Compact Agricultural Tractors Global Market Report 2025

The compact agricultural tractors market size has grown rapidly in recent years. It will grow from $16.21 billion in 2024 to $17.96 billion in 2025 at a compound annual growth rate (CAGR) of 10.8%. The growth in the historic period can be attributed to mechanization of smallholder farms, expansion of horticulture and orchard acreage, government subsidy programs for farm machinery, rise of landscaping and grounds maintenance services, and availability of affordable financing and credit lines.

The compact agricultural tractors market size is expected to see rapid growth in the next few years. It will grow to $26.67 billion in 2029 at a compound annual growth rate (CAGR) of 10.4%. The growth in the forecast period can be attributed to increasing demand for organic and specialty crops, shift toward small and medium farm ownership transfers, growth of urban edge agriculture and peri-urban acreage, supportive tax incentives and accelerated depreciation, and expansion of custom hiring centers and rental services. Key trends in the forecast period include intelligent hydrostatic transmission with programmable drive modes, integrated electro-hydraulic loader controls and multi-function joysticks, electric battery-powered compact tractors for low-emission operations, diesel-electric hybrid powertrains with energy recovery, and operator cabins with climate control and low-noise acoustic insulation.

The rising demand for organic farming is expected to drive the growth of the compact agricultural tractors market going forward. Organic farming is an agricultural system that relies on ecological processes, biodiversity, and natural cycles rather than synthetic fertilizers, pesticides, or genetically modified organisms. The increase in demand for organic farming is driven by growing consumer awareness of health and environmental sustainability. Compact agricultural tractors support organic farming by providing efficient, versatile, and space-saving machinery suited to small-scale, intensive, and eco-friendly farming practices. For instance, in May 2025, according to GOV.UK, a UK-based government department, in 2024, the total area of land farmed organically in the UK was 503 thousand hectares, an increase of 1% compared to 2023. Therefore, the rising demand for organic farming is fueling the growth of the compact agricultural tractors market.

Key companies operating in the compact agricultural tractors market are focusing on developing intelligent hydrostatic transmission (iHST) with integrated electro-hydraulic loader controls to enhance precision, operator comfort, and multi-implement productivity. Intelligent hydrostatic transmission (iHST) is a microprocessor-managed hydrostatic drivetrain that continuously optimizes pump motor response and torque delivery, enabling smooth, step-less speed control, programmable acceleration, cruise functions, and efficient power transfer for frequent stop-start tasks and tight-space maneuvering. For instance, in October 2025, Kubota Tractor Corporation, a US-based manufacturer of agricultural machines, launched the Grand L70 Series compact tractors featuring intelligent hydrostatic transmission (iHST) and a multi-function loader joystick, an operator-assist innovation aimed at higher productivity and ease of use. The intelligent hydrostatic transmission and joystick integration provide smoother control, reduce operator fatigue, and shorten cycle times, resulting in enhanced implement handling, finer speed modulation for horticulture and grounds care, and improved fuel efficiency through optimized power delivery. Overall, the technology raises productivity and comfort for small-acreage farms, vineyards, orchards, and municipal users by embedding advanced driveline and operator-assist features into compact platforms.

In November 2023, CNH Industrial, a UK-based company that designs, produces, and sells agricultural and construction equipment, partnered with LS Tractor to strengthen its tractor portfolio. This strategic partnership aims to enhance CNH’s compact tractor offerings by combining LS Tractor’s technical expertise with CNH’s manufacturing and distribution capabilities. It enables CNH to serve a broader range of customers in emerging and developed markets, offering cost-effective, high-performance compact tractors tailored to specialized applications such as horticulture and smallholder farming. The partnership reflects CNH’s focus on increasing market share in the growing global compact tractor segment by delivering localized, efficient, and technologically advanced solutions. LS Tractor is a South Korea-based global manufacturer of agricultural equipment.

Major players in the compact agricultural tractors market are Deere & Company, CNH Industrial N.V., Kubota Corporation, Mahindra & Mahindra Ltd., AGCO Corporation, YANMAR HOLDINGS CO. LTD., SDF Group, Iseki & Co. Ltd., Escorts Kubota Limited, Daedong Corporation, TAFE - Tractors and Farm Equipment Ltd., LS Mtron Ltd., VST Tillers Tractors Ltd., Kioti Tractor, Lindner Traktorenwerk GesmbH, International Tractors Limited, Minsk Tractor Works Ltd., TYM Corporation, Argo Tractors S.p.A., and BCS Group.

Asia-Pacific was the largest region in the compact agricultural tractors market in 2024. North America is expected to be the fastest-growing region in the forecast period. The regions covered in compact agricultural tractors report are Asia-Pacific, Western Europe, Eastern Europe, North America, South America, Middle East and Africa. The countries covered in the compact agricultural tractors market report are Australia, Brazil, China, France, Germany, India, Indonesia, Japan, Russia, South Korea, UK, USA, Canada, Italy, Spain.

Note that the outlook for this market is being affected by rapid changes in trade relations and tariffs globally. The report will be updated prior to delivery to reflect the latest status, including revised forecasts and quantified impact analysis. The report’s Recommendations and Conclusions sections will be updated to give strategies for entities dealing with the fast-moving international environment.

The accelerated imposition of U.S. tariffs and the emerging trade conflicts in spring 2025 are significantly influencing the agriculture sector by increasing input costs for seeds, fertilizers, and machinery parts sourced from abroad. Tariffs on imported agrochemicals and farm equipment have raised production expenses for growers, while retaliatory measures from key trading partners have reduced export opportunities for U.S. crops such as corn, wheat, and dairy products. As a result, many farmers are experiencing shrinking profit margins and heightened financial stress. In response, agricultural producers are diversifying crop portfolios, adopting precision farming technologies to reduce input waste, and advocating for government subsidies and market access relief.

The compact agricultural tractors market research report is one of a series of new reports that provides compact agricultural tractors market statistics, including compact agricultural tractors industry global market size, regional shares, competitors with a compact agricultural tractors market share, detailed compact agricultural tractors market segments, market trends and opportunities, and any further data you may need to thrive in the compact agricultural tractors industry. This compact agricultural tractors market research report delivers a complete perspective of everything you need, with an in-depth analysis of the current and future scenario of the industry.

Compact agricultural tractors are small, lightweight farm tractors with a shorter wheelbase and narrower frame than standard utility tractors, typically within specific horsepower ranges. They feature components such as a three-point hitch, power take-off, and front-loader compatibility to operate multiple implements. Their purpose is to provide affordable, versatile power for small and midsize farms, orchards, vineyards, and grounds maintenance, handling tasks such as soil preparation, mowing, hauling, material handling, and spraying in tight or confined spaces.

The key engine power of compact agricultural tractors includes less than 20 hp, 20-30 hp, 31-40 hp, 41-50 hp, and 51-60 hp. Less than 20 hp describes subcompact tractors that prioritize compact size, turf friendliness, and ease of attachment changes while still performing tasks such as mowing, light loader work, and property upkeep around homes, orchards, and vineyards. Different drivelines include two-wheel drive (2WD) and four-wheel drive (4WD), and various propulsions include internal combustion engine (ICE) and electric. These tractors use fuels such as diesel, gasoline, electric, or hybrid and are applied in agriculture, landscaping and grounds maintenance, horticulture, orchard and vineyard farming, estate and residential use, and municipal and commercial use.

The compact agricultural tractors market consists of sales of sub-compact tractors, compact utility tractors, mid-compact tractors, large compact tractors, and narrow or orchard compact tractors. Values in this market are ‘factory gate’ values, that is the value of goods sold by the manufacturers or creators of the goods, whether to other entities (including downstream manufacturers, wholesalers, distributors and retailers) or directly to end customers. The value of goods in this market includes related services sold by the creators of the goods.

The market value is defined as the revenues that enterprises gain from the sale of goods and/or services within the specified market and geography through sales, grants, or donations in terms of the currency (in USD unless otherwise specified).

The revenues for a specified geography are consumption values that are revenues generated by organizations in the specified geography within the market, irrespective of where they are produced. It does not include revenues from resales along the supply chain, either further along the supply chain or as part of other products.

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