IDEAS home Printed from https://ideas.repec.org/a/gam/jsusta/v9y2017i3p470-d93654.html
   My bibliography  Save this article

Agricultural Productivity Growth and the Role of Capital in South Asia (1980–2013)

Author

Listed:
  • Asif Reza Anik

    () (Department of Agricultural Economics, Faculty of Agricultural Economics and Rural Development, Bangabandhu Sheikh Mujibur Rahman Agricultural University (BSMRAU), Gazipur 1706, Bangladesh)

  • Sanzidur Rahman

    () (School of Geography, Earth and Environmental Sciences, Faculty of Science and Engineering, University of Plymouth, Plymouth PL4 8AA, UK)

  • Jaba Rani Sarker

    () (Department of Agricultural Economics, Faculty of Agricultural Economics and Rural Development, Bangabandhu Sheikh Mujibur Rahman Agricultural University (BSMRAU), Gazipur 1706, Bangladesh)

Abstract

The study assessed agricultural sustainability in South Asia (i.e., Bangladesh, Pakistan, India and Nepal) by computing multi-lateral multi-temporal Total Factor Productivity (TFP) indices and their six finer components (technical change, technical-, scale- and mix-efficiency changes, residual scale and residual mix-efficiency changes) and examined the role of capital in driving TFP growth covering a 34-year period (1980–2013). Results revealed that all countries sustained agricultural productivity growth at variable rates with Bangladesh experiencing highest rate estimated @1.05% p.a. followed by India (0.52%), Pakistan (0.38%) and Nepal (0.06% p.a.). There were little or no variation in technical and scale efficiency changes among the countries. However, residual scale efficiency increased @0.44% p.a. in Bangladesh, 0.12% p.a. in Pakistan, remained unchanged in India and declined −0.39% p.a. in Nepal. Similarly, mix efficiency increased @0.44% in Bangladesh, remained unchanged in India and declined @−0.12% p.a.in Pakistan and −0.39% p.a. in Nepal. The major drivers of agricultural TFP growth were the levels of natural, human and technology capital endowments whereas financial capital and crop diversification had opposite effects. Policy implications include land and tenurial reforms aimed at consolidating farm operation size and smooth operation of the land rental market to improve natural capital, investments in education to improve human capital and agricultural R&D to enhance technology capital in order to boost agricultural productivity growth in South Asia.

Suggested Citation

  • Asif Reza Anik & Sanzidur Rahman & Jaba Rani Sarker, 2017. "Agricultural Productivity Growth and the Role of Capital in South Asia (1980–2013)," Sustainability, MDPI, Open Access Journal, vol. 9(3), pages 1-24, March.
  • Handle: RePEc:gam:jsusta:v:9:y:2017:i:3:p:470-:d:93654
    as

    Download full text from publisher

    File URL: http://www.mdpi.com/2071-1050/9/3/470/pdf
    Download Restriction: no

    File URL: http://www.mdpi.com/2071-1050/9/3/470/
    Download Restriction: no

    References listed on IDEAS

    as
    1. Seyoum, E.T. & Battese, George E. & Fleming, E.M., 1998. "Technical efficiency and productivity of maize producers in eastern Ethiopia: a study of farmers within and outside the Sasakawa-Global 2000 project," Agricultural Economics of Agricultural Economists, International Association of Agricultural Economists, vol. 19(3), December.
    2. Derek Byerlee, 1992. "Technical change, productivity, and sustainability in irrigated cropping systems of South Asia: Emerging issues in the post‐green revolution Era," Journal of International Development, John Wiley & Sons, Ltd., vol. 4(5), pages 477-496, September.
    3. Shenggen Fan & Peter Hazell & Sukhadeo Thorat, 2000. "Government Spending, Growth and Poverty in Rural India," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 82(4), pages 1038-1051.
    4. David Roodman, 2009. "How to do xtabond2: An introduction to difference and system GMM in Stata," Stata Journal, StataCorp LP, vol. 9(1), pages 86-136, March.
    5. Kar, Gouranga & Singh, Ravender & Verma, H. N., 2004. "Alternative cropping strategies for assured and efficient crop production in upland rainfed rice areas of eastern India based on rainfall analysis," Agricultural Water Management, Elsevier, vol. 67(1), pages 47-62, June.
    6. Mark W. Rosegrant & Robert E. Evenson, 1992. "Agricultural Productivity and Sources of Growth in South Asia," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 74(3), pages 757-761.
    7. Alberto Alesina & Dani Rodrik, 1994. "Distributive Politics and Economic Growth," The Quarterly Journal of Economics, Oxford University Press, vol. 109(2), pages 465-490.
    8. 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.
    9. Wang, Jirong & Cramer, Gail L. & Wailes, Eric J., 1996. "Production efficiency of Chinese agriculture: evidence from rural household survey data," Agricultural Economics of Agricultural Economists, International Association of Agricultural Economists, vol. 15(1), September.
    10. Bjurek, Hans, 1996. " The Malmquist Total Factor Productivity Index," Scandinavian Journal of Economics, Wiley Blackwell, vol. 98(2), pages 303-313, June.
    11. M. N. Asadullah & S. Rahman, 2009. "Farm productivity and efficiency in rural Bangladesh: the role of education revisited," Applied Economics, Taylor & Francis Journals, vol. 41(1), pages 17-33.
    12. Rahman, Sanzidur, 2009. "Whether crop diversification is a desired strategy for agricultural growth in Bangladesh?," Food Policy, Elsevier, vol. 34(4), pages 340-349, August.
    13. Cecilia Garcia-Penalosa & Eve Caroli & Philippe Aghion, 1999. "Inequality and Economic Growth: The Perspective of the New Growth Theories," Journal of Economic Literature, American Economic Association, vol. 37(4), pages 1615-1660, December.
    14. Llewelyn, Richard V. & Williams, Jeffery R., 1996. "Nonparametric analysis of technical, pure technical, and scale efficiencies for food crop production in East Java, Indonesia," Agricultural Economics, Blackwell, vol. 15(2), pages 113-126, November.
    15. Mukherjee, Anit N. & Kuroda, Yoshimi, 2003. "Productivity growth in Indian agriculture: is there evidence of convergence across states?," Agricultural Economics, Blackwell, vol. 29(1), pages 43-53, July.
    16. Grepperud, Sverre, 1997. "Poverty, Land Degradation and Climatic Uncertainty," Oxford Economic Papers, Oxford University Press, vol. 49(4), pages 586-608, October.
    17. Lau, Lawrence J & Yotopoulos, Pan A, 1971. "A Test for Relative Efficiency and Application to Indian Agriculture," American Economic Review, American Economic Association, vol. 61(1), pages 94-109, March.
    18. Borensztein, E. & De Gregorio, J. & Lee, J-W., 1998. "How does foreign direct investment affect economic growth?1," Journal of International Economics, Elsevier, vol. 45(1), pages 115-135, June.
    19. repec:dau:papers:123456789/10091 is not listed on IDEAS
    20. Azam Chaudhry, 2009. "Total Factor Productivity Growthin Pakistan: An Analysis of the Agricultural and Manufacturing Sectors," Lahore Journal of Economics, Department of Economics, The Lahore School of Economics, vol. 14(Special E), pages 1-16, September.
    21. Kumar, Praduman & Mittal, Surabhi & Hossain, Mahabub, 2008. "Agricultural Growth Accounting and Total Factor Productivity in South Asia: A Review and Policy Implications," Agricultural Economics Research Review, Agricultural Economics Research Association (India), vol. 21(2), December.
    22. Byerlee, Derek & Murgai, Rinku, 2001. "Sense and sustainability revisited: the limits of total factor productivity measures of sustainable agricultural systems," Agricultural Economics, Blackwell, vol. 26(3), pages 227-236, December.
    23. Paul, Gilles Saint & Verdier, Thierry, 1996. "Inequality, redistribution and growth: A challenge to the conventional political economy approach," European Economic Review, Elsevier, vol. 40(3-5), pages 719-728, April.
    24. Fan, Shenggen & Hazell, P. B. R. & Thorat, Sukhadeo, 1999. "Linkages between government spending, growth, and poverty in rural India:," Research reports 110, International Food Policy Research Institute (IFPRI).
    25. Rahman, Sanzidur., 2007. "Regional productivity and convergence in Bangladesh agriculture," Journal of Developing Areas, Tennessee State University, College of Business, vol. 41(1), pages 221-236, September.
    26. James Carroll & Carol Newman & Fiona Thorne, 2007. "A Comparison of Stochastic Frontier Approaches to Estimating Inefficiency and Total Factor Productivity: An Application to Irish Dairy Farming," Trinity Economics Papers tep0907, Trinity College Dublin, Department of Economics.
    27. Praduman kumar & Anjani kumar & Surabhi Mittal, 2004. "Total Factor Productivity of Crop Sector in the Indo-Gangetic Plain of India: Sustainability issues revisited," Indian Economic Review, Department of Economics, Delhi School of Economics, vol. 39(1), pages 169-201, January.
    28. Timothy G. Taylor & H. Evan Drummond & Aloisio T. Gomes, 1986. "Agricultural Credit Programs and Production Efficiency: An Analysis of Traditional Farming in Southeastern Minas Gerais, Brazil," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 68(1), pages 110-119.
    29. Bera, Anil K. & Kelley, Timothy G., 1990. "Adoption of high yielding rice varieties in Bangladesh : An econometric analysis," Journal of Development Economics, Elsevier, vol. 33(2), pages 263-285, October.
    30. Mukherjee, Anit N. & Kuroda, Yoshimi, 2003. "Productivity growth in Indian agriculture: is there evidence of convergence across states?," Agricultural Economics of Agricultural Economists, International Association of Agricultural Economists, vol. 29(1), July.
    31. Manuel Arellano & Stephen Bond, 1991. "Some Tests of Specification for Panel Data: Monte Carlo Evidence and an Application to Employment Equations," Review of Economic Studies, Oxford University Press, vol. 58(2), pages 277-297.
    32. James Carroll & Carol Newman & Fiona Thorne, 2011. "A comparison of stochastic frontier approaches for estimating technical inefficiency and total factor productivity," Applied Economics, Taylor & Francis Journals, vol. 43(27), pages 4007-4019.
    33. Seyoum, E. T. & Battese, G. E. & Fleming, E. M., 1998. "Technical efficiency and productivity of maize producers in eastern Ethiopia: a study of farmers within and outside the Sasakawa-Global 2000 project," Agricultural Economics, Blackwell, vol. 19(3), pages 341-348, December.
    34. Mark W. Rosegrant & Robert E. Evenson, 1993. "Agricultural Productivity Growth in Pakistan and India: A Comparative Analysis," The Pakistan Development Review, Pakistan Institute of Development Economics, vol. 32(4), pages 433-451.
    35. Van den Berg, M. Marrit & Hengsdijk, Huib & Wolf, Joost & Van Ittersum, Martin K. & Guanghuo, Wang & Roetter, Reimund P., 2007. "The impact of increasing farm size and mechanization on rural income and rice production in Zhejiang province, China," Agricultural Systems, Elsevier, vol. 94(3), pages 841-850, June.
    36. Mahmood Hasan Khan, 1997. "Agricultural 'Crisis' in Pakistan: Some Explanations and Policy Options," The Pakistan Development Review, Pakistan Institute of Development Economics, vol. 36(4), pages 419-466.
    37. Byerlee, Derek R. & Murgai, Rinku, 2001. "Sense and sustainability revisited: the limits of total factor productivity measures of sustainable agricultural systems," Agricultural Economics of Agricultural Economists, International Association of Agricultural Economists, vol. 26(3), December.
    38. Cornia, Giovanni Andrea, 1985. "Farm size, land yields and the agricultural production function: An analysis for fifteen developing countries," World Development, Elsevier, vol. 13(4), pages 513-534, April.
    39. Jema Haji, 2007. "Production Efficiency of Smallholders' Vegetable-dominated Mixed Farming System in Eastern Ethiopia: A Non-Parametric Approach," Journal of African Economies, Centre for the Study of African Economies (CSAE), vol. 16(1), pages 1-27, January.
    Full references (including those not matched with items on IDEAS)

    More about this item

    Keywords

    agricultural total factor productivity; technical-; scale- and mix-efficiency changes; technical change; natural; financial; human and technology capitals; South Asia;

    JEL classification:

    • Q - Agricultural and Natural Resource Economics; Environmental and Ecological Economics
    • Q0 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - General
    • Q2 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation
    • Q3 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Nonrenewable Resources and Conservation
    • Q5 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics
    • Q56 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environment and Development; Environment and Trade; Sustainability; Environmental Accounts and Accounting; Environmental Equity; Population Growth
    • O13 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:gam:jsusta:v:9:y:2017:i:3:p:470-:d:93654. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (XML Conversion Team). General contact details of provider: http://www.mdpi.com/ .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.