Technology and Structural Change in Alberta Cereal Agriculture

Structural change and technology within the agriculture and food system in Alberta are becoming more complex as agriculture industrializes. This relationship is neither simultaneous nor unique according to work done on commercial cereal farms in central Alberta. The nature of the relationship appears to be one of periodic reversal of causality. Technology, characterised mainly as mechanical and chemical, shaped structure during the period represented by the 1971 census. Biotechnology is beginning now to have its own effect on fixed factor proportions distinct from that of mechanical technology. Mechanical technology change is having a greater effect on capital/labor ratios in 1986 than in 1971. Fixed factor proportions, as observed in 1986, appear to be becoming limiting to technology. Disturbances to the economic structure of agriculture by technological change normally bring reaction to preserve the status quo. The reaction, taking the form of subsidies and credit policies, may be counter productive to technological change required for competition in world markets during periods when structure determines technology. Perhaps the most important of these structural changes has been the declining rural equity in farm businesses which is slowly changing the self employed nature of agriculture to that of the owner/employee organisation of urban economies. This change makes farm family income increasingly dependent on off farm employment in rural and periurban areas. The results from this study lead to the conclusion that government policies to limit the consolidation of farms are more inhibiting now to technological change than they used to be. With the emergence of interest in agricultural free trade, it is more essential than ever before to distinguish between subsidies which compensate for hurt from hostile weather or foreign domestic policies, from those subsidies which address structural hurt from technological progress.