Addressing Risk Associated to ICT-Based Technology: Estimation of Financial Parameters

Background

From the study of the impact that PA technologies have on farm economics it has become clear that technology affects farm economics through multiple channels (Pedersen et al., 2019; Schimmelpfennig, 2016; J. Shockley et al., 2012; J. M. Shockley et al., 2011). For instance, PA technology can reduce operating costs by preventing farmers from overapplying inputs, and even if input use and operating costs increase, yields can grow enough to increase operating profits. The use of ICT and PA technology can effectively lead to a decrease of input costs. Several works have investigated to which extent technology can nowadays contribute to increase economic -but also environmental benefits in agriculture. It is widely documented how lower rates of fertilizer carefully better distributed applied can reduce input up to 38% without affecting yield and crop quality (Aggelopoulou et al., 2011; Casa et al., 2011; Matson et al., 1998; Zaman et al., 2005; Schmidt et al., 2002). Moreover, Dobermann et al. (2002) and Wang et al. (2003) reported both increased yields (up to 11%) and cost benefits resulting from site-specific fertilization management. Similar benefits were highlighted also for real-time pesticide application (Chen et al., 2013; Dammer & Adamek, 2012), lime application (Bongiovanni & Lowenberg-Deboer, 2000) and weed control (Dammer & Wartenberg, 2007; Kunz et al., 2015).