The economic and environmental impacts of precision
agriculture and interactions with agro-environmental
policy
J. Schieffer
•
C. Dillon
Published online: 7 October 2014
Ó Springer Science+Business Media New York 2014
Abstract A whole-farm model was used to investigate the interacting effects of precision
agriculture technology and agro-environmental policy on the production choices of a representative
grain farm. Although some precision agriculture technologies did increase efficiency of resource
use, they also decreased the effectiveness of policy, especially policies that rely on economic
incentives (e.g., emission taxes). Precision agriculture can lead to higher marginal abatement costs
in the form of forgone profits, decreasing producers’ responsiveness to those policies. Policy-
makers targeting pollution reductions from agriculture should take into account the increasing use of
precision agriculture techniques and their varying effects on agro-environmental policy.
Keywords Whole-farm modeling Á Agro-environmental policy Á Auto-steer Á Variable
rate application Á Automatic section control
Abbreviations
ASC Automatic section control
DSSAT Decision Support System for Agrotechnology Transfer
EU European Union
GPS Global Positioning System
RTK Real-time kinematic auto-steer
US United States
VRA Variable rate application
Introduction
Two competing demands faced by agricultural producers and policy makers are the pro-
duction of food for a growing population and the reduction of the environmental impacts
J. Schieffer (&) Á C. Dillon
Department of Agricultural Economics, University of Kentucky, 400 C.E. Barnhart Building,
Lexington, KY 40546-0276, USA
e-mail: jack.schieffer@uky.edu
123
Precision Agric (2015) 16:46–61
DOI 10.1007/s11119-014-9382-5
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