The evolution from conventional to modern agricultural practices, characterized by Agriculture 4.0 principles such as the application of innovative materials, smart water, and nutrition management, addresses the present-day challenges of food supply. In this context, polymer hydrogels have become a promising material for enhancing agricultural productivity due to their ability to retain and then release water, which can help alleviate the need for frequent irrigation in dryland environments. Furthermore, the controlled release of fertilizers by the hydrogels decreases chemical overdosing risks and the environmental impact associated with the use of agrochemicals. The potential of polymer hydrogels in sustainable agriculture and farming and their impact on soil quality is revealed by their ability to deliver nutritional and protective active ingredients. Thus, the impact of hydrogels on plant growth, development, and yield was discussed. The question of which hydrogels are more suitable for agriculture—natural or synthetic—is debatable, as both have their merits and drawbacks. An analysis of polymer hydrogel life cycles in terms of their initial material has shown the advantage of bio-based hydrogels, such as cellulose, lignin, starch, alginate, chitosan, and their derivatives and hybrids, aligning with sustainable practices and reducing dependence on non-renewable resources.