U.S. farmers hoping to use drones to locate lost livestock or monitor trouble spots in their fields were disappointed by what they say are overly restrictive commercial drone rules proposed Feb. 15 by the Federal Aviation Administration.

Two of the long-awaited draft rules were singled out for particular criticism: a requirement that pilots remain in visual contact with their drones at all times and a height restriction that limits the crafts to flying no more than 500 feet above ground. These constraints, farmers and drone operators say, would limit a drone's range—and consequently its usefulness.

Leading drone makers PrecisionHawk and Trimble Navigation, farm data services firms, including ones run by Monsanto and FarmLogs, and even some federal lawmakers are saying the proposed rules could delay the development of drone-assisted agriculture in the United States if they are finalized as currently written.

The FAA said farmers can address the line-of-sight limitation by placing spotters to track a drone's pilot.

Idaho farmer Robert Blair, who in January received the FAA's first exemption for drone use on a commercial farm, said the new rules would require him to fly 10 separate drone missions to cover his 1,300 acres, since he would have to continuously shift locations in order to keep his drone within sight.

Under the proposed rules, Blair told Reuters: "There's no way we can cover the ground we need to cover'' economically.

Even so, investors in precision farming say the new rules are friendlier to farmers than they are to Amazon.com. The e-commerce giant, which plans to use drones for package delivery, has indicated it may launch its first drone deliveries in overseas markets rather than wait for broader approvals from the FAA.

"People are looking for where the opportunities are ... and agriculture is it,'' said Rob Leclerc, chief executive of AgFunder, an online platform for investors in agriculture technology.

Delays cause trouble

Many agricultural drones initially will be used to identify trouble spots in fields or snap high-definition images of crops for plant health analysis, jobs suited for the small drones (weighing no more than 55 pounds)allowed under the proposed rules. Drones also can be used to gather evidence for crop-insurance claims.

For some farmers, the new rules will give FAA validation to practices they already have deployed. Despite a current ban on most commercial drone uses, classes teaching farmers how to use the unmanned aircrafts have flourished at rural colleges, and a bevy of YouTube videos stands as evidence that some farmers already have begun piloting them.

Still, it could take two years before the new FAA rules, announced Sunday, take full effect. Such delays could strain cash-strapped startups, which could be out of business before the market booms, say industry analysts.

Even now, companies that have invested in drone technology are feeling strains.

"It's been difficult for us,'' said Jim Kirkland, general counsel and vice president of equipment maker Trimble Navigation, which received an FAA exemption from the ban on commercial drone use in December and has made a series of acquisitions aimed at beefing up its technology.

"We bought this business several years ago and we fly these elsewhere in the world,'' Kirkland said. "And certainly we haven't gotten the revenue out of it that we could if rules had been in place.''

The delay also is giving opportunities for competing technologies, such as micro-satellites, to take root, said attorney Roger Royse, founder of the industry group Silicon Valley AgTech.

By the time comprehensive rules are in place, larger competitors likely will have absorbed upstarts and be positioned to dominate the market, some industry experts say.

Florida-based Pravia received an FAA exemption this month to fly drones over 10 crop test sites in seven states operated by seed company SyngentaAG. And Monsanto's Climate Corp has applied for an FAA exemption to use drones commercially.

"We're certainly going to be testing different applications of the [unmanned aerial systems]tools,'' Climate Corp chief executive David Friedberg told Reuters.

Investors wait

With the regulatory outlook uncertain and no quick payoff in sight, outside investment in drone technology has been modest. Last year, 19 different drone or drone-related firms in the U.S. and abroad received a total of $88.5 million in funding from venture capitalists and other investors, according to AgFunder research. All identified agriculture as a key market.

Among them: PrecisionHawk announced a $10 million Series B round of fund-raising in November of 2014, which included investments from venture capital firm Millennium Technology Value Partners, Red Hat co-founder Robert "Bob" Young and Intel Capital, the venture capital arm of chip maker Intel.

To date, the drone maker has seen its farming business grow abroad, in Canada, Latin America and Asia, where regulation has been less restrictive. Now that the FAA has proposed its regulations, PrecisionHawk plans to increase its hiring in the U.S. this year, said spokeswoman Lia Reich.

The FAA has opened a 60-day public comment period, after which it may consider changes to the proposed rules. Final regulations might not be in place for two years.

"It's movement,'' Reich said. "Any movement is a positive thing.''