‘High cost’ production practices typically involve the use of high-yield hybrid seeds, synthetic fertilizers, advanced irrigation systems like drip irrigation, precision farming technologies, and mechanized equipment for planting and harvesting.
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High-cost production practices in agriculture involve several distinct characteristics. These practices typically include the use of expensive inputs like hybrid or genetically modified seeds, chemical fertilizers, herbicides, and pesticides that require frequent application. Farmers often rely on extensive irrigation systems, which significantly increase water costs. Advanced technology and equipment play a crucial role, with sophisticated machinery for planting, harvesting, and processing, along with precision farming techniques using GPS, drones, and sensors to monitor crops and soil conditions. Automation systems for tasks like milking, sorting, and packing also contribute to high costs.
Skilled labor is essential for operating advanced machinery and managing high-tech farming operations, and certain high-value crops require significant manual labor. Infrastructure investments are necessary, including modern storage facilities to reduce post-harvest losses, on-site processing plants to add value to raw products, and efficient logistics for transportation. High energy consumption for running machinery, irrigation, and climate control is another cost factor. Continuous investment in research and development aims to improve yields and farm efficiency. Adherence to stringent regulations and obtaining certifications like organic or fair trade entail additional expenses. Finally, purchasing crop insurance and other risk management tools to protect against unpredictable events adds to the overall cost of production.