Lecture #8 - Lecture #8 Agricultural Surplus -The income...

Info iconThis preview shows pages 1–2. Sign up to view the full content.

View Full Document Right Arrow Icon
Lecture #8 “Agricultural Surplus” -The income generated in agriculture net of the direct consumption of agricultural producers and their household members. -Was viewed in some models of economic growth as the potential supply of savings which could be mobilized, either voluntarily or more often under coercion, as a source of investment capital to develop the non-farm sector. (ex: intersectional resource transfer) “Technology Treadmill” -As more and more farmers adopt a new technology that reduces the cost of producing a commodity, the market price of that commodity falls to the new lower cost of production. -Farmers who adopt each new technology faster than others initially earn higher profits (before the market price declines) -As the market price falls, the laggards in adopting the new technology start losing money and must either adopt it or get out. -In this sense it is said that farmers are on a treadmill to keep adopting each new cost- reducing technology that comes along. Agriculture’s Uniqueness
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Image of page 2
This is the end of the preview. Sign up to access the rest of the document.

Page1 / 2

Lecture #8 - Lecture #8 Agricultural Surplus -The income...

This preview shows document pages 1 - 2. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online