THE ROLE OF TECHNOLOGY IN SUSTAINING AGRICULTURE AND THE ENVIRONMENT

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 alon g a more sustainable path. From the agricultural sector's perspective, this requires an optimal investment plan for a nation's stock of envi ronmental assets that accounts for an intergenerational fulfillment of sustainability's dual goals: (1) satisfying food and fiber needs at r easonable costs to consumers; and (2) providing environmental service flows. In reviewing agricultural indicators to assess the nation's per formance in meeting these goals, we find productivity growth has incre ased while rates of soil erosion, wetland conversion, and pesticide ap plication 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 fi ber and environmental service demands partially depends on the availab ility and adoption of new technology. Several market impediments expla in the undersupply of sustainable technologies: (1) firms cannot fully appropriate rents from technology development; (2) success may vary w ith farm structure; (3) the heterogeneity of the resource base influen ces adoption; and (4) farmers cannot capture the benefits of environme ntal services. To address these market failures, sustainable agricultu re 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 alloca tion of environmental assets; and (3) legitimize markets for foods pro duced under more sustainable practices. (C) 1998 Elsevier Science B.V. All rights reserved.