Agricultural Robots Market Opportunities and Challenges

Northbrook, USA, 2020-Jan-21 — /EPR Network/ —

The agricultural robots market is expected to grow from USD 7.4 billion in 2020 to USD 20.6 billion by 2025, at a CAGR of 22.8% during the forecast period. The shortage of agricultural labor and rising wages, especially in developed countries, are the key driving factors for agricultural automation. Apart from this, accessible and improved navigation, AI, and IoT technologies embedded in agricultural robots is another market driver.

Agricultural robots such as auto-steering tractors, drones, and milking robots are already being adopted commercially. Initially, these robots were costly, and the technology and mechanical components were not robust enough. Over the years, however, the cost of robots have significantly decreased, as the cost of technologies such as GPS, multispectral imaging, and smart tags decreased. AgJunction (US), for instance, offers several low-cost auto-steering systems for farm vehicles starting at USD 3,995. Targeting developing countries with low-cost UGV or AGV based robots presents an excellent growth opportunity for market players due to the presence of a large number of small farms.

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On the other hand, market players are also adopting the ‘Robots as a Service’ model that involves subscription-based services. This will make agricultural robots more affordable to the farmers, compared to making a one-time purchase. Robot manufacturers are also developing and offering control software for these robots. Multi-modal systems (which control and co-ordinate swarm robots or different combinations of robots such as driverless tractors and drones) are expected to be deployed in the future. However, this will require the commercialization of driverless tractors and harvesting robots, which is only likely to happen by 2025. These developments are also supported by the agricultural industry as well as the government initiatives, which is expected to boost the growth and implementation of such robots further.

The agricultural robots market is segmented into three categories; hardware, software, and services. Services for agricultural robots are expected to grow at the fastest rate from 2020 to 2025 when compared to hardware or software. A typical robot service begins with system integration and consulting and continues forward with maintenance and support services. With agricultural robots not in widespread adoption worldwide (except in a few countries like the US and Japan), services will play an important role in transitioning farmers who are adopting robots for the first time. Newer, more autonomous agricultural robots that are currently being developed will have a different service model compared to current systems. As the cost of new agricultural robots can be upwards of USD 500,000, companies have started to offer these robots through lease or subscription. For instance, Naïo Technologies (France) offer their OZ weeding robot at a lease for USD 315–465 per month. Some agricultural drone companies directly offer their imaging services based on customer requirements wherein the company themselves operate the drone on behalf of the farmer. AGCO Corporation (US) expects that a fleet of robots could be offered as a service by dealers so that farmers can significantly reduce capital expenditures. More services are expected to appear as new agricultural robots are commercialized. Hence services will be the fastest-growing market.

The agricultural robots market for driverless tractors is expected to grow at the highest CAGR during the forecast period. Development of self-driving technology in automobiles is expected to also speed up the development of driverless tractors. Decreasing costs of sensors and cameras will allow companies to leverage them further in tractors. Although driverless tractors are yet to be fully commercialized, companies have been showcasing and testing their prototypes. In 2016, CNH Industrial N.V. (US) showcased an autonomous tractor under their Case IH brand. In 2019, both Deere and Company (US) and Mahindra and Mahindra (India) showcased prototypes of driverless tractors. Several Japanese tractor manufacturers are already field testing driverless tractors. Furthermore, driverless tractors could also be smaller and deployed in swarms, as compared to traditional tractors. They would reduce soil compaction as they would be much lighter in weight. Hence, driverless tractors is expected to have the highest growth among other agricultural robots.

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The market in APAC is expected to grow at the highest CAGR during 2020–2025. This growth can be primarily attributed to the deployment of agricultural robots in Japan. Japan has been in the forefront of technologies such as driverless tractors and companies such as Iseki (Japan) have already sold driverless tractors, although in very limited numbers. Other firms such as KUBOTA Corporation (Japan) and YANMAR CO. (Japan) are already field testing driverless tractors. Shortage of labor and decreasing wage gap for immigrant farmers and forcing farmers to automate in Japan. Australia is also one of the important countries in APAC for agricultural robots. Robots are being increasingly deployed in the dairy and livestock industry. Spraying robots are being developed through institutions such as Queensland University of Technology. The Civil Aviation Safety Authority (CASA) in Australia has already set guidelines on the operation of agricultural drones, which is similar to that of the guidelines set by the Federal Aviation Administration (FAA) in the US. Use of low cost drones and AGVs in developing countries such as India and China is also expected to contribute to the growth of the market. Hence, APAC is expected to be growing at the fastest rate among the other regions.

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