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1.3. Read the text.

Over the last decade, billions of dollars have been invested in the development of new agricultural technologies, yet for certain proven technologies there is a profound adoption gap particularly among smallholder farmers. Increased technology adoption, broadly defined to include adoption of improved agricultural practices, crop varieties, inputs and associated products such as crop insurance, has the potential to contribute to economic growth and poverty alleviation amongst the poor.

ATAI seeks to fill key gaps in the understanding of how to overcome the constraints on agricultural technology adoption. To organize the research and identify the research topics most in need of rigorous evidence, ATAI has developed a conceptual framework for considering the primary challenges to agricultural technology adoption. The conceptual framework is also available in the ATAI review paper, with full academic reference and further discussion of theories and evidence to date.

Conceptual Framework: Constraintsints on Adoption as Market Inefficiencies.

In a well-functioning economy where markets perfectly capture all costs and benefits, and individuals are fully informed and unconstrained, farmers will adopt a technology if they make a profit from adopting it. Of course, most economies of the world are very far from the well-functioning ideal. Movement away from this ideal creates constraints on the adoption of even profitable technologies. ATAI’s research focuses on improving the ability of poor farmers to benefit from agricultural technology by seeking ways around these constraints. Successful approaches require attention to the market imperfections and other constraints that characterize the contexts in which adoption decisions are made. We have identified 7 market inefficiencies that lower expected profits from agricultural technology adoption.

1. Externality

2. Input and output Market influences Input and output Market influences

3. Land Market influences

4. Labor Market influences

5. Credit Market influences

6. Risk Market influences

7. Information influences

1.4. Answer the questions:

1. What has the potential to contribute to economic growth and poverty alleviation amongst the poor?

2. What has ATAI developed to have rigorous evidence?

3. Would farmers adopt a technology if they make a profit from adopting it?

4. What 7 market inefficiencies that lower expected profits have been identified?

1.5. Match

1. well-being

A. being satisfied

2. deadweight

B. sleeping capital

3. deadweight welfare loss

C. when total society welfare is not maximized. 

4. margin

D. difference between revenue and specified expenses

5. marginal benefit

E. a positive externality when consumers pay a lower price and consume less quantity than the socially efficient outcome

6. marginal costs

F. the more goods are produced, the lower will be the per-unit expenditure, include direct materials, labor, services