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Economic Potential of Autonomous Tractor Technology in Australian Cotton Production Systems

Author

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  • Revell, G.B.
  • Powell, J.W.
  • Welsh, J.M.

Abstract

Autonomous tractor technology is increasingly viewed as a key factor in changing the paradigm of conventional agriculture, allowing a shift away from ever-increasing crop machinery sizes to swarms of smaller agricultural robots (agbots). The predicted benefits of agbots include improved productivity relating to key inputs such as labour, energy, and chemicals, as well as yield improvements from improved crop and fallow management and reduced compaction. To understand the economic potential of agbots in Australian cotton production, this analysis applied discounted cash flow analysis to compare changes in income and costs associated with investment in an agbot spraying system. The results showed that switching to agbot spraying is economically feasible compared to two conventional spray platforms in a representative cotton farming enterprise. Compared to a self-propelled sprayer, agbot spraying returned an average annual NPV of $95,750 (at a 5 per cent real discount rate) and a MIRR of 16 per cent, while compared to a three-point linkage tractor sprayer, agbot spraying returned an average annual NPV of $178,603 and a MIRR of 13 per cent. Differences in the NPV and MIRR rules were due to variations in the cashflow patterns. For both scenarios, the largest benefit component was increased crop income from yield gain, followed by avoided machinery capital costs, and reduced chemical costs. Sensitivity testing revealed that, for the self-propelled sprayer scenario, the yield change and farm size variables were both individually significant to the results as they both had the capacity to reduce the NPV below $0 at their maximum range. In the tractor sprayer scenario, the yield gain was the only significant variable, reducing the NPV to $0. With the increasing commercial availability of agbots and the widely predicted benefits, it is timely to understand the economic potential for agbot adoption in the Australian cotton industry. From the results we infer that agbot sprayer technology can be a viable economic technology for adoption in a cotton farming system if yield gains can be generated. The economic viability will also be influenced by a number of factors that will differ between farming operations, and as with any decision, farmers should closely review agbots in their own operational context before investment.

Suggested Citation

  • Revell, G.B. & Powell, J.W. & Welsh, J.M., 2020. "Economic Potential of Autonomous Tractor Technology in Australian Cotton Production Systems," AFBM Journal, Australasian Farm Business Management Network, vol. 17(1), October.
    • Handle: RePEc:ags:afbmau:333925
    DOI: 10.22004/ag.econ.333925
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    References listed on IDEAS

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    1. Lowenberg-DeBoer, James & Behrendt, Karl & Godwin, Richard & Franklin, Kit, 2019. "The impact of swarm robotics on arable farm size and structure in the UK," Land, Farm & Agribusiness Management Department 296492, Harper Adams University, Land, Farm & Agribusiness Management Department.
    2. Reddy, V. R. & Baker, D. N. & Whisler, F. D. & McKinion, J. M., 1990. "Analysis of the effects of herbicides on cotton yield trends," Agricultural Systems, Elsevier, vol. 33(4), pages 347-359.
    3. Lowenberg-DeBoer, James & Behrendt, Karl & Godwin, Richard & Franklin, Kit, 2019. "The impact of swarm robotics on arable farm size and structure in the UK," Agri-Tech Economics Papers 296492, Harper Adams University, Land, Farm & Agribusiness Management Department.
    4. Powell, Janine & Scott, Fiona, 2011. "A Representative Irrigated Farming System in the Lower Namoi Valley of NSW: An Economic Analysis," Research Reports 280788, New South Wales Department of Primary Industries Research Economists.
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