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Precision Agriculture: Almost 20% increase in income possible from smart farming

A new generation of technologies could change farms in the UK. We’ve written more about them elsewhere.

Here is the infographic summary again:

Future farm

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:

Precision livestock

Example activity: eCow bolus reduces infection of SARA

UK income from milk and milk products for mixed farm is £17,251 (2013/14 data).

10% increase in milk yield from this technology.

Increase in annual income = £1725

Farming data

Example activity: digital reporting removes costs of manually reporting for regulatory purposes

Average cost of reporting for regulation including welfare visits and updating compliance is £5,500 a year per farm.

Assume 20% of these costs are saved with automated reporting.

Saving in annual costs = £1,100

Smart Tractors

Example activity: reduce inputs in fuel, repair soil erosion, and increase yields

A tractor guiding system can add €18 per hectare for winter wheat, assuming cost of system reduces enough for smaller farms to afford.

Average croppable area for UK farm is 63 hectares.

Increase in annual income (from yield) = £759

Machinery fuel costs are on average £8541 (2010/2011 data).

10% reduction in fuel costs.

Saving in annual costs (from fuel reduction) = £854

Agribots

Example activity: precise application of fertiliser

This can reduce fertiliser costs by up to 99.9%

Fertiliser costs in the UK for a mixed farm are £17,341 (2013/14 data).

Saving in annual costs = £17,323

Survey drones

Example activity: mapping of blackgrass weeds increasing wheat yields

Blackgrass reduces wheat yields by 2-5%.

Average wheat yield makes £28,473 for mixed farm (2013/14 data).

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%

Author

Jess Norris

Jessica Bland

Jessica Bland

Jessica Bland

Principal Researcher in Futures

Jessica was a principal researcher in the Policy and Research team. She explored how Nesta could best support responsible development of disruptive technology. She organised Hot Topi...

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