Agriculture Supply Chain Management Market

Agriculture SCM Market 2022-2031:

The global agriculture supply chain management market was valued at $0.78 billion in 2021, and is projected to reach $2.1 billion by 2031, growing at a CAGR of 9.9% from 2022 to 2031.

Supply chain management manages the flow of goods and services and includes all processes that transform raw materials into final products. Similarly, agriculture supply chain management involves managing interaction between companies responsible for effective production and supply of products from farms to consumers to reliably satisfy consumers in terms of quantity, quality, and price requirements. This generally includes managing horizontal and vertical alliances and business-to-business relationships and processes. Thus, agricultural supply chains enforce internal mechanisms and develop chain-wide incentives to ensure the timely performance of production and delivery commitments. Although the differentiation of goods, increased efficiency, more cost-effective transport, and timely distribution have led to the growth of supply chains from the farm gate to the retail level. For instance, in May 2022, Intellync announced a partnership with Star Index, a provider of supply chain management solutions, to combine Star Index’s broad knowledge of supply chain insights with the expertise of Intellync in agricultural supply chains. It develops a software solution that will work to capture & report data, reduce resource requirements, assess risk, and facilitate improvements across the supply chains of the agri-food businesses.

The COVID-19 outbreak severely impacted the global agriculture supply chain management market adversely. It has caused disruptions in the agricultural supply chain due to a lack of supplies from other states, issues in the arrangement of the transport vehicles, transportation restrictions, labor shortage, inefficient cold chain facilities, panic buying, fluctuation in prices, and lack of collectors/aggregators in the market. Furthermore, the pandemic has affected the global export and import of agricultural products because of global trade restrictions. All these activities have negatively affected the global agriculture supply chain management. However, the players in the market are taking the required steps to overcome the loss incurred because of the pandemic. Moreover, it is anticipated that during post-pandemic the companies will focus more on solutions that will support advanced planning and mitigate the impact of similar events in the future. The companies will focus more on end-to-end stock visibility, complex supplier monitoring, and process automation; thus, boosting the demand for SCM software in the agriculture supply chain management industry in upcoming years.

Currently, agriculture supply chain management companies are employing new technologies such as blockchain ledger technology to improve efficiency and minimize transportation costs. For instance, in June 2021, Geora Ltd. announced a partnership with AgriDigital, a developer of software solutions for agricultural supply chains, to develop and integrate blockchain technologies into their products. This helped develop the tools to empower farmers to manage finances and efficiently track the supply chain variables.

The factors such as an increase in the need for demand management solutions among agri-business organizations, an increase in use of cloud-based SCM software, and surge in need for improved supply chain visibility supplement the growth of the agriculture supply chain management market. However, high cost associated with the implementation and maintenance of supply chain management (SCM) solution and uncertainty in regulations & lack of standards are the factors expected to hamper the growth of the market. In addition, rise in urbanization & globalization and integration of blockchain technology in agriculture supply chain management creates market opportunities for the key players operating in the agriculture supply chain management market.

The agriculture supply chain management market is segmented into component, solution type, deployment model, user type, and region. By component, the market is divided into hardware, solution, and services. By solution type, it is fragmented into transportation management system, warehouse management system, supply chain planning, procurement and sourcing, and manufacturing execution system. By deployment model, it is categorized into on-premise and on-demand/cloud-based. By user type, it is categorized into small & medium-sized enterprises (SMES) and large enterprises. By region, it is analyzed across North America, Europe, Asia-Pacific, and LAMEA.

The leading players operating in the agriculture supply chain management market are Agri Value Chain, AgriDigital, Ambrosus, Bext360, ChainPoint, eHarvestHub, Eka, FCE Group AG, Geora Ltd., GrainChain, Inc., IBM, Intellync, KPMG, Proagrica, SAP, Sustainable Agriculture Initiative Platform, and Trellis LTD.

Increase in in use of cloud based SCM software

Adopting cloud-based software in agriculture drives the supply chain management software market. The cloud-based supply chain management software offers several benefits over the on-premises supply chain management software. Cloud SCM offers pay-per-usage licenses and requires minimal IT setup, which businesses adopt to minimize operational costs and transform their processes. Also, cloud SCM vendors are working on upgrading their portfolio, which is expected to reduce the solutions’ costs further. For instance, in October 2021, FCE GROUP AG announced a partnership with Synergos-Nigeria, a non-profit organization working to bring improvements to smallholder farmers. The partnership worked to improve the agricultural produce in Kaduna State of northwest Nigeria. The project saw around 450,000 farmers receiving digital tools and access to a cloud platform for digital identification, supply chain traceability, and a payment system with traditional and alternative payment methods to transform agricultural practices, improve living conditions and increase the food security in Nigeria. Apart from this, it offers several advantages to agri-based organizations for faster deployment, minimal risk, greater flexibility, increased visibility, and others, which are positively impacting on the agriculture supply chain management market growth.

Surge in need for improved supply chain visibility

Agriculture supply chain management allows supply chain managers to monitor where their current operations are performing or underperforming so they can be prepared for minor problems and redirect resources for significant outcomes. In addition, it generates data-driven, reliable solutions for effective production and supply of products from farms to consumers to satisfy consumers in terms of quantity, quality, and price requirements. For instance, in June 2021, AgriDigital announced a partnership with Genesis Feed Technologies, a developer of software solutions for real-time data management, to participate in the Seed to Feed supply chain and traceability project. This allowed for further improvement in the field of supply chain logistics by enabling real-time insights across the entire supply chain. This fuels the adoption of real-time data management software by end users with the surge in need for improved supply chain visibility, fostering the agriculture supply chain management market growth.

High cost associated with the implementation and maintenance of supply chain management (SCM) solution

The efficient use of SCM solutions requires high investments for agriculture supply chain management by end users, which can’t be afforded by small or medium-sized organizations related to the agriculture industry. Meanwhile, the small firms find it difficult to afford such systems as they have limited budgets and cannot justify long payback periods. In addition, this software's implementation and installation efforts and time can take as long as several months, which is a primary concern as some organizations cannot operate for long periods. Also, the support, maintenance, and further customization in software costs are high, restraining the adoption of agriculture supply chain management software as these services can be more than the price of the software, which depends upon the type of customizations. In addition, the lack of internal IT expertise for agri-based industries requires training to maximize the efficiency of various solutions, thus adding to the cost of ownership of the systems. Therefore, such factors related to maintenance & high cost hinder the market growth.

Integration of blockchain technology in agriculture supply chain management

Companies in the agriculture supply chain management market are employing new technologies to improve efficiency and minimize transportation costs. The use of blockchain is one of these technologies. Blockchain is a distributed ledger technology that can record transactions between parties safely and permanently. Blockchain eliminates the need for intermediaries, previously required to function as trusted third parties to verify, record, and coordinate transactions by ‘sharing’ databases amongst multiple parties. Furthermore, the use of blockchain in the agricultural supply chain promises to give a reliable source of truth about the status of farms, inventories, and agricultural contracts, which is quite expensive. Blockchain applications for logistics/supply chain purposes can also generate energy, financial and environmental advantages. Furthermore, blockchain can save costs by supporting more agile, automated, and error-free processes. Hence, the increasing adoption of these advanced technologies will allow for more organized operations and is expected to drive agriculture supply chain management market growth.

Key Benefits For Stakeholders

• This study presents analytical depiction of the global agriculture supply chain management market analysis along with current trends and future estimations to depict imminent investment pockets.
• The overall agriculture supply chain management market opportunity is determined by understanding profitable trends to gain a stronger foothold.
• The report presents information related to the key drivers, restraints, and opportunities of the global agriculture supply chain management market with a detailed impact analysis.
• The current agriculture supply chain management market is quantitatively analyzed from 2022 to 2031 to benchmark the financial competency.
• Porter’s five forces analysis illustrates the potency of the buyers and suppliers in the industry.

 Agriculture Supply Chain Management Market Report Highlights