Sustainable Crop Farm Productivity: Weather Effects, Technology Adoption, and Farm Management

The main purpose of this study is to understand the potential determinants of sustainable field crop farm productivity. This paper considers a multi-input, multi-output production technology to estimate the effects of aridity on farm-level productivity using a stochastic input distance function. By isolating the respective weather components of agricultural total factor productivity (TFP), we can better assess the impact on productivity of adopting various technologies and farm practices that might otherwise be masked by changing climate conditions or weather shocks. We make use of data from Phase 3 of the United States Department of Agriculture (USDA) Agricultural Resource Management Survey (ARMS) between 2006 and 2020. We supplement this estimation using field crop farm productivity determinants, including technology adoption and farm practice variables derived from the ARMS Phase 2 data. We identify several factors that affect farm productivity, including many practices that help farmers make more sustainable use of natural resources. The results show that adopting yield monitoring technology, fallowing in previous years, adding or improving tile drainage, and contour farming each improved farm productivity. In particular, during our study period, conservation tillage increased by over 300% across states on average. It is estimated to increase productivity level by approximately 3% for those adopting this practice. Critically, accounting for local weather effects increased the estimated productivity of nearly all farm practices and increased the statistical significance of several variables, indicating that other TFP studies that did not account for climate or weather effects may have underestimated the technical efficiency of farms that adopted these conservation practices. However, the results also show the impacts can be heterogeneous, with effects varying between farms located in the U.S. northern or southern regions.