Smart Farms Market Trends

Growth Drivers

• Rising government initiatives: According to the data published by the World Bank in December 2024, governments provide over USD 650 billion per year in public support to the agricultural sector. Many governments in developed as well as developing countries attempt to bolster agricultural innovation and development by setting up policies, funding, and organizing programs.

• Increasing demand for food: The demand for food is increasing, owing to the rapidly growing population. As the world’s population continues to rise, the area of land available for agriculture is on the decline. For instance, according to the United Nations, the population around the world is estimated to reach 9.8 billion by 2050. Thus, the demand for food is estimated to grow at a rate of 2% every year. In previous years, smart farming methods have helped to increase food production without compromising quality standards.
• Surge in adoption of smartphones: The use of smartphones in agriculture helps to provide real-time information about crops and machinery to the user, regardless of the farmer's physical presence. Today, the smartphone has a wide range of sensors that plays an essential role in real-time information gathering on weather, crop conditions, and soil health information.  This contributes to additional revenue growth in the smart agriculture market. According to the World Economic Forum in April 2023, there are over 5.4 billion people globally who have at least 1 subscription.
• Surge in the integration of AI and Big data: AI holds the capability to revolutionize soil management by analyzing data to optimize nutrient levels. AI also automates repetitive tasks and allows farmers to focus on strategic activities. A survey conducted by Pew Research in February 2023, found that 27% of Americans say they interact with AI numerous times in a day.

Challenges

• Technical Risks: Compared to traditional farming, smart farming is a technology-driven farming. Hence, high reliance on technology comes with a potentially serious downside for the agrarian, if there is a breakdown in the unit/sensor failure. For instance, if the smart irrigation sensors are not working, the plants may either be under or overwatered. As a result, food safety is endangered in such cases, which can lead to high losses to the farmers.

• Low adoption in rural farms: The low literacy rate of farmers and lack of credit in rural areas are impeding growth. Installing AI, big data, etc. requires technical expertise that is difficult to understand initially.