The Role of Contractors in the Uptake of Precision Farming - A Spatial Economic Analysis

Contractors will play a vital role in providing farms access to new precision farming technologies, especially in small scale farming systems. We investigate the role of spatial competition among contractors in the uptake of precision farming, the distribution of farmer surplus, and the realization of policy interventions, accounting for alternative spatial pricing schedules. Conceptual analyses and case study show that a lack of spatial competition among contractors hinders uptake of precision farming technology and farmer surplus. The effectiveness of policy interventions to support precision farming among small farms is also contingent on the market structure and pricing schedules of contractors.