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Knowledge, prices and factor demand: Fertilizers in Argentine Agriculture

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  • Marcos Gallacher

Abstract

El objetivo de este trabajo es analizar la importancia de insumos asociados al conocimiento (“cambio tecnológico”) y precios relativos como determinantes de la demanda de factores en la agricultura argentina. Motiva este trabajo el incremento significativo (x 15) en la demanda de fertilizantes ocurrido en el período 1990-2019. Conocer los factores responsables de la demanda de fertilizantes resulta importante ya que estos insumos explican una parte significativa del producto agrícola en países con sectores agropecuarios altamente productivos, como es el caso de los EEUU y otros. En adición a lo anterior, la creciente preocupación por la sostenibilidad en el tiempo de los sistemas agrícolas enfatiza la necesidad de comprender la economía del uso de fertilizantes pues estos insumos, si bien contribuyen a la producción sostenible, (aumento de producción de grano y también de materia vegetal a ser incorporada al suelo) también generan inquietudes como resultado del consumo de energía necesaria para su producción y la posible contaminación de napas subterráneas que su uso puede generar. Los resultados muestran que en período 1990-2019 el incremento en la demanda de fertilizantes resultó no solo de bajas en el precio relativo fertilizante/grano, sino también del aumento de la productividad marginal del fertilizante. Esto sugiere la creciente importancia de “insumos asociados al conocimiento” en el proceso productivo. / The objective of this paper is to analyze the relative importance of knowledge inputs (or “technical change”) and input prices in explaining factor demand in Argentine agriculture. Motivation for the paper is the fifteen-fold increase in fertilizer demand observed in Argentina in the 1990-2019 period. Understanding the factors affecting fertilizer use is important, as this input accounts for a significant portion of output in countries with a highly productive agricultural sector, such as the U.S. and others. In addition, increased concern for the sustainability of agricultural systems requires understanding of the economics of fertilizer use, as fertilizers can both contribute to sustainable production (via increased production not only of marketable products, but also dry matter to be incorporated to the soil), but at the same time raise issues, in particular, related to groundwater contamination and energy (in the form of fertilizer) used in the agricultural sector. Results show that in the 1990 – 2019 period increase in fertilizer demand was a result not only of a fall in the fertilizer/crop price ratio, but also on increased marginal productivity of the fertilizer input. It is suggested that this is a result of the increased importance of “knowledge inputs” in the production process.

Suggested Citation

  • Marcos Gallacher, 2021. "Knowledge, prices and factor demand: Fertilizers in Argentine Agriculture," CEMA Working Papers: Serie Documentos de Trabajo. 811, Universidad del CEMA.
    • Handle: RePEc:cem:doctra:811
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    More about this item

    JEL classification:

    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
    • Q10 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - General
    • Q12 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Micro Analysis of Farm Firms, Farm Households, and Farm Input Markets

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