Abstract
Market impacts of technological change in Canadian agriculture are measured within a CGE framework using 2001 input-output data with agriculture disaggregated to six sectors and thirteen commodities. Technological change is modelled as productivity rises in the use of intermediate inputs and of primary factors. Impacts on output, intermediate use of output, foreign trade, final consumption, returns to primary factors and relative price are calculated for primary and processed food products. Impacts of technological change can be summarised into two general outcomes. First, supply managed sectors respond to technological change differently than other agricultural sectors. In the former, economic rents generated from quotas increase while in the latter, outputs, exports, and final consumption increase along with declines of relative supply prices. Second, large relative price declines for other commodities lead to consumer gains. DOI: 10.4038/sjae.v9i0.1830 Sri Lankan Journal of Agricultural Economics , Vol. 9, 2007 pp.1-21
Highlights
Economic assessments of impacts of new technologies can use several approaches
This paper reports general equilibrium results of a modeling exercise evaluating technological change in Canadian agriculture
This paper looks at the general equilibrium response of the commodity markets of these two groups to technological change
Summary
Economic assessments of impacts of new technologies can use several approaches. Many studies have used the partial-equilibrium model of Alston et al, (1995) which examines market consequences of new technologies and calculates changes in producer and consumer welfare. This paper reports general equilibrium results of a modeling exercise evaluating technological change in Canadian agriculture. Technological change is modeled as input savings in the use of purchased inputs (intermediate inputs as per Statistics Canada sectoral input classification) and of primary factors. A computable general equilibrium (CGE) model evaluates the impacts of technological change modeled independently in supply managed sector and other primary agricultural sector on the primary agricultural commodity markets. Intermediate demand for commodities, exports/imports and relative supply prices are the considered market impacts. The objective is to measure the general equilibrium impacts of technological change in the primary agricultural commodity markets. The two types of technological change (i.e. rise in productivity of intermediate input use and of primary factor use) constitute modeling scenario (1) and (2) respectively. The statistics indicate that the interlinkages between the supply managed sector and other agricultural sectors are very few
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