Innovative pricing and service models will drive the adoption of sensor technology in the agriculture industry, according to a new report from Lux Research. Sensor technology can help make more efficient use of soil, water, pesticides and equipment.
With price variability and other uncertainties, few farmers are able or willing to risk significant capital on these technologies, according to Lux. Developers need to target the crops best suited for their technologies and create attractive financing or leasing options, or adopt service models that resonate with the growers.
In their evaluation of the economics of sensing technologies used in agriculture, Lux made the following key finding:
- Only the largest corn farmers (those with farms over 2,500 acres) can afford or find it attractive to purchase most sensors. A services model with creative pricing options could be appealing for a broader range of row crop growers.
- Potato farms are less dependent on scale for affordability. Soil moisture sensing and analytics technologies will appeal to potato growers, who can afford a technology cost of $100 per acre, with little difference in affordability across farm sizes from 50 acres to 500 acres.
- Wine grape growers are open to quality-increasing technologies. Sensors that help growers produce premium quality grapes that fetch ultra-high prices and can help cut production costs will be most appealing to wine grape growers. Larger vineyards of 50 acres and larger have the greatest tolerance for hardware purchases, while smaller vineyards will gravitate to services.
The report, Sensing in Agriculture: How Can Technology Developers Drive Adoption? is part of the Lux Research Sensors Intelligence and the Agro Innovation Intelligence services.
Photo credit: Corn field via Shutterstock