Year of Publication

2005

Document Type

Dissertation

College

Agriculture

Department

Agricultural Economics

First Advisor

Carl R. Dillon

Abstract

Precision agriculture (PA) can be defined as a set of technologies that have helped propel agriculture into the computerized information-based world, and is designed to help farmers get greater control over the management of farm operations. Because of its potential to spatially reduce yield variability within the field through variable rate application of nutrients it is thought to be a production risk management instrument. Subsurface drip irrigation (SDI) is another production risk management technology that is generating interest from the farming community as a result of new technological improvements that facilitate equipment maintenance and reduces water consumption.In the first article the production risk management potential of these two technologies was investigated both for each technology and for a combination of the two. Simulated yield data for corn, wheat and soybeans were obtained using EPIC, a crop growth simulation model. Mathematical programming techniques were used in a standard E-V framework to reproduce the production environment of a Kentucky commercial grain farmer in Henderson County. Results show that for risk averse farmers, the lowest yield variability was obtained with the SDI technology. The highest profit level was obtained when the two technologies were combined.Investment in two sets of equipments (PA and SDI) to maximize profitability and reduce risk could however expose many farm operations to financial risk. In the second article, a discrete stochastic sequential programming (DSSP) model was used to analyze the impact of PA and/or SDI equipment investment on the farm's liquidity and debt to asset ratio.In the last article, the cotton sector in Benin, West Africa, was utilized to study the transferability of PA technology to a developing country. Properly introduced, precision agriculture (PA) technology could help farmers increase profitability, improve management practices, and reduce soil depletion. An improved production system could also help farmers better cope with the policy risk related to cotton production. Results from the two models show that PA is less profitable for the risk neutral farmer but more profitable for the risk averse one when compared to conventional production practices. The adoption of the new technology also has very little impact on the choice of crop rotation made by the farmer.

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