Digital Agriculture Market

The global Digital Agriculture Market is on a trajectory of significant growth, with an estimated value forecasted to reach USD 39.8 billion by 2029 from the 2024 valuation of USD 24.2 billion, exhibiting an optimistic Compound Annual Growth Rate (CAGR) of 10.4%. Continuous innovations in the digital agriculture market concerning precision farming techniques such as GPS/GNSS technology, sensors, and increased use of mobile internet services are enabling improved overall farm management. Advancements in digital farming technology are aiding farmers to enhance the productivity and sustainability of their land and agricultural practices. This is further contributing to the growth of the digital agriculture market.

Digital agriculture presents innovative solutions to address food insecurity challenges significantly exacerbated by population increase. Digital agriculture enables more efficient and sustainable food production with technologies such as remote sensing and data analytics. This can optimize resource utilization, enhance crop yields, and alleviate environmental impacts, growth in food availability and access. Additionally, digital platforms can promote access to information among farmers, and financial services, connect them to new markets, and empower them to make informed decisions and improve their livelihoods. Thus, the increase in farmers' adoption of digital agriculture tools and the steadily growing automation of farms are propelling the growth of the digital agriculture market during the forecast period.

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Market Dynamics

Driver: Increase in initiatives promoting digital agriculture by the government

The recent SPINS report published in 2022 states that consumer preferences have shifted significantly towards "better-for-you" products, with a focus on health and wellness. There are over 570  million farms across the world and 95% of these farms are less than in 5 ha in size. Large-scale farmers can easily invest in advanced digital agriculture technologies due to their financial capabilities. However, small and marginal farmers require financial assistance to enable them to invest in advanced farming technologies. Therefore, governments across the world are supporting the implementation of digital technologies in agriculture by providing financial aid to farmers. For instance, the United States Department of Agriculture (USDA) is providing loans to invest in digital agriculture technologies. The Farm Service Agency loans can provide the capital needed to invest in climate-smart practices and equipment including precision agriculture equipment. In January 20, 2020, China launched a detailed plan to develop the digitalization of its agricultural development and rural governance, aligning with the nation’s broader efforts towards rural vitalization.  Thus, the increased support from the government is strongly augmenting the growth of digital agriculture market.

Restraint: Lack of technical knowledge and inadequate training programs

Digital agriculture requires adequate technical knowledge, and the shortage of this among farmers is impacting the adoption of innovative digital technologies. AI programming differs for each application; this can be a restraining factor in developing a single protocol. Also, autonomous robots are highly advanced and specialized, and their function varies for each task. Several farmers witness difficulties in understanding the process and its use. In 2019, India had 179.8 million hectares of cropland area, around 9.6% of the global cropland. However, still, India reports around 30% of farmers that lack educational awareness. Research studies also highlight that lack of technical support is the major factor hindering the adoption advanced agriculture technologies in developing economies.

Opportunity : Growing use of agriculture-based software through smartphones

Digital agriculture is gaining traction due to the ease of employment of software and devices to implement day-to-day activities. Unmanned aerial vehicles (UAVs) or drones capture highly accurate aerial images, thereby providing précised data to farmers on their smartphones or devices. Thus, to utilize this attractive opportunity agriculture technology developers are developing and launching multiple user-friendly mobile farming applications (app) which can be accessed via smartphones by farmers remotely. Majority of  smartphone apps are inexpensive and offer vital information related to farming, such as weather and climate conditions and aid farmers to make smart decisions effectively. Due to its convenience in usage and affordability, the demand for the same is anticipated to grow exponentially in the global digital agriculture market.

Challenge: Increasing price sensitivity and market penetration

Small-scale farmers generally own small areas of the land, and digital agriculture equipment or software requires higher investment disrupting their economies of scale. The return on investment is usually higher on bigger farms, which account for more than 100 acres. Digital technologies and equipment aid farmers in covering a large area of land in significantly less time with high efficiency in operations.  An autopilot tractor which costs around USD 100,000, often does not provide adequate return on investment for small-scale farmers, resulting in decreased penetration. The high costs of hardware components of few software services is posing as a major challenge in the growth of the digital agriculture market.

Furthermore, the biggest reason for the low affordability by farmers is that they generally do not have any commercial tie-ups for their business, which provides growth opportunities to the farmers. Digital agriculture needs data acquisition to offer information on the farm and also special training to be provided to farmers and other stakeholders. Farmers are required to pay an additional cost for integrating software with the hardware devices and for further consultation to use these software solutions as they are complex to use, which is a major challenge in the market.

DIGITAL AGRICULTURE MARKET ECOSYSTEM

In the type segment, the hardware  accounted for the highest market share during the study period.

Hardware plays a strong role in digital agriculture. It acts as the cornerstone of various agriculture activities such as crop monitoring, sensing, surveying, and field intelligence systems. The hardware segment consists of automation & control systems and sensing and monitoring devices.  Automation & control systems aid farmers with improved crop protection through field surveying, real-time monitoring, effective irrigation, prompt harvesting, and pesticide application with robotic systems and field sensors.  In addition, sensing and monitoring devices serve as crucial components for gathering g crucial information regarding crops and fields, enabling in-depth analysis for decision-making, and supporting farmers in their agricultural operations. The growing need for farmers to make informed decisions and enhance their productivity is boosting the adoption of hardware devices and driving the growth of the market.

In the offering segment, the advisory services are anticipated to grow at the highest CAGR during the forecast period.

With the integration of advanced tools such as virtual assistants and AI powered chatbots advisory services are evolved consistently over the years. Advisory services can be used in a wide range of ways to address challenges in farming operations across crop types. For instance, digital advisory services can help a farmer decide when to harvest. The service could send an alert that a particular plot might be ready for harvest earlier than expected. The farmer can quickly see how each scenario would affect the crop’s profitability.  According to the Food and Agriculture Organization of the United Nations (FAO), in 2023, Digital agricultural extension and advisory services (AEAS) offer tremendous potential to improve information access and farming outcomes for smallholder farmers, particularly in developing countries. The governments across the world are offering assistance in providing advisory services support to the farmers.

Moreover, advisory services are delivered by a range of service providers, including Agri VAS providers, MNOs, NGOs, and, in some cases, technology vendors, governments, and regulatory agencies, often in partnership with MNOs. The increasing accessibility of services to farmers coupled with adequate government incentives, increased mobile internet penetration, and the need to improve farm productivity are propelling the market for advisory services strengthening its position in the digital agriculture market. 

The digital agriculture market in the Asia Pacific region is expected to grow at the highest CAGR during the forecast period.

Digital agriculture market in Asia Pacific is highly influenced by government incentives, increased internet penetration and connectivity, rising awareness about technological developments, the need for higher yields, and just the use of resources. The government policies and programs targeted toward farmer education have resulted in increased awareness about digital agriculture in the region. China contributes significantly to the region’s leading position, with India emerging, while Australia and New Zealand and Japan have been demonstrating constant growth in digital agriculture.

Furthermore, the growing support from the key players in the agriculture market is also contributing to the growth of the digital agriculture market in the region. For instance, In November 2022, Syngenta and Plantix partnered to allow smallholder farmers in Asia Pacific region  with AI-powered farming tools through the Cropwise Grower app. The aim of this initiative is to targets 500,000 farmers across five countries, providing them access to a vast database of crops, diseases, and best practices. It also provides localized content, offline functionality, and early pest/disease warnings. This collaboration aims to bridge the information gap for rural farmers, improve decision-making, and ultimately boost yields and livelihoods.

Key Market Players

The key players in this market include Cisco Systems, Inc. (US), IBM Corporation (US), Microsoft (US), Accenture (Ireland), AGCO Corporation. (US), Deere & Company (US), Topcon Corporation (Japan), Kubota Corporation (Japan), CLAAS KGaA mbH (Germany), Epicor Software Corporation (US), Hexagon AB (Sweden), Bayer AG (Germany), and Vodafone Group PLC (UK). The top players in the market have been focusing on expanding their market presence, enhancing their solutions, and partnering with many channel partners and technology companies to cater to consumers across the globe. The key players have a strong presence in North America, Europe, Asia Pacific, South America, and RoW, and well-established distribution networks spanning these regions.

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Scope of the Report

Target Audience

• Digital agriculture solutions developers and manufacturers,
• Precision Agriculture Solutions Manufacturers
• Digital agriculture service providers
• Related government authorities, commercial research & development (R&D) institutions. 
• Venture capitalists and investors.   
• Government agricultural departments and regulatory bodies such as the US Department of Agriculture (USDA), Food and Agricultural Organization (FAO),  Indian Council of Agriculture Research (ICAR), the Ministry of Farmers Welfare & Farmers Welfare (MoA & FW), and International Fund for Agricultural Development (IFAD).

Digital Agriculture Market:

By Offering

• Advisory Services
• Precision Agriculture & Farm Management
• Quality Management & Traceability
• Digital Procurement
• Agri e-Commerce
• Financial Services

By Technology

• Peripheral Technology
  • Platforms
  • Apps
• Core Technology
  • Automation
  • Drones
  • Robotics
  • AI/ML

By Operation

• Farming & Feeding
  • Precision Agriculture
  • Precision Animal Rearing & Feeding
  • Precision Aquaculture
  • Precision Forestry
  • Smart Greenhouse
• Monitoring & Scouting
• Marketing & Demand Generation

By Type

• Hardware
  • Automation & Control Systems
    • Drones/UAVs
    • Irrigation Controllers
    • GPS/GNSS
    • Flow & Application Control Devices
    • Guidance & Steering
    • Handheld Mobile Device/Handheld Computers
    • Displays
    • Harvesters & Forwarders
    • Variable Rate Controllers
    • Control Systems
    • Robotic Hardware
    • HVAC Systems
    • LED Grow Lights
    • Other Automation & Control Systems
  • Sensing & Monitoring Devices
    • Yield Monitors
    • Soil Sensors
    • Water Sensors
    • Climate Sensors
    • Camera Systems
    • RFID & Sensors for Precision Forestry
    • Temperature & Environment Monitoring Sensors
    • pH & Dissolved Oxygen Sensors
    • EC Sensors
    • RFID Tags & Readers for Livestock Monitoring
    • Sensors for Livestock Monitoring
    • Sensors for Smart Greenhouse
    • Other Sensing & Monitoring Devices
• Software
  • On-cloud
  • On-premises
  • AI & Data Analytics
• Services
  • System Integration & Consulting
  • Data Collection & Analytical Services
  • Connectivity Services
  • Assistant Professional Services
  • Maintenance & Support Services

By Region:

• North America
• Europe
• Asia Pacific
• South America
• Rest of the World (RoW)

Recent Developments

• In May 2024, CNH Industrial N.V. and Intelsat collaborated to offer farmers reliable internet access through a ruggedized satellite communications (SATCOM) service. Through this initiative, they aim  to provide internet connectivity for CNH equipment operating in remote and challenging environments. Intelsat will offer multi-orbit internet access, using their SATCOM experience and capabilities across geosynchronous and low-Earth orbits. The service will first be available in Brazil in the second half of 2024, in the areas where there is a prominent gap in high-speed internet access for agricultural use. The installation and support of Intelsat hardware services will be handled by Case IH and New Holland dealers. The collaboration plans to expand the service across U.S., Australia, and other regions, widening the reach of reliable satellite internet connectivity for farmers across the globe.
• In April 2024, AGCO Corporation and Trimble entered into a joint venture known as PTx Trimble. AGCO owns an 85% stake in PTx Trimble, and Trimble will hold a 15% stake. This is a combination of Trimble's precision agriculture business and AGCO's JCA Technologies to form a new company that will aid in providing better services to farmers with various factory fit and retrofit applications in the mixed-fleet precision agriculture market.
• In October 2023, Deere & Company collaborated with Sweden-based Delaval to establish the Milk Sustainability Center, a digital system designed to assist dairy farmers in monitoring nutrient use efficiency and implementing sustainability improvements in their operations. This initiative addressed the complexity of dairy farming, integrating crop and animal performance, and aims to streamline farm management by consolidating precision data in one accessible platform.
• In August 2023, AKVA Group expanded its digital capabilities by acquiring 51% of the shares in Submerged AS. This strategic move aimed to strengthen AKVA Group’s position in the digital domain. Submerged AS, as part of AKVA Group, was anticipated to contribute to enhancing AKVA Group’s digital capabilities.

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