S46


lends further support to our emphasis on the critical role of minimal subsis-

tence in the economic decision-making of subsistence peasant farmers.

 Three points of caution as we move from the restrictive theoretical setting

tothe greater complexity of the real world. First, it would be a serious

mistake in most instances to look upon the absolute levels and variances in

yield for a single crop as the appropriate measure. To the extent that there

is some degree of diversification in production, the obviously relevant measures

should refer to the farm as a whole.

 Second there is the obvious importance of introducing costs associated

 with any new technology. For example, from studies conducted at IRRI [1967], they

 estimate that the total cost of production per hectare using traditional methods

 and varieties is about US $200. On the average less than 10% of this is a

 cash outlay. When IP.8 is grown greater use of fertilizer and chemicals is

 required so that costs per hectare double and almost all the increase is in

 cash. Thus, cash expenditures rise from US $20 to US $220. V- Fortunately,

 in this case yield increases threefold, leading to a net return four times

 greater than with traditional varieties and methods. Although most diffusion

 studies do take such costs into consideration, the risk cost associated with

 minimal subsistence, Sms, is not.



 SPromoters of new innovations occasionally fail to recognize the double risks
 associated with much of the new technology. Where the new technology requires the
 purchase of a "package" of associated inputs to achieve maximum returns, the
 peasant farmer not only subjects himself to risks in production but also in costs
 which are of a much higher order of magnitude than he has previously experienced.
 If this action also reduces his ability to depend upon traditional forms of
 security (family or village) due to resentment at his innovative actions, the
 peasant faces a third form of risk. Any valuation and summation of all three
 often results in an extremely high risk factor.

 Sadly, it is often hesitancy on the part of peasant farmers to incur the
 full costs required by the optimal "package of practices" to secure the full
 benefit of the new varieties which frequently leads to an actual loss. There are
 several cases where farmers have failed to apply fertilizer at the higher levels
 required with the result that traditional varieties outyield the new.