Precision Farming Market – Global Forecast to 2025

Precision Farming Market by Technology (Guidance, VRT, Remote Sensing), Application (Crop Scouting, Field Mapping, Variable Rate Application), Offering (Hardware—Sensors, GPS, Yield Monitors; Software; Services) and Geography – Global Forecast to 2025

The precision farming market is estimated to be USD 7.0 billion in 2020 and is projected to reach USD 12.8 billion by 2025, at a CAGR of 12.7% between 2020 and 2025. The major factors driving the growth of precision farming market includes increasing farm mechanization in developing countries, rising labor cost owing to shortage of skilled labor, increasing strain on the global food supply owing to increasing population, substantial cost savings associated with smart farming techniques, and government initiatives to adopt modern agricultural techniques.

Precision farming is gaining tremendous popularity among farmers due to the increasing need for optimum crop production with limited available resources. Further, the changing weather patterns due to increasing global warming have impelled the adoption of advanced farming technologies to enhance farm productivity and crop yield. The precision farming has the potential to transform the agricultural sector, making the traditional farming activity more efficient and predictable. Increasing global food demand, extended profitability and crop yield, and crop health monitoring for higher yield production are the major factors fueling the growth of the precision farming market. Also, government initiatives in many country are helping farmers to use optimized agricultural and technological tools to improve their production levels.

COVID-19 Impact on the Global Precision Farming Market

The precision farming market is expected to witness a marginal dip in 2020 due to the COVID-19 pandemic as the movement restriction and lockdowns has resulted in the disruptions in the supply chain and led to a shortage of equipment, however the use of remote sensing and farm management software tools could lead to higher adoption during post COVID-19 period. COVID-19 has disrupted the supply chain in the precision farming market, and companies are exploring new opportunities to interact with growers and farmers by leveraging technologies. Companies have started focusing more on wireless platforms to enable real-time decision making with respect to yield monitoring, crop health monitoring, field mapping, irrigation scheduling, and harvesting management. For instance, SensoTerra launched new wireless systems in May 2020 to improve farm connectivity and field data analysis on the cloud. These sensor systems improve connectivity and can also be used for crops with large canopies with minimum manual support. Growers can access data in real time via a web-based interface or an app installed in their smartphones. The impact of COVID-19 pandemic is expected to be for shorter duration and the market is expected to offer lucrative growth in medium to long term.

IoT device installations in agriculture farms around the world are projected to witness a compound annual growth rate of 14%. COVID-19 is further expected to accelerate the installation of IoT devices in agriculture farms across the world to optimize irrigation scheduling with reduced labor requirements in the field. The number of connected agricultural devices is expected to wtiness a promising growth in medium to long term.

Precision Farming Market Dynamics

Driver: Surging adoption of variable rate, remote sensing, and guidance technologies

The adoption of technologies such as VRT, remote sensing, GPS, GIS, and guidance technology in precision farming has led to an increase in productivity and a decrease in labor overheads. Likewise, the use of cutting-edge technology-based agricultural equipment has enabled the optimum utilization of resources. Precision farming equipment based on advanced technologies not only add to the bottom-line savings by reducing the labor cost but also improves farm operations to a great extent.

Tasks performed before harvesting, such as weeding, application of fertilizers, and site inspections, account for about 50–70% of farm operating expenses. In precision farming, drones equipped with cameras are used for spraying, weeding, pruning, and harvesting applications. These drones take hyperspectral images, which help farmers to monitor processes at farmlands remotely. In the next 10 years, precision farming technology is expected to gain momentum, reducing the need for manual labor in farms, which would result in a drastic reduction in the labor cost.

Restrain: Limited technical knowledge and skills of farmers or growers

Precision farming is a smart farming technique that requires technical knowledge. The presence of limited knowledge about cutting-edge technologies and their usage creates a gap between the understanding and the execution of the concepts in precision farming. Although several governments and market players across the world are taking initiatives to provide training and consultation services to farmers regarding the utilization of precision farming techniques, many farmers remain outside the purview of such efforts. Likewise, limited technical knowledge to farmers in developing countries such as China, India, and Brazil hinders the growth of the precision farming market.

Opportunity: Integration of smartphones with hardware devices and software applications

The smartphone is among the most widely used technological inventions in history, and with the availability of multiple user-friendly farming applications (apps), smartphones are becoming powerful and easy-to-carry tools for farmers. Most of the smartphone apps are inexpensive and provide crucial information related to farming, such as weather and climate conditions. These apps effectively help farmers to make smart decisions.

Smartphones can be integrated with several hardware devices such as sensors, high-resolution cameras, and GPS receivers for various activities such as sample collection, aerial imaging, and record-keeping (a task recommended by experts). Some farming apps can load field information, and then with the help of software tools, grid it acre-wise.

Challenge: Management of data for productive decision making

Management of data is a major challenge for the growth of the precision farming market. Precision farming regularly produces high volumes of important data pertaining to mapping, variable rate seeding, soil testing, yield monitoring, and historical crop rotation. This data must be stored and managed properly as successful precision farming relies entirely on it for assessing farm conditions. Data management is the key to making smart farm-management decisions and improving farm operations.

The data is collected in raw format, processed by context, relevance, and priority, and it is then presented in a manner that can be used to make decisions. A major challenge faced by farmers is managing this data, which requires expertise and knowledge. Also, many users of precision farming do not know how to analyze their precision data. The adoption rate of precision farming could be boosted by providing easy data management solutions to farmers. However, to utilize it better, efforts should also be made to standardize the data format of precision agriculture processes.

Guidance Technology to hold largest market share between 2020 and 2025

Guidance technology held the largest market size owing to the early adoption of this technology by farmers or growers. GPS-based guidance technology allow growers to reduce overlapping of equipment and tractor passes, thus saving fuel, labor, time, and soil compaction. The main components needed for a guidance technology based system or device are a GPS/GNSS, DGPS receiver, antenna, controller, guidance & steering, handheld devices and display, along with the accompanying wiring harness. Other optional items include a data logger, sound device, or visual display. Guidance technology has been categorized into GPS/GNSS based guidance technology and GIS based guidance technology.

Market for weather tracking and forecasting followed by irrigation management application to grow at higher CAGR during forecast period

Increasing demand for climate information services owing to their benefits that enable farmers to deal with climate change and variability to improve decision-making in agriculture is the major reason behind the high growth of the market for weather tracking and forecasting between 2018 and 2023. Moreover, the increasing demand of cloud platform for climate services is a major factor propelling the growth of the precision farming market for this application. Irrigation management is expected to witness an attractive rate of growth during the forecast period. Irrigation management involves the use of technologies such as weather-based controllers, rain sensors, temperature sensors, network elements, water meters, and sensor-based controllers. The increasing demand for water conservation and food production, and reduction in the wastage of resources are the major driving factors for the growing adoption of precision tools for irrigation management applications.

“Market for the hardware required in precision farming is expected to hold the largest share during the forecast period.”

On the basis of offering, the precision farming market has been classified into hardware, software, and services. Hardware held the largest market share in 2018 owing to the high adoption of automation and control devices–drones/UAVs, GPS/GNSS, irrigation controllers, guidance and steering systems, yield monitors, and sensors. The increasing adoption of new technologies and advanced devices for precision farming is expected to drive the growth of the precision farming market for hardware. The precision farming market for services is expected to grow at the highest CAGR during the forecast period. Increasing demand for managed services is the major factor contributing to the growth of precision farming services market.

“Americas expected to account for the largest market share from 2020 to 2025.”

The Americas held the largest share of the precision farming market in 2020. Countries such as the US, and Canada in the Americas are the early adopters of precision farming technologies, which is the major reason for the high share of this region in the precision farming market. Farmers or growers in this region are increasingly adopting advanced farming systems and equipment such as steering and guidance systems, sensors, display devices, and farm management software. Rising adoption of advanced technologies in various agricultural applications, reducing number of labor, consolidation of farms, growing population, and increasing requirement for high productivity from the existing farm areas are some of the other factors fueling the growth of the precision farming market in the Americas.

 

Source: Marketsandmarkets

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