Market Trends of Europe Agricultural Machinery Industry
Shortage of Skilled Labor
Agriculture in Europe has traditionally relied on seasonal immigrant workers who worked on farms in various member states. However, rural households are attracted to cities due to more work opportunities, higher wages, and better living conditions, leading to a rapid rise in rural-to-urban migration. For instance, the rural population in Spain decreased from 19.4% in 2019 to 18.7% in 2022. Additionally, the heavy workload involved in farming has led to many individuals lacking interest in the field. This has further compounded the shortage of farm labor in the region. As per the World Bank, employment in agriculture reduced from 4.32% in 2020 to 3.99% in 2022 in the European Union. The labor shortage in European agriculture has led to a significant shift towards mechanization and automation. Tractors, one of the essential agricultural machinery, have witnessed enormous growth potential in the market. Farmers in the region increasingly prefer purchasing high-end tractors to work on larger fields as part of their effort to improve crop yields and boost farm efficiencies.
Germany Dominates the Market
Germany is a major market for agricultural machinery and implements in Europe. Due to its precision and innovative engineering, the country is one of the world's biggest exporters of agricultural machinery. It is also one of the largest manufacturers and consumers of agri-machinery in Europe.
Tractors are the primary power source for agricultural machinery in Germany. AGCO Corporation is a leading company in the tractor market, selling brands such as Massey Ferguson and Valtra Inc. Market players are introducing innovative machinery to encourage farm mechanization. For instance, in 2022, Case IH launched a new LB 424 XLD large square baler model that produces extra-dense 120 cm*70 cm bales, up with a 10% increase in density, which improves bale quality, handling, and rotor cutter.
German farmers receive an annual subsidy from the European Union to invest in modern machinery, which can otherwise be expensive. This subsidy enables them to carry out farm operations more efficiently. However, due to a shift in workforce preference from farm-oriented activities to allied sectors, the demand is rising for agricultural machinery to perform labor-intensive agricultural operations.
