A positioning system incorporating absolute rotary encoder was developed so as to realize the automatic measurement and control of farming tools in test as well as soil processing equipment in soil bin. Microprocessor and non-volatile memory were used for data processing and communication with a PC. In this paper, theoretical analysis of the system was introduced and its hardware design also included. Some innovations in software design were developed and some new ideas were proposed consequently to accelerate the operation of the program and promote its efficiency considerably. In practical application this system showed higher precision and reliability.