Agriculture Technology-as-a-Service Market Size is Expected to total US$ 3796.1 million by 2027
The global agriculture technology-as-a-service market size is expected to grow from USD 1,101.6 million in 2020 to USD 3796.1 million by 2027, at a CAGR of 22.9% from 2021 to 2027. Agriculture technologies are offered as a service for various agriculture applications covering the entire farming cycle, including data management, soil management, yield mapping, monitoring, spraying, harvesting, and planting. With an estimated 80 million people being added to the world’s population every year, the demand for essential ingredients that fulfill their daily needs, such as food, is expected to grow manifold. Subsequently, improvement in the standard of living of the rising urban population worldwide has led to an increased demand for fresh crop produce and animal protein. Increasing demand for food production globally, along with the pressure of providing a constant supply of high-quality farm produce, has formed an alarming situation for the farmers worldwide, who are struggling to increase production per hectare. Moreover, shrinking agricultural lands and scarcity of availability of natural resources raises the urgency to resolve the concern.
The concerns and pressure on the agriculture industry, factored by the growing demand for global food production, prompt the growers to enhance farm profitability despite slowing yield trends in several staple crops. As advancements across end-user industries lead to an efficient world, the agriculture industry gradually incorporates smart technologies on farms for profitable farming. With the introduction of information and communication technologies and advancements therein in the past decade, the agriculture industry has witnessed a revolution. Professionals and experts worldwide are comparing this revolution with the process in the previous century when new farm equipment and machinery, fertilizers, high-yield crops, and pesticides breeds led to dynamic growth in crop production around the globe.
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High growth in the market is probable to be driven by the growing need to adapt agriculture technologies across the industry, conversion of capital spending into operational expenditure for customers, and greater customer retention for facility providers. The extra benefits of lower costs, integration, accessibility, and scalability associated with ATaaS are also anticipated to be responsible for the reported development of the business model. Agriculture is the basis of livelihood and sustenance of the economy in several regions of the world.
Global Agriculture Technology-as-a-Service Market Dynamics
Drivers: Increasing Demand for Global Food Production
According to the FAO (Food and Agriculture Organization) projections of the United Nations (UN), by 2050, the worldwide population of 9.1 billion people would require overall food production to double from 2005. In contrast, the arable land could not be expanded to more than 5%. The demand for food is growing exponentially, and farmers face constant pressure from society to keep up with the demand. With 90% of the growth in the global crop production being dependent on increased cropping intensity and higher yields, the role of agriculture technology practices and equipment has risen to become a necessity for the agriculture industry. Agriculture technology services are being intensively introduced to improve agricultural productivity. Some of the prominent technology services utilized by farmers worldwide include farm management software, agriculture drones, agriculture robots, precision irrigation equipment, and remote sensing.
Challenges: Price Inflation of Agricultural Produce
The inflation of prices in the agriculture and food commodity market directly impacts the income of farmers, which is flexible, as it depends on the number of products sold. An increase in the price of inputs for the grower leads to overall growth in the cost of supplies sold. Even with government subsidies and low import duties, costly inputs in agriculture eventually reflect in the final agricultural commodity. Higher inflation of food prices causes low farmer incomes, which ultimately leads to the farmers cutting down on the costs of production, which does not fall in line with high capital investment and maintenance costs of using agriculture technologies in agriculture. Governments and associations need to find ways to allow technological inclusion in agriculture actively.
Opportunities: Growth of Agriculture Service Economy
With the exponentially growing population worldwide, the subsequent rise in global demand for food, depletion of finite natural resources, and shrinking agricultural lands, the need to enhance farm yield has become critical. Factors such as the increase in the urban population in developing countries with the enhancement of quality of living due to high-income levels and increased demand for animal protein and fresh crop produce are growing the market for crop production. Limited availability of raw materials such as fresh water and arable land and slowing yield trend in some staple crops have prompted farmers and the farming sector to introduce innovative and advanced smart agriculture techniques and technologies to enhance farm profitability. The growth in the agriculture service economy can aid entrepreneurs in adopting the service business model with opportunities to build scalable businesses which can be relevant globally. The increase in the number of companies and start-ups with agriculture technology-as-a-service business models is expected to generate a high influx of funds to this sector.
Scope of the Report
The study categorizes the agriculture technology-as-a-service market based on product, application, technology, and regions.
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By Product Outlook (Revenue, USD Million, 2017-2027)
- Software-as-a-Service (SaaS)
- Equipment-as-a-Service (EaaS)
By Application Outlook (Revenue, USD Million, 2017-2027)
- Yield Mapping and Monitoring
- Soil Management
- Crop Health Management
- Navigation and Positioning
- Others
By Technology Outlook (Revenue, USD Million, 2017-2027)
- Data Analytics and Intelligence
- Guidance Technology
- Sensing Technology
- Variable Rate Technology
- Others
By Region Outlook (Revenue, USD Million, 2017-2027)
- North America (US, Canada, Mexico)
- South America (Brazil, Argentina, Colombia, Peru, Rest of Latin America)
- Europe (Germany, Italy, France, UK, Spain, Poland, Russia, Slovenia, Slovakia, Hungary, Czech Republic, Belgium, the Netherlands, Norway, Sweden, Denmark, Rest of Europe)
- Asia Pacific (China, Japan, India, South Korea, Indonesia, Malaysia, Thailand, Vietnam, Myanmar, Cambodia, the Philippines, Singapore, Australia & New Zealand, Rest of Asia Pacific)
- The Middle East & Africa (Saudi Arabia, UAE, South Africa, Northern Africa, Rest of MEA)
The yield mapping and monitoring application is projected to account for the largest market share by application
The applications can be classified as yield mapping and monitoring, soil management, crop health management, navigation & positioning, etc. In terms of value, the yield mapping and monitoring application dominated the global agriculture technology-as-a-service market (by application) in 2020. High market share and growth potential associated with yield mapping and monitoring as an agriculture technology-as-a-service application is attributed to the growing need to understand the yield pattern before applying any agriculture technology and wide adoption of software-as-a-service business model.
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Yield mapping products are comparatively new to the agriculture industry, thus offering these products as a service allows the agriculture companies and growers to test the product’s viability through essentially affordable initial investment. These are a few primary reasons behind the higher adoption of yield mapping and monitoring products under the global agriculture technology-as-a-service market. Amongst other applications, soil management is valued at the second position in terms of the highest market share. Companies such as SGS and Intertek offer agriculture technology as a service for soil management.
Asia Pacific accounts for the highest CAGR during the forecast period
The geographical analysis of the global agriculture technology-as-a-service market concerning different regions, namely North America, Asia-Pacific, Europe, South America, and the Middle East & Africa. Globally, Asia Pacific is probable to hold the highest CAGR in the global agriculture technology-as-a-service market during the forecast period. As per the United Nations, over 60% of the world’s population lives in the Asia-Pacific region, which is expected to grow exponentially, leading to concerns about food insufficiency. In the Asia-Pacific region, high population growth, increasing disposable incomes, and increased urbanization have increased consumption in the Asia Pacific region. Henceforth, farmers in the region are now concentrating on rising crop yields and providing an all-year supply of agricultural products to satisfy the increasing demand for food. Several countries in the region have experienced the growing adoption of technology. Although the current rate is sluggish, it is anticipated that acceptance will increase at a tremendous pace with rising awareness and growing food demand.
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The rising market penetration of internet farming practices and increased government investments encourage regional demand for agricultural technology. At the same time, growing awareness among farmers and agricultural companies of the value propositions associated with agricultural technology-as-a-service is driving regional growth at a considerable pace.
Key Market Players
The companies evaluated include 365FarmNet GmbH (365FarmNet), Accenture plc (Accenture), AGCO Corporation (AGCO), Agrivi, Airbus SE (Airbus), AT&T Inc. (AT&T), Ceres Imaging, CLAAS KGaA mbH (CLAAS), CNH Industrial N.V. (CNH Industrial), CropIn Technology Solutions Pvt. Ltd. (CropIn), Deere & Company (John Deere), Fujitsu Ltd. (Fujitsu), Hexagon Agriculture (Hexagon), Kubota Corporation (Kubota), IBM Corporation (IBM), Intertek Group plc (Intertek), Microsoft Corporation (Microsoft), Nutrien AgSolutions Inc.(Nutrien), Raven Industries (Raven), Robert Bosch GmbH (Bosch), SGS S.A. (SGS), Taranis, Teejet Technologies (Teejet), Topcon Corporation (Topcon), and Trimble Inc. (Trimble).
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