Research and Development/Tech Change/Emerging Technologies,

Davis, Joe T.

English

Research Papers in Economics

SOUTHERN  JOURNAL  OF AGRICULTURAL  ECONOMICS  JULY,  1984
DISCUSSION:  POLICY  CONSIDERATIONS  OF  EMERGING
INFORMATION  TECHNOLOGIES
Joe  T.  Davis
The  development  and  adoption  of  informa-  the issue  of market structure  impacts emerging
tion  technologies  to  the  marketing  and  pro-  from the adoption of this new technology. Does
duction  of food and fiber  has  raised  numerous  this indicate that a new dimension of structural
issues which our profession will have to address  issues  has been  created  as  a  result  of the  new
in  years  to  come.  Professor  Sporleder  has  pre-  technology and that the traditional ones are just
sented an outline which can direct our thinking  a  part of this set or  does this  indicate  that the
concerning  the  policy  issues  arising  from  the  new technology  may impact  or change the  na-
use of these new technologies in the agricultural  ture  of the traditional  issues?
sector.  I  agree  with  his  statement  that  society  Although the linkage between  the traditional
has  entered  the  "information  age"  and would  issues  and the emerging  issues  associated  with
add that the agricultural  sector is experiencing  information  technologies  was  not  altogether
this  transformation  along with  other  segments  clear,  the  identification  of  some  broad  issues
of the economy.  The decade  of the 1980's will  associated  with  this  new technology  was  well
most likely be remembered  as a period of rapid  presented.  I  have  no particular  arguments with
technological  development  and  adoption,  es-  this list of issues  and agree with  Dr.  Sporleder
pecially  in  the  area  of computer  use  and  in-  that  it would  be  impossible  to  enumerate  all
formation  delivery,  the  issues  dealing  with  this  subject.  My  com-
This  discussion  will  attempt  to  accomplish  ments relative to the issues created by emerging
three  objectives:  (1)  to  discuss  the  evolution  information  technology  will be  to supplement
of the issues  raised  in the paper,  (2)  to  refine  those presented and to specifically address those
some  of  the  issues,  particularly  those  relating  issues  which  will  face  the  administration  and
directly  to  the  land-grant  system,  and  (3)  to  faculties  of our  land-grant  system.
offer  differing  viewpoints  on  some  of the  im-  The degree of involvement  by land-grant uni-
plications presented.  versities  and state extension services  in  the in-
Considerable  time was  taken to present what  formation  field is  not well  defined.  The  degree
was  called  "traditional  farm structure and mar-  of  involvement  can  range  from  operating  and
keting  policy  issues"  which  covered  the  areas  maintaining a complete system to being a casual
of  control,  market  access,  thin  markets,  and  observer  of  what  is  occurring  in  the  private
public information  availability. There is no par-  sector.  The  issue  is  how  much  involvement
ticular argument  concerning  these  issues  relat-  should  these  units  have  and will  all  states  be
ing  to  markets  and  production  activities;  involved?  The answer more  than likely will not
however,  the linkage  to the  emerging  technol-  be  all  or  nothing  but will  lie  somewhere  be-
ogies  associated  with information  delivery was  tween  these  extremes.  The  number  of  states
somewhat  unclear.  The  author  indicated  that  involved will vary depending on their particular
these  issues  were  presented  to  enhance  the  situation,  funding,  clientele  needs,  and  other
articulation  of those issues created by emerging  external  factors.  Some universities may play an
information  technologies.  When the  issues  re-  important  role  in the development  and  testing
lated to  information were  presented,  the  rela-  of new methods,  systems,  and techniques  and
tionship  of these  traditional  issues  to the  new  not provide the service  or maintain  the system
ones  was  not  clear.  There  was  an  element  of  after  development.  The  university  system  has
control  involved  in  the  issue  of  access  to  in-  performed  this  role  in  numerous  other  areas
formation;  however,  I  do  not  believe  that this  and would not be departing from their mission
is  in  the  same  vein  as  the  traditional  policy  or method of operation  in accepting  this role.
issue  of "Who Will Control Agriculture?"  Also,  Other  institutions  may  go  beyond  this  devel-
the traditional issues  of control,  market access,  opment role  and maintain  the system  for their
and  thin  markets  were  said  to  be  a  subset  of  clients.
Joe  T.  Davis  is  an Associate  Professor,  Department  of Agricultural  Economics,  University  of Kentucky.
Invited discussion presented at the annual meeting of the Southern Agricultural Economics Association, Nashville, Tennessee,
February 5-8,  1984.  Invited papers are  routinely published  in the July SJAE without editorial council review but with review
of the  copy editor  (as  per Executive  Committee  action June  25,  1982).
23The extension service  and the university com-  The  issue  of  collaborative  arrangements  for
munity are an unmatched source of information  information  delivery  must  be  explored.  This
and will play a role either directly or indirectly  will involve  arrangements  between  public and
in  providing  information  and  data  to  informa-  private firms, universities and cooperatives, and
tion  delivery  systems.  The  issue  is should  the  among  universities.  These  arrangements  could
universities  take  a passive  or aggressive  role  in  impact  the  cost  effectiveness  of  the  large  in-
this area? Some would argue that the appropriate  formation  systems  as  well  as  allowing  the  ex-
role should only involve providing information  pertise  of  the various  participants  to be  fully
which will be delivered  by private systems and  utilized.  The  duplication  of  information  and
not  be  involved  with  the  maintenance  of  the  effort  could  undoubtedly  be  reduced  through
actual  system.  This  results  in the  question  of  some  type of collaborative  arrangements.
control and  as  Dr.  Sporleder  indicated,  brings  There  are  several  conclusions  and  implica-
up the problem  of developing  data bases from  tions which Dr. Sporleder  has presented  in this
public  information  and  repackaging  that infor-  paper which  cause  some  concern  on  my part.
mation  for  sale.  This  is  not  completely  new  I  agree  that  there  is not  a tremendous  amount
since  a  tremendous  amount  of our  current  in-  of empirical  research available  in  this area and
formation  ends  up  in  outlets  for  which  pro-  that some  statements  and implications  cannot
ducers and  consumers  must pay  a fee.  be substantiated  oneway or another but theory
A university that decides to operate  an infor-  and work in other areas seem to shed some light
mation  delivery  system  will  face  many  opera-  on the issues  contained  in this paper.
tional and policy decisions. Administrators  will  The  implication  that these  new information
have  to decide  if the  service  will be  provided  technologies  can impact  the structure  of  agri-
free or if users will be charged.  If a fee structure  culture  at the  farm level  has  some very  signif-
is  used, how much  should be  charged?  Should  icant  ramifications.  I  would  agree  that  this  is
the fee  cover the full cost of operation or only  possible  under  some  rather  specific  assump-
a portion of the cost? The large  investment cost  tions,  however,  these  assumptions  were  not
and manpower needs of these systems may them-  enumerated in the paper. As a result; the linkage
selves become  an issue.  Decisions  will have  to  is  not all  that  intuitive  to  me.  I  would  argue
be made concerning  the priority of this service  that the impacts are more likely to occur in the
relative to the other programs of the experiment  area  of  conduct  and  efficiency  of  the  market
station and the extension service. Will this serv-  than  on the structure  of the farm  sector  or the
ice  be  continued at the  expense  of some  other  marketing  firms.  This  assumes  that  the  infor-
activities during periods of reduced budgets and  mation  stays in  the public domain and that the
program  cutbacks?  information  systems  simply  deliver  the  infor-
A closely related  issue  concerns whether our  mation  in a  more  efficient  and timely  manner.
information  is appropriate  for inclusion  on an  The  statement that  information  technologies
electronic  information  delivery  system.  There  have  no  clear  relationship  to  vertical  coordi-
is  some  indication  that  much of the  extension  nation  enhancement  is very  hard for me to ac-
and  research  productivity  has such  a  long  life  cept.  It may well be  that the misunderstanding
that it is not economical or beneficial  to include  comes  from differing  definitions  of vertical  co-
these  on such  a  system.  These  systems  may be  ordination or information  technologies.  My par-
desirable  for the  more  rapidly changing  infor-  ticular  view  of  the  coordination  mechanisms
mation and data and for those information  items  would  include  private  treaties,  vertical  own-
that  are  rather  perishable.  This  issue  must  be  ership,  cooperatives,  bargaining  associations,
addressed and decisions reached concerning the  and information systems. If the information sys-
appropriate  method of delivery for our output.  tem  influences  the flow  of  information  within
The  issue of whether  the  public sector will  the market which affects the level of knowledge
meet  the  needs  of  our  farm  clientele  in  the  and the  level  of  uncertainty,  then there  must
development  of information  systems will even-  have been some degree of coordination achieved
tually  face  decisionmakers.  The  cost  effective-  by that system.  It is my contention that the new
ness of most of the large computer based systems  information  technologies  which  are  available
resides  in the spreading  of the  high fixed  cost  to  the  agricultural  sector  will  in  fact  lead  to
over  a  large  number  of users.  Since  farm  pro-  such improvements  and  thus  will have  an  im-
ducers  are  so  few  in  number  relative  to  the  pact on vertical  coordination.
total population and are located  in areas  where  Dr. Sporleder indicated that the development
linkage  to  communication  networks  will  cost  of electronic cash markets  may be  compared to
more than the urban areas, private industry may  "inventing a better buggy whip"  since the trend
choose to service the larger urban areas and not  is  toward non-cash  transactions  in agriculture.
meet the  demands  of the  farm producer.  If this  I agree with  the trend; however,  only about  30
happens,  how  will  the  land-grant  system  re-  percent  of the  total  farm output is  under  con-
spond?  tracting and  vertical  integration.  Although  the
24trend  is  for increased  activities  in  these  areas,  be considerable  disagreement concerning the  is-
it is  hard  for  me to believe  that the electronic  sues which  need to  be  addressed  but this  rep-
cash  market  alternatives  may  not  hold  some  resents  a first  step in an open discussion  of the
promise  for the remaining  70 percent of prod-  issues  and  the  possible  policy  implication  sur-
uct sold.  rounding this  new technology  and  its  use.  Our
profession  must take  the leadership  in this area
The  paper which  Dr.  Sporleder  has  presented  and  analyze  the problems  associated with these
gives  the profession  an opportunity  to  begin to  issues.  Decisionmakers  at the  state and  national
identify and prioritize the issues surrounding the  levels will  have  to  address  these  issues and  de-
development and utilization of information tech-  velop policies which are consistent with the goals
nologies  in  the  agricultural  sector.  There  may  and objectives  of the  land-grant  system.
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DISCUSSION: POLICY CONSIDERATIONS OF EMERGING INFORMATION TECHNOLOGIES

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