The global farm equipment market is projected to grow from USD 107.7 Billion in 2023 to USD 136.3 Billion by 2028, at a CAGR of 4.8% during the forecast period. The growth of the farm equipment market is largely fueled by factors such as government assistance through farm loan waivers and credit financing, incentives offered by equipment manufacturers to boost dealer services and rentals, the increasing adoption of farm mechanization, and the practice of contract farming.
The tractors segment holds the largest share of the farm equipment rental market. The market’s growth can be attributed to the increasing farm mechanization driven by government efforts to encourage farmers to rent equipment as per their needs. The demand for tractors accounted for the largest share, followed by combines. The rising concerns over farm productivity across the globe would subsequently drive the growth of the tractors segment in the farm equipment rental market during the forecast period. The segment will be leading in Asia Oceania market where most small and medium farmers opt to rent tractors with high power output, such as 71-130 HP, for farming operations through key players such as John Deere, AGCO Corporation, Mahindra & Mahindra, TAFE, etc. For instance, TAFE provides J-farm services for renting high-power output tractors through the farmer-to-farmer model, which negotiates the rental price and thus fulfills their respective requirements. In August 2021, Sonalika Group also introduced the ‘Sonalika Agro Solutions’ app, designed to facilitate the rental of advanced farm machinery for farmers. It serves as a platform for both listing tractors and implements for rent and for interested farmers to find and rent these resources, all through their smartphones. Farmkart, an Agri-tech innovation startup, started in 2017 in India, introduced the tech-driven platform 'rent4farm' to tap into the unstructured agriculture equipment rental business. The platform enables farmers to rent high-quality machinery and equipment at competitive rates. Such technological innovations are shaping the farm tractor rental market in Asia Oceania, offering farmers more efficient and eco-friendly options for their operations, giving promising opportunities for market players.
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The 31-70 HP segment holds the largest farm tractor rental market share. Asia Oceania is estimated to be the largest market for 31-70 HP tractors for rental purposes, as these tractors are suitable for farmland that ranges from 1 to 20 acres. The key markets of Asia Oceania, such as China, India, and Japan, have smaller farmland sizes. The tractors are powerful enough to handle various tasks, such as tillage, planting, and harvesting, but they are also not too large or bulky to maneuver in small fields or orchards. 31-70 HP tractors are typically more fuel-efficient than larger tractors, which can save farmers money on fuel costs and are easy to maintain, saving farmers time and money. Also, the farm size in emerging countries is small to medium and requires fewer power tractors than high-power tractors. The cost of manual labor or draught animals is the same when renting a low to medium-power tractor. Smallholder farms mostly prefer these tractors, and 84% of the world’s 570 million farms are smallholding, less than two hectares in size. This drives the growing demand for tractors with moderate power output like 30-70 HP. A shift towards small-scale farming can be a dominating factor in leading the 31- 70 HP tractor market growth.
Asia Oceania market is projected to be the largest. The Asia Oceania region comprises China, India, Japan, South Korea, Australia, and Rest of Asia Oceania. In addition to high containerized transportation, factors such as increasing Gross Domestic Product (GDP), infrastructure investments, rising per capita income, growing inclination toward mechanization, and government initiatives for FDI have created more opportunities for the farming business, in turn driving the farm tractor market in the Asia Oceania region. India holds the top position as the world's largest tractor market. Government initiatives, including farmer-focused schemes and loan waivers, along with efforts to encourage farm mechanization, are set to propel the growth of the Indian tractor market. Regulations will play a key role in shaping the country's agricultural industry. For instance, many state-level governments in India offer incentives from the central level to promote electric vehicles. Companies in the Asian market, such as Kubota Corporation (Japan) and Mahindra and Mahindra (India), are constantly evolving, and even more innovative and cutting-edge technologies are expected in the coming years.
Key Market Players:
Major players in the market include John Deere (US), AGCO Corporation (US), CNH Industrial (UK), Kubota Corporation (Japan), and CLAAS KGAA (Germany). These companies have a strong track record in developing and manufacturing farm equipment and its components. They have facilities and manufacturing centers across all regions, such as North America, Asia Pacific, and Europe. They are well-positioned to benefit from the growth of new technologies such as electric and autonomous equipment in the market as they have already stepped into the market by developing their portfolio suitable to adopt the same.
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