Autonomous Tractors Market (2022-2029)

The growth of this market is driven by the rising adoption of modern agricultural techniques, the increasing government initiatives to support farmers, and improved credit availability. However, the high initial cost of advanced agriculture equipment and the rising fragmentation of land are factors restraining the growth of the autonomous tractors market.

Technological advancements and the shortage of farm laborers are expected to offer significant growth opportunities for players operating in this market. However, the low awareness of advanced agriculture technologies poses a major challenge to the market’s growth. Furthermore, agriculture digitalization is a major trend observed in this market.

The COVID-19 pandemic adversely affected the global economy. The lockdowns and quarantines imposed to curb the spread of the SARS-CoV-2 virus negatively impacted many sectors, including the agricultural sector. In the initial days of the pandemic, disrupted logistics and transportation impacted the movement of agricultural commodities. Hence, the autonomous tractors market registered a decline in sales in 2020.

In addition to the interruptions in the industry’s value chain from raw materials supply to manufacturing, packaging, and distribution, the COVID-19 pandemic also led to restrictions on the movement of workers, the closure of equipment manufacturing facilities, and reluctance among farmers to buy expensive equipment due to the uncertainty in the market. The industry suffered severe labor shortages due to repeated lockdowns, affecting machinery production. The decline in revenues during the initial months of 2020, coupled with reductions in demand from major markets, impacted the profitability of autonomous tractor manufacturers and vendors. Therefore, disruptions in transportation & logistics impacted production and adversely affected the autonomous tractors market in terms of sales volumes during the initial phase of the pandemic in 2020.

However, government bodies gradually eased restrictions on transportation, making it easier for autonomous tractor providers to meet the demand from farmers across most countries. In 2021, strong growth was witnessed in the autonomous tractors market due to the growing demand for agricultural commodities. In addition, the increasing number of government subsidiaries for purchasing autonomous tractors contributed to the market's growth.

The implementation of farm loan waiver schemes encourages farmers to buy farm equipment. Several governments have launched various schemes in different parts of the world to relieve farmers from their loans and encourage farm mechanization.

Government subsidies play an essential role in the agriculture sector of a country. For instance, the U.S. Farm Service Agency (FSA) provides guaranteed and direct farm ownership and operating loans to family-size farmers who cannot obtain commercial credit from a bank, farm credit system institution, or other lenders. FSA loans can also purchase land, livestock, equipment, feed, seed, and supplies. The United States Department of Agriculture also announced various loan programs, including direct farm ownership down payment program. The maximum loan amount increased from USD 250,000 to USD 300,000, and the guaranteed amount on conservation loans increased from 75 to 80%. Thus, the Government spends heavily on various subsidies to drive the agricultural sector.

Farm equipment, such as tractors, combines, and harvesters are expensive; hence, it is challenging for farmers to purchase this equipment with limited funding sources. In India, Rashtriya Krishi Vikas Yojana is a state government scheme that provides 100% subsidy to farmers. The scheme aims to develop the agriculture sector keeping agro-climatic, natural resources, and technology in mind. The Government also provides agricultural machinery where assistance is provided for farm mechanization and women-friendly equipment and tools. Furthermore, the NABARD loan scheme provides a subsidy of up to 30% on the purchase of tractors. Apart from this, up to 100% subsidy is given for other agricultural machinery to increase farmers' productivity.

Therefore, several governments have increased their support through improved subsidies/credits to encourage farmers to adopt autonomous equipment and increase crop production.