John Holt

Technology Adoption Decisions under Irreversibility and Uncertainty: An Ex Ante Appproach

Empirical results demonstrate that uncertainty about costs and requirements for environmental compliance is an important determinant of dairy producers& investment behavior. Ex ante forecasting of how uncertainty and irreversibility are likely to affect producers& responsiveness to agricultural technologies has implications for the design of environmental policies. Simulation modeling methods are described. The empirical analysis focuses on Texas producers& propensity to adopt free-stall dairy housing. Free-stall investments offer advantages for both productivity-augmentation and pollution abatement, yet uncertainty and irreversibility are obstacles to adoption. Implications of this ex ante paradigm for policy design and implementation are discussed.

Managing Change in Extension

Managing change in extension is capitalizing on todays strengths while building tomorrows niches. A shrinking support base, increasing competition, and rapid changes in what people need and want in off-campus education are strong forces for change in extension programs. But inertia inherited from past success, the difficulties of changing mental habits, conflicting clientele signals, and rewards schema that give no clear signals all complicate change management. Symbiosis is needed between faculty and all levels of administration in order to find the support, and the will, to manage change constructively.

An Ex Ante Approach to Modeling Investment in New Technology

A conceptual framework to account for irreversibility and uncertainty in technology adoption decision making is suggested as an extension of the Dixit-Pindyck model. The general case of farmers making large capital investments to bring their production facilities into compliance with environmental regulations is spotlighted, and the role of evolving policies as a source of uncertainty is considered. Many environmental policies affecting production agriculture are geared toward water conservation or water quality protection; several examples are discussed. The particular case of Texas producers’ propensity to adopt free-stall dairy housing is spotlighted. Free-stall investments offer advantages for both productivity augmentation and water pollution abatement, yet uncertainty and irreversibility are obstacles to adoption. Empirical results demonstrate that uncertainty about costs and requirements for environmental compliance is an important determinant of dairy producers’ investment behavior. Ex ante forecasting of how uncertainty and irreversibility are likely to affect producers’ responsiveness to agricultural technologies has implications for the design of environmental policies. Simulation modeling methods are described. Implications of this ex ante paradigm for policy design and implementation are discussed.

Educational Programs For Commercial Agriculture And Agribusiness

Selected problems and opportunities inherent in educational work with large Agricultural and Agribusiness firms are examined in this paper. The problems arise largely because of the increasing size and complexity of todays large firms; the nature of their requests for assistance; and existing means of teaching the personnel of those firms. The opportunities lie in helping solve their problems in a manner which retains University contact with this important audience without disrupting academic budgets and faculty relationships.

IMPACT OF REDUCING FEDERAL ORDER CLASS I DIFFERENTIAL ON REPRESENTATIVE TEXAS AND NEW MEXICO DAIRY FARMS

The General Accounting Office (GAO) recommended that the USDA substantially reduce or eliminate the extent of price discrimination practiced under federal milk marketing orders. The purpose of this study was to quantify the impacts of alternative means of implementing the GAO proposal on the economic viability of Texas and New Mexico dairy farms. Five dairy farms were simulated for six years under the current dairy policy and five alternative proposals. Results of the analyses indicate that large New Mexico dairies can remain economically viable under all of the alternatives. On the other hand, federal order policy changes would accelerate the loss of equity for moderate size Texas dairy farms.

A USER-ORIENTED MODEL FOR INCORPORATING RISK INTO SHORT-RUN DECISIONS

factor to determine the range of possible outcomes This paper describes a simple model extension and probability associated with each possible outspecialists can use with farmers in organizing data, come [5]. Two major factors affecting a wheat analyzing information and producing easily under- farmers decisions are production yields and prices for stood results applicable to specific recurring manage- wheat and stockers. Decision trees provide a method ment decisions. Decision trees are used as the basis of incorporating estimated ranges of factors and their for organizing data and producing results [8]. The probabilities into the decision process. In the model, model can be used with portable computer terminals, three yield levels, three price levels and corresponding giving farmers and specialists in the field access to yield and price probabilities are required to produce a large computers. It can also be used by teachers and nine-limb decision tree with nine levels of income researchers to analyze decision alternatives and as a (Figure 1). Yields and prices are assumed to be teaching aid. independent events. 1