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Title: Comparison of contraints to technology adoption on large and small farms
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Table of Contents
    Title Page
        Title Page
    Table of Contents
        Table of Contents
    List of Figures
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    Reference
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Full Text
* .i


9q, L-1


A COMPARISON OF CONSTRAINTS TO TECHNOLOGY ADOPTION

ON LARGE AND SMALL FARMS








BY

BRUCE A. DEHM








M.S. THESIS PROPOSAL








COMMITTEE: Dr. PETER E.HILDEBRANn, CHAIRMAN

Dr. TIMOTHY A. OLSON, MEMBER

Dr. JON VAN BLOKLAND, MEMBER








Table of Contents


Page


Introduction


Problem Statement


Hypothesis


Objectives


Methodology


Data Collection


Linear Programming as a Descriptive Tool


Linear Programming as a Diagnostic Tool


References








List of Figures


Figure Page



1. Farm Numbers for U.S.,Florida, Suwannee County,
1870-1978. 4a


2. Average Farm Size in Acres for U.S., Florida,and
Suwannee County,Florida, 1870-1978. 4b


3. Number of Farms by Acres Harvested,Florida,1945-
1978. 5a


4. Number of Farms by Value of Sales, Florida, 1978. 5b


5. Value of Products Sold by Size of Sales, Florida,
1978. 5c


6. Map of Suwannee and Columbia Counties, Florida. 13a


7. Product and Labor Flows for a Full-Time Small
Farm in Suwannee and Columbia Counties, Florida 14a


8. Product and Labor Flows for a Part-Time Small
Farm in Suwannee and Columbia Counties, Florida. 15a


9. Product and Labor Flows for a Full-Time Large
Farm in Suwannee and Columbia Counties, Florida. 16a








A COMPARISON OF CONSTRAINTS TO TECHNOLOGY ADOPTION

ON LARGE AND SMALL FARMS





Introduction:

In the fertile environment of competitive markets and

dynamic technical change, the processes involved with the

production of people's food and fiber have undergone tremendous

change. The widespread application of science and technology

to agriculture has greatly increased the efficiency of

production factors such as labor and land in the U.S. in the

last 50 years. Never before in the history of humankind have

so few people produced food for so many. Since 1933 the volume

of labor engaged in agricultural production has decreased more

than 70 percent, while the average per acre yields in corn and

wheat have increased more than 340 percent and 220 percent

respectively (Cochrane, 1979, p. 130). Americans enjoy one of

the highest standards of living ever achieved and much of the

credit lies in the high productivity of its agricultural base.

These achievements have not come without certain costs

however. Agriculture in the late 20th century has become a

highly technical, capital intensive complex in our industrial

society. The technical, financial and managerial revolutions

that have transformed U.S. farms from the 18th century

Jeffersonian concept of a self-sufficient, non-commercial

entity into the present day agricultural firm that is input

intensive and profit oriented have produced many social,

economic and environmental ramifications. We are surrounded





Page 2


almost daily with public concern of the social and economic

consequences of resource concentration, corporate agriculture,

rural decay of farming communities, limited access to land and

capital, and long range environmental effects of chemical

fertilizers, pesticides and herbicides. Arguments concerning

the positive and negative aspects of the social and economic

consequences, and whether or not public policy can or should be

used to direct these changes has precipitated into what has

become known as "the structure issue".(Paarlberg, p. 129) Farm

structure is defined as "the control and organization of

resources needed for farm production. Its dimensions include

the number of sizes of farms-by commodities and by regions, the

degree of specialization in production and the technology

employed, the ownership and control of productive resources,

barriers to entry and exit in farming, and the social, economic

and political situation of farmers." (Rasmusson, p. 3)

The attendant farm structure controversies are complex

and interrelated. Furthermore, economic considerations are no

longer the sole criteria in the formulation of solutions.

Legal, ethical and philosophical principles have also come to

play an important role in determining public policy in

structural issues.(Simpson,Wershow)

The role and importance of the American family farm is

one controversy in particular that has received much attention

in recent years. Undoubtedly, the survival of the family farm

in modern America is a complicated issue that involves deep

emotional beliefs as well as economic and political

ramifications. The American family farm evokes visions of





Page 3


hardworking and godfearing men, women and children who worked

to tame a new land with their staunch individualism and

independent value system. Over the years however, the concept

and definition of the family farm has changed considerably.

During the 17th and 18th centuries, hired labor and labor

saving technology were limited, which meant that most farms

"rarely expanded beyond a size that could be operated by a

single family."(Brewster,p.18) The phrase "family farm" itself

may not have been part of American vocabulary until the early

20th century, but concepts and beliefs of economic

self-sufficiency and wide distribution of land were important

socially and politically as a means to ensure responsible

citizenship and a republican form of government. These values

have carried over into the 20th century and account for the

notion that family farmers are the backbone of

democracy.(Brewster,p.18)

In the early 20th century, family farms were considered

those farms that were capable of supporting and fully employing

a family. In the 1940s, this definition was expanded to

include a moderate amount of outside labor to help maintain the

farm plant but still excluded farms that received off-farm

income as part of the total farm-family income. During the

1950s and 1960s however, total farm numbers in general declined

dramatically with part-time farms being the only group to

increase in absolute number. Political expediency deemed it

necessary to include these part-time farms in the family farm

definition to mitigate the drastic decline in the number of

family farms. The modern definition has eliminated the






Page 4


concepts of economic self-sufficiency. "The family farm is a

primary agricultural business in which the operator is a

risk-taking manager, who with his family does most of the

farmwork and performs most of the managerial

activities."(Brewster, p.21).

The dramatic decline in the numbers of medium and small

family farms in the past few decades has alarmed many

Americans. Nationally, as figure 1 indicates, the total number

of farms has decreased 40 percent to 2.7 million between 1935

and 1978. During the same period, average farm size (figure 2)

has increased from 140 acres to nearly 400 acres. The

concentration of production has also change greatly over the

past few decades. In 1978, farms that sold less than $40,000

of produce represented 78 percent of all farms, but only 18

percent of all sales. Farms with sales above $100,000

constituted 7.1 percent of all farms, yet generated 56 percent

of the total sales. In terms of acreage, 6.6 percent of the

farms encompass 54.1 percent of the land in farms. These data

indicate that production is being concentrated into a

relatively small number of large farms.(USDA,1981,p.42-3.)

U.S. Census of Agriculture and USDA data indicate that

structural changes in Florida are similar to national trends.

As illustrated in figures 1 and 2, Florida farm numbers have

decreased 39.5 percent while average acreage per farm has

increased 363 percent during the 1935-1978 period. Although

the Florida figures show a recent (since 1978) surge in farm

numbers and decrease in farm size, these trends are due mainly

to an increase in small "hobby" or "retirement" farms, locally




I LI k -4-


Qt.5 '5FLoRiA ,5vAnne


Number of Farms


o = U.S.


x = Florida


. = Suwannee County


1900


/9)o


I1 o0


/)70


19/o


/93~
Al~~





Average Farm Size (acres)

o = U.S.
x = Florida
= Suwannee County



300











doo


S1/o 191o / 30 / o


/ -0 / /Y 70


iw Io 1 Se 1/9o






Page 5


known as "ranchettes". As indicated in figure 3, and Census

data, a majority of new farms are in the less than 10 acre

category. These figures do not speak for the plight of the

small and medium sized family farms, but indicate rather the

recent migration from urban to rural areas in Florida.

Concentration of productive resources is higher in Florida

than nationally. Figures 4 and 5 show that in 1978, 82 percent

of all farms sold less than $40,000 of produce, but represented

only 8 percent of total sales. Farms with sales above $100,000

constituted 9.6 percent of all farms, yet generated 84.4

percent of total sales.

Concern for the welfare of the family farm has been broad

based. Congressional affirmation of "the family farm system

(as being) essential to the social well-being of the Nation..."

(Food and Agriculture Act of 1977,p.7) is a clear indication of

public support and concern for a troubled agricultural sector.

Likewise,the Florida legislature has shown its concern for the

family farm with the recent passage of a "Right To Farm" bill

which stregnthens the position of long-time farmers faced with

complaints from encroaching urban residents over noise and

odors from agricultural operations. (Moses,1982.,

Wershow,personal communication) In 1981, the Florida

Legislature authorized and funded a Govenor's Conference on the

Future of Small Farms to inform political leaders of the small

farmer situation so that "public policy (can be managed) in

ways that will encourage small farms to continue in profitable

operation." (Lt.Gov. Wayne Mixon ( Moses,1982)) Structural

issues that require further study and resolution abound. These






40,000
Farm
Numbers
by Acres
Harvested















20,000









10,000




5,000


/OO-/qq
1,000 do- qqj

1945


1950


-- -a. -


1959


1964


1969


1974


1978


Figure 3: Number of Farms by Acres Harvested, Florida


Source: U.S. Census of Ag.


La0











FLORIDA

Figure 4
Farms by Value of Sales: 1978


Less than 2,500
36.2%










$2,500 to $4,999
14.4%


$100,000 or more
-9.6%

$40,000 to $99,999
. "-- 8.3%


$20,000 to $39,999
8.6%



$10,000 to $19,999
10.6%


$5,000 to $9,999
124%


Figure 5
Value of Products


Sold by Size of Sales:


1978


$10,000 to $19,999
2.2%
$20,000 to $39,999 3.5% ----
$40,000 to $99,999
7.5%


Less than $10,000
2.5%















$100,000 or nxm
84.4%





Page 6


range from arriving at a general consensus on the exact nature

of farmer problems, to farm size definition, tax, credit,

marketing, income equity and agricultural trade and pricing

problems.



Problem Statement:

The focus of this thesis will include a structural issue

that is concerned with the relationship between available

technology and farm size. Many factors contribute to the

previously indicated trends in U.S. farm structure. These

include the price level of agricultural products and factors of

production, and the availability of credit, competitive markets

and information. Technology also plays an important role in

these trends in that land augmenting technology (hybrids,

seeds, chemical fertilizers,etc.) has allowed huge increases in

yields per acre, while labor augmenting technology (tractors

and other mechanical equipment) has allowed individuals to

cultivate more land with less labor. The "technological

treadmill" (Cochrane, 1979) theory suggests that aggressive,

innovative farmers adopt new, cost-reducing technology and

increase their profit position relative to late or non-adoptors

of new technology. In a competitive free market system, the

farmers who are able to reduce per unit cost the most in the

long run are able to survive because as output expands, product

price falls and squeezes the high cost producers out of

farming. The process is referred to as a.treadmill because new

technology is continually made available to farmers, and since

there are always aggressive and innovative early adoptors, the






Page 7


remaining farmers must follow suit and adopt the new cost

reducing technology or eventually be forced out of farming. As

a result, technical change "frequently provides an advantage to

those who seek or can readily adopt to change; but at the same

time, it usually puts some at a disadvantage those who do not

or can not readily adopt to change."(USDA,1981,p.127)1/



In light of the technological treadmill theory and of the

structural trends in U.S. agriculture, questions arise about

the nature of new technologies being produced for farmers. Is

it possible that much of the new agricultural technology is

biased towards the large-scale agricultural firm that is

managed by the aggressive, early adoptors, and thus exacerbates

the technological treadmill? Could much of this new technology

contain inherent prerequisites for successful application that

are beyond the grasp of most small and medium-sized family

farms? Many of the new farming practices and technologies are

purported to be "scale neutral", implying proportionate

availability and equal value to both large and small scale

farms. To what degree is this statement true in North Florida?

1/ However,this is not to suggest that the treadmill is
the sole inducement behind the changes in farm structure. The
treadmill process as described can be considered a "push"
process in that it eliminates farmers against their will.
However,concurrent with U.S. post WW II development have come
many off-farm employment opportunities in the industrial,
professional and service sectors of the economy. The amenities
offered by such opportunities have served to "pull" people from
rural areas and allow them alternative life-styles that the
farm could not provide. Thus we see that changes in the farm
structure are due to elements that both "push" and "pull"
farmers out of agriculture.





Page 8


This thesis will investigate and attempt to answer these

questions in the context of contemporary farming systems found

in the north central region of Florida.

The task of defining the terms small, medium and large

scale farms is not easy.. Many researchers follow the U.S.D.A.

method of catagorizing farm size based on gross cash farm

sales, as was done earlier in this paper. Although these types

of definitions are useful when describing general trends, they

fail to consider many characteristics that qualitatively

differentiate farms by size. For this study, size, either in

terms of product sales or land area is only marginally useful

in separating large and small farming systems. Other important

classification criteria lie in the production strategies, the

patterns of household consumption, and the interaction between

production and consumption activities, with the various

beliefs, value systems and goals held by family and larger than

family farmers being the underpinnings of such strategies and

activities.

Even though each farmer has his own motivation for

farming, there seems to be sufficient homogeneity between

farmers of similar farming systems to suggest that in general,

motivational factors, production strategies and consumption

activities are different between the small and medium sized

family farms, and the larger than family sized farms. The

assumption for this thesis will be that larger than family

farms operate more as a business and rely on the farm primarily

as a means to produce income, wealth and profit. In North

Florida, these farming systems are often chacterized by fewer





Page 9


and larger farm enterprises that require hired labor and six

and eight row machinery. The production strategy is calculated

for high yields on large acreages with the use of large amounts

of fixed and operating capital as a means of insuring

successful crops.(i.e. irrigation, chemical weed and pest

control) To a large degree, production decisions on the farm

enterprises are made separately from consumption decisions in

the household and visa versa.

Medium and small family farmers on the other hand perceive

their farm as a home first, a desirable and cherished lifestyle

that they wish to maintain. Family living expenses and

production costs are more likely to compete for the same scarce

resources, so that production decisions on the farm and

consumption patterns in the household are more closely linked.

Production strategy is calculated for yields that are roughly

one third to one half the size of those on larger than family

farms for many crops in North Florida. Two and four row

equipment, enterprise diversity, integration between crops and

livestock, and a high utilization of farm products by the

household typify many of these farming systems.





Hypothesis:

Small-scale family farmers in N. Florida are unable or

unwilling to adopt input intensive agricultural production

techniques because these practices require resources or impose

other conditions that the farmer does not have, is uhable to

obtain, or is unwilling to accept.





Page 10


Hypothesis:

Economic, social and environmental constraints prevent

small and medium scale family farmers in N. Florida from

adopting agricultural production techniques employed by large

scale farmers.





Objective #1:

Identify typical large scale farming system and typical

small scale farming systems in the Suwannee, Columbia County

area of N. Florida. This will include describing the nature of

the farming systems and defining the production and consumption

activities that occur within them.





Objective #2:

Identify and quantify the major social, economic and

biophysical constraints facing both small family farms and

large scale farms in the two county region.





Objective #3:

Determine the constraints of small farms that limit the

adoption of farming practices and technologies that are

utilized on large farms in the study area.




Page 11




Objective #4:

Based on the findings of a linear programming analysis,

determine why small farms have not adopted the technology and

recommended practices used on large scale farms, and to make

recommendations pertaining to the necessary characteristics of

new technology for small farms in the study area.





Methodology



1. DATA COLLECTION:

The input/output coefficients for the activities and the

values for the constraint coefficients for a linear programming

analysis will be estimated mainly from primary sources of

information. The author has been involved with corn and wheat

enterprise record keeping projects in the study area for 22

months in conjunction with the North Florida Farming Systems

Research and Extension Program. Data compiled from past and

future farmer interviews will be the source for much of the

activity and constraint coefficients, but sources such as local

markets, county extension agents and other individuals involved

in agriculture will also be utilized. Where necessary,

available and relevant published data will be used.



2. Linear Programming as a Descriptive Tool:

The analysis will utilize linear programming as a

whole-farm modeling technique to describe the activities,

































COLUMBIA


Riv T


0 5 10 t5 20
KILOME TEARS


0 5 10 1 15
MILES


Figure 6: Suwannee and Columbia Counties, Florida.


-- -Y I s-





Page 12


constraints and objectives of three separate contemporary

farming systems found in Suwannee and Columbia Counties of N.

Florida. This area (fig.6) has an extensive agricultural

background with a predominance of medium and small sized farms.

In 1965, the number of farms and farmers in Suwannee County

ranked second in the state of Florida. (U.S.D.A.,1965) Flue

cured tobacco, watermelons, corn, peanuts, soybeans and small

grains, as well as hogs and cattle are the major farm

enterprises.

That linear programming can be used to model whole farms

as a system is well documented. (Dalton, McCarl, Ghodake) This

thesis will use linear programming to first simulate three

predetermined, representative farms: the first will be a

full-time,small family farm, the second a part-time small

family farm, and the third a full-time,large farm. The

whole-farm models will take into account the various types of

decision criteria, management practices and technologies used

within the three representative systems with changes in the

input/output activity coefficients.

Constraints in the models will be divided into the

following classes: 1) resource restrictions 2) external

restrictions and 3) subjective restrictions. The first

category, resource or input restrictions determine the

availability of land, labor and capital for the production,

management, storage and marketing activities on the farms.

External restrictions are normally beyond the control of the

farm operator, and will include the level of government tobacco

or peanut allotments, the amount of credit lenders may extend,




Page 13


and any taxes imposed by the state and federal governments. The

third class of contraints, subjective restrictions, are imposed

by the operator himself and reflect a farmer's personal

decision on which crops to produce, the size of certain farm

enterprises and the amount of debt a farmer is willing to

carry. These are the important constraints which differentiate

a family farm as defined here from the larger than family farm.

Each model will consider a single twelve month

production/consumption cycle. The objective function for each'

system will be identical in that operators will maximize gross

margin (total revenue variable expense). However, it is

conceivable-that product prices may vary between systems due to

differences in quality, usage and farmer valuation of the

various products.

The underlying assumptions in linear programming of

linearity, divisibility, additivity and single-valued

input/output coefficients do not present serious limitations

for the purposes of this study. In general, the three farming

systems will be represented by the following model

representation:


n
Maximize Z = Z C X.
j=l J

n
Subject To Z a..X. < b. (i = 1,2,3..,n)
j=1d X -

and X. > 0













Where
Z = Objective Function
C. = value of one unit of X.
J J
X. = number of units of activity j produced
a..= use of resource i per unit of activity j
IJ
b. = set of available resources i for'
activities
















The first farm model will represent a typical full time,

small family farm, based on a homogenous group of farms that

exhibit similar farming system characteristics in the study

area. (fig.7). This system is defined by area farmers

themselves as the traditional pattern of agricultural

production and consumption in the region. A diverse mixture of

crops and livestock characterizes this system where peanuts

and/or tobacco and hogs represent a major source of cash

receipts. Corn, vegetables, pasture grasses, cattle and

poultry are typically utilized within the farm. One of the

main advantages of diversification is that a farmer can feel

confident that at least some of his enterprises will remain

profitable enough to maintain the economic viability of the








Figure 7: Product and Labor Flows, Full-Time, Small Farm, Suwannee and Columbia Counties, Florida.


. WATER -
SMELONS
L


- ~1

--4


LABOR





Page 15


farm in any one year. This system has existed for more than

half a century in the study area, although the various

components have undergone some alteration and have increased in

technical efficiency via the adoption of some technology over

the years.

The second farm model (fig. 8) represents a small farm

system that has evolved from the previous traditional full time

small farm (fig. 7) into a part-time small farm. This

evolutionary process is probably a response to both competitive

"push" and luring "pull" factors discussed earlier. The small

farmers of figure 8 are often forced to work off-farm to

maintain an adequate family income and cash flow. The

necessity to feed, house, cloth and educate members of the

family requires that farmers and/or their spouses and children

seek dependable sources of secured income. These essential

demands for one reason or another cannot be met by the farm

itself, and force many changes onto the farm system. Decisions

must be made to reallocate scarce resources such as labor and

management time, often leading to major reorganization and

focus of enterprises within the farm. It should be noted that

these farms are not considered "hobby" farms, "weekend" farms,

or ranchettes. Most of the farm families have a long history

of farming and maintain extensive kinship networks in the area.

Profit is still a strong incentive for production and

successive farm losses can force them out of farming

altogether. As figure 8 illustrates, these part-time family

farms follow many traditional farming activities, but on a

reduced scale or with less diversification.







Figure 8: Product and Labor Flows, Part-Time Small Farm, Suwannee and Columbia Counties, Florida.



MARKET


'WATER-
I MELONS
L_


r T- P -I
,TOBACCO i PEANUTS
. -I.- .j


VEGETABLES

~I


I MARKET


LABOR


r .
IP
I0 I

L


I-
I
1__


It-





Page 16


The third model in this analysis will be of a large farm

representative of those found in Suwannee, Columbia county

area. This model will represent a homogenous group of farms

that are defined by the farmers themselves as a typical large

farm. Figure 9 shows that these farms are characterized by

fewer enterprises and large acreages of specialized crops.

These farms employ high technology/

in both the labor and land augmenting categories to insure high

yields of high quality product. Farming is a full time

occupation for these farmers and because they produce large

volumes of output they have greater marketing and financing

flexibility.



3. Linear Programming as a Diagnostic Tool:

Once the descriptive models of the three systems have been

completed and represent as accurately as possible the "real

world", the hypotheses will be tested. The procedure for

determining whether or not small farmers are prevented from

adopting high technology because of their constraints is quite

simple once the descriptive models have been completed. In

essence, each of the small farm systems will be allowed to

choose between their present technology or the higher

technology used on large farms, given their present (small

farm) constraints. This will be accomplished by creating two


2/ Following Barkley's definition of high technology being
"high" when all effective opportunities to substitute capital
for labor have been utilized.(Barkley,p.309)







Figure 9: Product and Labor Flows, Full-Time Large Farm, Suwannee and Columbia Counties, Florida.


MARKET


WATER-
.MELONS
A'


PEANUTS
l ^


r
I
'H
I
G
SS
I
I
I
I,-


, CORN
L_ .. .. J


S.


'VEGETABLES "
.1


HOUSEHOLD


MARKET


LABOR


--


I


_


r





Page 17

separate merged activity models. The first merged activity

model will be created by combining the activities from the

small full time and large full time descriptive models into one

matrix. The constraints and objective functions for this

merged model will be those used in the small, full-time farm

descriptive model. Diagrammatically, the process will be as

follows:
Step 1: Build Descriptive Linear Programming Farm Models


__Large Farm Activities Small Farm Activities

Large Farm Small Farm
Constraints (Model 3) Constraints (Hodel 1)





Step 2:

Create Merged Activity Model



Large Farm Activities/Small Farm Activities

Small Farm
Constraints (Merged Activity Model I)



This merged model will simulate the availability of high

technology to the small farmer, and allow him to choose the

activities that will maximize his objective function given his

small farmer constraints. As a test of the hypothesis, if the

optimized merged activity model fails to include large farm

(high technology) activities, the hypothesis will not be





Page 18


rejected. It can then be inferred that the constraints of

small farms prevent them from adopting high technology.

The second merged activity model will be similar in all

aspects to the first except that the activities and constraints

for the small, part-time farm model will be utilized in place

of the small, full-time farm model. The large farm activities

will remain the same as in the first merged model, as will the

hypothesis testing procedure.

As well as testing the hypothesis, the merged activity

analysis can provide insight into reasons why small farms do

not adopt high technology as part of their production strategy.

Once the constraints of small farmers are adequately defined,

recommendations pertaining to the necessary characteristics of

new tehcnology for small farms can be made. Any future

research that is directed at the problems of the small farmers

can use the results of this analysis to help determine the

applicability of tentative solutions.





Page 2C


REFERENCES

American Agriculture: The Changing Structure, ed. F.W. Owen,
Lexington, Mass., Heath, 1969.


Barkley, Paul W. "Some Nonfarm Effects of Changes in
Agricultural Technology" American Journal of Agriculture
Economics. Vol. 60(1978):309-315.

Berry, W. The Unsettling of America: Culture and Agriculture.
Avon Pub. 1977.


Bostwick, W. W. "Suwannee County Development Plan." Live Oak
Chamber of Commerce and Florida Power and Light Co., 1946.


Boulding, Kenneth E. W. Allen Spivey. "Linear Programming and
the Theory of the Firm." N.Y.:MacMillan Co;1960.


Brewster David E. "Changes in the Family Farm Concept" in Farm
Structure A Historical Perspective on Changes in the Number
and Size of Farms. Committee on Agriculture, Nutrition and
Forestry, U. S. Senate, U. S. Government Printing Office,
Washington D. C., April 1980.


Budgets for Major Crop and Livestock Enterprises for Small
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