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Is a slowdown in agricultural productivity growth contributing to the rise in commodity prices?

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  • Keith O. Fuglie

Abstract

A slowdown in the rate of agricultural productivity growth is thought by many observers to be contributing to the recent rise in agricultural prices. In this article I decompose sources of output growth in global agriculture into aggregate input and total factor productivity (TFP) components and examine whether productivity growth slowed substantially in the years leading up to the recent rise in commodity prices. Contrary to widely held perceptions, I find no evidence of a general slowdown in sector-wide agricultural TFP, at least through 2006. If anything, the growth rate in agricultural TFP accelerated in recent decades. However, the results do show a slowdown in the growth of agricultural investment. Accelerating TFP growth largely offset decelerating input growth to keep the real output of global agriculture growing at about 2% per year since the 1960s. Regionally, however, agricultural productivity performance has been uneven. These findings have important implications for the appropriate supply-side policy response to the current agricultural price crisis. Copyright (c) 2008 International Association of Agricultural Economists.

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  • Keith O. Fuglie, 2008. "Is a slowdown in agricultural productivity growth contributing to the rise in commodity prices?," Agricultural Economics, International Association of Agricultural Economists, vol. 39(s1), pages 431-441, November.
  • Handle: RePEc:bla:agecon:v:39:y:2008:i:s1:p:431-441
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    2. Butzer, Rita & Mundlak, Yair & Larson, Donald F., 2010. "Measures of fixed capital in agriculture," Policy Research Working Paper Series 5472, The World Bank.
    3. Bruno Lanz & Simon Dietz & Timothy Swanson, 2017. "Global Population Growth, Technology, And Malthusian Constraints: A Quantitative Growth Theoretic Perspective," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 58, pages 973-1006, August.
    4. Sheahan, Megan & Barrett, Christopher B., 2017. "Ten striking facts about agricultural input use in Sub-Saharan Africa," Food Policy, Elsevier, vol. 67(C), pages 12-25.
    5. Eldon Ball & David Schimmelpfennig & Sun Ling Wang, 2013. "Is U.S. Agricultural Productivity Growth Slowing?," Applied Economic Perspectives and Policy, Agricultural and Applied Economics Association, vol. 35(3), pages 435-450.
    6. Wang, Sun Ling & McPhail, Lihong Lu, 2012. "Impacts of Energy Shocks on US Agricultural Productivity Growth and Food Prices —A Structural VAR Analysis," 2012 Annual Meeting, August 12-14, 2012, Seattle, Washington 124892, Agricultural and Applied Economics Association.
    7. Rada, Nicholas E. & Valdes, Constanza, 2012. "Policy, Technology, and Efficiency of Brazilian Agriculture," Economic Research Report 127498, United States Department of Agriculture, Economic Research Service.
    8. Yu, Bingxin & Nin Pratt, Alejandro, 2011. "Agricultural Productivity and Policies in Sub-Saharan Africa," 2011 Annual Meeting, July 24-26, 2011, Pittsburgh, Pennsylvania 105400, Agricultural and Applied Economics Association.
    9. Wang, Sun Ling & McPhail, Lihong, 2014. "Impacts of energy shocks on US agricultural productivity growth and commodity prices—A structural VAR analysis," Energy Economics, Elsevier, vol. 46(C), pages 435-444.
    10. James M. MacDonald, 2014. "Comment on "Influences of Agricultural Technology on the Size and Importance of Food Price Variability"," NBER Chapters,in: The Economics of Food Price Volatility, pages 54-58 National Bureau of Economic Research, Inc.
    11. Jean-Paul Chavas & David Hummels & Brian D. Wright, 2014. "Introduction to "The Economics of Food Price Volatility"," NBER Chapters,in: The Economics of Food Price Volatility, pages 1-11 National Bureau of Economic Research, Inc.
    12. Pardey, Philip G. & Alston, Julian M. & Chan-Kang, Connie, 2012. "Agricultural Production, Productivity and R&D over the Past Half Century: An Emerging New World Order," 2012 Conference, August 18-24, 2012, Foz do Iguacu, Brazil 131824, International Association of Agricultural Economists.
    13. Rudel, Thomas K., 2013. "Food Versus Fuel: Extractive Industries, Insecure Land Tenure, and Gaps in World Food Production," World Development, Elsevier, vol. 51(C), pages 62-70.
    14. Lafuite, A.-S. & Loreau, M., 2017. "Time-delayed biodiversity feedbacks and the sustainability of social-ecological systems," Ecological Modelling, Elsevier, vol. 351(C), pages 96-108.
    15. Headey, Derek, 2011. "Rethinking the global food crisis: The role of trade shocks," Food Policy, Elsevier, vol. 36(2), pages 136-146, April.
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    17. Rada, Nicholas, 2013. "Assessing Brazil’s Cerrado agricultural miracle," Food Policy, Elsevier, vol. 38(C), pages 146-155.

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