Global Farm Equipment Market: Backbone of Sustainable Farming
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Burgeoning global population due to continuous improvement in fertility rates and decline in mortality rates has been putting an extreme burden on available resources. Moreover, increasing life expectancy on account of improvements in healthcare infrastructure and availability of better healthcare solutions and services across different regions/countries is further contributing to this mushrooming global population. The figure below shows the total population for the period 2010-2019:
Total Global Population Data, in Billion, 2010 to 2019
Source: The World Bank Group
According to the World Bank Group data, the global population has increased from 6.922 billion in 2010 to 7.674 billion in 2019.With the limited availability of resources such as arable land and water due to increasing urbanization and industrialization, increasing the agricultural productivity with limited resources have mounted concerns among governments during the forecast period.
With population growing at a tremendous rate, the number of people suffering from hunger across the globe has also been increasing since 2015. The United Nations estimated that approximately 821 million people globally suffered from hunger in 2018. With the world not on the right track to achieve Zero Hunger target by 2030, this figure is projected to increase to 840 million by 2030. The recent global pandemic outbreak caused due to COVID-19 is expected to further double this figure, putting more 130 million people at the risk of acute hunger by the end of 2020.
As global arable land area continues to decline, growing demand for food is further pressurizing farmers to increase the total yield. The figure given below shows the pace at which arable land available per capita is shrinking worldwide:
Global Arable Land Area, in Hectare per Person
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.
All the above factors are driving the demand for modern and smart farming solutions to improve agricultural yield per unit of area. As such, the demand for advanced farm equipment is growing at a remarkable rate, thus positively impacting the global farm equipment market growth.
Poor climatic conditions due to rising global temperature is another factor that is severely impacting the agricultural output which, in turn, is bolstering the demand for farm equipment. According to the NASA statistics, global land-ocean temperature index has risen from 0.39 degree Celsius 0.99 degree Celsius in 2019. A report from the World Meteorological Organization showed that the 2018 drought in Europe was a result of heatwaves and catastrophic precipitation which was attributed to very high temperature levels across the region. According to the observatory, ongoing climatic changes are expected to keep causing such droughts which is pushing farmers to adopt modern yet sustainable farming practices using advanced farm equipment so as to minimize agricultural yield losses due to extreme climatic conditions.
Market Segment Overview
Global farm equipment market has been classified by type, function, and geography. By type, the market has been segmented as combines, plows, sprayers, planters, and others. By function, the global farm equipment market has been classified as plowing & cultivating, sowing & planting, plant protection & fertilizing, and harvesting & threshing. Geographically, the market has been segmented into five major regional markets- North America, South America, Europe, Middle East and Africa (MEA), and Asia Pacific (APAC). Europe and North America together accounted for a significant share in the global farm equipment market in 2019 which is majorly attributed to the high farm income of farmers along with high level of awareness among them about the use and benefits of advanced farm equipment that are available in the market. Asia Pacific is projected to witness a substantial compound annual growth rate between 2020 and 2025 on account of increasing efforts to boost agricultural yield in order to eradicate food insecurity from highly populous countries such as China and India. According to the official Census data, the total population in India is projected to rise from 1.177 billion in 2010 to 1.400 billion in 2026. Middle East and Africa (MEA) will also experience a good market growth during the forecast period as governments in Middle East and African countries are focusing on increasing domestic agricultural production in order to reduce their reliance on imports and so push their GDP at new higher levels. For instance, the UAE government officials have recently announced to launch the country’s hydroponic vertical farming company Smart Acres which will be set up in Abu Dhabi and is set to launch in Q3 of 2020. In July 2019, the FAO (Food and Agricultural Organization of the United Nations) launched a digital agricultural extension model in Egypt to improve the agricultural productivity within the Country program framework signed between the Government of Egypt and FAO for the period 2018-2022.
Global farm equipment manufacturers are continuously diversifying their product portfolio while collaborating with each other in order to maintain their market position. They are also expanding their production facilities across various regions so as to serve better to their expanded customer base. In 2019, Japan-based drone manufacturer, FLIGHTS Co., Ltd, which promotes the use of drones in various industries, developed its own cost-effective drone for spraying pesticides. In the same year, Mahindra & Mahindra Ltd, together with its channel partner Mahgoub Sons Group in Sudan, launched its high-performance range of tractors in the country. This tractor range from 15HP to 92HP covers the needs of all types of farmers with different farm sizes.
ABOUT THE AUTHOR:
Anjali Joshi is a senior market research analyst at Knowledge Sourcing Intelligence. She oversees a team of analysts and is known for the quality of market intelligence she delivers to the clients which range from start-ups and Non-profit Organizations to Fortune 500 companies. Anjali’s keen understanding of international business and market dynamics, coupled with her years of experience working in this industry, allows her to analyse current and future trends across both global and clients’ target markets and help them in making informed decisions.
