The Australia Agriculture Equipment market is moderately concentrated with five players capturing ~75% of the market share in 2021. Most manufacturers of agricultural machinery sell their machines through authorized dealerships. Both OEM’s and aftermarket sales go hand-in-hand owing to an increase in demand for original equipment which increases the demand for spare parts. Online Physical-digital channels of Purchase listing their products online will be preferred by consumers in the medium term.
- There is continuous growth in the sales of tractors in the agricultural equipment market as they are inevitable for farming operations in the rough terrain of Australia.
- GPS-enabled agricultural equipment and the predominance of precision farming techniques are the major trends in the market.
- There is heavy competition among local and foreign players as a significant proportion of agricultural equipment used in Australia are imported from overseas.
- OEM’s and aftermarket sales go hand-in-hand as the demand for original equipment rises, demand for spare parts increase along with it.
- Price and quality of the equipment along with the level of automation and type of commodity produced by the farmer affects the decision-making process of purchasing equipment.
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Surge in demand for New Technology: Farmers are currently preferring technological upgradations in their agricultural equipment. GPS enabled agricultural equipment and predominance of precision farming techniques are the major trends in the market. GPS technology helps in accurate field navigation to minimize redundant applications and enable maximum ground coverage in the shortest possible time in the rough terrain in Australia. Precision Agronomics Australia (PAA) has developed a unique product in the i4M technology and is leading the next wave of precision agriculture. Increased use of data science, automation, and communication technologies has gained prominence in the sector.
Government Initiatives to Regulate Agri-equipment Market: Regional Investment Corporation (RIC) administers concessional loans on behalf of the Australian Government for farm businesses, drought-affected small businesses and other eligible businesses. These farmer loans assist farmers to purchase, establish or develop a farm business or machinery. Rural Research and Development Corporation (RDC) invest around AUD 1,176 Mn each year in agricultural innovation, with more than $300 million of funding coming from the Australian Government. RDC focuses on investing in digital agriculture and mechanization to deliver new trade and market access for producers, create jobs and reduce red tape.
Importance of loans and credit schemes: The increasing price of agriculture equipment will necessitate the importance for loans and credit schemes to invest in the purchase of machinery. The availability of credit and loans at a lower interest rate increases the preference for financed purchases. 13% of the total workforce employed in agriculture will be young population of 15 to 34 years of age by 2025. Young farmers will prefer financed purchases owing to the low capital in hand and easy availability of credit from different sources.
Analysts at Ken Research in their latest publication “Australia Agricultural Equipment Market Outlook to 2026F – Driven by Adoption of Technological Advancements in Farming Techniques and Financial support of Government” by Ken Research observed that Agri-equipment Market in Australia is at a growing stage. The rising government policies and demand in the Agri-equipment industry, an increase in credit availability along with rising online platforms for sale of Agri-equipment is expected to contribute to the market growth over the forecast period. The market is expected to grow at 9.1% CAGR by value, during 2021-2026F.
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