Precision Agriculture: almost 20% increase in income possible from smart farming
Here is the infographic summary again:
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We’ve tried to work out how much this would save a farm in the UK in the future. This wasn’t easy: farming data isn’t easy to handle; most of these technologies have only been trialled on larger farms so far; it’s not clear what the capital costs of investing in these technologies will be.
The rough calculation below points to a potential 17.9% annual increase in profit for a mixed use (wheat with grazing livestock) average size farm in England (81 hectares). But estimates easily vary between 7.1% and 76.3%, just taking into account that average farm business incomes vary hugely each year and adding the highly speculative fertiliser savings. There will likely be other factors that affect the real value of these savings to individual farms.
Farming is a business built on small profit margins relative to costs and income. And so some of the most exciting prospects will come from making a difference to some of the most significant factors in those costs and income. Average farm income in 2013 was over £270,000 a year and about £240,000 goes back into costs. Given this large volume of turnover, the £30,000 or so profit margin could be increased if new agricultural technologies can drastically reduce the costs of fertilisers or increase yields by even 5%.
Here are our calculations for example savings in each technology area:
Example activity: eCow bolus reduces infection of SARA
Increase in annual income = £1725
Example activity: digital reporting removes costs of manually reporting for regulatory purposes
Assume 20% of these costs are saved with automated reporting.
Saving in annual costs = £1,100
Example activity: reduce inputs in fuel, repair soil erosion, and increase yields
Increase in annual income (from yield) = £759
Saving in annual costs (from fuel reduction) = £854
Example activity: precise application of fertiliser
Saving in annual costs = £17,323
Example activity: mapping of blackgrass weeds increasing wheat yields
Increase in annual income = £854
- Total potential profit increase (without fertiliser saving, as these are still highly speculative and don’t include capital cost) = £5,292
- Total potential profit increase (with fertiliser saving) = £22,615
- Average mixed use farm business income in England in 2011 = £74,078
- Average mixed use farm business income in England in 2013 = £29,632
- Lowest estimate of percentage increase in farm profit (2011 income without fertiliser saving) = 7.1%
- Middle estimate of percentage increase in farm profit (2013 income without fertiliser saving) = 17.9%
- Higher estimate of percentage increase in farm profit (2013 income with fertiliser saving) = 76.3%