Farm Equipment Market is projected to be worth USD 114.2 billion in 2020 growing at a CAGR of 3.50%. Factors driving the market growth are farmers’ desire to boost output and productivity, significant developments in technology, government incentives, easy availability of credit, and the rise of contract farming. It’s anticipated that farmers will invest in new equipment thus creating revenue-generation opportunities for the market players.
- Asia-Pacific region is predicted to rule the market share in the next couple of years, majorly owing to high significance of agriculture in India and China.
- Tractors surfaced as the leading product category and contributed to over 43.6% of the market share in 2020 which is why these are often considered essential agricultural equipment.
- Despite the Covid-19 pandemic, the demand for farm equipment was strong in 2020 because food production and agriculture were treated as essential, so farmers had to continue activities as normal.
- India and China lead the sale of tractors by a big margin. India happens to be the world`s biggest tractor market in 2020, a title which it has consistently held for the last 5 years.
- Demand for tractors of 40HP to 100 HP is continuously increasing in India owing to its capacity to perform well in even terrains that are difficult.
The farm equipment industry is an increasingly lucrative one, with the need for better farming methods. The increased mechanization of various agricultural activities such as plowing, harrowing, planting, harvesting, and farming is expected to increase the demand for agricultural equipment, which will stimulate the growth of the global agricultural equipment industry. In India, tractor sales grew as a result of government programs for rural development and agricultural mechanization, and a range of other factors, such as increasing pay in rural areas is likely to raise farm equipment sales. The emergence of new technologies can provide opportunities for profitable growth. These technologies can provide better performance and fewer errors. However, technologically advanced equipment may not be cost-friendly and small-scale farmers in developing countries such as India may not willing to invest which could be a restraint.
Key market players include John Deere, Mahindra & Mahindra, AGCO, CNH Industrial N.V., Kubota, Valmont Industries Inc., International tractors Limited, and Iseki & Co., Ltd. These companies hold this position as they give importance to the quality of farm equipment as well as technological developments and make product strategies accordingly.
- Deere and Co. saw an increase in the sales of tractors and in the quarterly profits after rising crop rates.
- Kubota, a Japanese tractor manufacturer to invest in Escorts which is a Faridabad-based company. This deal could help Kubota increase its presence in India and become a key player.
- Indian major, Mahindra, and Mahindra announced that 26094 tractors were sold in India in November 2021. Irregular rains were identified as a factor leading to a drop in sales.
- In October 2021, the Indian government announced a 50% discount on tractor purchases under the PM Kisan Tractor Scheme. If a farmer buys a tractor under the program, he will be qualified for the program's benefits and will be responsible for half of the purchase price.
- In India, the market share of 41HP-100HP tractors in overall domestic volumes climbed to around 50.8 percent between April and October FY21, an increase from 49.3 percent during the same period in FY19.