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A Risk Analysis of precision farming for tomato production

Yangxuan Liu, Michael Langemeier, Ian Small, Laura Joseph, William Fry, Jean Ristaino and Amanda Saville

No 253119, 2017 Annual Meeting, February 4-7, 2017, Mobile, Alabama from Southern Agricultural Economics Association

Abstract: This paper compares precision farming technology with calendar-based approaches in scheduling fungicide applications to manage tomato late blight disease. Two fungicide scheduling strategies were evaluated: calendar-based strategy and BlightPro decision support system based strategy (DSS-based strategy). Using results from 14 years of computer simulation experiments for 25 locations in the United States, we constructed distributions of net return to all costs excluding fungicide cost and application cost (net return per acre) for the calendar-based and DSS-based strategies at each location. These distributions were then compared using three risk management methods: stochastic dominance, stochastic dominance with respect to a function, and stochastic efficiency with respect to a function. Results show that in terms of disease control, the DSS recommended spray schedule is more effective. Depends on the percentage of tomato yield improvement for DSS, the preferred strategy is different. Average net income over fungicide cost and average risk-adjusted net income for the DSS recommended spray schedule is lower for susceptible cultivars and higher for moderately susceptible cultivars and moderately resistant cultivars with no yield improvement for DSS strategy. The value added by DSS ranges from -$17.69 to $48.33 per acre with no tomato yield improvement for DSS strategy. When there are more than 5% yield improvement, DSS strategy is strong preferred strategy by tomato growers. Our research contributes to the literature by providing a method to evaluate the economic benefit of adopting DSS.

Keywords: Agricultural Finance; Farm Management; Production Economics; Research and Development/Tech Change/Emerging Technologies; Risk and Uncertainty (search for similar items in EconPapers)
Pages: 22
Date: 2017
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DOI: 10.22004/ag.econ.253119

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