Frontier analysis providing a Copernican view to flat-earth economics issues in smart farming

Nowadays, we are at the eve of massive digitization in agriculture. Rise in data acquisition, governance and combination is expected to lead to smart farming, in which a more efficient and economically optimised production is aimed at. Economically optimizing may, however, be a disappointing exercise because of the flat-earth-economics phenomenon, which shows that deviating from optimum not greatly impacts profit. Flat earth economic is known for decades but frequently ignored, and –to our knowledge- absent in evaluating frontier analysis and using its results for decision making. In particular in precision farming, where marginal but miniscule extra
economic benefits are sought with expensive investments, detecting efficiency pathways is fundamental. On the contrary, technological progress might give more substantially profit gains. The question is thus to distinguish both.

This paper clarifies both phenomena with some cases (rotational livestock or aquaculture production, individual animal monitoring) and examines with both artificial data and real-case data what the potentials and pitfalls of frontier methods may be.

The paper is elaborated as follows. First, some theoretical grounds of flat earth economics and technological progress are discussed in terms of consequences for frontier analysis in practice. Second, we use three, four cases of own published and non-published research to deliver anchor points to discuss potentials and pitfalls of frontier analysis of flat earth phenomena. Finally, discussion will be consolidated into a framework that may allow to position frontier analysis in precision agriculture research and smart farming practice.