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A Reappraisal of the Role of Agriculture in Economic Growth in Melanesian Countries

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  • Fleming, Euan M.
  • Fleming, Pauline
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    Abstract

    Fortunes in the agricultural sectors of four of the largest South Pacific countries are traced in recent decades by estimating the single factoral terms of trade index. The single factoral terms of trade are measured for agriculture in four Melanesian countries-Fiji, Papua New Guinea, Solomon Islands and Vanuatu-over the period, 1970 to 2002. This index provides a useful method to assess changes in returns to factors employed in agricultural production in these countries. Except in Solomon Islands, farmers experienced a deteriorating index, indicating that they have reaped progressively lower returns to their resources. In Solomon Islands, returns to resources are shown to have increased slightly. A sustained contribution by the agricultural sector to economic growth requires a major improvement in returns to farm resources. Of the three components of the factoral terms of trade index, product price increases and cost decreases are argued to be unlikely to yield great dividends in the foreseeable future. Most potential lies in increasing TFP, which will depend on more effective work from the national research and extension services, and greater transfer of improved technologies from international research centres than achieved to date.

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    Bibliographic Info

    Paper provided by International Association of Agricultural Economists in its series 2006 Annual Meeting, August 12-18, 2006, Queensland, Australia with number 25715.

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    Date of creation: 2006
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    Handle: RePEc:ags:iaae06:25715

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    Related research

    Keywords: factoral terms of trade; Melanesia; smallholders; total factor productivity; International Development; D24; O12; O47; Q17;

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    1. John Luke Gallup & Jeffrey D. Sachs, 2000. "Agriculture, Climate, and Technology: Why are the Tropics Falling Behind?," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 82(3), pages 731-737.
    2. Coelli, Tim & Fleming, Euan, 2004. "Diversification economies and specialisation efficiencies in a mixed food and coffee smallholder farming system in Papua New Guinea," Agricultural Economics, Blackwell, vol. 31(2-3), pages 229-239, December.
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