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Technology
Greenspan on Agriculture
 I
cannot stress too much the overwhelming importance of technical
change as a primary force that will likely be reshaping farm supply
conditions—as it has been doing for a long time. As a consequence
of each producer's striving to become more efficient and thereby
to contain costs, successive waves of innovation have swept through
the farm sector over the decades. Crop producers, in stages, have
implemented increased mechanization, heavier uses of fertilizers,
new higher-yielding varieties of seeds, low-tillage methods of production
that have enabled producers to economize on energy inputs, and heavier
reliance on chemicals and pesticides to reduce crop losses. The
payoff to these efforts is evident in gains in national average
yields per acre of roughly 40 percent to 60 percent for our major
field crops—corn, wheat, soybeans, and cotton—over the
past three decades.
Livestock productivity
also has moved up: The nation has a smaller cattle herd than it
did three decades ago, but beef production has risen more than 20
percent. The dairy herd is about three-fourths the size it was in
the late 1960s, but output of milk has increased more than one-third.
In the poultry business, the flock of hens has changed little, on
net, but the poundage of broilers delivered to retail has risen
spectacularly. Pork production in 1998 was up close to 50 percent
from that of three decades ago, even though the inventory of hogs
and pigs on the nation's farms was up only slightly. Over time,
livestock producers have been able to exert greater control at all
stages of production. Increased application of industrial methods
has proved especially advantageous in several of these sectors.
These technical
advances have added up to a huge increase in the productivity of
farmers and farm workers. Over the past thirty years, farm value-added
per hour worked has grown at an average rate of more than 4.5 percent,
roughly three times the rate of increase in output per hour in the
nonfarm business sector of our economy.
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From
remarks by Chairman Alan Greenspan, "The Farm Economy,"
at the Annual Convention of the Independent Bankers
Association of America, San Francisco, California, March
16, 1999
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