In an increasingly digital world, it’s no surprise that smart agriculture has become an integral part of the broader industry. Smart agriculture consists of technology — big data, the cloud, and the internet of things (IoT) — that make it easier to manage the various agricultural operations. The market for agriculture technology has grown exponentially in recent years. A report from Grand View Research estimated the agriculture market’s value at $5.79 billion in 2016. According to the most recent figures, the global smart agriculture market grew to $13.7 billion in 2020.
A wide range of technology companies makes up this industry. Among them are precision agriculture companies CropX, Arable, Ceres Imaging, Gamaya, AgriData, and Aker Technologies. Other businesses highlighted in the report include Deere & Company, Trimble, AKVA group, AG Leader, LumiGrow, Afimilk, and Fancom.
Impact of COVID-19
The past year was devastating for many of these companies due to the COVID-19 pandemic and its large-scale disruptions in supply chains across the world. “Lockdowns, closures, and other measures adopted by authorities worldwide led to severe operational constraints for farm equipment manufacturers,” the report explained. “Numerous production sites of agriculture equipment manufacturers faced delays and interruptions in the supply chain, along with labor shortages and low customer activity.”
For example, Deere & Company, one of the most iconic companies in the agriculture industry, saw its net income drop to $2.751 billion for the fiscal year of 2020 (the equivalent of $8.69 per share). The company had reported $3.253 billion in net income the year prior ($10.15 per share). California-based services company Trimble, meanwhile, reported a “solid financial performance” with just a 1% year-over-year revenue increase in 2020 to $829.7 million.
The market is expected to recover from this tough year, according to the market analysis. In fact, the global smart agriculture market is slated to grow at a respectable compound annual growth rate (CAGR) of 9.4% over the next six years.
The market expansion will be driven by a number of factors, including the general recovery of the US economy. However, what will play one of the biggest roles, the report says, is the continuous “influx and implementation” of new concepts and technologies. The accelerated adoption of AI-powered technologies, as well as other technology like drones, are expected to drive a “notable transformation” in the industry, according to the market analysis.
The smart agriculture market is also being “revolutionized” by blockchain technology, “which is enabling farmers to track crops, digitally and in real time,” the report notes. All these technologies help streamline farming processes, promoting efficiency and cost-saving.
About the Author
Jemima is a journalist who enjoys reporting on business, particularly small business and entrepreneurship.