Farmer Efficiency and Technology Use with Age

Common belief and some empirical evidence indicates that productivity of a farmer may increase with age, reach some maximum level, and then decrease with further age (Tauer 1984; Tauer 1995). If productivity exhibits a life-cycle pattern, then productivity of agriculture may decrease as the U.S. farm population continues to age. Lifecycle changes are also critical in planning for succession of farms to the next generation, where transfers should occur near peaks in productivity. Previous estimates of U.S. farmer productivity by age did not decompose productivity into efficiency and technology components, but if productivity changes with age, decomposition would be useful, Efforts aimed at alleviating productivity decreases or enhancing productivity increases would depend upon whether productivity changes were from efficiency or technology use. Productivity might first increase with age if efficiency increases as a farmer gains experience, Productivity may decrease with old age as a farmer fails to adopt new technology. Younger farmers could be provided with incentives to participate in educational and training programs, enhancing their efficiency. Older farmers might be allowed to accelerate investment write-offs for taxes, encouraging investment. This research estimates productivity of farmers by age for each state by computing separate efficiency and technology components. Productivity is the product of efficiency and technology indices. These Malmquist indices are computed using non-