Benefits of Increasing Information Accuracy in Variable Rate Technologies

Improvements in the sustainability of agricultural production depend essentially on advances in the efficient use of nitrogen. Precision farming promises solutions in this respect. Variable rate technologies allow the right quantities of fertilizer to be applied at the right place. This helps to both maintain yields and avoid nitrogen losses. However, these technologies are still not widely adopted, especially in small-scale farming systems. Recent developments in sensing technologies, like drones or satellites, open up new opportunities for variable rate technologies. In this paper, we develop a bio-economic modelling framework to assess the usefulness of different sensing approaches in variable rate fertilization to measure environmental heterogeneity at field level, ranging from satellite imagery to drones and handheld N-sensors. We assess the utility of these sensing technologies and quantify the effects on yields, nitrogen input and associated net returns using wheat production in Switzerland as our case study. Our results show that net profits increase when a high-resolution technology is applied to fields which exhibit higher spatial heterogeneity of soil conditions and lower spatial autocorrelation of different soil types. However, even with a high degree of spatial heterogeneity within a field, both the overall utility of variable rate fertilization and the absolute differences in the net returns between the technologies remain low. Our results suggest that the additional cost of using a drone that provides the highest resolution should not exceed 4.5 CHF/ha compared to the use of a standard N-sensor or satellite imagery. Thus, the adoption of variable rate technologies depends essentially on the additional economic and environmental effects they generate. Therefore, it might be necessary to implement specific policy measures, such as taxes on nitrogen in combination with subsidies. Moreover, specific technology providers, such as contractors, may play a vital role in technology uptake since the economic benefits might only play out at larger spatial levels.