Precision agriculture adoption and technical efficiency: An analysis of sugarcane farms in Brazil

Precision Agriculture Technologies (PATs) are at the core of the fourth revolution in farming technology, also called Agriculture 4.0. This study evaluates the determinants of PATs adoption and its impacts on technical efficiency (TE) and technology gap ratio (TGR) of sugarcane farms in the state of São Paulo, Brazil. A selectivity correction model for stochastic frontiers is combined with a metafrontier production function approach to estimate the role of a set of determinants of PATs adoption and its impacts on TE and TGR. In person interviews with 131 sugarcane farmers provided cross-sectional farm level data from the 2018/19 crop year. The estimates of a sample selection equation showed that farming size, farmer's schooling and technical assistance positively affect PATs adoption by sugarcane farmers. Estimates of stochastic production frontiers (SPFs) and metafrontier revealed that the average of the TE and TGR scores of adopters are higher than those of non-adopters. The managerial gaps (TE) between adopters and non-adopters are considerably wider than their technology gaps (TGR). The adoption of PATs subsidizes farmers decision-making process which increased the efficiency in inputs use, an important issue for economic and environmental sustainability in sugarcane farming.