among producers and farm operations affects what is adopted, to what extent, and when. This section discusses the barriers to adoption that can affect producers differentially.

Differences in farm size may influence technology adoption. Figure 3–1, for example, shows the extent to which several technologies were adopted by dairy farms of different sizes. Some innovations, such as management-intensive rotational grazing—intensively grazing a portion of a pasture followed by a rest period to allow the forage to regrow—are used more by smaller farms than by larger farms. Larger farms tended to adopt others, such as total mixed-ration equipment and the use of milking parlors.

One characteristic that can affect the degree to which farms of different sizes adopt various new techniques or technologies is divisibility. The literature distinguishes between bulky and divisible innovations. Bulky innovations—such as tractors, combines, and other farm machinery—require a significant initial investment but reduce variable cost. It makes economic sense for a given farm to purchase a bulky technology only if its scale is above a critical level. There is a general assumption—and there is some supporting evidence (Feder et al., 1985; Marra and Carlson, 1990)—that larger farms tend to buy and adopt bulky innovations early. Small farms also might adopt the innovation if they collaborate and purchase equipment through a cooperative, for example, or if they rent equipment from dealers or obtain custom service from contractors. Homesteaders in the early days of U.S. agriculture demonstrated that smaller farms could benefit from machinery rental and custom services (Cochrane, 1979; Gross et al, 1996). Today, there is widespread use of custom services for harvesting and land preparation (for example, leveling fields using lasers). Some of the scale effects of technologies can be offset by institutional arrangements. Nevertheless, the introduction of bulky innovations affects the structure of agriculture significantly. The per-unit cost for the equipment owner is generally lower than for the renter or for the user of custom service. Those who purchase farm machinery also could have an extra incentive to augment the size of their operations to make full use of new equipment.

Many agricultural innovations are divisible in that they can be divided into small enough units to, in principle, be used on any size operation: chemical innovations (fertilizers, pesticides); biologic innovations (seeds, biologic pest controls); and managerial innovations (new techniques of pruning, modification of timing for some activities). Divisible innovations are ostensibly more scale neutral than are bulky innovations; indeed, in many cases, per-unit gain from the adoption of innovations, such as seed varieties, does not vary with size. However, adoption of divisible innovations can entail a large initial investment,