The farm equipment market size is significantly influenced by the increasing demand for food production due to the growing global population. As more people require food, farmers are turning to advanced equipment to enhance productivity and efficiency. Innovations in technology, such as precision agriculture and smart farming solutions, are also contributing to the expansion of the market. These advancements allow farmers to monitor their crops and optimize resource use, leading to higher yields and reduced costs. Consequently, the demand for modern farming equipment is expected to rise, further driving the farm equipment market size in the coming years.
Another critical factor impacting the farm equipment market size is the growing emphasis on sustainable farming practices. With climate change posing significant challenges to agriculture, farmers are increasingly adopting equipment designed to minimize environmental impact. This shift includes investments in machinery that promotes soil health, conserves water, and reduces greenhouse gas emissions. As governments and organizations push for sustainable practices, the farm equipment market size will likely see substantial growth as farmers seek to comply with new regulations and meet consumer preferences for environmentally friendly products.
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Battery Electric Tractors would lead the future of the tractor industry.
To adhere to strict emission regulations for Non-Road Mobile Machinery (NRMM), manufacturers are creating hybrid and electric farm tractors. Hybrid versions combine a diesel engine with an energy storage system to enhance fuel efficiency and power for heavy tasks. Alternatively, fully electric tractors rely solely on batteries. Hybrid tractors can save around 35-40% on annual fuel costs. Challenges like expensive batteries, limited technology, and restricted applications may slow electric tractor adoption in the next few years. Yet, the advantages—like energy efficiency, strong torque, clean emissions, and low upkeep—will drive demand over the long term.
Many Indian states are offering incentives to promote the adoption of electric tractors. States like Kerala, Tamil Nadu, and Madhya Pradesh offer a waiver of road tax for electric tractors, and the discount on road tax ranges from 50% to 100%. States like Delhi, Gujarat, Maharashtra, and Rajasthan provide direct cash incentives along with the road tax waiver. These incentives are structured similarly to the FAME II (Faster Adoption and Manufacturing of Hybrid and Electric Vehicles) scheme. Solectrac, Inc., a Northern California-based company specializing in battery-powered electric tractors for agricultural and utility use, has unveiled that its e25 compact electric tractor is now qualified for participation in the Clean Off-Road Equipment (CORE) Voucher Incentive Program, supported by a substantial USD 125 million fund. With all the support from governments, developments in battery technology like increased battery capacities, reduced charge time, etc., and increased cost of skilled labor, especially in vineyards, would generate a demand for electric tractors.
Asia Oceania is projected to be the highest-growing regional market
For the market analysis, the Asia Oceania region includes Japan, China, India, South Korea, Australia, and the Rest of Asia Oceania. The increasing farm mechanization driven by subsidies/loan waivers and government efforts is expected to drive farm tractor sales in India. Electric farm tractors are gaining traction in China due to various factors. The government’s push for cleaner transportation and financial incentives has spurred adoption. Rising awareness of sustainable agriculture’s importance has further driven demand, given the environmental impact of traditional methods. Indian government provides a capital subsidy of up to 40% of the cost of an electric tractor. This subsidy is available to farmers who purchase electric tractors from approved manufacturers. Precision agriculture is gaining recognition in India and China as a sustainable and environmentally friendly approach to crop farming, yielding improved agricultural outcomes. As precision agriculture offers the potential to increase yields, reduce waste, and improve overall farm profitability, farmers often require more advanced and capable equipment to implement these practices effectively. Tractors, a fundamental tool in modern farming, are crucial in precision agriculture operations.
Key Market Players
The farm equipment market is led by established players, such as John Deere (US), AGCO Corporation (US), CNH Industrial (Netherlands), Kubota Corporation (Japan), and CLAAS KGAA (Germany). These companies have adopted several strategies to gain traction in the market.
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