Precision agriculture technology adoption and technical efficiency

We explore the relationship between precision agriculture (PA) technology adoption and technical efficiency using the 2016 USDA Agricultural Resource Management Survey (ARMS). Efficiency gains from PA are likely cumulative, that is, the true impact of precision farming depends on the integration of complementary tools. To examine the efficiency benefits of different PA bundles, we perform a two-step analysis. First, we use cluster analysis to identify distinct producer groups based on patterns in PA technology adoption. These producer groups map naturally onto the classic technology adoption curve (laggards, late majority, early majority, innovators). Second, we use stochastic frontier analysis (SFA) and stochastic meta-frontier analysis (SMFA) to estimate differences in technical efficiency between PA adoption groups. We find that farms with advanced PA technology bundles are significantly more technically efficient than non-adopters. Differences in technical efficiency are not found to be driven by heterogeneous production technologies, but rather inefficiencies in input usage at the farm level. Our results have strong implications for farm consolidation in US agriculture.

Automated summary

The study explores the relationship between precision agriculture technology adoption and technical efficiency, finding that farms with advanced precision agriculture technology are more technically efficient, with the efficiency differences driven mainly by inefficiencies in input usage at the farm level rather than differences in production technologies.