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

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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
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This note was uploaded on 03/25/2009 for the course ACE 451 taught by Professor Unnevehr during the Spring '08 term at University of Illinois, Urbana Champaign.

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

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