2018

farm equipment market 

Source: China Statistical Yearbook

The growing demand for advanced farm equipment is attributed to poor climatic conditions which are unfavourable for farming in many countries, and growing awareness among farmers regarding new methods to cope with them. Farmers in Europe, for instance, are drifting towards advanced farm equipment since the heavy drought of summers 2018 kicked in. A report from the World Meteorological Organization showed that the drought was a result of heatwaves and disastrous precipitation which was attributed to very high temperatures across the region. What is important to note here is that this situation has still remained unchanged, and the European Drought Observatory (EDO) reports of high degree of dryness across some parts of the continent starting from Estonia and Finland to the Netherlands and Belgium.

According to the observatory, ongoing climatic changes are expected to keep triggering such droughts, and this is pushing farmers towards solutions which can aid them in minimizing losses by helping them squeeze out maximum value from fields when the climatic conditions are favourable. Furthermore, as farmers, in many parts of the world, are being educated and being made aware of the best farming practices, adoption of advanced farm equipment is increasing among them, thus propelling the market growth. However, the market growth is being hindered by low farm incomes in many parts of the world. In many developing and underdeveloped countries, either there are no schemes for benefitting or strengthening farmers, or the benefits of government schemes get clogged in the system itself and are not able to reach farmers. In either way, farmers are deprived of help from the government.

Since it is difficult for poor farmers to buy expensive farm equipment, they usually remain stuck to traditional farming practices which involve minimum use of advanced farm equipment. Yet, continuous advancements in technologies, on account of huge investments by pumped into research and development by technology providers, are making many technologies and solutions more affordable for farmers. Still, continuous decline in farming population in many parts of the world is keeping the market from gaining much growth. Changing lifestyles across the globe, on account of rising influence of western culture on people, is pushing youngsters away from farming practices. In many countries, youngsters can be seen migrating towards cities in pursuit of better standard of living which is achieved by better access to resources. According to a data from the World Bank Group, only 47.14% of the global population used to live in urban areas in 2001, and this figure stood at 55.71% in 2019. As global urban population continues to grow at the rate of more than 1% per year, number of people associated with farming will continue to decrease, thus shrinking the demand for farm equipment. Furthermore, the demand for farm equipment is being further hindered by growing popularity of more modern approaches to farming across the globe. Vertical farming is gaining widespread adoption in many parts of the world. Commercial greenhouses are getting more attention from governments and people in many countries. As these approaches, which include minimal use of farm equipment, continue to gain traction, the demand for farm equipment will continue to get affected.

Geographically, the report, titled Global Farm Equipment Market, by Knowledge Sourcing Intelligence, segments the market into North America, South America, Europe, Middle East and Africa, and Asia Pacific. Europe and North America together account for a significant share in this market and the market growth in these regions is majorly attributed to high farm income of farmers and increasing awareness among them regarding advanced farm equipment available in the market. The Asia Pacific silicon farm equipment market is expected to show a good growth over the next five years.

About the Author:

Dhiraj Kumar Sharma is a Market Research Analyst at Knowledge Sourcing Intelligence. He combines his outright understanding of technologies with years of experience working in the industry to deliver actionable information to clients who span across industries and geographies. Dhiraj often works closely with clients in order to better understand their requirements and is known for the quality of market insights he delivers to them.