If farmers and ranchers had access to broadband, they would realize benefits amounting to $64.5 billion a year, according to the American Broadband Initiative

July 20, 2019 - By Megan Nelson - According to a U.S. Department of Agriculture report, A Case for Rural Broadband, if access to broadband and adoption of digital agricultural technologies matched producer demand, U.S. agriculture would realize benefits amounting to nearly 18% of total U.S. market production, or $64.5 billion annually, based on 2017 levels.

The report, published by the American Broadband Initiative, analyzes the possible economic benefits of bringing e-connectivity to agriculture and, more importantly, what needs to be done to make it happen.

The advent of digital technology and next-generation precision agriculture is resulting in ever-increasing productivity with fewer inputs, better market access and healthier rural communities. To realize the benefits of this new digital technology, high-speed broadband service must be available everywhere.

The highest rate of adoption for precision technology used to improve yields and reduce costs is in the already highly mechanized row crop sector. USDA estimates connected technologies in row crops could result in a $13.1 billion gross benefit annually from next-generation precision agriculture.

Technology for improved planning, such as microclimate modeling, yield monitoring and precision seeding, is estimated to have a combined potential annual gross benefit of $4.2 billion. On the production side of new technologies, the potential is even greater at $6.7 billion in possible benefits derived from precision agriculture.

With an average dependence of 34% on broadband services to utilize these new technologies, the key to unlocking these significant gains is full deployment and adoption of broadband infrastructure.

Specialty-crop farmers could also see major gains with the adoption of new production and planning technology. Total annual benefits for next-generation precision agriculture for specialty crops is estimated at $13.3 billion. With a possible increase of $8.5 billion, market-coordination efforts will likely get the biggest boost.

Of the new opportunities in market coordination, direct-to-consumer sales are estimated to post a potential annual gross benefit of $6.4 billion. Specialty-crop producers can shorten the supply chain by utilizing digital platforms. USDA estimates a revenue increase of 50% per unit of apples, 649% per unit of salad mix and 183% per unit of blueberries.

According to the USDA estimates, the livestock and dairy sectors are poised to benefit the most from next-generation precision agriculture, with annual potential gross benefits totaling $20.6 billion. The majority of estimated benefits come from the production side and are focused on increased efficiency of animal care.

Utilizing Bluetooth technology, animal wearables transmit general health data directly to the producer, resulting in a 15% reduction in medication per animal, as well as a shortening of the cattle-finishing process by four to six weeks.

Unsurprisingly, as poised as producers in the livestock and dairy sectors are to reap enormous benefits from next-generation precision aggriculture, they are also the most dependent on reliable high-speed broadband to enable new technological advancements.

USDA has outlined key priorities for strategic action planning involving improved broadband deployment, incentivizing innovative technologies and creating environments for innovation, strategic funding and communication.

To bring broadband services to even the most remote areas, public and private entities must work closely with communities to determine specific needs and challenges. Reducing barriers in federal processes to access government assets is one of the cornerstones of the American Broadband Initiative and continues to be a focus at the federal level. The task of actualizing broadband infrastructure relies on funding for deployment as well as for new innovations that can lead to long-term successes for the entire sector.

The USDA report puts the hypothesized potential benefits that broadband technology and infrastructure could bring to rural areas at $64.5 billion annually. Increasing the availability of broadband to all of rural America, coupled with increased precision-agriculture adoption, are estimated to increase the gross economic benefits to row-crop agriculture by 4%, adding up to $5.9 billion; increasing 19% for specialty crops, or up to $8.6 billion; and 7%, or up to $23 billion, for livestock.

USDA leaves us with this call to action: Spread the word.

For the full economic benefits of high-speed broadband to be realized throughout rural areas, adoption rates of precision-agriculture tools and next-generation technology must be much higher. Producers must perform their own cost-benefit analyses to see where these emerging technologies fit in their operations.

(Megan Nelson is an economic analyst for the American Farm Bureau Federation. Adapted from the AFBF Market Intel blog.)
Reprinted with permission: California Farm Bureau Federation