In response to the challenges faced by the agriculture sector, there is a growing emphasis on sustainability-driven solutions, particularly through the implementation of connected agriculture. This innovative approach utilizes advanced technologies to enhance, manage, and regulate farming operations more efficiently. The evolution of digital technologies has enabled the collection and utilization of vast amounts of data at minimal costs, thereby facilitating increased crop yields while simultaneously reducing resource consumption, including water, fertilizers, and seeds.According to a report from Fortune Business Insights, the global connected agricultural market was valued at approximately $1.84 billion in 2018, with projections indicating it could expand to $7.22 billion by 2026. This represents an impressive compound annual growth rate (CAGR) of 19.1% over the forecast period. Notably, North America emerged as a dominant player in this market in 2018, capturing a significant 34.06% share.Despite these optimistic forecasts, the industry has seen a slowdown in efficiency, which is often measured by Total Factor Productivity (TFP). The global TFP growth rate has decreased from 1.6% in the early 2000s to a mere 0.9% over the past decade. As global food consumption is projected to surge by 60% by 2050, this stagnation in productivity raises serious concerns about food security, potential price hikes, and growing environmental pressures.Moreover, the Farm Products sector has reported negative returns both year-to-date and over the past year. In contrast, global food commodity prices saw a rise in February 2025, influenced by increases in sugar, dairy, and vegetable oil costs.The agriculture sector is also undergoing significant changes, particularly with the increasing contributions from the Global South—encompassing regions such as Africa, Asia, and Latin America—which together accounted for 73% of global agricultural output by 2020. Analysts from McKinsey & Company predict that as these emerging markets continue to modernize their agricultural practices, their share of production is expected to increase even further. This transformation is propelled by advancements in crop science, innovative irrigation techniques, and the adoption of mechanization, all of which have enabled higher yields from the same land resources. Additionally, a reduction in inflation in the United States towards the end of 2024 has alleviated input costs, especially in energy, resulting in improved profit margins for agricultural producers.The agriculture industry, which encompasses both crop cultivation and livestock rearing, plays a crucial role in meeting global demands for food and raw materials. According to data from the Business Research Company, the industry is projected to grow at a CAGR of 7.9%, rising from $14.36 trillion in 2024 to $15.50 trillion in 2025. This underscores the sector's vital importance as a cornerstone of the global economy, despite facing structural changes over the years due to resource management challenges, shifting global demand, and technological advancements.In our recent publication, we highlighted the eight worst small-cap agriculture stocks to buy, and in this article, we will examine CNH Industrial N.V. (NYSE:CNH) and its performance compared to other underperforming small-cap agriculture stocks.Sustaining agricultural growth will demand substantial investment in next-generation farming technologies and sustainable practices. McKinsey & Company suggests that advancements in agricultural technology could potentially yield a 25% increase in global output over the next decade while simultaneously enhancing efficiency and reducing environmental impact. Notably, the sector remains a vital component of the U.S. economy, contributing over $1.5 trillion to GDP in 2023, which represents 5.5% of the country's overall economic output.Despite the sector's foundational role in global economic stability and its ability to support billions of people worldwide, not every stock within the industry has shown robust performance.Our methodology for this analysis involved utilizing Finviz screeners to identify stocks within the agricultural inputs and farm products sectors. From a broader list, we focused on companies with strong market capitalizations. Subsequently, we evaluated the number of hedge funds invested in these entities, as we believe a higher level of hedge fund interest correlates with better stock performance. Additionally, we assessed the short percentage of float for each company, reflecting the level of investor pessimism. The final list was organized in ascending order based on this short proportion.Our interest in hedge fund favorites stems from research indicating that emulating top hedge fund stock selections can lead to above-average market returns. Over the years, our quarterly newsletter has successfully identified 14 small-cap and large-cap stocks each quarter, yielding a remarkable 373.4% return since May 2014, significantly outperforming benchmark indices by 218 percentage points.As for CNH Industrial (NYSE:CNH), a leading global manufacturer of agricultural and construction equipment, the company operates through three main segments: Agriculture, Construction, and Financial Services. It provides a diverse array of agricultural machinery, construction equipment, and precision agriculture solutions under well-known brands like Case IH, New Holland, and STEYR.Despite achieving run-rate savings of $600 million by the end of 2024 and reducing dealer inventory by over $700 million in the last quarter of 2024, CNH Industrial faced a considerable decline in sales. The company reported a staggering 31% drop in industrial net sales during the fourth quarter, with figures declining to $4.1 billion, contributing to an overall 23% decrease in full-year revenue, which totaled $17.1 billion. Furthermore, the adjusted EBIT margin fell to 8.2%, a decline of 370 basis points compared to the previous year, while the agriculture gross margin dipped to 20.6% in Q4.The company also reported a concerning negative free cash flow of $401 million for the fiscal year 2024, raising alarms about its liquidity management. Agricultural output hours fell by 34% year-on-year in Q4, prompting CNH Industrial to announce plans to reduce production by an additional 15-20% by 2025. Moreover, the company anticipates a worldwide industry demand drop of 5-10% in 2025, with its agriculture division expected to see a net sales decline of 13-18%, primarily due to its dependence on North American cash crop equipment.Additionally, rising delinquencies within CNH’s Financial Services segment have heightened investor anxiety, with portfolio delinquencies increasing from 1.4% to 1.9% at the end of 2023. The company further revised its earnings projections for 2025, now forecasting EPS between $0.65 and $0.75, a decline from the previous year’s $1.05.The bleak financial outlook and decreasing profitability have led to a rise in short interest, as investors increasingly bet against the stock. As a result of these mounting challenges, CNH Industrial has become a target for short sellers, ranking among the worst agriculture stocks for investment.In summary, CNH is positioned 5th on our list of worst small-cap agriculture stocks to consider buying. While we acknowledge the inherent potential of CNH, we believe that investments in AI stocks present a better opportunity for generating higher returns in a shorter timeframe. One particular AI stock has shown gains since the start of 2025, even while popular AI stocks have dropped around 25%. For those in search of a promising AI stock trading at less than five times its earnings, we recommend checking out our report on the most affordable AI stock available.For further insights, read our articles on the 20 Best AI Stocks to Buy Now and the 30 Best Stocks to Buy Now According to Billionaires.Disclosure: None. This article was originally published at Insider Monkey.