Better rural broadband availability has “significant positive impacts on crop yields and other farm production metrics,” the Federal Communications Commission’s Office of Economics and Analytics found in a new working paper.
The report, by economist Katherine LoPiccalo (who previously worked at the FCC but is now at the Consumer Financial Protection Bureau), drew on FCC data on broadband availability by census tract and U.S. Department of Agriculture data on agricultural productivity by county, for crops such as corn, cotton, hay, and soybeans. The report found “statistically significant effects” of increased broadband penetration, both on lower costs and higher production for farms.
The paper acknowledges that high-speed connectivity is “considered an essential component of modern agriculture” and sought to quantify the impacts of broadband availability on farming outcomes.
LoPiccalo’s analysis found that a 1% increase in the number of broadband connections (25/3 Mbps) per 1,000 households was associated with a 3.6% increase in corn yields (bushels/acre). Meanwhile, a 1% increase in network speeds of just 10/1 Mbps per 1,000 households was associated with a 2.4% decrease in operating expenses per farm operation.
Corn, cotton, hay, soybeans and wheat yields were all “positively and significantly correlated” with increased penetration rates of 25/3 Mbps broadband, LoPiccalo found, and there were also some positive effects on crop yields even when better broadband penetration was associated with the slower 10/1 Mbps speeds. Increased 10/1 Mbps penetration was correlated with a 6.5% decline in fertilizer expenses per farm and a 3.4% decrease in seed and plant expenses. Interestingly, the evidence was mixed for expense improvements at increased penetration of 25/3 Mbps.
The paper also notes that larger farm firms are more likely to utilize broadband and e-commerce than small farms, and farm operations further up the supply chain, such as feed suppliers, are also more likely to do so.
Access to online pricing can help farmers source materials at lower cost, improve their bargaining position with local suppliers and obtain higher prices for their crops or livestock, the paper notes. Up-to-date information on weather and commodity markets may also allow farmers to automate record-keeping and reporting, and broadband access can also allow them to participate in online banking. Precision agriculture can also provide farmers with more accurate, real-time information about farm and crop conditions.
“I’ve had the chance to visit many farms and ranches during my time as chairman. … A constant theme I’ve heard is the boost in productivity that comes with the use of precision agriculture and other broadband-based technologies,” said FCC Chairman Ajit Pai in a statement on the new working paper. “This paper confirms these anecdotes, and underscores the importance of the Commission’s top priority of expanding broadband access in rural and underserved areas.
He added that the paper “shows how the Rural Digital Opportunity Fund and other universal service programs that help deliver broadband to rural America can benefit us all—in particular, helping America’s farmers produce more and better food for the rest of us.”
