ABSTRACT

Technical change alters the distribution of costs, benefits, incomes and assets among both the adopting and non-adopting individuals and firms. But, how those alterations occur is not always clear. The picture is clouded in either a historical narrative or a statistical analysis because the agricultural sector has experienced not one—but many—technological advances, market demands have shifted, and supply industries also are affected by price and technological changes. To clarify these effects, a model which simulates the agricultural sector was developed and an experiment which changes only the technology was performed. The effects on the number, size and profitability of individual firms in the industry, on the market-clearing prices and quantities of inputs and outputs, on industry-wide net farm income, and on productivity at both the firm and industry level were examined.