FCC Paper: Broadband Boosts Farm Productivity

Broadband boosts farm productivity, according to a new paper from the FCC Office of Economics and Analytics. The paper found evidence of crop yield improvements from increased adoption of broadband providing speeds of at least 25 Mbps downstream and 3 Mbps upstream.

A 1% increase in the number of households with service at speeds of at least 25/3 Mbps is “associated with” a 3.6% increase in corn yields and a 3.8% increase in soybean yields, the paper found. Cotton, hay and wheat yields also were positively impacted by a 1% increase in 25/3 Mbps households. Only those five crops were studied.

Researchers speculate that the better crop yields may have been achieved through precision agriculture technology requiring 25/3 Mbps connectivity.

Precision agriculture already has gained considerable support within the FCC. For example, the commission plans to direct $1 billion of the 5G Fund for Rural America Phase 2 auction toward the technology.

The Office of Economics and Analytics paper, titled “Impact of Broadband Penetration on U.S. Farm Productivity,” was based on an analysis that paired FCC broadband data with data from the USDA’s National Agricultural Statistics Service.

Broadband and Farm Productivity

Broadband adoption at lower speeds (10 Mbps/768 kbps) yielded fewer benefits, although researchers did find lower operating expenses for farms with service at that speed. A 1% increase in the number of 10 Mbps/768 kbps connections is associated with an approximate 6.5% decline in fertilizer expenses per operation and a 3.4% decrease in seed and plants expenses per operation.

“Studies have found that improved connectivity may contribute directly to sales growth and profitability by lowering input or other supply costs,” the paper notes. “Access to the internet decouples purchasing patterns from spatial constraints by providing farmers the ability to comparison shop for farm inputs, machinery and even credit among local, near local or national suppliers. Evidence suggests that U.S. farmers use e-commerce to obtain lower prices on seeds, herbicides and other crop supplies.”

A note included in the paper about broadband and farm productivity explains that the paper is “intended to stimulate discussion and critical comment within the FCC, as well as outside the agency, on issues that may affect communications policy.” The note also cautions, however, that “the analyses and conclusions set forth are those of the authors and do not necessarily reflect the view of the FCC.”

Nevertheless, the paper concludes that the research “provides evidence that improved connectivity at higher speed thresholds is an important factor in improving outcomes for U.S. farms” and that “the results clearly indicate that internet access meaningfully contributes to rural infrastructure development.”