For the first time, the national market for Agriculture 4.0 technologies is shrinking. After seven years of uninterrupted growth, 2024 has seen an annual drop of eight percent. This trend has been heavily influenced by a decrease in demand for machines and equipment integrated with digital solutions, largely due to the end of tax incentives.
After years of steady growth, 2024 marks the first slowdown in the Italian market for digital technologies in agriculture. This is the key finding of the “Smart Agrifood Observatory 2025,”. This is an annual study conducted by the Politecnico di Milano in collaboration with the University of Brescia. The report reveals that, for the first time in seven years of consistent and continuous expansion, the national sector of so-called Agriculture 4.0 technologies has suffered a setback. The total business volume in 2024 reached €2.3 billion, down eight percent from €2.5 billion in 2023. This decline reflects a twofold trend: a significant reduction in investments in mechanical solutions alongside growth in the software segment.
Downward Trend
Despite the strategic importance of software for farms aiming to operate with an increasingly large amount of data, its growth was not enough to fully offset the decline in demand for machines and equipment with integrated digital solutions. According to the study, this drop was caused by a combination of factors. Chief among them were the massive investments made between 2020 and 2023, driven by government tax incentives that effectively saturated the market. In 2024, the sector also suffered a significant decline in registered machinery. The more structured and technologically advanced companies had already renewed and expanded their machinery fleets during the incentive period, which allowed them to recover up to 60% of their investment.
The Blow After the End of Incentives
With the incentives exhausted, the market took an inevitable hit. This was further worsened by reduced productivity due to increasingly frequent extreme weather events and rising costs for energy and crop protection products. It’s worth noting that the machinery and equipment segments account for over 55% of the national Agriculture 4.0 market—an amount that software solutions alone cannot yet compensate. Farmers now choose digital tools mainly to improve forecasting capabilities (41% of cases), enhance monitoring and management activities (38%), and improve planning (32%).
According to the same study, trends in the software market also indicate a growing awareness of the benefits of digital tools. However, only 8% of Italian companies have reached a sufficient level of maturity in this area, compared to 35% that are in a phase of evolution and 57% that are still lagging behind.
As a result, in 2024 the percentage of Italian farmland managed using 4.0 solutions remained nearly unchanged—rising only slightly from 9% in 2023 to 9.5% in the past year. This stagnation is also due to the fact that 84% of Italian companies using digital solutions have already benefited from at least one incentive. Without new ones available, many farmers have decided to scale back and wait for better times.
