Farm Equipment Market Driven by Government Policies and Support
The global farm equipment market is anticipated to expand at a CAGR of 7.34% throughout the forecast period, from US$117,147.192 million in 2020 to a total market value of US$192,280.893 million by 2027.
Tools, machinery, and upkeep supplies made specifically for use on farms in conjunction with the production or processing of food resources for market usage are referred to as “farm equipment.” It comprises equipment for irrigation, haying, foraging, and harvesting. These implements help reduce labor requirements, improve crop quality, and shorten the time needed for agricultural work. Sprayers and self-propelled spreaders operate more swiftly and effectively while covering a larger area each day. These tools ensure that nutrients and safety measures are administered consistently, which helps to reduce overall costs and boost crop yields. There are numerous low-pressure, high-pressure, foggier, and air-carrying varieties of mechanical sprayers. These sprayers come in manual, tractor-mounted, and aerial designs. The towed or vehicle-mounted sprayers give the contemporary farmer various benefits, including more operating freedom.
Increasing government agriculture aid will drive the worldwide farm equipment industry
The agriculture industry has historically seen significant government intervention, maybe more than any other economically productive sector. Governments have historically taken this action because they wanted to guarantee a suitable level of farmer income as well as adequate and reasonably priced food supplies for their populations. According to the most recent edition of the OECD’s annual Agricultural Policy Monitoring and Evaluation report, released in June 2020, the support policies implemented by the 54 countries studied – all OECD and EU countries, as well as 12 key emerging economies – provided an average of USD 536 billion (EUR 469 billion) in direct support to farmers from 2017 to 2019. While these goals are still important today, many governments have expanded the scope of their policies to accomplish other objectives, such as supporting innovative and competitive industries as well as environmentally sound production systems that are more resistant to risks such as climate change. For instance, Farmers and growers in England can apply for up to £500,000 in Government funding to invest in cutting-edge robotics and technology to increase food output beginning in January 2022. Grants of up to £500,000 are available to invest in productivity-boosting equipment such as driverless tractors, harvesting, spraying, and harvesting robots, and automated milking systems. Additionally, the U.S. Department of Agriculture (USDA) will invest $300 million, including money from the American Rescue Plan, in a new organic transition initiative that will help create new and better markets and income streams for farmers and producers, according to information released in August 2022 by the Agriculture Secretary. The initiative will provide comprehensive technical support, including farmer-to-farmer mentoring, as well as immediate assistance in the form of financial assistance for conservation efforts and additional crop insurance assistance. It will also support market development initiatives in targeted markets.
Technological progress will feed the world’s rising population
Globally, the market is gaining substantial traction as a result of the growing human population and the resultant requirement for higher production to meet the need for food. According to a United Nations report updated in December 2022, that provides new evidence that the world is moving further away from its goal of ending hunger, food insecurity, and malnutrition in all forms by 2030, the number of people affected by hunger globally rose to as many as 828 million in 2021, an increase of about 46 million since 2020. The market picture is being improved by the demand for premium packaged foods, the speeding up of industrialization, and the growing spending power of consumers. The demand for agricultural products is the main factor driving the demand for planting and fertilizing technology as opposed to manual planting and fertilizing methods. For example, Mahindra unveiled a new potato planter under its Farm Equipment Sector (FES) in September 2020. The latest sophisticated Precision Potato Planting machinery, known as the ‘PlantingMaster Potato Plus,’ was conceived and developed in partnership with Dewulf, a European partner. PlantingMaster Potato Plus, according to the Indian business, has been engineered to fit Indian farming conditions, offering increased yields and improved quality. Deere & Company also intends to introduce new fertilizer technologies and an electric excavator to assist clients in being more productive and sustainable. The new technologies were unveiled by the equipment business during its keynote talk at the CES 2023 event in January. Its ExactShot technology employs sensors and robotics to deposit starter fertilizer on seeds as they are planted in the soil, allowing farmers to save up to 60% on starter fertilizer during planting.
EV tractors are making their way into a sustainable farming sector
The tractor category accounts for the greatest revenue share, owing to a manpower shortage and a growing population to fulfill global food requirements, which has made tractors a requirement for enhancing agricultural output. Electric tractors are expected to be a big growth opportunity for market participants. The cost-effectiveness of electric tractors, together with their eco-friendliness and great efficiency, is attributed to the growth. For instance, the e70N tractor from electric tractor developer Solectrac went on sale in August 2021. As part of a grant from the Funding Agriculture Replacement Measures for Emission Reductions Demonstration Program of the Bay Area Air Quality Management District, Solectrac provided the 70-horsepower, diesel-equivalent tractors to three farms in Northern California (FARMER). Solectrac is a manufacturer of electric tractors that was established in Northern California to give farmers independence from the infrastructure, pollution, and price volatility brought on by fossil fuels.
COVID-19 Insights
The COVID-19 pandemic caused a minor drop in the agricultural equipment industry in 2020. Government limitations enforced to combat the new COVID-19 resulted in the temporary shutdown of manufacturing facilities, resulting in output delays. As a result, the industry suffered throughout the first half of 2020. Companies including Kubota Corporation saw a decrease in agricultural equipment sales. Revenue for Kubota Corporation and its subsidiaries fell by 66.8 billion (3.5%) from the previous year for the fiscal year that concluded on December 31, 2020. Domestic revenue dropped by $30.2 billion (4.8%) from the previous year as a result of revenue in farm and industrial machinery declining mostly as a result of unfavorable effects of the COVID-19. However, when governments opened up their economies, demand for agricultural equipment increased by double digits.
