Technological Advancement and Producer Income 



General Technological Advancement — A general technological advancement 



reduces costs per unit for all producers. The reduction in costs 



2 

 results in more production and eventually a lower price. Producer 



income may increase or decrease depending upon the shapes of the 



relevant supply and demand curves. Given our knowledge of the supply 



and demand curves in agriculture, we hypothesize that much agricultural 



research which results in general technological advancement eventually 



decreases producer income. 



Specific Technological Advancement — Specific technological advancement 



reduces costs for only a part of the producers producing a certain 



commodity. Often specific technological advancement affects costs of 



producers in a particular geographical area, leaving other producers' 



costs relationships unchanged. Given that specific technological 



advancement affects a minority of producers, that minority will benefit 



from increased producer income while other producers will have reduced 



incomes. 



Often it is difficult to determine a priori whether research will 



result in specific or general technological advancement. Furthermore, 



suppressing research results if the advancement turns out to be general 



raises serious ethical and moral questions. It is important to recognize 



that both general and specific technological advancements have aggregate 



Producer income is the same as producer surplus in this paper. 



2 



Assumes static demand. 



