Impacts of Precision Farming on the Structure of Agriculture (and Related Thoughts)

David Debertin ()

No 159377, Staff Papers from University of Kentucky, Department of Agricultural Economics

Abstract: In this paper I first discuss the role of external capital constraints in limiting the ability of farmers to implement new technologies. Via a theoretical model, I illustrate the role of farm size in determining if a particular cost-reducing technology is implemented. I show that the cost savings associated with a new technology capable of reducing per-unit costs of production may not necessarily be accessible to farmers that face significant external capital constraints that limit farm expansion. Finally, I explain why cost-reducing technologies that have high up-front adoption costs act as a driving force for farm size expansion and the consequent reduction in the number of farms-an explanation for the structural changes that have dominated American agriculture for 75 years or more.

Keywords: Agricultural and Food Policy; Production Economics; Research and Development/Tech Change/Emerging Technologies (search for similar items in EconPapers)
Pages: 16
Date: 1998-11
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Persistent link: https://EconPapers.repec.org/RePEc:ags:ukysps:159377

DOI: 10.22004/ag.econ.159377

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