Impacts of New Agricultural Technology on Real Growth in the US and KY Farm Economy:1949-1995

It is widely believed that public and private research and educational activities have led to rapid advances in the production of crops and livestock, making farmers far better off than they would have been had these technological advances not taken place. The cash receipts data for the postwar period from 1949 to 1995 for both the US and for Kentucky tell a very different story. Once an adjustment is made in the cash receipts data to account for the effects of inflation, real cash receipts from the sale of crops and livestock in 1995 remain almost exactly where they were in 1949--this despite the massive introduction of productivity-enhancing technologies. Over the same time period, gross sales per farm have risen somewhat, but only because farm numbers were declining at a rapid pace over the same time period. On a per-farm basis, from 1949 through 1970s, real sales of crops and livestock increased at a steady pace, rising rapidly in the late 70s, followed by a decline in the early 80s. Since the mid 80s, in both the US and in Kentucky, the real dollar value of sales of crops and livestock per farm have stalled. Nationally, a two-tiered structure of agriculture is emerging, dominated on one side by large-scale factory­ style production systems catering to specific demands of the marketplace and on the other side by part-time farmers whose primary income comes from off-farm employment. The traditional focus of colleges of agriculture has been to cater to the research and educational needs of mid-size commercial operators--those where income from farming represents most of the household income--who look to colleges of agriculture as a primary source of information about new technologies that could be adopted in an effort to increase productivity, and, hopefully, income. Since income from the sale of crops and livestock represents a small component of the income of many part-time farmers, these farmers are often less likely to be interested in the latest productivity-enhancing technologies compared with farmers who earn most of their income from the sale of agricultural commodities and products. Too, these farmers are likely to be less willing to make investments in the newest capital-intensive, productivity-enhancing equipment, often because such equipment requires a "larger than part-time'. scale of operation. Consumers, of course, have benefitted from these productivity gains in that they are able to purchase certain commodity-like items (flour, hamburger) at the grocery stores less expensively than if the technologies had not been adopted by farmers. But with changes in social and work-related demographics (i.e. wives who work) and an increased emphasis on highly processed prepared foods and foods eaten away-from-home, gains that permit consumers to buy raw hamburger and flour less expensively become less and less important to the family budget over time. These findings have important implications for future public support of research and educational programs aimed primarily at improving agricultural production technologies.