Economic benefits of precision agriculture Case studies from Australian grain farms

In commercial practice in Australia the implementation of precision agriculture (PA) has in common the use of spatially-aware technologies made possible through the use of global positioning systems (GPS). Most commonly this includes, the use of vehicle guidance to reduce overlap in application of agricultural chemicals, reduced traffic associated with tramlining to reduce compaction and operator fatigue, shielded spraying of pesticides in row crops, yield monitoring, variable rate technology (VRT) for application of agricultural chemicals, especially fertiliser, and within-paddock zone management for agricultural operations.

Although PA technology has been available in Australia for more than a decade, it has been estimated that only around 3% of Australian grain growers are using some form of the technology (Price, 2004). One of the chief reasons for low adoption of PA is the reluctance of farmers to invest many thousands of dollars in PA without knowing if the technology will return a profit. A number of studies have reported the economic benefits of tramline farming and guidance for chemical application. Few studies have examined the value of variable rate technology and zone management.

Aims

In this study we attempt to quantify the economic benefits of PA on six case study farms from the Australian wheatbelt. We did not confine our analysis to VRT alone but also considered benefits to guidance and reduced traffic.

Methods

The farm case studies covered a range of agro-climatic regions (Mediterranean, uniform and summer dominant rainfall patterns), cropping systems (wheat-lupin, wheat-canola, and winter and summer crops), farm sizes (1,250 to 5,800 ha cropping program), soil types (shallow gravels to deep cracking clays), and production levels (average wheat yields from 1.8 to 3.5 t/ha). The farmers had been involved in PA from 2 to 10 years and covered the range of PA technologies that are commonly used by Australian grain farmers. Among the six farmers, all had invested in guidance and were practising some form of variable rate management of fertiliser. However, only some were using auto-steer and tramlining. One was using NDVI and another, the GreenSeeker technology for in-season nitrogen management. As such, the data set covered the range of likely situations confronting practitioners of PA in the Australian wheatbelt.

 

Each grower was interviewed and information was collected on: area of cropping program, crops grown, area of the cropping program to which PA technologies are applicable, average cropping gross margin, PA equipment purchased, included date and cost, management actions associated with PA technology implementation, the estimated reduction in overlap for tramlining / guidance, the rates of fertiliser applied in each zone for zone management, areas of management zones in each paddock, rates of fertiliser applied for uniform zone management, yield in each management zone, and growers’ opinion of non-monetary benefits of PA. Standard economic analyses were applied including gross margin calculations and discounted cash flow analysis.

Results

The level of capital investment in PA varied from $55,000 to $189,000 (Table 1), which is typically at the medium to high end of investment for Australian grain growers. When expressed as capital investment per hectare cropped it varied by a factor of three from $14 to $44/ha. The estimated annual benefits from PA ranged from $14 to $30/ha and consequently the investment analysis showed that the initial capital outlay was recovered within 2-5 years of the outlay, and in four out of the six cases within 2-3 years (Table 1).

 

For all farmers we were able to quantify benefits to variable rate fertiliser management, ranging from $1 to $22/ha across the six farms (Table 2). On a per paddock basis, benefits ranged from -$28 to +$57/ha/year. Variation in monetary benefits from farm to farm could be explained by (1) whether or not starter fertiliser was being varied and not just nitrogen topdressing, and (2) the degree of within-paddock yield variation. The methodology for estimating the benefits of VRT requires further testing on 6 paddock-scale data where yields and fertiliser rates are recorded for uniform and VRT-managed strips.

Benefits due to reduced overlap of spraying were typically in the order of 10% savings on spraying costs. Other benefits nominated by farmers and estimated by us were less fuel use, less soil compaction, less hired labour requirement and more timely sowing. Intangible benefits listed by farmers were: the ability to conduct on-farm trials, increased knowledge of paddock variability, increased confidence in varying fertiliser rates, and better in-crop weed control due to shielded spraying.

 

All farmers were all highly literate in the use of computers, GPS technology, and variable rate controllers, routinely soil tested and kept good farm records. All invested considerable time in setting up their system in the beginning (with considerable teething problems in some cases), but on-going labour demands were minimal. Some did not use a consultant, while others placed heavy reliance on consultants for zone definition, yield map processing and variable rate map production. We also found that, while a number of farmers are trialling VRT in test strips within paddocks, it seems that very few have taken the jump into full commercial implementation of VRT on their farms.

Conclusions

This study is the first of its kind to estimate the economic benefits of precision agriculture in a commercial context. It demonstrates that Australian grain growers have adopted systems that are profitable, are able to recover the initial capital outlay within a few years, and also see intangible benefits from the use of the technology. While the results here will go some way towards informing the debate about the profitability of PA, it also illustrates that the use of, and benefits from, PA technology varies from farm to farm, in line with farmer preferences and circumstances.

Acknowledgements

This work has been carried out with funding from the Grains Research and Development Corporation and CSIRO Sustainable Ecosystems. The authors would like to acknowledge the time and access to farm records from David Forrester, David Fulwood, Stuart McAlpine, Mike Smith, Rupert McLaren and Richard Heath. Assistance from Ian Maling (SilverFox Solutions, Perth) for data analysis of yield maps and comments from Rick Llewellyn, Matt McCallum, Phil Price and Bindi Isbister is gratefully acknowledged.

References

Price P (2004). Spreading the PA message. Ground Cover, Issue 51, August 2004. Grains Research and Development Corporation, Canberra.

 

Table 1: Summary across six farmer case studies of capital investment in precision agriculture technologies, estimated annual benefits and year when initial investment is recovered.

Farmer	Region	Size of cropping program (ha)	Capital Investment in PA		Annual estimated benefits to PA*	Years to break even
			Total $	$/ha	($/ha)
Forrester	West	2,600	90,000	35	21	4
Fulwood	West	5,800	189,000	33	22	2
McAlpine	West	3,400	65,000	19	21	2
Smith	North	1,250	55,000	44	30	2
Heath	North	3,430	95,000	28	24	3
McLaren	South	4,000	56,000	14	14	5

* excluding capital costs

 

Table 2: Summary across six farmer case studies of benefits ($/ha) to precision agriculture technologies, in total and separated into categories.

Farmer	Total	Reduced overlap	Fertiliser management	Less soil compaction	Fuel savings	Other
Forrester	21	5	16
Fulwood	22	13	7			2
McAlpine	21	12	1		4	4
Smith	30	8	22
Heath	24		20	4
McLaren	14	7	7

Contact details

Dr Michael Robertson

Officer-in-Charge

CSIRO Sustainable Ecosystems

Private Bag 5, PO Wembley, WA 6913

Ph: 08 93 336 461
Fx: 08 93 336 444
Mb: 0417 721 510

Email: michael.Robertson@csiro.au

 

Dr Peter Carberry

Theme Leader

CSIRO Agricultural Sustainability Initiative

APSRU, PO Box 102, Toowoomba, Qld. 4350

Ph: 07 4688 1377

Fx: 07 4688 1193

Mb: 0419 656 955

Email: peter.carberry@csiro.au