high-tech toolbox for Agriculture

It's a high-tech toolbox that is also leading to a battle between U.S. states for research funding earmarked for farming.

Farming states may not be making semiconductors or writing software code, but research in soil conservation, pesticides and genetics is geared toward innovation in the farm fields and is every bit as cutting edge in its own way as anything coming out of Silicon Valley.

Some of Silicon Valley's biggest trends are also capturing the attention—and dollars—of the biggest players in the agricultural sector.  paid close to $1 billion earlier this year to acquire Climate, a Silicon Valley–funded start-up working in data analytics and predictive analysis.

For the first time in its eight-year history, CNBC's Top States for Business has included agriculture research dollars (both federal and state) within its innovation ranking—and the competition is every bit as fierce as in other technology niches.

Read MoreAmerica's Top States for Business: Which state will lead in 2014?

Despite any misconceptions to the contrary, embracing new technology has been a staple of farm life.

Even when it came to the 'new' technology of the landline telephones in the 1920s, more farmers had them than the public at large, according to the U.S. Department of Agriculture.

"I love that people think agriculture is a late adopter to technology," said Steve Lucas, president of SAP Platform Solutions, a software firm that provides data platforms for agriculture machine maker John Deere. "But the truth is different, and we're seeing bigger innovations than ever before, and the agriculture industry is jumping in," he said.

The recent advances have been starting at the bottom of the supply chain, said Derek Yach, executive director of the Vitality Institute.

"We have better seeds, better forms of plant breeding, better soil nutrients and increased yields of crops," said Yach, who is a former senior vice president of global health and agriculture policy at PepsiCo.

"And it's really just getting under way now," he said.

R&D money 'not enough'

Every year, the states are granted around $7 billion by the government—specifically the U.S. Department of Agriculture and the National Science Foundation—to develop new technologies for agriculture. There is also some private funding.

However, the competition for those dollars is very tough, said Mark Rieger, dean of the University of Delaware's college of agriculture and natural resources.

"We could use more money than what's available now," said Rieger. "But it would be better if we could have more private funds so we're not so dependable on the government."

States leading the way when it comes to research and development programs in agriculture include California, Michigan, New York, Florida, North Carolina, Illinois, Nebraska, Indiana, Virginia and New Jersey.

Read MoreOrganic farming is unsustainable: Commentary

To get government funds, many states must often team up with each other and with local universities on agriculture projects.

Some of the tech advances in agriculture being used or on the drawing board include:

• Telematics, or satellite-generated maps of crop fields, known as precision farming.
• Soil and crop sensors.
• High-flex tractor tires to ease weight across fields.
• GPS navigation for farm machinery.
• Precision navigation for better water distribution.
• Robotic picking machines and tractors.
• Drones for crop mapping and monitoring.
• Research for soil nutrient replacement.
• Chemical and mechanical treatments to process manure and discharged water from livestock.