Agriculture Reference
In-Depth Information
an economic sense do not survive, while those that prove to be well adapted to their
new commercial environment, flourish.
Different types of crop traits confront different types of market uncertainty. The
market for pest control or disease resistance traits depends upon the prevalence of
the targeted pest or disease problems and the relative costs of other technologies,
such as chemicals, for controlling them. Output or product quality traits such as nu-
tritional content, controlled ripening, or reduced all ergenicity will each target very
specific user segments and create value one or more steps down the vertical chain of
markets between farmers and consumers. Markets for drought and stress tolerance
traits, depend upon yet other considerations, to which we turn next.
2.3   Sources of Market Uncertainty: Factors Influencing 
Farmers' Decisions to Adopt Drought- and  
Stress-Tolerant Crops
Those investing in the development of drought- or stress-tolerant crop genetics must
consider what factors will influence the likelihood of adoption of such crop variet-
ies. Questions of adoption—by whom, where, and when—are central to the success
and impact of new crop varieties on agricultural productivity. Extensive literature on
technology adoption clearly shows that the extent to which a new technology—such
as a new crop variety—is taken up by potential users is strongly influenced by several
key factors, including: (i) the degree of complementarity between the new technology
and other already existing technologies or (ii) the degree of substitution between the
new technology and other already existing technologies, (iii) the appeal of the new
technology to potential first-time adopters (i.e., its potential for adoption on the exten-
sive margin), (iv) the distribution and timing of benefits actually realized by adopters
of the technology, and (v)social perceptions of the new technology. Each of these
market factors will be considered for drought and stress tolerant crop varieties in turn.
2.3.1   Interaction with Other Complementary Technologies
The first factor that influences the adoption of a technology is the degree of com-
plementarity between that technology and other parts of the production system to
which it is to be added. When two technologies in a production system are comple-
mentary, adding or improving upon one increases the returns to using more of the
other—whether by improving its efficacy or efficiency. As such, the extent to which
one technology is adopted is not an isolated decision; rather it becomes part of a
more complex set of decisions about the production system as a whole package of
technologies.
In particular, there is complementarity in the farming context between risk re-
ducing and yield-enhancing technologies. The complementarity principle can be
illustrated in a simple mathematical model of crop production. Let actual yield be
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