Agriculture Reference
In-Depth Information
has adopted the technology. And over a period of time, a given technology will
eventually become obsolete, or become superseded by a yet newer version, and the
percentage of the market using that technology begins to 'decline', thus completing
that technology's 'life cycle'.
Diffusion rates may differ by country or by region. It can be observed that some
farmers in some regions adopt a technology earlier than others. And sometimes
a new technology can lead to the expansion of cultivated acreage into 'marginal'
areas not previously utilized for growing crops, thus the technology is truly pioneer-
ing, tipping the balance between being able to viably farm in an area versus not.
Modern irrigation is one example. As a technology, it is land-quality augment-
ing, and, as such, it tends to be more quickly adopted on low-quality lands, much
of which could not previously be cultivated. Different irrigation technologies have
different efficiencies. The water-use efficiency of flood irrigation is typically 0.2-
0.6 depending on soil conditions. Upgrading to sprinkler irrigation increases ef-
ficiency into the range of 0.5-0.8. Drip irrigation may reach efficiencies as high as
0.95. The more efficient irrigation technologies, however, are also more expensive.
They are more likely to be adopted on very poor soils, such as sandy soil types or
steeper grades, or when water prices or output prices are high. Drip irrigation has,
in California, expanded the acreage of high-value perennial crops such as avocados
and wine grapes into previously uncultivated marginal lands in foothills and desert
areas.
Transgenic herbicide-tolerant soybeans are another example. In Argentina, the
area sown to soybeans has tripled since the introduction of herbicide-tolerant variet-
ies (Trigo et al. 2009 ). And, apart from the rise in acres, the mean yield per acre has
also increased. The technology has enabled farmers in Argentina to grow soybeans
by addressing an end-of-season weed problem. Agricultural commodity analysts
had been concerned by the late 1990s, about the effect that growing demand from
China would have on the global price for soybeans, but the increased production in
Argentina resulting from adoption of herbicide-tolerant soybeans, has been able to
meet China's demand.
Based on these observations, drought- and stress-tolerant crop varieties are likely
to increase cultivation acreage. There is significant acreage globally where rainfall
is at the margin of viability under current rainfall patterns (300-400 mm per year).
To the extent that drought-tolerant varieties can enhance the probability of crop
survival and increase average yields in these marginal uncultivated lands, they can
become arable cultivated lands.
The adoption of drought- or stress-tolerant varieties will not necessarily be driv-
en by an increase in mean yields, but rather by the reduced probability of detrimen-
tal losses. For example, suppose the threshold yield—the yield giving a farmer just
enough revenue to meet costs—is 0.6 tons per acre. Suppose then that adopting a
drought-tolerant variety increases mean yield from 0.6 to 1.1 tons per acre, and it
also reduces the probability of falling below 0.6 tons per acre in any given year from
40 to 10 % probability. The increase in mean yield matters less than the decreased
probability of failure. The main differences are in the lower tail of the yield distribu-
tion, and this is the primary factor that will drive adoption on the extensive margin.
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