Economics of Management Zone Delineation in Cotton Precision Agriculture

Abstract

This paper develops a management zone delineation procedure based on a spatial clustering approach and evaluates its economic impact for the case of Texas cotton production. The results show that there is potential economic value in using a spatial approach to management zone delineation, but its value critically depends on the cost of collecting soil test information needed to delineate those zones. JEL Classification: Q12 Introduction Optimally configuring management zones for better management of farm inputs is one of the most important issues in precision farming and variable rate application. Management zones are geographical areas that can be treated as homogenous, so that input application and decisionmaking can be treated separately for each zone. This approach may then lead to more efficient management of the farm. The objectives of this paper are: (1) to develop a univariate management zone delineation procedure based on a specific spatial clustering approach called ESDA (Exploratory Spatial Data Analysis), and (2) to evaluate the potential economic impact of this management zone delineation procedure for the case of cotton production in the Texas High Plains. Moreover, this paper implements spatial econometric techniques and shows its importance in economically evaluating management zone delineation procedures. Empirical Methodology Data and the ESDA Approach to Management Zone Delineation The data used to establish management zones is based on a 2002 agronomic cotton experiment designed to study nitrogen (N) use for cotton production in the Southern High Plains