The global farm equipment rental market is estimated to be valued at USD 46.8 billion in 2020 and is projected to reach USD 66.4 billion by 2025, recording a CAGR of 7.3%. The market has high growth potential in emerging markets, such as Asia Pacific, South America, and Rest of the World (RoW), as they have started to use farm equipment on rent or lease, which offers them a variety of benefits that allows the crops to be harvested on time without having to meet the large cost of a down payment on machinery. In addition, the launch of new technologically advanced farm equipment in developing countries is projected to drive the growth of the market.
By equipment type, the farm equipment rental market is segmented into tractors, harvesters, sprayers, balers, and other equipment types. The demand for tractors for rental basis by the farmers is expected to further boost mechanization during the forecast period. As the population in the Asia Pacific region continues to increase at a rapid pace, countries such as India, Thailand, and Vietnam would observe a significant growth in the demand for food grains, which, in turn, will drive the farm equipment rental market in the region. The regional government authorities are making efforts to increase farm mechanization by providing additional support to the farmers.
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On the basis of power output, the farm equipment rental market is segmented into <30 HP, 31-70 HP, 71-130 HP, 131-250 HP, and >250 HP. The 71–130 HP market segment majorly consists of 4WD tractors and some 2WD tractor models, as well. Countries in the Asia Pacific region are striving to increase the farm mechanization rates and are experiencing a growth in demand for such tractors. The demand for these tractors from the developed nations is higher due to factors such as high consumption rates, higher food production necessity, greater power requirements in the farms, and the large land size of farm holdings.
Based on drive, the farm equipment rental market is segmented into two-wheel drive and four-wheel drive. The four-wheel-drive segment is projected to witness a faster growth during the forecast period. Four-wheel-drive tractors are robust machines used mainly for large-scale commercial farming practices of 100–2,000 ha. They have a very high pulling capacity and have high wheel-slip and wheel-power capacities. The distinctive feature of this machinery is that it has controls to move all four wheels and provides higher traction as compared to that of 2WD tractors. It is highly versatile and can also support a broader scope of implements, including haulage, loader, mowing, plant protection, tillage, and slashing.
The market in Asia Pacific is projected to drive the market growth during the forecast period, in terms of value. The predominance of small-scale manufacturers and increasing focus on rice cultivation are also widely seen across various countries in the Asia Pacific region. Farmers in the Asia Pacific region are increasingly producing rice and crops such as palm and cotton. Further, a shift from the adoption of labor-intensive farming techniques to advanced technological equipment in the agricultural sector across the Asia Pacific countries has led to increasing demand for tractors and various farming equipment such as harvesters and spraying and threshing equipment for the renting purpose. Investments in various agriculture machinery have also led to increased crop production, particularly in developing countries such as India, China, Vietnam, and Thailand.
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Key players such as John Deere (US), CNH Industrial (UK), Kubota Corporation (Japan), AGCO Corporation (US), Mahindra and Mahindra (India), and Tractors And Farm Equipment’s Ltd. (India) in the farm equipment rental market are focusing on new product launches, expansions & investments, acquisitions, agreements, joint ventures, collaborations, and partnerships to expand their global footprint.
