Value of Farm Data in Farmland Rental Markets

Abstract

Precision farming data enhances agricultural productivity by informing site-specific resource management. These benefits may be capitalized into the underlying value of the farmland itself, raising rental rates. This paper uses a stated preference choice experiment to estimate farmers’ willingness-to-pay for farm data in farmland rental markets. Farmers are willing to pay a small premium to acquire data accrued by previous operators, depending on the field type and quality information provided by the landowner, as well as farmers’ use of precision agriculture technology. We find evidence that farm data confers both a “management value” and a “signaling value” to prospective tenants.