Agriculture Reference
In-Depth Information
broad question is whether the characteristics of the new crop variety could serve as
a replacement for any other technology that is or that might alternatively be used in
production. And, if so, how closely do the new and the existing technologies com-
pare in terms of efficacy and price?
A clear example of substitution from biotechnology can be seen in insect resis-
tant
Bt
crop varieties, which substitute for chemical pesticides and, potentially, or-
ganic or integrated pest control methods. A transgenic insect resistance trait, like
Bt
,
however, is not a perfect substitute for these other solutions to pest damage. Factors
such as timing, insect specificity, monitoring requirements, and more will vary be-
tween these different pest control options. There can also be economic differences
in how the crop can be sold afterwards. Under these conditions of what economists
call 'imperfect' substitution, the extent to which the new biotech option is adopted
is, thus, not an isolated decision; rather the decision is strongly influenced by com-
parisons with other technologies for which it provides a substitute.
Drought tolerance may, at first sight, appear to be a fairly novel technical op-
tion, without real substitute. However, upon closer inspection, it is clear that ir-
rigation technologies (providing greater efficiency of water access, storage, and
delivery) are at least a partial substitute. Tolerance to salinity or metal toxins may
not have many substitutes, and therefore may be more readily adopted as solu-
tions in those areas where such problems are endemic. Cold or frost tolerance
will substitute, to some degree, for techniques to control frost damage—such as
spraying or fans or greenhouses. Of course, crop varieties developed through a
breeding approach and varieties developed through a transgenic approach for a
similar trait, such as drought tolerance, will be very close substitutes and can be
expected to compete.
2.3.3 Appeal to First-Time Adopters of the Technology
(Adoption on the 'Extensive' Margin)
The third factor is the degree to which a technology is likely to be adopted by first-
time users—that is, farmers who do not already have a closely comparable solution
in place for managing crop stress problems. The decision by new users to adopt a
new technology for the first time is a very different process than the decision of
those who are effectively upgrading or switching from an existing technology.
The cumulative effect of decisions to adopt or not to adopt a new technology
across a population of first-time users can be modelled as the diffusion curve of that
technology. Diffusion is typically S-shaped over time. It begins at the point of com-
mercial release and increases slowly at first with a few per cent of early adopters
taking up the technology. Among farmers, early adopters are typically better-capi-
talized and better-educated and more willing than others to take risks (Feder et al.
1985
). The new technology then comes to its most critical test: will the percentage
of adopters take off by appealing to 'mainstream' adopters. If adoption does take
off, the diffusion curve can rise rather quickly. Eventually, the market approaches
'saturation' as diffusion levels off at the maximum percentage of the market that
