Agricultural equipment market size, trends and growth is expected to expand at a CAGR of 5.4% during the forecast period 2022-2027 Due to the significant impact of COVID-19, the agricultural machinery industry requires some flexibility for machines to be equipped with transition engines that were already manufactured and procured before the crisis. Markets have slowed during the pandemic as governments take measures to prevent the spread of the virus, global supply chains are disrupted, and production is shut down. The market is driven by increasing mechanization rates in developing countries, which could have long-term implications. Shrinking land, water and labor has increased the need for agricultural mechanization in developing countries. In 2018, the rate of agricultural mechanization in developing countries such as India and China were 45-55%, while in developed countries such as the United States it was 95%. In 2020, tractors will account for more than 43.6% of the market share of the agricultural machinery market. Asia Pacific is expected to grow rapidly due to high demand for agricultural products mainly from India and China during the forecast period. In Asia, China dominates the production and sales of agricultural equipment. Meanwhile, India, Japan and Australia are expected to contribute significant shares to the global market in the coming years, overtaking Europe as the largest market. The population of the region is increasing, driving the need for agricultural mechanization. In 2021, New Holland Agriculture entered a strategic partnership with the agriculture division of the Alamo Group, a leading supplier of implements and accessories compatible with New Holland's line of compact and medium tractors. In September 2019, CNH Industrial expanded its presence in China by opening a new parts and service center in Shanghai, China. 
Agricultural equipment market size The agricultural equipment market size was valued at over USD 120 billion in 2021 and is expected to grow at a CAGR of 10% from 2022 to 2028. Global industry shipments are expected to exceed 10 million units by 2028. Favorable government initiatives aimed at supporting the development of the agricultural sector are driving industry demand. Many government departments around the world provide funding to their farmers to help them adopt sustainable farming practices and use machinery to increase productivity. In addition, financial support to farmers through local government loan relief programs complements market development. The COVID-19 pandemic has forced government authorities to impose strict restrictions and travel restrictions in 2020. It is hampering the logistics and OEM production of farm equipment, affecting overall sales. The implementation of strict travel restrictions has created further challenges for farmers with labor shortages and barriers to hiring skilled labor for various field tasks, thus encouraging farmers to purchase agricultural equipment that can help improve operational efficiency and productivity. farms. The agricultural equipment industry will recover in 2021 due to improving economic conditions and the adoption of agricultural mechanization technologies that will help increase agricultural productivity. 
Asia Pacific is considered to be one of the fastest growing markets as companies located in the region are launching new agricultural machinery, thus dominating the market with faster innovations and product launches. The Chinese government is promoting agricultural mechanization of various crops such as rice, wheat, corn, potatoes, canola, cotton and sugarcane. In 2020, China's Ministry of Finance issued a central financial subsidy of more than 20 billion yuan for the purchase of agricultural machinery. China plans to make the total mechanization rate of crop cultivation and harvesting reach 75% by 2025. According to the Tractor and Machinery Association of Australia (TMA), sales in the country's small tractor segment have increased, supported by an immediate asset write-off program. In 2020, the number of tractors under 40 hp (30 kW) increased by 72% year-on-year for the month and 36% year-on-year for the full year. Increasing focus on agricultural mechanization and government push for mechanization is likely to boost sales and lead to innovations such as driverless machines, which are likely to drive the market over the forecast period. Given the positive contribution of governments, businesses, associations, and individuals around the world in boosting agricultural production, the agricultural equipment industry has seen a global boom in trade in recent years. Many government administrations offer farmers incentives and a wide range of financing options to maximize yields by using advanced agricultural machinery and incorporating sustainable agricultural practices, creating favorable prospects for companies operating in this market. 
Agricultural equipment market trend
The agricultural equipment industry primarily acts as a key bridge in the food value chain, providing the necessary equipment along with the necessary maintenance support. Highlights of the key trends defining the industry are outlined below:
- Pay attention to tracking
Technological and social food system innovations and the relocation of supply chains can play a key role in addressing the pandemic. It will also help ensure that these supply chains are more resilient and sustainable to any other potential or unexpected events. In fact, the growing trend of localization focused on incorporating sustainable functions will pave the way for the growth of the global agricultural equipment market in the coming years.
- rent explosion
Farm equipment rental solutions not only help in increasing the awareness of farmers but also help in reducing farming costs, increasing income and overall returns. Agricultural equipment sharing platforms are likely to become popular in the coming years.
- Scaling up precision agriculture
Precision agriculture is expected to see significant growth post-COVID-19, further helping farmers and the food sector achieve sustainable yields. Precision agriculture uses key precision monitoring tools to generate greater yield per unit area so that overall production is sustainable and achieved by optimizing resources. This development is likely to change the landscape of the global agricultural equipment market in the coming years.
- The need for digitization in agriculture
Although agriculture is one of the leading industries in the world, much of the industry is still underserved by digitization. This is particularly important given the increasing prevalence of variable weather patterns caused by global warming. Droughts in the United States have cost the economy $291 billion since 1980, according to the National Oceanic and Atmospheric Administration. Similarly, a NASA study found that fluctuating rainfall and increased carbon dioxide could reduce annual crop yields by a quarter by 2030.
- The fight for electrification and autonomy
Although the industry has spent decades turning to autonomous agricultural equipment, the race to commercially produce such products has recently gained significant traction. Farm equipment manufacturers are now getting closer to having fully driverless tractors on farms. 
In particular, with net zero emissions targets at the heart of the electric vehicle revolution, the shift to greener technologies is becoming increasingly urgent. But when it comes to heavy agricultural machinery, agricultural electrification may be more suitable for autonomous robots. Major agricultural equipment OEMs such as Mahindra, Kubota and John Deere are already launching driverless tractors that can operate with the highest precision. To that end, John Deere, the world's largest agricultural equipment manufacturer, expects to launch a 14-ton electric tractor that does not require an operator in the fall of 2022. Such developments will enable the standalone agricultural equipment market to yield lucrative returns in the coming years. However, most of the bells and whistles surrounding modern and electric farm equipment are designed to improve the accuracy of chemical applications and reduce labor requirements. The technology still has shortcomings in energy conversion and performance. With constant innovation, it will be interesting to see how motorized agricultural machinery will revolutionize the agricultural equipment market in the next decade. The market is driven by increasing mechanization rates in developing countries. Shrinking land, water and labor has increased the need for agricultural mechanization in developing countries. In 2018, the rate of agricultural mechanization in developing countries such as India and China were 45-55%, while in developed countries such as the United States it was 95%. In 2017, the level of agricultural mechanization in India was 40-45%. With nearly 80% of small and marginal farmers owning less than 5 hectares of land, penetration of agricultural equipment has been slow. 
Agricultural equipment growth
The global agricultural equipment market is expected to grow from US$ 99.4 billion in 2021 to US$ 126.0 billion in 2027, at a CAGR of 4.0% during the forecast period. An increase in demand for agricultural mechanization has also been seen recently, and this demand is expected to strengthen further as the population grows. Asia Oceania remains an important market for agricultural equipment, although demand is also growing in Europe and North America. The US farm equipment market is expected to grow at a rate of 7% by 2028 due to the increasing use of specialty tractors. According to the US Department of Agriculture (USDA), agriculture, food and related industries contributed $1.055 trillion to US GDP in 2020, or 5% of total GDP. Agricultural production contributed $134.7 billion, or about 0.6 percent of total GDP. Since agriculture-related industries rely on the contribution of agricultural products to the economy, the total contribution of the agricultural industry accounts for more than 0.6% of the total GDP. Manufacturers such as Deere & Company and Claas KGaA mbH offer innovative specialist tractors with high power for processing hard-to-reach areas and handling a variety of implements. The increasing development of modern machinery to improve agricultural performance and production is driving the market demand. The industry has seen an explosion in farmers using digitally connected tractors to increase productivity. In addition, there is an increasing trend in small-scale private farming. The company introduces compact tractors for heavy and demanding applications. 
Europe farm equipment market size, by country The European agricultural equipment market accounted for nearly 20% of the revenue share in 2021 and will witness steady growth through 2028. The industry in the region has high demand for agricultural equipment due to rising labor costs in agriculture and shortage of seasonal workers. Industry players are focusing on improving the functionality of their agricultural equipment products to gain a competitive position and serve a wide range of customers in the region. Companies are adding additional features to their product lines to address labor shortages. Penetration in developing countries is lower. Hence, the agricultural mechanization market has great potential to increase the penetration rate and size of the agricultural equipment market during the forecast period. The market for agricultural machinery, including combines, is expected to grow as African farmers demand access to the latest agricultural technologies to improve their farming operations and reduce production costs. The African Union Commission (AUC) and the Food and Agriculture Organization of the United Nations (FAO) see agricultural mechanization as a direct and integral part of achieving the vision of zero hunger by 2025 as stated in the Sustainable Development Goals outlined in the agenda 2063. action. The agricultural machinery market has consolidated with major players capturing most of the market share. The leading players in the market are Deere and Co., CNH Industrial, AGCO Corporation, Kubota, Mahindra and Mahindra Limited, Iseki & Co. Ltd, JC Bamford Excavators Limited and Lindsay Corporation. These companies engage in various strategic activities such as product innovation, expansion, collaborations, and mergers and acquisitions. For example, in August 2021, John Deere introduced the new 6155MH tractor, which offers all the field performance and reliability of the other M-Series. 
Technology-based agriculture equipment is the future of farming, which is paving the way for market growth. Owing to rising fusion of innovative technologies in agriculture equipment, the market is expected to witness significant growth during the forecast period. Rising population is increasing the demand for food, thereby increasing pressure on farmers to innovate time and cost-efficient methods of farming. Agriculture equipment helps farmers make farming more profitable and stress-free by enhancing crop quality and reducing labor cost.
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