The role of technology in sustaining agriculture and the environment

Abstract

Visions of sustainable development often leave unanswered the question: What actions taken by the current generation will ensure that future generations can meet their economic and environmental needs? In this context, we assess the role of technology in steering agriculture along a more sustainable path. From the agricultural sector's perspective, this requires an optimal investment plan for a nation's stock of environmental assets that accounts for an intergenerational fulfillment of sustainability's dual goals: (1) satisfying food and fiber needs at reasonable costs to consumers; and (2) providing environmental service flows. In reviewing agricultural indicators to assess the nation's performance in meeting these goals, we find productivity growth has increased while rates of soil erosion, wetland conversion, and pesticide application have declined. However, individuals continue to demand more environmental services while private markets undersupply environmental services. The capacity of the agricultural sector to meet food and fiber and environmental service demands partially depends on the availability and adoption of new technology. Several market impediments explain the undersupply of sustainable technologies: (1) firms cannot fully appropriate rents from technology development; (2) success may vary with farm structure; (3) the heterogeneity of the resource base influences adoption; and (4) farmers cannot capture the benefits of environmental services. To address these market failures, sustainable agriculture policy should: (1) support research and development in sustainable technologies and provide incentives to encourage adoption; (2) ensure that conservation efforts reflect the efficient and sustainable allocation of environmental assets; and (3) legitimize markets for foods produced under more sustainable practices.