physical and biological capital is increasing in quality because of technological advance. There are also direct connections between physical and biological capital accumulations and institutional change. Capital does not accumulate in market-controlled economies unless entrepreneurs and others find it profitable to make and maintain investments. This is also true of centrally con- trolled economies, except that public decision makers replace private entrepreneurs. Unless public decision makers find it advantageous to make and maintain investments, modern high-technology capital is not used. Further, it cannot be advantageously used without management skills. Subject-Matter Research on Biophysical Capital The following discussion details the importance of researching the accumulation of biological and physical capital. Productive land is typically a mixture of soil (with its natural inherent properties) and manmade capital such as drains, irrigation systems and fertilizer residuals. Together soil and capital become productive land. Thus, biological and physical capital can complement poor quality soil to make it productive. An example is the addition of water to otherwise inherently fertile but un- productive desert soils. Other capital can substitute for or add to the total effectiveness of soil. Examples include fertilizer, higher yielding varieties, and control of the hazards of weather and pests. Projections indicate that within 50 years the United States may have to farm an additional 50 million to 60 million acres and be able to double current crop yields. This will require an investment of biological and physical capital in soil and water to increase the pro- ductive land. Other capital will increase the amount of land farmed by converting it from less intensive to more intensive uses. Current perspectives on soil conservation and land use are often negative. Instead of focusing negatively on soil losses, we should look to investments that will establish the land base-soil plus capital- required for the future. Present technology has permitted many farmers to make substantial capital investments for improvement, including conservation, of their soils. More research by technical scientists, however, is re- quired to generate technologies for improvement and conservation of our soils, lands and water. Biological and physical capital can also replace labor. Capital replaced labor when the corn picker was invented. Other forms of capital are highly complemen- tary to certain kinds of labor and must be used propor- tionally with it. Cotton pickers, for instance, require one highly skilled operator for each machine. One cannot get along without the other. This is a different relation- ship than when mechanical cotton pickers replaced large numbers of unskilled cotton pickers who were already leaving southern agriculture for much higher paid nor- thern industrial employment. Analysts disagree about future real wage rates and standards of living for the American people and for potential farm laborers. Some suggest that U.S. stand- ards of living will fall. If this happens, real wages will follow and there will be less need for labor-saving technologies and capital to replace labor. We project, however, that U.S. standards of living and real wage rates will continue to rise. This will create a demand for more labor-saving capital to virtually eliminate all of "stoop labor" from commercial agriculture. In either event, a technological advance may be classified by whether the capital which carries it substitutes for or complements different kinds of soil and complements or replaces different kinds of labor. Agricultural credit, an important area for SM research, is provided in the United States by the private sector, by federal and state governmental, by part governmental/part private (parastatal), or by cooper- ative agencies. Public, private and parastatal agencies must participate in building the capital base to produce the output needed. This will require new and creative means of financing agriculture. Basic Disciplinary Research on Biological and Physical Capital Accumulation Capital is a source of increased output. Various forms of capital should be defined and measured. The nature of capital changes with time and technology. Techno- logical advances may increase the effectiveness of some forms of capital and make others obsolete. Fundamental, conceptual and measurement problems related to capital and technological advance should be addressed in the disciplinary research of economists. Measuring Changes in the Quality of Capital When agricultural capital changes as a consequence of technological advances, measurement difficulties arise. It is as important to improve our measurements of changes in the quantity and quality of capital as it is to measure the biological and physical processes that occur in laboratories. Though some measurements are now made and reported in "the balance sheets" for U.S. agriculture, more and improved measurements are needed. The Theory of Producer-Generated Capital The economic theory of generating, saving and investing in farm-produced capital is important but not well developed or understood. This fruitful area for DISC economic research is particularly important for agriculture.