The Asia Pacific agricultural irrigation machinery market is expected to grow at a CAGR of 6.2% during the forecast period 2019-2025. Water scarcity being the major concern in the current agricultural scenario is the foremost driving factor for the growth of this sector followed by the awareness about the micro-irrigation system, need for high productivity to meet the food demand due to the increased population. In 2018, the drip irrigation system dominated the market, in terms of revenue of around 75.5%. The area under drip has shown strong growth in the past few years.
The consolidation of farmlands in various parts of the world is making it possible for more farmers to invest in expensive irrigation machinery, which in turn is driving the market. New product launches, mergers and acquisitions, expansion of business units, and manufacturing plants are also being taken up by the companies to stay relevant in the market studied
Key Market Trends
Subsidies From Government and Support From Financial Institutions
Government organizations are promoting micro-irrigation systems in various countries, in order to encourage farmers to adopt advanced irrigation technologies, by providing various benefits or subsidies to farmers. The governments of the Asian countries are taking special measures to promote advanced irrigation systems in their countries. During the study period, CI-Agriculture, an Indonesian start-up has taken up the task of educating the farmers about the benefits of advanced irrigation systems which can improve yield and efficiency.
The Indian Government approved initial aggregation of USD 702.3 million for setting up micro-irrigation Fund (MIF) in May 2018, along with the National Bank for Agriculture and Rural Development (NABARD). This fund is registered under the Pradhan Mantri Krishi Sinchayee Yojna (PMKSY), which was formulated on July 1, 2015. The primary objective of the scheme is to promote micro-irrigation technologies, primarily among consuming crops, like cotton and sugarcane.
Furthermore, it is focusing on expanding the coverage of field crops under micro-irrigation technologies. Moreover, the central government offered a 35% to 45% subsidy for drip irrigation systems. This is expected to strengthen the market.
Water Scarcity Concern
The micro-irrigation systems market is primarily driven by factors, such as the need for increasing crop productivity while addressing the issues of water scarcity. Thus, governments are focusing on formulating initiatives, to increase the usage of micro-irrigation systems, while limiting water shortage. The Indian Agricultural Research Institute (IARI) established the design of a micro-irrigation system (DOMIS), a web-based application system that helps in designing customized micro-irrigation systems for efficient water utilization, under several agro-climatic conditions. Furthermore, it is planning to develop devices that utilize low amounts of water, in order to help farms.
In India, owing to recurring droughts in 2012, 2015, and 2016, micro-irrigation systems gained immense popularity. Therefore, both central and state governments are promoting micro-irrigation systems, in order to tackle the water crisis which both the Drip as well as Sprinkler irrigation resolves.
The market share analysis indicates that the market studied is consolidated, with major companies accounting for about majority of the market share. With the governments’ thrust on augmenting the penetration of water conservation and efficiency driven by the micro-irrigation system, the market is estimated to witness substantial growth in the near future. This is expected to benefit companies, such as Jain Irrigation Systems Limited, EPC Industries Ltd, and Netafim Ltd, among others.
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