The global tractor rental market is anticipated to register a CAGR of about 8% during the forecast period (2020 - 2025).
- In the current market scenario where everything can be rented from bicycle to home, from car to workplace sharing or renting a tractor is much-needed service as most of the tractors are just parked in the garage. Tractor rental companies offer tractors as per the requirements of the farmers.
- Purchasing any farming machinery always requires a huge amount of money and in addition to that, it needs maintenance but in case of renting there is no hassle of any maintenance.
- The increasing demand for mechanization and the rising number of low and medium-scale farmers are the primary factors that are creating a huge demand for tractor rental in underdeveloped countries such as Ghana and other African countries, majorly in the south of the Sahara, tractor rental firm allows tractor owners to fully utilize their machines, and additionally providing services to farmers, who cannot afford their tractors.
Key Market Trends
Increase in Online Rental Services is driving the Market
Tractor rental market has created the best solution to the middle-class farmers’ who can’t afford and maintain the tractor as now they can rent a vast variety of tractors on basis of location, type, feature, and duration. Farmease one of the leading rental service providers in the United States connects the farmers to share their spare farm machinery to the needy farmers who can’t afford the machinery. Tractor owners can earn from their tractor which adds a second income source to them, and on the renters front, they get access to the tractor on demand by that they get the latest technology at affordable prices according to the need. Major rental service providers are tapping on the unexplored market as the developing countries have huge potential for tractor rental as compared to matured markets such as North America and Europe.
For instance, in 2018, Aeris, the United State based technology company is coming together with Hello Tractor, an agriculture technology company that has previously worked with farmers in Nigeria and Kenya, to launch a tractor rental service in India.
Asia-Pacific is Expected to grow at the fastest rate in Tractor Rental Market
One of the key factors for the growth of the Asia-Pacifictractor rental market is to provide the best technology and reduce the financial burden on farmers. Renting a tractor allows the farmers to cultivate their crops on time without investing large sums of money on tractors, it also provides them a convenient way of enhancing their operations.
In India, According to the survey by the National Bank For Agriculture and Rural Development (NABARD), there is a very low penetration of farm machinery. In NABARD All-India Rural Financial Inclusion Survey (NAFIS) just 5.2% of agricultural households have a tractor and just 1.8% owned a power tiller.
In April 2020, TAFE, announced a free tractor rental scheme in Uttar Pradesh, India through its JFarm platform, for 90 days duration. This initiative of TAFE is announced under its CSR in which the company will offer 3,000 tractors on a free rental basis to reduce the impact of COVID-19 on small farmers.
The global tractor rental market is moderately fragmented, has several active players, and also the market is witnessing the emergence of many new startups. Some of the major players in the market are John Deere, Farmease, Trringo, and JFarm Services amongst others. The companies are expanding their presence by acquiring other market participants, increasing their tractor counts, tapping in new and unexplored markets. For instance,
- In 2019, John Deere entered into an agreement with the Plooua mobile application, The platform makes the renting process easy and convenient it formalizes the contract and carries out the payment process by a secure payment platform.
- In 2020, John Deere announced that it is teaming up with Hello Tractor, an agritech tractor-hailing startup. They are currently in the testing phase of the technology where a small black box is fitted beneath dashboards on around 400 tractors in Ghana and Kenya.
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