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A Comprehensive Assessment of the Role of Risk in U.S. Agriculture pp 325–352Cite as

Agricultural Technology and Risk

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Part of the book series: Natural Resource Management and Policy ((NRMP,volume 23))

Abstract

On the face of it, it would seem that agricultural technology might be thought of and modeled in the same way we would other agricultural inputs. As with any other productive input, such as labor, we can think of a derived demand for a particular technology that changes with output price, technology price, and the technology’s marginal product. So, why devote a separate chapter to technology? Webster’s New American Dictionary (1995) defines technology as “a manner of accomplishing a task using special knowledge of a mechanical or scientific subject.” There are two parts of this definition that support the tendency to differentiate a new technology from other agricultural inputs or older technologies: “special knowledge” and “scientific.” Special knowledge implies an initial period where the knowledge has yet to be acquired. This period may be characterized by uncertainty about how the technology works and how to apply it in a particular situation. As the special knowledge is acquired, experimentation and learning take place. The special knowledge may not be applicable to any other manner of accomplishing the task, so that if a newer technology is introduced, the learning must take place again. This implies an initial opportunity cost of adopting a new technology that is higher than using an older, conventional input. The “scientific” part of the definition, especially in the case of agricultural technologies, implies that the development of the technology probably takes place off the farm. It may take some time between the technology development and dissemination of sufficient information about it to be seriously considered by the farmer. Ultimate usefulness of the technology on the farm depends on its applicability to the unique growing conditions and other characteristics of the farm and the farmer. Again, this implies some additional level of initial uncertainty. A useful distinction, then, between conventional agricultural inputs and technology might be the degree of “newness” and special knowledge requirements of the input or production technique. Therefore, we leave aside conventional input choices and land allocation to different crops (except newly developed cultivars or varieties).

We thank Mitch Renkow and the participants in the SERA-IEG 31 annual meeting at Gulf Shores, Alabama (especially Paul Mitchell), for valuable comments and suggestions. We accept responsibility for any remaining errors.

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Authors and Affiliations

  1. North Carolina State University, USA

    Michele C. Marra & Gerald A. Carlson

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  1. Michele C. Marra
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  1. University of Maryland, College Park, USA

    Richard E. Just

  2. Brigham Young University, USA

    Rulon D. Pope

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Marra, M.C., Carlson, G.A. (2002). Agricultural Technology and Risk. In: Just, R.E., Pope, R.D. (eds) A Comprehensive Assessment of the Role of Risk in U.S. Agriculture. Natural Resource Management and Policy, vol 23. Springer, Boston, MA. https://doi.org/10.1007/978-1-4757-3583-3_15

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