Leopold Letter, 1998. Summer Vol 10 (2).Assessing new technology： farm by farmMichael DuffyExtension economistz ISULeopold Center associate directorEvery day seems to bring a new technology to farmers. Global positioning, infrared analysis, herbicide-resistant crops, new hybridsz and variable rate applications are a few relatively recent innovations in agricultural technologies.The changes are coming so fast that it is hard to keep pace with them. And these new technologies and changes do not come without a cost. Recently a farmer remarked to me that many of his neighbors were shifting their production to a contract basis simply because the increased complexity made them feel that they could not keep up with the changes； it seemed easier to have someone else do the keeping up and evaluating.Contract production is certainly one approach. However, the contractor reaps the majority of the rewards for adopting technological changes, reducing the role of the farmer to that of a hired employee.Economic theory holds that the early adopters of a clearly superior technology are the ones who benefit most because by the time late adopters begin to use the new technologies, profits generated through improvements have been factored into the market price.The challenge is knowing which technologies are superior and which offer only marginal benefits. Some technologies are not the most efficient initially, but as they are refined over time, they become the most effective choices. Knowing which technologies to adopt-and when to adopt them-are critical questions facing farmers. The problem is further complicated when one considers the impact of the new technologies on sustainability.There are no magic solutions. It is important for farmers to realize that what may be right for one farm may not be right for another. Farmers need to seek the most appropriate technologies for their individual operations-not necessarily the newest technology.Evaluating a new technologyEvaluating any technology involves two steps. First, farmers must know their goals. This has been said so often that it may seem like a clichez but it is critical in evaluating the appropriateness of a new technology. Economists often assume profit maximization is the only goal. However, there are additional considerations and goals.Different technologies use different resource mixes. This mix of resources can determine whether a technology is appropriate. For example, some farmers adopt technologies to save labor. If the labor that is freed up has a higher use, then such technologies will usually be appropriate. The labor that is freed up may be used for more work, more leisure, or family time. The key question isz what value is placed on the labor saved? An appropriate technology for a starting farmer may not be appropriate for one reaching retirement age. Similarly, technologies that involve working with computers and high- technology equipment may not be appropriate for someone who prefers working with animals.The second step in evaluating alternative technologies is accurate assessment of resources. Economists typically talk about four resource categories: land, labor, capitalz and management. Land includes all the plants and animals inhabiting it. Capital includes both the liquid assets we typically think of as cash and also the stock assets such as buildings and equipment and the technologies they incorporate. Labor denotes the physical activities involved on all farms. Management is the combining of these resources. On most family farms, labor and management tasks are performed by the same individuals.A further classification of resources proposed by University of Missouri agricultural economist John Ikerd is internal versus external. He uses these terms in discussing agricultural change. We used to rely on the resources that were internal to the farm. But now, we have substituted not only capital for labor but external resources for internal resources. These changes in production agriculture have dramatically increased production levels-but they have also greatly expanded the cost of production. Farms have essentially become a place that money passes through. A professor at Tuskegee University once said, We have reached the level of sophistication in this country where everybody is making a profit on agricultural commodities except the farmers who produce them.When evaluating a new technology, it is important to remember that we are seeking the appropriate technology for a given set of goals and resources. The farmer must determine whether adoption of a new technology involves relatively minor (incremental) changes versus significant alterations in the farming operation (embodied technologies).A partial budget (see next section) is the best evaluation technique for assessing an incremental technological change. But effectively evaluating changes (alternative technologies) that will have a significant impact