Estimated Macroeconomic Impacts of the Introduction of Precision Arable Crop Production, in Particular to the Costs and Return on Investment

In 2016, the Research Institute of Agricultural Economics carried out a questionnaire survey and in-depth interviews among the arable crop farms of the Hungarian Farm Accountancy Data Network system to examine the penetration and application levels of precision and soil conservation farming. 6.9 per cent of the respondents applied precision farming methods. Based on the results, in case of the main crops (wheat, maize, rape, sunflower) precision farming leads to increasing yields and has a cost and profitability advantage compared to the traditional farming methods. Among the macroeconomic impacts the lower environmental load (input use rate) can be highlighted, and the lower import inputs at national economy level. According to the respondents, the main barrier to the diffusion of the technology is the high investment cost. The aim of this study, based on the survey, was to investigate the required investments, the investment costs and benefits on farm- and macro level in case of transition to precision arable crop production. The investment cost depends on whether a complete machinery change is needed, the existing machinery requires specific updates with precision equipment or only minor elements and software must be purchased by the farm. The investment costs for these scenarios were estimated based on the data provided by the KITE Zrt. It was found, that in case of the machinery update with precision equipment and software – regardless of the farm size – the investment is returned by the extra revenue generated by the technology. However, the return was not proved in case of the complete machinery changes. Presumably, if the national or EU subsidy system – in form of subventions or repayable assistance, subsidized loans or interest – may provide funding for farmers to adopt precision technology elements, the precision farming would have an intensive diffusion in Hungary.