Executive Summary- Farm Equipment Rental Market
The agricultural industry is one of the most crucial industries in the world. The industry requires ideal climatic conditions, land availability, and fertility, along with sufficient water availability. Apart from these factors, the availability of equipment for farm operations is another huge aspect of traditional agriculture. Some of the primary equipment used in the field include harvester, tiller, cultivators, seeder, and sprayer. Also, to power most of these equipment, a high horsepower tractor is also required in the field.
A wide range of equipment manufacturers are operating globally that offer farm equipment. These equipment come with wide specification settings to fit the users need and demands. Farmers around the world own lands that range from 1 hectare in length to upward of XX hectares. The requirements for farm equipment change with the land availability.
A small farm with less than XX hectares of land might not require high horsepower equipment, but a larger land would. Thus, farm equipment demand by the farmers is dependent on their land availability and equipment affordability. The majority of the small- and medium-scale farmers struggle to afford equipment for their farm as their revenue generation from agriculture is low and less land leads to low production.
Thus, to cater to the long-standing issue of equipment unaffordability, farm equipment manufacturers have started offering farm equipment on a rental basis. Through this, a farmer would be able to use equipment as and when required and would pay for the equipment on an hourly, weekly, or monthly basis.
This has become a major driver for the upliftment of small and medium-scale farmers around the world as through rental equipment, a farmer can increase their agricultural production and thus increase their revenue from agriculture. Through rental farm equipment, small and medium-scale farmers will also be able to cater to the growing global food demand with increased agricultural production.
One of the major challenges in the growth of the farm equipment rental market is the lack of awareness among farmers on the availability of farm equipment on a rental basis. Since awareness is low in some regions of the world, such as the Middle East and Africa, the adoption of rental equipment is low in these regions.
Also, some farmers have such low revenue from agriculture that the affordability of farm equipment on a rental basis is difficult for them. This is another major challenge for the farm equipment rental market.
Farm equipment rental services are one of the biggest solutions to the problems of small and medium-scale farmers. Through increased government initiatives on the growth of the market, the adoption of farm equipment on a rental basis is expected to grow exponentially in the coming years.
Market Drivers and Challenges in Global Farm Equipment Rental Market
A major factor driving the farm equipment rental market is the high cost of farm equipment. Since 2005, due to increased emphasis on agricultural digitization, farm equipment has been updated with new technologies such as ISOBUS and sensors, which has created huge inflation in the prices of equipment.
Thus, the increase in farm equipment cost has made it difficult for growers to afford the equipment. Thus, increased farm equipment cost is a huge driver for the farm equipment rental market.
One of the key challenges for the farm equipment rental market is low awareness about the availability of farm equipment on a rental basis. Since awareness of rental farm equipment is low, the adoption of these equipment is low, which leads to a hindrance in the growth of the farm equipment rental market.
Market Drivers and Challenges in Global Farm Equipment Rental Market
The farm equipment rental market is expected to help farm equipment manufacturers in gaining presence in different regions. Due to their market presence, companies have distinctive advantages in some regions. For instance, Mahindra & Mahindra Ltd. has huge market dominance in India, whereas Deere & Company has a huge market presence in North America.
Through rental farm equipment, the adoption of farm equipment provided by these companies would increase in the regions where these companies do not have much market presence. Thus, the farm equipment rental market would lead to an increased global presence for farm equipment manufacturers.
The global farm equipment rental market is expected to grow more in the coming years with increased government initiatives for the upliftment of the market.
Some of the leading companies operating in the global farm equipment rental market are Associated Supply Company, Inc., Cedar Street Sales & Rentals, Deere & Company, Escorts Limited, Farmease, Flaman Group of Companies, JC Bamford Excavators Ltd., KWIPPED, Inc., Mahindra & Mahindra Ltd., Messick’s, Pacific Tractor & Implement, The Pape’ Group, Inc., Titan Machinery Inc., Tractors and Farm Equipment Limited, and German Bliss Equipment Inc.
Global Farm Equipment Rental Market (by Product)
The farm equipment that are primarily rented by equipment manufacturers includes tractor, harvester, baler, sprayer, and others. These equipment are used by farmers to perform a wide range of activities in the agricultural field.
Global Farm Equipment Rental Market (by Product), $ Billion, 2020 – 2026
The global farm equipment rental market in the product segment is dominated by tractors, followed by the harvester, and is expected to be the same during the forecast period. The dominance of tractors in the product segment is due to the multiple-purpose tractors used in the field. Tractors are used for transportation as well to provide power to other implements such as harvesters and balers.
Competitive Landscape of Global Farm Equipment Rental Market
Rental farm equipment providers have been actively working on growing the market by offering a wide range of farm equipment on a rental basis. Also, equipment providers offer the equipment on an hourly, weekly, or on a monthly basis to offer a better price to the farmers that would require the equipment for longer durations of time.
The market has seen major development by key players operating in the market, such as merger and acquisition, business expansion, partnership, collaboration, and joint venture. The preferred strategy for the companies has been mergers and acquisitions to strengthen their position in the global farm equipment rental market.
For instance, in August 2021, Herc Holdings Inc., a leading North American equipment rental supplier operating as Herc Rentals Inc., announced that it had completed the acquisition of all the assets of Texas- based CBS Rentals. Also, in March 2021, Titan Machinery entered into a definitive purchase agreement to acquire HorizonWest Inc., which consisted of a three-store CaseIH agriculture dealership complex headquartered in the U.S.
Another strategy adopted by the players in the market is partnership, collaboration, and joint venture. The companies have put in considerable efforts to develop new strategies for increasing the availability of rental farm equipment, such as tractors, harvesters, balers, sprayers, and others.
For instance, in February 2019, Tractor and Farm Equipment Limited launched JFarm Services, which aims at increasing easy access to farm mechanization solutions through the rental of tractors and modern agricultural equipment.
The global farm equipment rental market is poised to grow in the forecast period with increased developments by key players in the market. Also, farmers have started opting for rental farm equipment to enhance their agricultural productivity and efficiency, which results in an increased global agricultural production.