Being able to provide accurate soil moisture measurements would allow farmers to make more efficient use of irrigation and fertiliser applications on different soil types.
"As an example, some farmers might have a $100,000 annual bill for irrigation.
"If they could save 20% or 30% of those costs by irrigating more efficiently, that's up to $30,000 they have saved.
"It is a double whammy.
"[The technology] will allow farmers to time pivot operations for optimal effect.
"If they are able to control irrigation more efficiently and accurately they can grow better crops more consistently across varying soil types," he said.
"Their crops [under their present systems] might be reaching 60% or 70% of their true potential, but with the right amount of water, they will be better able to maximise that potential.
"By making better use of water, Central Otago could well be more productive per hectare than Southland in 10 years' time."
A proposal to establish the Centre for Space Science Technology was submitted to the Ministry of Business, Innovation and Employment (MBIE) by the Alexandra-based steering group, which included Bodeker Scientific scientist Dr Greg Bodeker, Central Otago District Council economic development manager Warwick Hawker and Gary Kelliher, last year.
Their application was successful and the group was granted about $15million (as well as co-funding) to establish the institute in Alexandra.
Mr Kelliher said the contract with the MBIE would be signed shortly, after which the group intended to establish the institute's overseeing trust.
The group will be asking for expressions of interest from people who wish to be trust and board members (and chief executive) and hopes to open the centre in six months.
The institute will also employ about 30 to 40 scientists, information technology experts and support staff, all of whom will be based in Alexandra.
Although the institute will have bases in Dunedin, New Plymouth and Lincoln, its head office will be in Alexandra, where scientists will harvest and broker data from existing satellites and eventually the centre's own CubeSats (extremely small satellites), to develop agricultural, horticultural and forestry-focused products for improved irrigation, soil, fertiliser, plant-monitoring and farm-imagery applications.
The centre will also transfer data to commercial and regional council entities which wish to develop their own products for on-sale to farmers and other consumers.
The institute will also broker oceanic, atmospheric, fire-risk and crop-yield data.
The centre will earn its income from royalties and commissions and hopes to be self-sustaining within three years.