Impact of Farm Size and Uncertainty on Technology Disadoption

Abstract

For policies that promote use of new technologies by farmers to be successful, it is important that farmers continue to use these technologies. Technology disadoption has not been analyzed in the literature widely and there is no theoretical model that analyzes technology disadoption. The objective of the current study is to provide a theoretical framework that explains the impact of farm size and uncertainty with respect to production technology on farmers’ decision to disadopt a new technology. Current study found that a negative relationship between farm size and disadoption technologies that were complement to other technologies that are used by larger farms. Also, the current study predicted that larger farmers are more likely to disadopt a new technology if a fixed replacement cost is required, where average replacement cost decreases with farm size. For the impact of technological uncertainty, the current paper found that if the variance of the profit from current technology or pratice increases, farmers become more likely to disadopt the current technology or the practices.Technology Disadoption, Farm Size, Uncertainty, Environmental Quality, Environmental Economics and Policy,