The global precision agriculture market is growing rapidly and is expected to achieve a CAGR of 13.12% during the forecast period 2022-2027

10 Jul 2023

precision agriculture market

Precision agriculture is focused on detecting, analyzing, and reacting to field variability concerning crop properties with the help of precision agriculture technologies such as global positioning systems (GPS) and sensors. Adopting such technologies will assist the farmers in whole-farm management practices. The potential for increased productivity while lowering environmental consequences is emphasized through the utilization of information technology. 

As per World Bank data, the urban population is expected to grow by 1.5 times and reach 6 billion by 2045. The need to improve agricultural productivity has become critical as the world population has grown exponentially, resulting in increased global food demand, decreased agricultural land, and depletion of scarce natural resources. These factors have also necessitated the implementation of improved crop production technology.

Precision farming is an approach where inputs are utilized precisely to get increased average yields compared to traditional cultivation techniques. The products included in the precision agriculture market are hardware, software, and services. 

Precision agriculture tools and techniques have various applications, such as field monitoring, crop forecasting, precision planting, precision spraying, precision fertilization, precision irrigation, and farm management, amongst other applications.

Farming has witnessed several technological transformations in the last few years, becoming more industrialized and technology-driven. Farmers have achieved better control over growing crops by using various smart agriculture technologies, making it more predictable and improving efficiency. Precision agriculture can achieve various functions, such as farm management, field management, and fleet management.

Different companies and research institutes have extensively worked on diverse types of crops. Precision agriculture combines hardware solutions, such as sensors, robots, GPS, and mapping tools, with software and services to customize the production of various farm produce, including field crops, permanent crops, and other farms produce. Global precision agriculture involves using various technologies such as guidance, sensing, variable rate application, and data analytics and intelligence. 

Major promotion programs by the government help the precision agriculture industry directly or indirectly to grow further. For instance, the Asia-Pacific Federation for Information Technology in Agriculture (APFITA) actively encourages the development and applying cutting-edge information and communication technology (ICT), Internet of Things (IoT), computer vision, remote sensor networks, robotics, big data analytics, machine learning, and other frontier technologies for efficient and sustainable agricultural practices.

The global precision agriculture market was valued at $7,086.6 million in 2021 and is expected to reach $14,615.8 million in 2027, following a CAGR of 13.12% during 2022-2027. The market growth is highly impacted by the increasing requirement for higher crop yield and a boost in investments in climate-smart agriculture practices.

Market Drivers and Challenges in the Global Precision Agriculture Market

The use of precision technologies can assist farmers in reducing waste and increasing efficiency by integrating them into their operations. Trends such as increasing requirements for crop yield and increasing demand to combat climate change further contribute to the growth of the global precision agriculture market. Varying weather circumstances influence soil quality and crop yields. Therefore, farmers adopt innovations and technologies that can optimize production costs and lessen the harmful effects of greenhouse gases, such as methane, on the environment.

The steep decrease in the agricultural labor population has to be replaced with efficient technological solutions to bridge the supply and demand gap in the agricultural industry. Growing labor scarcity in the agriculture industry is one of the major drivers accelerating the demand for precision agriculture. Precision agriculture automates crop production with the help of technologies such as sensing technology and variable rate technology, which leads to a significant reduction in overall labor costs. Furthermore, the World Bank Group (WBG) has been expanding its investment in climate-smart agriculture projects across the globe. Therefore, initiatives from government bodies and financial institutions in climate-smart agriculture are expected to accelerate the adoption of precision agriculture.

The growth of this market is hindered by several challenges too. The major challenge in the global precision agriculture market is the high initial investment. The hardware that the farmers use, such as sensors, and drones, has limitations, including high maintenance and operation costs. Therefore, using expensive tools and technologies is less effective for small farms, as the hardware equipment is too expensive compared to the profits earned for small farms. In addition, emerging and underdeveloped economies lack the infrastructure for precision agriculture, so the demand for precision agriculture equipment is expected to remain low in these countries. Moreover, precision agriculture generates a considerable amount of data, and there are concerns regarding security. There are concerns over the ownership, use of the data, and how the companies will store them. Hence, these farmers are concerned regarding data privacy.

Global Precision Agriculture Market (by Application)

Precision agriculture technologies enable the farmer to optimize and modify the number of agri-inputs and effectively manage the farm activities, resulting in high yield and low operational cost. The applications include field monitoring, crop forecasting, precision planting, precision spraying, precision fertilization, precision irrigation, and farm management, amongst other applications. 

The precision irrigation market is expected to grow significantly during the forecast period, enabling farmers to use water efficiently and reduce the wastage of nutrients, water, and chemicals. Field monitoring applications also present colossal market growth opportunities. The advent of complete field monitoring solutions has proved to be one of the most beneficial applications of precision agriculture technologies. Traditional approaches, such as manual crop inspection and soil monitoring, are not only time-consuming but can also be inaccurate. Thus, applying precision technology in the field monitoring process of collecting georeferenced data and other related information reduces potential threats and boosts viable economic opportunities.

Global Precision Agriculture Market (by Function)

The transformation toward digital agriculture represents the new frontier of agricultural production and is recognized as the most valid solution to increasing the quality and sustainability of future food production worldwide. Precision agriculture technologies can be utilized in functions such as farm management, field management, and fleet management.

The field management captures major market share due to the usage of hardware such as sensors, drones, nozzles, cameras, smartphones, and tasks such as planting, spraying, fertilizing, and irrigation, among other activities. The field management software integrates sensor data and imaging input with other data, allowing farmers to identify fields that require treatment and verify the optimum amount of water, fertilizers, and pesticides to apply. This supports the farmer in various ways, such as avoiding wasting resources and run-off and ensuring that the soil has just the right amount of additives. 

Global Precision Agriculture Market (by Farm Produce)

Advanced precision agriculture techniques and technologies have been introduced in the agriculture industry, which aims to efficiently handle the production of all types of farm produce, such as field crops, permanent crops, and other types of farm produce.

Field crops capture a significant market share in the global precision agriculture market because these crops are grown for large-scale consumption. This is followed by permanent crops, which include fruits, vegetables, and nuts, among others.

Global Precision Agriculture Market (by Technology)

Precision agriculture is gaining popularity primarily due to the introduction of high technology that is more accurate, cost-effective, and user-friendly in the agricultural industry. Precision agriculture technologies include guidance, sensing, variable rate application, data analytics, and intelligence. 

Guidance technology is a majorly used technology in the global precision agriculture market. The guidance technology comprises the global positioning system (GPS) and global navigation satellite system (GNSS) technologies applied in the agriculture industry for navigation purposes. It is followed by sensing technology. Sensing technology solutions are integrated with data analysis software that helps the farmers process the extracted farm information.

Global Precision Agriculture Market (by Product)

The products included in the global precision agriculture market are hardware, software, and services.The market share is dominated by hardware solutions. Hardware solutions in precision agriculture include automation and control solutions, sensing and navigation solutions, and other hardware solutions such as probes and analyzers. The rising demand for hardware solutions is because of the widespread use of yield monitors, handheld computers and mobiles, and agriculture cameras.

Global Precision Agriculture Market (by Region)

The market holds a prominent share in various countries of North America, Europe, Asia-Pacific and Japan, China, the U.K., Middle East and Africa, and South America. The supportive government policies and the economic advantage provided by economies of scale operation have made farm consolidation a common phenomenon around the global nations, especially in developing countries.

The global precision agriculture market is growing rapidly and is expected to achieve a CAGR of 13.12% during the forecast period 2022-2027. North America and Europe are the key contributing regions to the global precision agriculture market. The sprouting of start-ups bringing in precision agriculture-related products and the demand for food production with efficient input utilization to cut down production costs are forcing the adoption of precision agriculture in the Middle East and Africa. Providing technical training for farmers to adopt advanced precision agricultural technologies is increasing its adoption in China.