The adoption of GPS in Cropping Agriculture



Understanding the market.
Agriculture is a notoriously volatile and price sensitive market. Predominantly populated by family owned and operated enterprises, purchase decisions are carefully taken and often based upon word-of-mouth recommendations. The adoption of new technology in a given geographical area commonly follows the success of prominent growers who experiment with the technology first. As a consequence the adoption time frame from initial sales to innovative growers through to volume sales to mainstream growers can be many seasons, a period of time further modified by the vagaries of climate, yields and commodity prices (growers are quick to close their wallets if they feel that bad times are ahead). These factors often cause inexperienced entrants to underestimate the time for new technology to be adopted.

Another important aspect of agricultural is the diversity of enterprise performance compared to other industries. Diagram 1 below illustrates that in most industries individual enterprises perform 85% to 95% as effectively as the best of breed. In agriculture the majority of individual enterprises operate around 60% as effectively as the best in breed. The implications for the adoption of new technology are obvious, there is simply not the same performance related imperatives to keeping up with the competition (i.e. other growers) as in other industries. It also reflects the underlying individualistic nature of most growers, they like to do it their way.


Figure 1. Relative performance of Agricultural Enterprises Source: James Moody, WANTFA Conference, Perth, Australia, February 2005

Combine the volatile nature of the underlying industry with individualistic nature of the enterprises and reasons for the wide variation in adoption rates of GPS in agriculture start to become clearer. Yet the need for positioning and spatially referenced information is real and is generally used to help fulfill two primary goals (1) Increasing farm productivity by boosting crop yields and (2) improving operating efficiency by reducing the usage of chemical and fuel and decreasing the number machine hours.

An important point to note is that historically yields have been improved by increasing the chemical input, the change in farming practices advocated today are intended to increase yields while at the same time potentially decreasing chemical input.

GPS and Precision Farming
Precision Farming is a term often used to describe the use of GPS and other technologies in improving farm productivity and operating efficiency. Diagram 2 illustrates three major applications for GPS (Mapping, Input Control and Machine Control) which incorporate this concept and how they relate to the three main approaches that most growers initially take to Precision Agriculture (Improving Agronomy, Reducing Error and Changing Practice).


Figure 2. GPS Adoption in Cropping Agriculture ©Position One Consulting

Mapping describes using GPS as part of a data collection system which includes geographical position. The purpose is to collect geographically referenced data for subsequent analysis and decision making. Input Control refers to using GPS to monitor, control and precisely apply inputs such as fertilizers, pesticides and seed or seed plants. Machine Control is using GPS to better control the steering of agricultural machinery and implements.

As mentioned previously, growers have typically approached Precision Farming from the perspective of either: (i) Improving Agronomy, (ii) Reducing Error or (iii) Changing Practice. Many will use the term Precision Farming but most do not initially use the full array of products and techniques available to them. It is important to note that these approaches are not mutually exclusive it is simply that most growers start of with one before moving to others. Farming enterprises which are using elements of all three approaches can perhaps be said to have truly adopted Precision Farming.

Improving Agronomy is a “scientific” approach to Precision Farming. It typically involves a considerable amount of data collection (Mapping) of the farm property including soil composition, pest concentrations and yields. This information can be built up over successive seasons and the grower then uses techniques such as Variable Rate Technology (VRT) to place chemicals only where required (Input Control). The objective is to progressively improve yields while restricting chemical usage to those areas which can be proven to require it. In this approach the primary objective is farm productivity with a secondary outcome of operating efficiency.

Reducing Error can perhaps be described as the “practical” approach to Precision Farming. It most commonly involves helping the operator drive the machinery in a straighter line through the use of a visual guidance system or an automated steering system. By reducing the amount of overlap (where the ground is covered twice) and underlap (where a strip may be missed) seed, chemical and fuel input can be reduced by up to 10%. Further advantages are reduced fatigue, a decrease in the time taken to perform operations and a reduction in the need to repeat or “fill-in” jobs. Additional techniques include methods such as boom-section-control where a spray boom with multiple nozzles on each side will switch off the end nozzles if it detects it is overlapping. Generally with this approach the grower is seeking operating efficiency with a potential bonus of farm productivity although in practice this is often not measured.

The third approach is where the grower is Changing Practice often with the joint goals of both improving both farm productivity and operating efficiency. An example of this is the adoption of control traffic. With this practice the grower permanently divides his field into crop zones and driving zones. Every pass of machinery for sowing, fertilizing, spraying and harvesting is along the same wheel ruts (driving zone) significantly decreasing compaction in the crop zone which improves soil structure, water retention and root penetration. Growers moving to control traffic report steady improvements in crop yields as the effects of compaction are reduced season by season. The investment is considerable as machinery is generally fitted with sub-inch auto-steering to ensure as small a driving zone as possible. In addition implements are often standardized to “fit into” the new driving patterns. Prior to changing farm practice growers usually undertake significant mapping activity to determine the optimum layout and implementation of the farming system being adopted.

The economics of GPS adoption
It is important to understand the initial approach of growers as the economics are significantly different between the three choices. At a minimum most growers will do a simple calculation of payback as illustrated in the formulae below.

Payback (years) = Capital Cost / (Savings + Yield Improvements)

Where Payback measured in years is the capital cost of the equipment divided by the savings and yield improvements measured in dollars per annum. For example if the capital cost is $10,000 , savings in fuel, chemicals etc are estimated at $1,000/year and additional revenue from yield improvements at $3,000/year, payback would be estimated at 2 years and 6 months.

It is obvious from this simple pay back formulae that a grower who is only considering savings (which corresponds to the Reducing Error approach) will either have to accept a longer payback than growers adopting other approaches or alternatively will seek products with a lower capital cost. In reality growers choose the latter and this goes someway to explain the prevalence and popularity of relatively low cost products such as visual guidance systems amongst growers in this category.

Extending this observation further, growers who are changing farm practice often fully account for both expected yield improvements and extensive savings. This in turn justifies the higher capital costs of products such as sub-inch auto-steer and associated equipment changes.

Obviously the size of the farm, scale of operations and crop value are all factors in the economics of adoption. However the basic rule applies, if the grower is only justifying his purchase on operating efficiency and not taking into account potential improvements in farm productivity he will not be prepared to spend as much on the product.

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