CHAPTER FOUR

TECHNICAL CHANGE IN AGRICULTURE

It is about adoption of new method of production by farm household. No purely technical

solutions exist to problems of poverty and inequality in peasant agriculture;
1st the relative success of new methods depends on an array of natural and economic factors,
amongst which the way markets work is of critical importance. Many attempts to introduce new
methods have failed to achieve their intentions due to insufficient account being taken of failures
in land, labor, variable inputs and output markets. Land improvement may not take place due to
tenure problems, labor time conflicts may occur between new and old activities, complementary
inputs may not reach farmers for timely application and so on.
2nd it is quite wrong to assume that new methods only arise from formal research implying a one
way information flow from scientists to farmers. Farm households are observed to adapt to
changing circumstances, utilizing their own technical know-how as well as opportunities
presented to them to work inside.

Technical change is multifaceted process and can involve many different avenues by which new
methods eventually come to be taken up by farmers.
The largest part of the increase in agricultural output during the last centuries has to be attributed
to technological change.

Technological change allows to:

o Produce more output with the same quantity of inputs
o Produce the same output with lower quantities of inputs
Technological change can be distinguished between:
 Neutral, when, at given input prices, the optimal ratio of inputs is the same after the
technological change;
 Biased, when, at given input prices, the technological change modifies the optimal ratio
of the inputs.
In figure 4.2, the isoquant is shifted downward by the technological change, but the input
ratio(K/L) remains the same. This indicates a neutral technology change.
 Figure 4.2. Neutral Technological Change
Capital

A
B Q1 = 100

Q2 = 100
K/L
o Labor

In figure 4.3 below, a technical change biased in favor of capital and against labor, the isoquant
has moved, but in such a way to make the K/L ratio higher. The technical change is labor saving
and capital-intensive. This indicate a biased technological changed.

Figure 4.3. Biased Technological Change

Capital

B A

K/L2 Q1 = 100
K/L1 Q2 = 100
o Labor

Technological change can be:

 Labor saving: e.g., innovations in mechanization, chemical weed control
 Land saving: e.g., High yield varieties, new agronomic practices, pesticides
4.1 .Source of Technical Change in Agriculture

There are several sources of technological change:

 Learning –by-doing
 Public research and development
 Private research and development
 Improved research and development

Technical change means a reduction in the quantity of resources required to produce a given
output, or alternatively more output for the same level of resources.
Technical change is usually defined as the proportional decrease in costs of production
achievable by the innovation when both the old and the new techniques operate at their optimal
input combination and when factor prices are held constant.

Technical change is termed disembodied when the reasons for the increased productivity cannot
be identified. In practice technical change is always embodied in the particular resource which
results in greater efficiency. Eg. if higher yield per unit area result from using new seeds, then
technical change is embodied in the new seeds.

Innovation refers to the first practical use of a new, more productive, technique. Process
innovation is one which changes the amount, combination, quality or type of inputs required to
produce the same kind of output. Most innovation in agriculture are process innovation in which
the output produced remains unchanged (wheat, teff..). a product innovation is one which the
nature of output changes and it is usually considered more prevalent in industry than agriculture.
4.2 characteristics of Technical changes
Although having ahealthy,motivated ,hardworking, educated and well trained farmer is decisive
for agricultural development .the educated farmer and the uneducated farmer must get
productivity boosting technology ,which can help to achieve the designed level of
development .Therefore, improving the generation, multiplication and diffusion of technology
can be attached to the efforts for developing the production capacity of the people.
In Ethiopian context ,it is stated Ethiopia has diversified agro-ecological zones. This situation is
not viable to use the same technology all over the country. A technology implemented at one
zone for example in zone with adequate rainfail,may not work at others where there is shortage
of rain to bring the expected results. The technology must be compatible with environmental
conditions of each zone so as to bring about the maximum possible benefit to the zone in terms
of agricultural product. Therefore, we have to deliver technologies that fit the different agro-
ecological zones of country and that can be improved continuously.

Assessing agricultural technologies around the world, selecting those that may fit to our
conditions, making the selected ones more compatible to our realities require high level of
professional and research capacity .the process of selecting technologies and arranging them in
packages is a key task at whole. the technology must be disseminated and reach to the
agricultural products producer. According to our plan, not less than three extension workers
trained in medium level colleges will be assigned to each kebele. The implementation of this
plan has already started. Highly qualified agricultural extension professional to support ,lead and
coordinate the extension workers at kebele levels. Moreover, there must be close linkage
between the research and extension systems .the extension services should be periodically
technologies .our system of technology multiplication should go along with the desired rapid
agricultural development and thus it must be able to quickly multiply the technology and supply
it to farmers frequently .if it takes years to multiply a technology, there cannot be rapid and
sustainable development at the required rate. The technology to be multiplied should be of
acceptable quality .it should also be of competitive and affordable to the farmer in its price .this
can be achieved if a system of technology multiplication is setup in which the government,
private investors and farmers are involved.

The generation of new technology should be continuous. the process of looking for a better
substitute should be started even before a new technology is disseminated. The production and
marketing problems of the farmer must be continuously investigated and the solutions must be
sought on sustainable basis .that is why we say the system should be setup in which research
works are based on the real problems of farmers, in which research and extension systems are
strongly linked to make easier identification of problems and involving researchers on the one
hand, and disseminating the findings quickly and appropriately back to farmers on the other
hand.
4.3. Adoption and Diffusion of technologies:
while examining the role of new technology in rural development ,we would like to caution that
the adoption of technologies which are not appropriate may cause serious damage to the
biosphere ,albeit unintentionally .the general economic and political environments prevailing in
developing countries tend to favour and promote environmentally harmful technologies .for
example ,indiscriminate use of chemical fertilizers, and the effluents discharged by firms
producing such chemicals as naphthol, disulphonic acid and its derivatives, pollute rivers,
strearms, land and air and cause hazards to human health and reduce the longevity. People in
most LDCs, particularly the poor, suffer more from such hazards, as there are neither property
rights nor liability rules to protect them. Therefore, it is necessary that environmental impacts of
new technologies are carefully evaluated before they are recommended for wider use.

4.4 The economics of technical change

The factors affecting rural favorably or adveselarly are so varied, and have combined over time
in so many different ways.it is very difficult to isolate a small number of crucial variables or
determinants. There are many physical, Technological, Economic, socio-cultural, institutional,
organizational and political factors that affect the level and pace of rural development. These
factors operate at all levels household ,village, district ,state, nation and the world as a
whole .Depending upon how they are managed, these factors can have both favorable and
adverse effects on development. For instance ,if the human resources of country are not propely
developed by proper nutrition, health care, education and training ,and are not productively
utilized, these resources become liabilities and obstacles to development .But if they are properly
developed and utilized, then they become great assets and major factors contributing to
development .knowledge about the nature and magnitude of the impact of various determinants
on economic development is necessary for rural development practitioners to be able use these
factors to achieve their goals efficiently and effectively.

4.5. Induced innovation

The change in relative factor prices induces firms to search for production methods which use
less of the resource which has become more expensive. This is the basis of induced innovation
which seeks to explain paths of technological development in agriculture in terms of changing
relative factor scarcities over time. Its elements are;
  As agriculture develops over time particular resources become scarce and their costs rise
relative to other resources.
 The resources which become scarce vary between regions according to land availability,
population density and growth and the nature of economic growth in the larger economy.
 In the labor scarce, land plentiful economy farmers seek innovations to increase output
while saving labor. The potential demand for such innovations induces manufacturing
industry to devise and produce labor-saving machines.
 In the labor abundant land scarce economy, farmers seek innovations to raise the
productivity of land. This induces a search for yield increasing technologies by both
private and public agencies.

Biological innovation (new seed, fertilizer etc) is handled by the induced innovation theory. Here
the cause of induced innovation is a rise in the price of land relative to variable inputs like
fertilizer. The relative shortage of land induces a search for new crop varieties which can be
combined with cheap variable inputs to produce more output per unit of scarce land.

In summary induced innovation approach makes technical change an endogenous response to

changes in key economic variables. The relevant variables are relative factor prices (e.g land/
labour price ratio), and changing size of market for different agricultural inputs and outputs.
Changing relative prices cause farmers to attempt to save on scarce factors (or to produce outputs
which use less of scarce factors) therefore reducing the size of market for scarce inputs or for
outputs which use scarce inputs.

4.6. Adoption of new varieties:

World production of grain increased during the production period of 1961 to 2004 ,compared
with area harvested over the same period .cereal production was increased by more than doubled
in developing nations between the years 1961 to 1985.yields of rice ,maize ,and wheat also
increased steadily during that period the production in increment can be attributed roughly equal
development to irrigation ,fertilizer, and improved seeds uses especially in case of Asian rice.
The novel Technological development of the adoption of anew varieties was the production of
what some referred to as ''miracle seeds.'' scientists created strains of maize, wheat, rice and other
varieties of crops that are generally referred to as high yielding varieties.
high yielding varieties have an increased nitrogen -absorbing potential compared to other
varieties .since cereals that absorbed extra nitrogen would typically lodge ,or fall over before
harvest, semi traditional varieties in the presence of adequate irrigation ,pesticides ,and fertilizers
.one criticism of high yielding varieties is that they were developed as F1 hybrids, meaning they
need to be purchased by a farmer every season rather than saved from previous seasons ,thus
increasing a farmer’s cost of production.