Costs and ROI of smart farming in India with break-even analysis

Hello Smart Farmers, if you are planning to start smart farming in India and want to know more about advanced technology setups to set up advanced technology, increase productivity crop yields and resource usage If you want to reduce your costs and profits, this article will explain all the calculations of costs and profits. It was involved. What are you waiting for? Let’s dive in.

A. Smart Farm prepaid and initial setup costs

1. Average land cost per acre

1. Usually it depends on the location of the farm and depends on the infrastructure and water source.
2. In rural areas facing the right roads, you can get an average land cost between Rs 200,000 and Rs 500,000. You can expect to see more costs in the vicinity of cities and large towns.

2. How much does it cost to set up your infrastructure?

• If you are planning on farming greenhouses or polyhouses, expect to pay 800 inches per square foot.
• Establishing installed water with drip or sprinkler irrigation costs around 60,000-90,000 INR per acre.
• Expect additional costs for a borewell or electrical setup.

3. Estimated cost of equipment and technology required

• Care for the soil and efficient use of water require IoT sensors that can cost an average of 40,000 to 70,000 INR per unit.
• To spray pesticides and monitor the entire field crop, you will need to purchase an agricultural drone. This can cost around 3-5 lakh per unit.
• You need to buy automated planters/ceders and harvesters. Expect to pay between 5-10 leeks.

4. Purchase farm software and management tools

• This mainly depends on the type of farm software you are purchasing and the software’s capabilities. Usually you should be ready to pay for field management and crop analysis software between Rs 10,000 and 5 lakh.
• You will also need to pay for a subscription to the data service to get others such as weather information and crop analysis. This will cost around 25,000 to 50,000 people per year.

5. Employment and training for skilled labor

• Labor must be hired and trained to operate these tools accurately. These costs may be around Rs. 30,000 to 35,000 per month.
• If you already have a workforce working on the farm, you can arrange a technical training session.

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B. Calculating monthly and annual repetitive costs

1.Estimated annual maintenance costs

• Generally, agricultural equipment such as IoT devices and sensors, as well as other smart tools require regular maintenance, with approximately 10,000-15,000 INRs per unit annually expected.
• Agricultural drones also require annual service. This is because about 15,000-20,000 INRs need to be fired.

2. Average monthly energy costs

• If the farm is equipped with solar, maintenance costs are expected to be near zero. However, a one-time initial installation may cost 2-5 laks.
• Running all these devices and equipment means you’ll spend 10,000-20,000 inches per month on your power bill.

3. Seasonal consumable costs

• Seed costs vary from crop to crop, and can cost around 10,000 inches per acre per season.
• Other input costs include fertilizers and pesticides. These pesticides are paid around 10,000 to 15,000 inches per acre.

4. Farm Software and Data Analytics Subscription Renewal

• You can expect to pay 20,000 a year for farm management software
• You can renew your data subscription packages from 15,000 to 20,000 inch per year.

C. Expected Return on Investment in Smart Agriculture (ROI)

1. Expected crop yield increased

• With these smart tools and technologies, you can easily achieve 30% to 50% improvement crop yields.
• Early detection of pests, diseases, water stress and weather patterns can easily reduce yield losses.

2. How much can you save?

• Using sensors for irrigation can reduce water usage by up to 30% to 40%. This also helps with sensible fertilizers through irrigation methods.
• Precision agricultural technology can save 20% to 30% on pest control.

3. Improve market access to smart growing agricultural products

• Smart technology can be used to grow premium quality crops for export markets and domestic consumption.
• If you are growing organic crops using these precision smart technologies, it is very easy to get a price of 25% to 50% in the agricultural commodity market.

4. Comparing profits between smart and traditional agriculture

• Traditional agriculture offers up to 1 lakh per acre each year
• With smart agricultural technology, you can expect up to 3 rakhs per acre each year.

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D. How analytical analysis works in smart farming

1. Three factors affect break-even

• The first one is the initial investment size.
• The second is the increase in the type of crop grown and yield.
• The third is accessibility of current market prices and more profits.

2. Break-even points for small and large smart farms

• A small smart farm can usually take 2-3 years.
• On average, a large smart farm can take around 3-6 years.

3. How to calculate break-even points in smart agriculture

• For example, the initial investment was 200,000 rupees.
• If revenues increase 4,000 rupees over two years.
• The break-even point calculation is 20 sec / 4 sec = 5 years.

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E. Get government support and subsidies for smart agriculture in India

1. How much financial aid is possible: Up to 25% subsidies are available for Smart Farm equipment and machinery. You can also apply for subsidies for polyhouse/greenhouses, irrigation systems (drip and sprinkler systems), and solar energy structures. The percentage of subsidies varies by state.
2. Get tax benefits from smart agriculture: You can get an exemption from agricultural income.
3. Training Program: There are many states that offer training programs on various techniques in Smear Agriculture. You can contact specific agricultural departments in your state.

F. General difficulties facing in smart agriculture

1. Expect high upfront costs: This is not feasible for small, marginal farmers.
2. I have no knowledge of smart technology. Rural farmers are typically limited or lack knowledge of smart technology. This is the main concern and should be noted.
3. The problem of integration in smart agriculture: Usually you can find device and equipment compatibility issues. Proper technical knowledge is required to solve this.
4. Get market access: It is extremely difficult to reach the premium market for high-tech agricultural products and must be addressed for access to the export market.

G. Act wisely to reduce input costs and maximize agricultural profits

1. First, make it smaller: It’s best to start with minimal technology.
2. Share resources and equipment: You can share smart equipment such as drones with your neighboring farm to reduce costs.
3. Benefits of government subsidies: Subsidies and grants can be used to reduce initial investments in smart agricultural equipment and infrastructure development.
4. Cultivating high value crops for better profits: You can start with the demand and veil crops such as saffron, mushrooms, exotic vegetables, herbs, organic millet and more.

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Conclusion

With various government subsidies and schemes, focusing on smart agricultural techniques and planning properly, you can achieve the best ROI. While many farmers may be afraid of initial costs, long-term benefits may include greater yields and reduced input costs.