The farm equipment rental market is estimated to account for a value of USD 46.8 billion in 2020 and is projected to grow at a CAGR of 7.3% from 2020, to reach a value of USD 66.4 billion by 2025. The global market is projected to witness significant growth due to factors such as the rise in the global population, shortage of skilled labor, increasing mechanization trends and rising demand for food grain products have fueled technological advancements across the globe are some of the major factors fueling the demand for farm equipment rental.
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The increasing demand for renting tractors and harvesters in the Asia Pacific region is projected to drive the growth of the market
According to the FAO, Asia Pacific accounted for nearly 40% of the global arable land in 2016. 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 tractor and various farming equipment such as harvester 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.
Drivers and Restraints:
Market dynamics for farm equipment rental continue to evolve on the basis key drivers and restraints. The rising demand for operational efficiency and increasing mechanization of farm processes in developing countries increases the demand for farm equipment rental. The key drivers and restraints in farm equipment rental market are enlisted below.
Key drivers for farm equipment rental include:
- Shortage of skilled labor and an increase in mechanization in developing countries
- Rising demand for productivity and operational efficiency
- High cost of agriculture equipment
- Limited availability of arable land
- Growing government subsidies for farming equipment
Restraints impeding the market include:
- Low level of awareness among farmers
The growth of the rental farm equipment market is driven by the growing need to reduce the financial burden on farmers. Farm equipment such as large farm tractors, harvesters, mowers, balers, conditioners, threshing equipment, and tillage equipment are quite expensive for the farmers. However, the farm equipment rental companies ease up the financial burden by offering the equipment at affordable leasing rates. Farm equipment rental services offer cost benefits to farmers and help them transform agriculture through mechanization.
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Key Market Players
Key players in this market include John Deere (US), CNH Industrial (UK), Kubota Corporation (Japan), AGCO Corporation (US), Mahindra & Mahindra (India), JCB (UK), Escorts Ltd (India), Tractors and farm equipment’s ltd. (India). These major players in this market are focusing on increasing their presence through expansions & investments, mergers & acquisitions, partnerships, joint ventures, and agreements. These companies have a strong presence in North America, Asia Pacific, and Europe. They also have manufacturing facilities and strong distribution networks across these regions.