Farming As A Service Market Size, Share & Trends Analysis Report By Service Type (Farm Management Solutions, Production Assistance, Access to Markets), By Delivery Model, By End User, By Region, And Segment Forecasts, 2023 - 2030

Report Overview

The global farming as a service market size was valued at USD 3,623.2 million in 2022 and is expected to expand at a compound annual growth rate (CAGR) of 14.8% from 2023 to 2030. Farming as a Service, generally abbreviated as FaaS, is a framework of professional services that offer a suite of agrarian management solutions. It gives farmers access to various services such as precision farming tools, analytics, utility & labor services, equipment rentals, and entrance to a broader audience & markets, among others. The factors such as increasing adoption of modern agricultural methods, reducing labor costs, and rising demand for food due to the growing population are the significant drivers attributing to the industry’s growth.

The FaaS market is segmented as service type, delivery model, and end-user. The service segment is further segmented into three sub-segments: farm management solutions, production assistance, and market access. Analytics services are concerned with metrics like yield monitoring, weather data, germination data, soil quality data, etc. are dealt with in farm management. Access to markets deals with cutting out intermediaries and linking farmers directly to suppliers and marketplaces using technologies like IoT and mobile applications.

Production support deals with outsourcing or leasing of both equipment and human resources. The delivery model is further bifurcated into two types: subscription and pay-per-use. In the subscription model, the farmer rents out equipment for a certain period. In the pay-per-use type, the farmer pays for the equipment each time he uses it. FaaS prevents resource misuse and encourages increased crop productivity. Due to the increased use of farming-as-a-service, farmers are becoming more proficient in smart livestock monitoring, farm management, information sharing, and precision farming, among others.

In July 2020, DeHaat, an end-to-end farming solutions & service provider, adopted a franchise-based approach. DeHaat center in Jaipur is a franchise that provides services such as farm inputs to produce offloading. Farmers can obtain advisory services at the center, over the phone, and through the DeHaat mobile app. Jaipur’s DeHaat center serves 300-400 farmers. More than 650,000 farmers in Bihar, Jharkhand, Odisha, West Bengal, and Uttar Pradesh are supported by approximately 1,890 franchises.

According to a study published by International Labor Organization (ILO), “Improving market access for smallholder farmers,” conducted by the farmers who used FaaS techniques on their farms noticed a significant improvement in both the quality and quantity of their produce. According to the findings of the report, the farmers who sold their products through the ‘Out Grower’ scheme saw an increase in their income by USD 274 per farm in a year as opposed to the farmers who struck to traditional methods, which saw a rise of only USD 31 per farm in a year.

The farmers enrolled in the scheme were also able to meet the order demand consistently. The model was mapped into a simple value chain that included farmers, retailers, distributors, and consumers. Farmers who participated in the intervention improved their horticulture production methods over those who did not. When participating in the ‘Out Grower’ program, producers should practice effective farm management, which includes rain, seedling nurseries, and garden beds protective tunnels) the average increase in productivity went up by 17%, from 44% in a year to 61% in a year after enrolling in the program.

The company’s assistance to farmers was crucial because they faced a lack of quality transportation, guidance, supply chain issues, etc. A drastic change in the selling patterns of the farmers was also noticed as switching from selling to the neighborhood market to selling via Josephina Farm. Before the intervention, farmers typically sold 69% of their output at regional markets. This decreased to 17% after the intervention, with the remaining 65% being sold to the corporation. Farmers reported a slight decline in food production for family use (from 16% of yield before intervention to 11% after intervention).

COVID - 19 Impact Analysis

The outbreak of the COVID-19 pandemic had an adverse effect across several industries. The lockdowns imposed and the restrictions on the movement of goods and people had an impact on the functioning of the agriculture sector as well. However, agricultural goods being an essential commodity, the movement of agriculture inputs and agricultural produce were permitted.

After a small setback to the functioning of agriculture logistics in the initial few months of the lockdown, agriculture logistics limped back to normalcy by the end of the year 2020. The farm management solutions such as precision farming tools and analytics gained more relevance in the wake of the pandemic as they allowed remote monitoring of several parameters such as yield monitoring, pest prevention, and irrigation.

The market access services which connect the farmers to the end-users through the use of mobile applications were highly utilized. The effect of the COVID-19 pandemic was comparatively low on the agriculture sector. The demand for services under the farming as a service model continued to grow owing to the stable demand for agricultural products.

Several players in the FaaS industry were able to raise funds in the recent past which helped them maintain cash flow. Clover Ventures Private Limited and LeanCrop Technology Solutions Pvt. Ltd. are some of the companies which raised funds recently.

Service Type Insights

Based on service type, the farming as a service market is segmented into farm management solutions, production assistance, and access to markets. The farm management solutions segment held the largest market share of about 76.8% in 2022. Farm management solutions include solutions such as providing insights to government, farmers, corporates, and other final advisory firms.

Farm management services also include precision farming services which have shown tremendous growth in recent years owing to the growing acceptance of precision farming to meet the rising global demand for high-quality food products. Tools such as hyperspectral imaging technology, sensors (to gather data on weather conditions, soil health), auto-guidance equipment, precision irrigation systems, etc., to improve agricultural results.

Further boosting demand for precision farming and quickening market expansion is the worsening water issue and the growing need to conserve natural resources. Production assistance is further sub-segmented into equipment rentals, labor, utility services, and agricultural marketing. Equipment rental services include renting farming equipment such as tractors, combines, etc.

These rental services are used by small and medium-scale farmers. Labor services include renting or outsourcing labor and other workforce requirements for a field. Renting out labor helps the farmer with one less task of labor management and can focus on other work. The utility services segment provides the services such as irrigation and power grid services.

The access to market segment is expected to grow at the fastest CAGR of 15.4% during the forecast period. Access to lucrative, value-added marketplaces is sometimes limited for smallholder farmers. Farmers struggle to transition from one crop to another without essential supporting services, such as infrastructure and service provision barter and subsistence trade for more beneficial types of exchange.

The access to markets segment of FaaS addresses this exact problem and connects the farmers and the suppliers and further the suppliers and the final consumer through digital means such as mobile applications, websites, helpline numbers, etc.

End-user Insights

Based on the end user, the market is segmented into farmers, government, corporate, financial institutions, and advisory bodies. Farmers were the largest end-users of farming as a service as the segment held a revenue share of more than 30.3%. Also, the farmer end-user segment is anticipated to be the fastest growing segment with a CAGR of 15.1% during the forecast period. Farmers are the primary users of Farming as a service.

The farmers use all the service types such as farm management solutions, production assistance, and access to markets. Farmers use farm management solutions to allow them to make informed decisions based on data rather than a random guess. Farmers also use production assistance services such as equipment rentals, labor services, utility services, and agricultural marketing.

The government sector only uses the access to markets feature so that they can use the FaaS providers to eliminate the middlemen from the farming industry, which will benefit the farmers in the long run. Farm management solutions are utilized by banks and financial institutions for various purposes such as risk management, speeding up loan claims, etc. Risk assessment is an essential metric for financial institutions to ensure the viability of the investment.

Delivery Model Insights

Based on the delivery model, the market is segmented into subscription and pay-per-use. The subscription delivery model held the largest revenue share of more than 58% in 2022 and is expected to command a majority of the revenue share during the forecast period. Subscription services deal with farmers renting or leasing out farming equipment for a particular period, such as 3 to 4 months.

Subscription services help farmers who need some specific equipment only once or twice a year for a certain period. Pay per use is a service where a farmer pays for the equipment every time he uses it, and there is no particular time frame for which he rents out the equipment. The subscription services are economically more beneficial in the long run because the farmers spend more on the pay-per-use model over a longer period.

For instance, a small-scale wheat-producing farmer who can’t afford a combine harvester can rent it for a particular period when he wants to mow his wheat produce. The pay-per-use and subscription models are available, but the subscription model will be more viable as the farmer will pay more in the long run.

Pay per use model can be used where the period of renting equipment is small such as 1 or 2 days. For instance, Trringo, a Mahindra and Mahindra-based venture, is a startup that focuses on equipment rental and related services. Trringo operates on a franchise and marketplace-based model. Mahindra and Mahindra recently provided seed funding to a company named Gold Farm. Gold Farm is a farm equipment aggregator.

Regional Insights

North America is one of the largest farming economies in the world and has one of the largest average farm sizes around the globe. North America currently has around 897,400,000 acres under cultivation, and the U.S. has an average farm size of approximately 445 acres.

So the sizeable average farm size and large area under cultivation make North America the prominent region in the farming as a service market. The significant market share of the region has been ascribed to the increased use of automation and control systems in the majority of the countries, as well as the increasing acceptance of smart farming methods, which has led to an increase in the use of agriculture farming-as-a-service.

The Asia Pacific region is expected to grow at the highest CAGR during the forecast period. The growth is due to agro-based economies such as India, China, and Bangladesh, which have agriculture as the highest contributor to these countries' respective GDPs. The growth is primarily a result of the region's expanding population and rising food demand.

Other significant factors anticipated to fuel regional expansion in the coming years include strong support from governments of various nations in the Asia-Pacific region for supporting the adoption of FaaS models in the agriculture sector and fast improving infrastructural facilities. It is projected that the food consumption patterns will change due to the population's exponential growth, posing difficulties for agricultural production.

The governments of various regions encourage the adoption of Farming-as-a-Service models and farmers' use of cutting-edge technology to close the food gap, which will drive the regional industry during the forecast period. For instance, Mahindra has erected more than 1,000 technique plots across India to highlight the advantages of utilizing Krish-e, which is Mahindra and Mahindra farming as a Service branch. Mahindra has so far observed an increase in income per acre of USD 63 to USD 186 for farmers who have embraced Krish-e-assisted farming techniques.

The European farming industry is dominated by the countries like France, the largest agro-based economy in Europe. France produces roughly 23% of the entire E-15 nation's agricultural produce, and Germany and Italy follow France in the volume of European farm produce. The major agricultural products in Europe are cotton, off-season fruits and vegetables, cocoa, tea, spices, soy-bean products, and coffee. FaaS technologies are widely used in Europe to monitor the products' quantity and quality.

Key Companies & Market Share Insights

Because of the growing world population, there is severe food scarcity everywhere. This is one of the main driving forces behind the demand for farming as a service. It offers analytical outputs and predictive analytics to support effective crop development and animal health. In addition to the other factors mentioned, a severe lack of skilled laborers and fertile land impacts the demand for valuable and data-driven insights to maximize crop yields.

Additionally, governments in many nations are enforcing strict restrictions on the use of crop protection chemicals in response to growing environmental concerns, which is favorably affecting farm management software sales globally by boosting productivity and return on investment (ROI). Leading market firms also consistently support R&D initiatives to build efficient FaaS solutions. This is expected to drive the industry, along with emerging technological developments like the blend of the Internet of Things (IoT) and cloud computing.

For instance, Accenture launched its Connected Crop Solution. The farm management solution integrates three significant stakeholders: farmers, field agents, and the agro-input company. All the significant insights from various sources are integrated, provided on a single platform, and available to the farmers via a mobile application. Accenture also provides a cloud analytics engine that different field agents can use to guide the farmers on areas like crop nutrition, irrigation needs, seed quality, etc.

All major players are focusing on new product launches and geographical expansion. For instance, Trimble announced the launch of the Fast-App, where farmers will need to answer ten questions. With every question, the app will suggest a specific solution to a particular problem that a farmer has.Some prominent participants in the global farming as a service market include:

• Mahindra and Mahindra

• John Deere

• ITC

• Trimble

• EM3

• Apollo Agriculture

• Accenture

• Taranis

• Precision Hawk

• IBM

• BigHaat

• Ninja Kart

Farming As A Service Market Report Scope

Global Farming As A Service Market Segmentation

The report forecasts revenue growth at global, regional, and country levels and provides an analysis of the latest industry trends and opportunities in each of the sub-segments from 2017 to 2030. For this study, Grand View Research has segmented global farming as a service market report based on service type, delivery model, end-user, and region:

• Type Outlook (Revenue, USD Million, 2017 - 2030)

  • Farm Management Solutions

    • Precision Farming Tools

    • Analytics

    • Information Sharing

  • Production Assistance

    • Equipment Rentals

    • Labor services

    • Utility services

    • Agricultural marketing

  • Access to Markets

    • Supplier to farmers

    • Farmers to end market

• Delivery Model Outlook (Revenue, USD Million, 2017 - 2030)

  • Subscription

  • Pay-per-use

• End-user Outlook (Revenue, USD Million, 2017 - 2030)

  • Farmers

  • Government

  • Corporate

  • Financial Institutions

  • Advisory Bodies

• Regional Outlook (Revenue, USD Million, 2017 - 2030)

  • North America

    • U.S.

    • Canada

    • Mexico

  • Europe

    • U.K.

    • Germany

    • France

    • Italy

  • Asia Pacific

    • China

    • Japan

    • India

    • Australia

    • South East Asia

  • South America

    • Brazil

  • Middle East & Africa