Technological Advancements and Their Impact on Agricultural Production, Slides of Agricultural economics

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Role of technology in

Agricultural Production

Submitted by: NIKHIL

(A-2018-30-

Submitted to: Dr. Jagtar

Guleria

Background

New technology usually comes in the form of

an improvement in one or more of the inputs

used in the production process. Modern farms

and agricultural operations work far differently

than those a few decades ago, primarily

because of advancements in technology,

including sensors, devices, machines, and

information technology.

Due to shift in production function. An improvement in one of the inputs might raise its marginal product and increase the elasticity of production for that input, causing the slope of the new production function to be greater than the old production function at a given level of input use. Due to efficiency improved with given production function Efficiency improvement can be further decomposed into technical efficiency (based on input and output relationship) and allocative efficiency (occurs when there is an optimal distribution of goods and services, taking into account consumer’s preferences). Technological change is an increase in productivity

Due to shift in production function

Neutral technological change A technical change is said to be neutral if it is neither capital saving nor labor saving i.e. it is neutral in its effect in the sense that neither of the two factors become more or less important at the margin. There are two definitions of neutrality. One is given by Prof. Hicks and the other by Prof. Harrod.

Hicks views on Neutrality

According to Prof. Hicks, neutrality

is “An invention which raises the

marginal productivity of labour and

capital in same proportion”. Thus, a

technical change is neutral if the ratio

of marginal product of capital to that of

labour remains unchanged at constant

capital labour ratio.

Production function The shape and position of production function is shifted upward and to the right. Total production increases with the given level of inputs with the result that both AP and MP curves move upward Cost function The shape and the position of cost function moves downward and to the left. An increase in AP and MP causes a decrease in AC and MC respectively. As a result cost per unit produced come down Farm price level With increase in output, there may be fall in prices of certain commodities. Therefore the benefit of technology is shared by consumers as well Labour employment opportunities With increase in the volume of farm business, greater employment opportunities are opened to the farmer, traders and persons engaged in industries and subsidiary to agriculture. 01 03 04 Impact of Technical change examined in relation to

Importance of technological change in Agricultural

1. Farmers no longer have to apply water, fertilizers, and pesticides uniformly across entire fields. Instead, they can use the minimum quantities required and target very specific areas, or even treat individual plants differently. Benefits include:
2. Higher crop productivity
3. Decreased use of water, fertilizer, and pesticides, which in turn keeps food prices down
4. Reduced impact on natural ecosystems
5. Less runoff of chemicals into rivers and groundwater
6. Increased worker safety

Rate of technical change can be

measured:

• From production function- by estimating Y = f(X, t).

• From the cost function- by estimating the cost

function C(r, Y, t)

• From Profit Function- by estimating the profit function

(p, r, t)

• From production function- by estimating Y = f(X, t).

• From the cost function- by estimating the cost

function C(r, Y, t)

• From Profit Function- by estimating the profit function

(p, r, t)

Where

• Level of technology in percentage area under HYV Total cropped area Fertilizers used per hectare Recommended doses Number of irrigations given Level of technology in percentage area under HYV Total cropped area Fertilizers used per hectare Recommended doses Number of irrigations given Determine the level of technology adopted by individual farmer