The Smart Sustainable Shellfish Management (S3AM) framework combines aquatic drone and monitoring technology to enhance the efficiency and sustainability of oyster production. It provides advanced tools for assessing sub-tidal lands for profitable lease development, precision seed planting on the seafloor, monitoring inventory growth, and optimizing harvests. These features aim to boost productivity by improving seed survival rates, reducing fuel usage, and lowering labor hours through guided harvesting.
S3AM technology offers oyster growers two main adoption options: purchasing the technology outright or subscribing to a service model. In the purchase model, growers face a high upfront cost, which could slow adoption, especially for smaller farms. This initial investment might also lead to a digital divide, as only larger, financially secure farms may be able to afford the technology suite (Rotz et al., 2019). However, a subscription-based model, where growers pay a fixed fee for services like mapping, monitoring, and inventory management without purchasing the entire technology, provides a more accessible alternative. This subscription model allows smaller farms to access smart production technology by purchasing only the data needed for their operations.
Given that most oyster growers in Maryland are small-scale, our study seeks to determine which of these two options would optimize farm profitability in the long run. We will conduct an investment analysis for both purchasing and renting options, comparing their viability for Maryland’s growers. The study will employ investment appraisal techniques—including Return on Investment (ROI), Net Present Value (NPV), Modified Internal Rate of Return (MIRR), and Payback Period—to evaluate the financial outcomes of both models and provide growers with information for their decision-making. Our investment analysis will be unique, as S3AM is a monitoring technology designed to enhance production efficiency by reducing errors and time spent on tasks. Unlike full automation technologies that replace labor, S3AM complements labor, boosting productivity per labor hour, which can then be traded for additional paid work or leisure and can be added in the model as additional gain.
For this study, we will use the 2018 enterprise budget as a baseline and simulate results from over 10,000 hypothetical oyster farms. The purchase model will consider a quasi-fixed cost, while the subscription model will use a fixed cost structure. We will compare results across three production scenarios: farms with outputs of 200 bushels, 2,000 bushels, and 6,000 bushels, focusing on Maryland, where traditional bottom culture is the primary oyster production method. The results from this study will guide Maryland’s oyster growers in making informed technology adoption decisions based on production scale and financial outcomes.