Machines that are used to cultivate agricultural land for the purpose of organic or inorganic farming, among several others, are known as agricultural machineries. The global agricultural machinery market is witnessing rising investments in various research and development activities by leading manufacturing companies. The agricultural machinery market accounted for a market value of USD 202.20 billion in the year 2018. It is further anticipated to grow at a CAGR of 7.82% during the forecast period, i.e., 2020-2027. Rising mechanization in the agriculture sector and use of advanced technologies such as electric and hydrostatic concepts in tractors are anticipated to influence the market growth in the next few years.
Growth Highlights based on Region during 2018-2027
The regional aspect of agricultural machinery market consists of a detailed analysis of the market in North America, Europe, Asia Pacific, Latin America and Middle East & Africa. The market in Asia Pacific is projected to witness the highest growth rate with a CAGR of 9.18% over the forecast period. The growth of market in this region can be attributed to the rising investments in agricultural industry by government for maintaining high productivity from the fields, mainly in countries such as China and India. The market is anticipated to observe significant growth on account of increasing export of agricultural products from the Asia Pacific region to the international market. The market in North America attained a market size of USD 54.44 billion in 2018 and is anticipated to grow further on the back of rising availability of advanced technologies in agricultural machineries along with rising agricultural productivity in the region.
The study further incorporates Y-O-Y Growth, demand & supply and forecast future opportunity in North America (United States, Canada), Latin America (Brazil, Mexico, Argentina, Rest of LATAM), Europe (U.K., Germany, France, Italy, Spain, Hungary, BENELUX [Belgium, Netherlands, Luxembourg], NORDIC [Norway, Denmark, Sweden, Finland], Poland, Russia, Rest of Europe), Asia-Pacific (China, India, Japan, South Korea, Malaysia, Indonesia, Taiwan, Hong Kong, Australia, New Zealand, Rest of Asia-Pacific), Middle East and Africa (Israel, GCC [Saudi Arabia, UAE, Bahrain, Kuwait, Qatar, Oman], North Africa, South Africa, Rest of Middle East and Africa).
Market Segmentation Synopsis
On the basis of product, the agricultural machinery market is segmented into tractor, thrasher, rotavator, self-propelled vertical conveyer reaper, multi crop planter, harvester, power tiller, irrigation systems and others. The segments for tractor and harvester are anticipated to hold the highest market share and the harvester segment is predicted to grow at the highest rate over the forecast period. This can be attributed to tractors and harvesters being the most commonly used agricultural machines. CLICK TO DOWNLOAD SAMPLE REPORT
The market is segmented by crop into grain crops, vegetable crops, fruit crops, fiber crops and high-value crops. Out of these, the grain crops held the largest share of 70.7% in the market and the segment is estimated to continue the growth trend till 2027. Moreover, the segment for vegetable crops is predicted to grow at the highest rate during this period on account of rising demand for food and increasing food security worldwide.
Based on applications, the market is segmented into land development & seed bed preparation, sowing & planting, harvesting & threshing, weed cultivation, plant protection and post-harvest & agro processing. The segment for land development & seed bed preparation held the highest share of USD 39.01 billion in the market in 2018. The harvesting & threshing segment is anticipated to grow at the highest rate over the forecast period. Increasing productivity from agricultural lands all around the world in order to meet the growing consumer demand plays a significant factor in the growth of this segment.
By Energy Capacity
The energy capacity segment is further sub-segmented into below 100 HP, 101-500 HP, 501-1000 HP and more than 1000 HP, out of which, the below 100 HP segment is estimated to hold the leading share in agricultural equipment market and grow at the highest rate over the forecast period, which can be attributed to the high usage of agricultural machinery with an energy capacity of below 100 HP, majorly in regions including Asia Pacific and Latin America.
Market Drivers and Challenges
The decline of population involved in the food production industry, such as farmers and other labor, is estimated to fuel the demand for agricultural equipment and machinery in order to increase the productivity of farm workers. According to the World Bank, the employment in agriculture decreased from 33.8% of total employment in 2009 to 28.1% of total employment in 2019.
Along with the productivity of people, the agricultural output increases through advanced machineries as well. The favorable government policies across developed and developing countries that allow the implementation of numerous initiatives in order to boost the demand for agricultural machinery is another growth driving factor for the market. Additionally, the various other advantages offered by these machineries include reduction in time taken to carry out various activities, increase in productivity and rising profits from the produce. The advancing farming methods and technologies being adopted by farmers results in a substantial increase in the crop productivity. Furthermore, the rising expenditure on research and development activities leads to the development of advanced machines in the agriculture industry. On account of the above mentioned factors, the agricultural machinery market is predicted to grow significantly over the forecast period.
Agricultural machinery market is estimated to experience some challenges which might hamper the market growth in the coming years. The high cost associated with the advanced agricultural equipment and machineries is a major factor estimated to restrict the growth of this market as it further affects the demand for agricultural machinery, especially in the low income countries. Another factor impacting the market growth negatively is predicted to be the mismanagement of resources. Displacement of a large number of people for bringing about industrialization and urbanization in the area has resulted in the depletion of arable land available which is estimated to hinder the market growth over the coming years.
Some of the affluent industry leaders in the agricultural machinery market are KUHN Group, Deere & Company, AGCO Corporation, CNH Industrial, SDF Group, Kubota Corporation, CLAAS KGaA mbH, The Toro Company, Escorts Ltd. and Mitsubishi Mahindra Agricultural Machinery Co. Ltd. Moreover, other key and niche players are increasing their market potential through penetration in new and emerging markets along with innovation and technology introduced in agricultural machinery.
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