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

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.