‘Precision Farming’ or ‘Precision Agriculture’ aims at increasing productivity, decreasing production costs and minimizing the environmental impact of farming. In this context, the present study has been undertaken to understand the impact of precision farming on resource-poor regions and underprivileged farmers. Specifically, the study has looked into productivity, income, employment, and adoption behaviour of technology in agriculture. The study, conducted in the Dharmapuri district, has collected data on precision and non-precision farmings through the interview schedule during the year 2007. Sources of the productivity difference between the precision and conventional farmings have been identified by decomposing the productivity change. Financial impact of adoption has been studied through a two-stage econometric model. The first stage of the model consists of an adoption decision model that describes the factors which influence the likelihood of adopting precision farming. Results of first stage have provided input for the second stage of the model, which has been used to estimate the impact of precision farming on farm financial performance. The study has revealed that adoption of precision farming has led to 80 per cent increase in yield in tomato and 34 per cent in brinjal production. Increase in gross margin has been found as 165 and 67 per cent, respectively in tomato and brinjal farming. The contribution of technology for higher yield in precision farming has been 33.71 per cent and 20.48 per cent, respectively in tomato and brinjal production. The elasticity of 0.39 for the adoption in tomato and 0.28 in brinjal has indicated that as the probability of adoption increases by 10 per cent, net return increases by 39 per cent and 28 per cent in tomato and brinjal cultivation. Lack of finance and credit facilities have been identified as the major constrains in nonadoption of precision farming. The study has suggested that providing of subsidies for water-soluble fertilizers and pump-sets will increase adoption of precision farming.