The World Bank has estimated that an additional $80 billion in financing are needed annually to achieve the 70 % increase in food supply required to feed the world in 2050. One of the cornerstones in achieving this increase in production is expected to be improved agricultural technology, where one of the latest additions is precision agriculture. It is believed that the money for investing in this technology must come from the private sector, but financial institutions are hesitant in lending money to farmers. This, in part, comes down to a high perceived riskiness in agricultural lending stemming from the risk composition in agriculture compared to other industries as well as from weak collaterals provided by farmers. This thesis aims to find what factors are most prominent in banks´ risk assessment of agricultural firms during the lending process and look at how precision agriculture could help mitigate these risks. We have gathered aggregated quantitative data from FAOSTAT and the Swedish Board of Agriculture on farm income and hectare yield (productivity) at Swedish farms. These variables were found to be two of the most important factors in agricultural lending based on previous research. In addition to this data, information on e.g. weather, ecological farming and expenditure related to pesticides, fertilizer, and machinery were collected to further the analysis. Precision agriculture is made up from a myriad of different technologies. We have opted to not separate the technologies in this study as the adoption of each technology included in the term is currently not sufficiently well understood. This aggregation of technologies allowed for us to use the dynamic AAGE-model to estimate the adoption based on the minimum hectare size where precision agriculture should be profitable at each point in time. The study finds that precision agriculture does have a positive impact on farm productivity and income volatility. Hence, precision agriculture should reduce the risk of agricultural financing given to adopting farmer which would increase the access to credit and, in continuation, lead to an increase in aggregated food production. In addition, we conclude that financial institutions should gain a better knowledge of precision agriculture technologies and use this information to improve the credit evaluation process in agricultural lending. Lastly, banks should understand how the risks related to information asymmetry and moral hazard could be reduced by utilizing the data available through farmers use of precision agriculture technology.

Today energy resources are becoming scarcer and therefore more valuable. In conjunction with the population growth over last century, the need for finding new, more efficient, and sustainable methods of agricultural cultivation and food production has become more critical. To facilitate this process, we are designing, building, and evaluating a system for precision agriculture which provides farmers with useful data about the soil, the water supply, and the general condition of their fields in a user friendly, easily accessible manner. Our system aims to make cultivation and irrigation more efficient as the farmer is able to make better informed decisions and thus save time and resources. The diversity of location and climatic effects upon agricultural cultivation, along with other environmental parameters over time makes the farmer’s decision-making process more complicated and requires additional empirical knowledge. Applying wireless sensor networks for monitoring environmental parameters and combining this information with a user-customized web service may enable farmers to exploit their knowledge in an efficient way in order to extract the best results from their agricultural cultivation. The system can scale based on each farmer’s demands and the resulting ensemble of collected information may represent a valuable resource for future use, in addition to its use for real-time decision making. The design of the precision agriculture system contains a prototype solution regarding the sensor platform and a customizable service that can be utilized in different ways and by several entities. / Idag när energiresurser blir allt knappare och knappare blir de även mer värdefulla. I samband med befolkningstillväxten under förra århundradet har behovet av att hitta nya, mer effektiva och hållbara metoder inom jordbruket och livsmedelsproduktion blivit av allt större vikt. . För att underlätta denna process har vi designat, byggt och utvärderat ett system för precisionsjordbruk som ger bönder mer användbara data om jorden, vattenförsörjning och det allmänna tillståndet i sina områden på ett användarvänligt och lättillgängligt sätt. Vårt system syftar till att göra odling och bevattning effektivare då bonden kan fatta bättre underbyggda beslut och därmed spara tid och resurser. Mångfalden av läget och jordbrukets klimatpåverkan, tillsammans med andra miljöparametrar över tiden gör bondens beslutsprocess mer komplicerad än tidigare och kräver ytterligare empirisk kunskap. Att tillämpa trådlösa sensornätverk för övervakning av dessa parametrar och att presentera? denna information med en användarvänlig skräddarsydd webbtjänst kan göra det möjligt för jordbrukare att utnyttja på ett effektivt sätt nåde bästa resultaten från sitt jordbruk. Systemet kan skala utifrån varje bondes krav och den insamlade data kan utgöra en värdefull resurs för ett framtida jordbruk, utöver dess användning för dagens bondes beslut. Utformningen av systemet för precisionsjordbruk innehåller en prototyplösning avseende sensorplattformen och en anpassningsbar tjänst som kan användas på olika sätt och av flera enheter.