The farm equipment rental market involves renting out agricultural equipment such as tractors, harvesters, sprayers, balers, and other equipment to farms for temporary use. Renting farm equipment provides flexibility to farmers and reduces their capital expenditure. Renting equipment on an as-needed basis such as for harvest or planting seasons eliminates the need for high upfront investments and allows farmers to access advanced machinery.
The farm equipment rental market is estimated to be valued at USD 57.17 Bn in 2024 and is expected to reach USD 87.82 Bn by 2031, growing at a compound annual growth rate (CAGR) of 6.3% from 2024 to 2031.
Key Takeaways
Key players operating in the farm equipment rental market are Deere & Company, CNH Industrial, AGCO Corporation, Kubota Corporation, and Mahindra & Mahindra.
The key opportunities in the market include increasing demand for customized and technologically advanced rental solutions from large scale and contract farmers. Furthermore, growth in inclusive rental businesses and pay-per-use models are creating new growth prospects.
The Farm Equipment Rental Market is expanding globally led by growth in Asia Pacific and South America. Countries such as India, Brazil, and China are witnessing rising demand for rental equipment due to lack of access to capital and expensive equipment among smallholder farmers.
Market drivers
Rising labor costs are a major growth driver for the farm equipment rental market. Hiring farm equipment on rental helps reduce dependence on manual labor and cuts operating costs significantly. Rental equipment enhances agricultural productivity while minimizing workforce requirements. The availability of compact equipment suitable for small farms is increasing adoption.
PEST Analysis
Political: Farm equipment rental market is influenced by government policies and regulations regarding the agriculture industry. Subsidies and tax benefits for farm mechanization impact demand.
Economic: A growing economy increases farm output and drives the need for advanced machinery for high productivity. Fluctuations in commodity prices and farm income influence equipment upgrades and rental decisions.
Social: Population growth increases global food demand. Urbanization is reducing the agricultural labor force, raising mechanization needs. Younger generations are less interested in manual farming, boosting demand for modern equipment.
Technological: Advanced digital technologies like automation, IoT, data analytics and GPS are integrating into farm tools. This improves functionality for tasks like autonomous sowing, spraying, harvesting etc. Drones and robotics open new precision agriculture possibilities.
Geographical Regions
The North American region accounts for the largest share of the global farm equipment rental market in terms of value. This can be attributed to the high demand for renting tractors and harvesters from large agricultural farms in countries like the US and Canada. Mechanization is well-established and rental services are widely used for equipment sharing or to supplement owned machinery during peak seasons.
The Asia Pacific region is projected to grow at the fastest pace during the forecast period. Significant investments are being made in the agricultural sector across developing economies to boost productivity and output. Rising farm incomes and subsidies and initiatives by governments to promote modernization are fueling rental equipment adoption. Increased contract farming and cooperative mechanization models also support market expansion.
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Ravina Pandya, Content Writer, has a strong foothold in the market research industry. She specializes in writing well-researched articles from different industries, including food and beverages, information and technology, healthcare, chemical and materials, etc.
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