I nnovations are first adopted by the larger and more cash-rich farmers. They are able to take advantage of relative profitability of innovation and therefore can reap the windfall profits that come from producing more and selling more at a given market price. As more farmers adopt these innovations, the rate of profits increase.
Innovation then declines due to rise in supply and the relative inelasticity of demand for food.
N ext, innovation introduces a comparative advantage for the first adopters who usually are those who profited the most from the earlier innovation. This creates larger but fewer farms. F armers are encouraged to act so that expected costs of production and expected earnings from sales of products meet. S o, rational pursuit of individual profits produces unintended consequences lessening the adjustment of the total system and forcing a continuous adoption of new innovations.