Understanding markets for agricultural innovations

Abstract

The return on public investment in agricultural research depends, in part, on the extent to which primary producers adopt the products of that research. Consequently, a pre-condition for maximising the return on investment in the development of agricultural innovations is to identify how many primary producers will adopt different innovations and determining what processes are required to ensure innovations diffuse among producers as rapidly as possible. In other words, maximising the return on investment in agricultural research requires identifying the relevant market for innovations and determining what processes will accelerate diffusion through that market. A method for identifying the market for an agricultural innovation is presented in this paper. The method is, in essence, a process for discovering how agricultural innovations contribute to satisfying the needs of primary producers as managers of agricultural enterprises. The method draws on consumer behaviour theory and farming systems theory. It is based on the assumption that the adoption of agricultural innovations is a highly involving decision for producers. It has been used to identify the markets for innovations in irrigation systems in the horticultural, viticultural, vegetable and dairy industries, breeding practices and animal health practices in sheep and cattle, pest and disease management practises in horticulture and viticulture. While the decision to adopt most innovations is highly involving, we have discovered this is not necessarily so for all innovations. We further describe, in this paper, a fertiliser innovation where involvement appears low. We consider and contrast the different decision styles associated with high and low involvement. We then discuss the implications for identifying the market for low involvement agricultural innovations and for promoting the adoption of low and high involvement innovations in agriculture.