Development of Artificial Intelligence and Potential Impact of Its Applications in Agriculture on Labor Use and Productivity

Abstract Artificial intelligence (AI) is one of the most striking recent technology developments. Potentially, it can significantly affect all areas of economic activities including agriculture. The paper addresses two issues such as the actual essence of AI and its most important current and expected future applications in agriculture and their potential impact on labor use and productivity of this sector. The research methods applied in the paper are critical analysis of selected literature sources and deductive reasoning regarding the likely influence of ai applications on labor use in agriculture and its total factor productivity. It was found out that applications of AI in agriculture are numerous and very diverse both in terms of technological solutions and managed processes. Moreover, the market for AI applications in agriculture is expected to grow quite rapidly due to an increasing tendency to automatize agricultural production and marketing processes. This inevitably leads to substitution of physical labor with sophisticated machinery and robots. Also, it generates demand for new labor competencies needed to manage increasingly capital intensive agricultural production and related processes driven by the use of AI. Based on mainly theoretical considerations, it can be surmised that widespread use of ai in agriculture should positively contribute to the growth in the total factor productivity (TFP) of the sector. Consequently, countries where agricultural producers adopt AI solutions faster can gain competitive advantage in food production.