PUBLISHER: KBV Research | PRODUCT CODE: 1709847
PUBLISHER: KBV Research | PRODUCT CODE: 1709847
The Global Digital Agriculture Market size is expected to reach $38.16 billion by 2031, rising at a market growth of 9.9% CAGR during the forecast period.
Early technological adoption, a well-established agricultural infrastructure, and significant investments in precision farming and smart agriculture solutions drive the North America segment. Farmers in the U.S. and Canada leverage advanced technologies such as IoT, AI, drones, and automation to enhance productivity, reduce costs, and meet sustainability goals. Thus, the North America segment procured 35% revenue share in the market in 2023. Government initiatives and subsidies encouraging the adoption of digital farming practices, with widespread access to high-speed internet connectivity and strong research and development (R&D) capabilities, have further accelerated market growth in this region.
The major strategies followed by the market participants are product launches as the key developmental strategy to keep pace with the changing demands of end users. For instance, In 2025, February, BASF SE unveiled three farming solutions, including Xarvio Field Manager for Fruits and Veggies, a digital crop optimization platform. BASF integrates seeds, crop protection, and digital intelligence to enhance yield and efficiency. The company aims to expand its support for fruit and vegetable growers worldwide. Additionally, In December, 2024, Bayer AG unveiled FieldView in Mexico, expanding its digital agriculture platform to optimize crop management. Used in 27+ countries, FieldView helps farmers analyze real-time data, improve efficiency, and enhance sustainability. Bayer aims to strengthen Mexican agriculture by maximizing resources and supporting informed decision-making.
Market Growth Factors
Precision farming, also known as precision agriculture, leverages advanced technologies such as Global Positioning System (GPS), Internet of Things (IoT), and Artificial Intelligence (AI) to enhance agricultural practices. Precision farming allows for the optimization of inputs such as water and fertilizers in accordance with specific field conditions through the use of GPS-guided machinery and data analytics. Higher crop yields and more effective use of resources are the outcomes of this. Hence, the benefits of precision farming are augmenting the demand for digital agriculture solutions.
Additionally, by formulating supportive policies, governments can encourage the integration of advanced technologies into agriculture, leading to increased efficiency and sustainability. For instance, a study highlighted that repurposing a small portion of government agricultural spending towards targeted expenditures on research and development (R&D) and incentives for innovation adoption could reduce poverty, lower the cost of healthy diets, and decrease the land required for agriculture. Thus, these factors are supporting the growth of the market.
Market Restraining Factors
The adoption of digital agriculture technologies comes with a significant financial burden, particularly for small and medium-scale farmers. Precision farming tools, IoT-enabled sensors, drones, satellite imaging, and automated irrigation systems are key innovations transforming the agricultural sector. However, these technologies require substantial upfront investments, including hardware, software, installation, and training costs. Unlike traditional farming practices that involve minimal technological infrastructure, digital agriculture demands a shift towards capital-intensive operations, which many farmers find difficult to afford. Hence, the high initial investment cost remains one of the most critical factors hampering the large-scale implementation of digital agriculture technologies.
Component Outlook
Based on component, the market is classified into hardware, software, and service. The hardware segment garnered 41% revenue share in the market in 2023. Equipment such as sensors, drones, automated irrigation systems, and GPS-guided machinery allow farmers to efficiently manage resources, reduce waste, and improve crop yields.
Application Outlook
On the basis of application, the market is divided into precision farming & farm management, livestock monitoring, supply chain management, financial management, and others. The precision farming & farm management segment acquired 29% revenue share in the market in 2023. With growing concerns over food security and sustainability, farmers are adopting precision farming tools to optimize input usage such as water, fertilizers, and pesticides, thereby reducing operational costs and environmental impact.
Technology Outlook
By technology, the market is segmented into AI, drones, IoT, automation, and others. The automation segment garnered 19% revenue share in the market in 2023. Automated machinery, including self-driving tractors, robotic harvesters, and automated irrigation systems, helps farmers perform repetitive tasks more precisely and consistently. Automation reduces operational costs, increases scalability, and enhances efficiency in large-scale farming operations.
Regional Outlook
Region-wise, the market is analyzed across North America, Europe, Asia Pacific, and LAMEA. The Europe segment acquired 30% revenue share in the market in 2023. The Europe segment is primarily driven by stringent regulations on sustainable farming, environmental conservation, and food safety, which encourage the adoption of digital agriculture technologies. The European Union's policies, including the Common Agricultural Policy (CAP) and the European Green Deal, promote precision farming, data-driven solutions, and eco-friendly agricultural practices.
Recent Strategies Deployed in the Market
List of Key Companies Profiled
Global Digital Agriculture Market Report Segmentation
By Application
By Technology
By Component
By Geography