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A Reappraisal of the Role of Agriculture in Economic Growth in Melanesian Countries

Author

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  • Fleming, Euan M.
  • Fleming, Pauline

Abstract

Fortunes in the agricultural sectors of four of the largest South Pacific countries are traced in recent decades by estimating the single factoral terms of trade index. The single factoral terms of trade are measured for agriculture in four Melanesian countries-Fiji, Papua New Guinea, Solomon Islands and Vanuatu-over the period, 1970 to 2002. This index provides a useful method to assess changes in returns to factors employed in agricultural production in these countries. Except in Solomon Islands, farmers experienced a deteriorating index, indicating that they have reaped progressively lower returns to their resources. In Solomon Islands, returns to resources are shown to have increased slightly. A sustained contribution by the agricultural sector to economic growth requires a major improvement in returns to farm resources. Of the three components of the factoral terms of trade index, product price increases and cost decreases are argued to be unlikely to yield great dividends in the foreseeable future. Most potential lies in increasing TFP, which will depend on more effective work from the national research and extension services, and greater transfer of improved technologies from international research centres than achieved to date.

Suggested Citation

  • Fleming, Euan M. & Fleming, Pauline, 2006. "A Reappraisal of the Role of Agriculture in Economic Growth in Melanesian Countries," 2006 Annual Meeting, August 12-18, 2006, Queensland, Australia 25715, International Association of Agricultural Economists.
  • Handle: RePEc:ags:iaae06:25715
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    File URL: http://purl.umn.edu/25715
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    References listed on IDEAS

    as
    1. 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.
    2. John Luke Gallup & Jeffrey D. Sachs, 2000. "Agriculture, Climate, and Technology: Why are the Tropics Falling Behind?," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 82(3), pages 731-737.
    Full references (including those not matched with items on IDEAS)

    More about this item

    Keywords

    factoral terms of trade; Melanesia; smallholders; total factor productivity; International Development; D24; O12; O47; Q17;

    JEL classification:

    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
    • O12 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Microeconomic Analyses of Economic Development
    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence
    • Q17 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agriculture in International Trade

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