As a result of COVID-19 and the farmers’ unwillingness to acquire pricey high-powered farm equipment, the agricultural equipment market is expected to experience a minor decline in 2020. For details, you can refer to this agricultural equipment market report by BIS Research.
However, the restart of manufacturing facilities, the opening of international crossings, favorable weather (rain) conditions in equatorial regions, and government assistance for agriculture are anticipated to help re-establish momentum by the end of the year.
Government assistance in the form of loan forgiveness and credit financing
Farm loan waiver programs encourage farmers to purchase farm equipment. Governments established various programs in various parts of the globe to relieve farmers of debt and promote agricultural automation.
For example, the US Farm Service Agency guarantees and directs loans to family-size farms that can’t secure commercial credit from a Farm Credit System institution, a bank, or other lenders.
Additionally, FSA loans may be used to finance the acquisition of land, animals, seed, feed, equipment, and supplies. The government invests a significant amount of money each year on different subsidies to stimulate the agriculture sector.
Due to the high cost of agricultural equipment such as combines, tractors, and harvesters, it is difficult for farmers to acquire them with their restricted finance sources. As a result, numerous governments have boosted their assistance for farmers in credits/subsidies to encourage them to use modern agricultural equipment and therefore enhance food production.
Restriction: High equipment costs in emerging economies
Continuous development efforts and research have led to the formation of modern goods capable of performing various functions. Complex mechatronic systems demand specific production and assembly methods in advanced machines.
The entire process of developing, manufacturing, and distributing the equipment requires significant investment, which is shown in the price of the equipment made accessible to farmers. Small farmers’ inability to invest a large sum adds to agricultural equipment’s low penetration rate in developing nations.
Farmers in developing countries in Asia and Africa are hesitant to invest in costly machinery. However, the adoption of agricultural equipment is high in Europe and North America, owing to workforce scarcity and the increased price of farm labor.
Precision agriculture presents opportunities.
Agriculture is under pressure to provide agricultural goods to feed the world’s rising population, which has driven farmers to prioritize efficiency and production to develop their businesses.
Precision farming is growing more popular among farmers looking to maximize their output with minimal resources. This agricultural technology has the potential to address the issue of increased food demand across geographies successfully.
Additionally, this technology enables farmers to boost operational efficiency and productivity, reducing the gap between agricultural product supply and demand. Precision farming technology enables more effective use of seeds, water, land, fertilizers, and agricultural equipment, resulting in an overall increase in yield quantity and quality.
Agricultural drones that were recently issued to major farms, municipal governments, and agricultural goods wholesalers. Thus, the need for precision farming is a potential for OEMs since it enables farmers to increase their production.
What is the future of the agriculture equipment market?
Tractors are likely to be the rental market’s largest segment. Prices are likely to increase when modern technology is implemented in farm machineries such as balers, tractors, and sprayers.
Thus, farmers may prefer to rent expensive equipment rather than invest in it in dost-prone nations such as China and India. Additionally, the advent of numerous digital rental companies such as Trringo and JFarm Services is projected to increase awareness of rental services in emerging markets.
Author Bio:
Alison Lurie is a farmer of words in the field of creativity. She is an experienced independent content writer with a demonstrated history of working in the writing and editing industry. She is a multi-niche content chef who loves cooking new things.