Not so, say Cornell University researchers. They have found that a farmer's productivity has less to do with efficiency decreases due to age and everything to do with using the latest agricultural technology.
"There indeed seems to be a life cycle effect, but it appears for different reasons than we thought. Productivity increases, reaches a plateau and then decreases. Younger farmers tend to start out with older technology, and that's why they're not as productive. And the older farmers as a group do not keep buying new technology in their waning years because it's not cost effective, and that's why they're not as productive," says Loren Tauer, Cornell professor of agricultural economics and a researcher with Cornell's Agricultural and Financial Management Program.
Beginning farmers are building equity, he says, and they often start with equipment that is old. On the other hand, older farmers are making a business decision to forgo purchasing a new $200,000 combine, rationalizing that the next farmer on their land can buy it.
The research paper, "Farmer Efficiency and Technology Use with Age," by Tauer and Nazibrola Lordkipanidze, a Cornell graduate student in agricultural economics, will be published in the April 2000 issue of the journal Agricultural and Resource Economics Review.
Tauer explains that even if older farmers see a decrease in productivity, this study shows that older, experienced farmers are still using older technology efficiently. "Seeing a decrease in production isn't always devastating," he says.
Tauer says the U.S. Department of Agriculture, the federal agency that funded the research, is seeking to find ways to sustain the productivity of America's farmers, whose average age increased from 52 in 1987 to 54 in 1997.
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The study has implications for business management decisions, says Tauer, such as passing on the management of the farm to the next generation before productivity starts to decrease. Other implications include federal agricultural policies.
Says Tauer: "To get established, farmers need to have access to new technology, and that's why we have various federal and state programs. These programs help the younger farmers increase their productivity. This shows we need to keep those programs. Most farmers start out young - and most survive in the business."