A recent study conducted by the strategic consulting and market research firm, BlueWeave Consulting, revealed that the Global Farm Equipment Rental Market was worth USD 45.82 billion in the year 2021. The market is projected to grow at a CAGR of 6.1%, earning revenues of around USD 69.36 billion by the end of 2028. The Global Farm Equipment Rental Market is booming because the need to ease farmers’ financial burdens is one of the main causes fueling the growth of the farm equipment rental market. Agricultural equipment rental market development is being driven mostly by the need to ease farmers’ financial burdens. During the projection period, the market will be favorably driven by the growing need to reduce financial constraints on farmers. Larger farming tools like tillage equipment, mower conditioners, and forage harvesters are not only more expensive but also take longer to produce the required outcomes. As a result, farm equipment rental firms are offering heavy equipment at competitive rental rates. However other factors, such as rising government support for the purchase of new farm equipment, could restrain market expansion.
New Products to Support Market Growth
Countries like China and India have low rental penetration rates when compared to the global average. The CHC farm machinery app, which enables farmers to hire tractors and other farm machinery, was launched by the Indian government in October 2019. Small and marginal farmers can easily rent farm equipment thanks to this software. Mahindra, a pioneer in the farm machinery market, has also unveiled TRRINGO.com as a farm machinery hiring company. The TRRINGO is the first technology-based model in tractor rental services for farmers who are unable to purchase their tractors and other agricultural equipment.
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High Demand for Equipment
Tractors, harvesting equipment, soil cultivation equipment, pest control equipment, and planting and fertilizer equipment are examples of farm equipment rentals. These artefacts are classified into numerous groups. Rotary tillers, for example, are soil cultivation tools that are used in conjunction with tractors. Rotary tillers use an electric motor cultivator with spinning blades to cultivate the soil. Furthermore, the agricultural aircraft sprayer in the farm equipment category serves as pest control equipment. It is used to apply insecticides, pesticides, and herbicides to plants. Furthermore, the distinctive farm equipment combine harvester is a rare piece of machinery that is only available in a few countries. A combine harvester is a piece of machinery used to harvest, clean, and thresh grain crops.
Challenge: Government Support for the Purchase of New Farm Equipment Has Increased
One of the main obstacles to the growth of the global farm equipment rental market is the growing government support for the purchase of new farm equipment. For instance, the Agriculture and Farmers Welfare Department in India offers farmers financial assistance for the purchase of machinery for managing straw. Similar to this, the Chinese government offers farmers up to 30% off the cost of brand-new agricultural equipment as part of a subsidy scheme. Through this government scheme, farmers can get technologically advanced equipment for less money. The demand for new types of farm equipment will increase as a result of government incentives for agricultural equipment. Because of this government help, farmers can now choose to buy current agricultural equipment models rather than rent them. Such challenges can obstruct future development. These factors collectively prevent the global farm equipment rental market from expanding.
Global Farm Equipment Rental Market – By Drive
Based on drive, the Global Farm Equipment Rental Market is segmented into Four-Wheel Drive and Two-Wheel Drive. Tractors with four-wheel drives are durable equipment typically utilized for 100–2,000-hectare commercial farming operations. They have very high wheel-slip and wheel-power capacities in addition to having a very high pulling capacity. The tractor’s body is resistant to the most damage, and it also shortens the time needed for cultivation in general. The industrialized nations, including the US and those in Europe, which have the preponderance of large-scale and commercial farmers, are where 4WD tractors are in the highest demand. They also observe adoption rates of mechanization in farming between 95% and 99%.
Impact of COVID-19 on Global Farm Equipment Rental Market
The market for farm equipment rentals decreased in 2020 as a result of the partial government shutdown and the lack of demand from farmers. Numerous farm equipment products have been put on hold as a result of the COVID-19 pandemic, primarily as a result of the prolonged shutdown in significant foreign markets. The market for renting farm equipment has experienced a significant slowdown recently, and this trend is likely to continue through 2020. In the first quarter of 2020, COVID-19 already affected sales of equipment and machinery, and it is anticipated that this effect will continue throughout the year. The substantial demand for machinery and equipment has already been observed by the United States, Germany, Italy, the United Kingdom, and other major manufacturing nations.
The leading market players in the Global Farm Equipment Rental Market are John Deere, AGCO Corporation, CNH Industrial, Kubota Corporation, CLAAS Company, Zector Tractors, Valmont Industries, SAME Deutzfahr Group, Kuhn Group S.A, Manitou Group, and Other Prominent Players. The Global Farm Equipment Rental Market is highly fragmented with the presence of several manufacturing companies in the country. The market leaders retain their supremacy by spending on research and development, incorporating cutting-edge technology into their goods, and releasing upgraded items for customers. Various tactics, including strategic alliances, agreements, mergers, and partnerships, are used.
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