Measuring Farmer Response to the Rate of Agricultural Innovation: Experimental Evidence from Michigan

View the project final report

Commodities

• Agronomic: corn, soybeans, wheat

Practices

• Crop Production: General agricultural technology adoption

The development and release of innovative new agricultural technologies has provided farmers with numerous tools to increase yields while reducing input use and maintaining the integrity of the natural resource base.

Despite a vast literature on farmer demand for sustainable technologies, little work has been done to understand how the rate of innovation influences farmer decision-making about whether and when to adopt new technologies. This is an important problem due to large increases in the number of new technologies made available on the marketplace that may be driving farmers to delay or to forego the adoption of new sustainable technologies. This research will develop theoretical links between the rate of innovation of sustainable agricultural technologies and optimal farmer adoption decisions. Through this research, farmers will learn how the rate of innovation may alter profit-maximizing adoption behavior and we anticipate they will incorporate this information into their choices over new technologies. Through the analysis of results, policymakers and researchers will better understand farmer decision-making processes and the strength of experimental methodologies to capture agricultural innovation mechanisms. Utilizing a novel lab-in-the-field experiment and survey, we will test these hypotheses with Michigan farmers of wheat, corn, and soybeans. Farmers will make investment choices during a dynamic economic experiment allowing for the observation of farmer adoption behavior under different innovation scenarios. A survey will help to contextualize the experimental findings, and gain insight into how farmers perceive and plan new technology adoption decisions. Farmers, industry partners, and MSU Extension faculty will play key roles in evaluating the experimental design to ensure it is reflective of how farmers make adoption decisions in the field.

This research will provide insight into how farmers might increase expected profits and best implement sustainable agricultural technologies by adjusting adoption decisions based upon the observed rate of agricultural innovation.

The goal of this research is to investigate the effect of the rate of technological innovation on farmer adoption of sustainable, productivity-enhancing agricultural technologies. There are three primary learning outcomes associated with this project. First, farmers will learn how the rate of innovation influences optimal timing of agricultural technology adoption decisions to maximize profit. Data from an economic experiment will be used to observe farmer behavior under different technological innovation scenarios. Second, agricultural educators and policymakers will learn what factors farmers consider when making a sustainable technology adoption decision. Extending beyond expected profitability, this research will directly ask farmers about their decision-making processes. The primary action outcome of this research is that farmers will take into account information about the rate of technological innovation when choosing what technologies to adopt and the timing of new investments.