The global agricultural machinery market is expected to grow at a CAGR of more than 7% during the period 2016 to 2020, according to Technavio’s latest report.

“The global agricultural machinery market is expected to grow due to growing urbanization and different initiatives from governments worldwide regarding agricultural activities. Many governments especially in developing countries are offering credit facilities and subsidies to farmers, which help them in purchasing advanced machinery,” said Brijesh Kumar Choubey, a lead analyst for retail goods and services at Technavio.

The agricultural machinery market in North America is expected to exceed $46 billion by 2020, growing at a CAGR of approximately 8%. The agricultural machinery market in North America has reached maturity and is expected to witness slow growth during the forecast period due to a decline in the price of commodities and a weak economic cycle in North America. These factors lead to low income of farmers and affect the demand for agricultural machinery.

However, factors such as latest development in technologies and contribution toward precision farming are driving the market. High capacity tractors are used in this region due to the existence of large farms. The U.S. and Canada are the major contributors to the agricultural machinery market in North America.