Influencing the Success of Precision Farming Technology Adoption—A Model-Based Investigation of Economic Success Factors in Small-Scale Agriculture

Johannes Munz () and Heinrich Schuele
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Johannes Munz: Institute of Applied Agricultural Research, Nuertingen-Geislingen University, Hechingerstr. 12, D-72622 Nuertingen, Germany
Heinrich Schuele: Faculty of Agriculture, Economics and Management, Nuertingen-Geislingen University, Neckarsteige 6-10, D-72622 Nuertingen, Germany

Agriculture, 2022, vol. 12, issue 11, 1-21

Abstract: Even more than 30 years after the introduction of precision farming technologies and studies of their benefits in terms of productivity gains and environmental improvements, adoption rates, especially for variable-rate technologies, are very low. In particular, in smallholder areas, farm managers are reluctant to adopt these technologies. Therefore, this study identifies factors that hinder or facilitate adoption from an economic perspective. Using a model-based sensitivity analysis with three farms of different sizes (11 ha, 57 ha and 303 ha), it is shown that larger farms have higher resilience to external factors due to economies of scale. In addition, it is clarified that the certainty of obtaining additional benefits with GPS guidance systems can explain the higher adoption rates in farming practice, although the additional benefits (per hectare and year) are much lower for this technology than for variable-rate technologies. Small farms (>30 ha) are by no means excluded from the use of digital technologies, as it is shown that the influence of learning costs on profitability is very low, low subsidies can lead to a drastic reduction in the minimum farm size and the presence of low-cost technologies is an efficient solution which allows small farms to participate in the digital transformation of agriculture.

Keywords: precision farming; technology adoption; small-scale agriculture; economic success factors; production function analysis (search for similar items in EconPapers)
JEL-codes: Q1 Q10 Q11 Q12 Q13 Q14 Q15 Q16 Q17 Q18 (search for similar items in EconPapers)
Date: 2022
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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