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The Economics of Precision Agricultural Machinery Management
Department of Agricultural Economics
This research is needed to provide further economic assessment of precision agriculture machinery management, including economics, in a multidisciplinary analysis. Ultimately, this research aims at providing the missing element of the analysis of the economic performance of precision agriculture machinery regarding both profitability and risk management in a whole farm setting.
2010 Project Description
Expertise in precision agriculture economics research resulted in two invited presentations. The first was at the Bright Animal EU Framework 7 Coordination and Support Action Workshop in Copenhagen, Denmark in May 2010 to discuss precision dairy farming integration of economic and environmental aspects. Another presentation was made at the invitation of a session organizer at the 10th International Conference on Precision Agriculture in Denver, Colorado (July 2010). Furthermore, two refereed journal articles, one Ph.D dissertation and a selected paper resulted from efforts related to this project.
The value of this research project has been to provide managerial decision-making assistance by evaluating the risk and returns of various production and management practices, including their interrelationships. These contributions in 2010 include theoretical and empirical establishment of the need to consider adaptive farmer behavior in policy development as well as the establishment that variable rate fertilization does not globally result in reduced total farm fertilization levels as compared to uniform rate fertilization. Methodologically, the use of Boolean logic conditions in the reflection of low subsidy versus high subsidy choices faced by Greek farmers is modeled with mixed integer nonlinear programming. Results indicate that Greek farm managers appear to have multiple objectives such as protection of the environment, minimization of risk, maximization of family income and better allocation of available family work hours throughout the year. Empirically, contributions beyond those already mentioned include economic analysis of autosteer technology and the investigation of hedonic modeling for herbicide price determination. It was determined that auto-steer navigation was profitable for a grain farmer in Kentucky with net returns increasing up to 0.90% ($3.35/acre). Additionally, the technology could be used in reducing production risk. Adoption of the technology also alters production practices for optimal use. The empirical results for hedonic herbicide price modeling indicate the importance of positive (efficacy against grasses and broadleaf weeds) and negative production characteristics (crop response). Moreover, explicit inclusion of the biochemical and physical way in which herbicides kill a weed, in the form of mode of action, improved model fit and performance.
Vassalos, M., C.R. Dillon and P. Karanikolas. Farm Decision-Making in a Multifunctional Context: The Case of Conventional and Organic Farming in Kerkini District, Greece. Applied Studies in Agribusiness and Commerce. 2010,1&2(2010):59-64.
Luck, J.D., S.K. Pitla, S.A. Shearer, T.G. Mueller, C.R. Dillon, J.P. Fulton and S.F. Higgins. Potential for Pesticide and Nutrient Savings via Map-based Automatic Boom Section Control of Spray Nozzles. Computers and Electronics in Agriculture. 70,1(2010):19-26.
Dillon, C.R. Profitability of Dairy Cattle through Precision Livestock Farming. Bright Animal EU Framework 7 Coordination and Support Action Workshop. Copenhagen, Denmark. May 27 and 28, 2010.
Dillon, C.R. and J. Shockley. Precision Management for Enhancing Farmer Net Returns with the Conservation Reserve Program. Invited Paper. Proceedings of the 10th International Conference on Precision Agriculture. Denver, Colorado. July 18 to 20, 2010. 10 pp. Electronic (CD) proceedings.
Vassalos M. and C.R. Dillon. A Hedonic Price Analysis of Corn and Soybean Herbicides. Paper presented at the 120th European Association of Agricultural Economists, Chania-Crete, Greece. September 1 to 4, 2010.
Shockley, Jordan. Ph.D. Dissertation. 2010. Whole Farm Modeling of Precision Agriculture Technologies.