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Energy, Natural Resources and Research in Agriculture: Effects on Economic Growth and Productivity for the United States

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  • Pavelis, George A.

Abstract

Farm use of electricity and petroleum fuels, public investment in conservation and natural resources, and agricultural research and extension are discussed as factors in economic growth and production efficiency in American agriculture. The analysis covers mainly the 44 years from 1929 to 1972 but also gives some data for the period from 1948 to 1972. Growth and efficiency effects are determined from production functions that consider the three factors to be auxiliary inputs to farm labor, capital investment, and farmland. Gross farm product (GFP) data published in the national income and product accounts of the United States are the measure of total farm output and real growth. The productivity measure is the ratio of an index of total output over an index of all farm inputs as periodically published by the Economic Research Service. The effects of the three auxiliary inputs and various basic inputs on total farm output and efficiency are quantified as ‘partial’ rates of growth or decline in output or productivity. A partial rate is the product of the average annual rate of change in the employment of a specific resource input and its unit effect on output or efficiency. Results indicate that energy use in agriculture has contributed modestly to economic growth in agriculture. It has had a somewhat greater positive effect on the efficiency of resource use on farms. Increased energy use accounted for perhaps 6 percent of the tendency for agricultural output to increase from 1929 to 1972, and for 15 percent of the tendency for productivity to increase. Results for public resource development and conservation indicate that it has contributed positively but in a minor way to economic growth in agriculture. It has tended to depress overall efficiency in resource use. It appears to account for from none to 10 percent of the tendency for growth, but for from none to perhaps 1/3 of the tendency for efficiency to decrease. Agricultural research and extension results indicate that it was the most important factor in real farm output in the United States having increased at a net rate of 1 percent per year over the period 1929-1972 and in farm productivity having increased by 1.75 percent per year. Research and extension activities explain about 80 percent of the tendency for growth from 1929-1972, and from 60-70 percent of the tendency for increased efficiency.

Suggested Citation

  • Pavelis, George A., 1973. "Energy, Natural Resources and Research in Agriculture: Effects on Economic Growth and Productivity for the United States," Miscellaneous Publications 324660, United States Department of Agriculture, Economic Research Service.
    • Handle: RePEc:ags:uersmp:324660
    DOI: 10.22004/ag.econ.324660
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    References listed on IDEAS

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    1. Harry W. Ayer & G. Edward Schuh, 1972. "Social Rates of Return and Other Aspects of Agricultural Research: The Case of Cotton Research in São Paulo, Brazil," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 54(4_Part_1), pages 557-569.
    2. Robert Evenson, 1967. "The Contribution of Agricultural Research to Production," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 49(5), pages 1415-1425.
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    1. Bell, Bonita, 1975. "Economics of Agriculture: Reports and Publications Issued or Sponsored by USDA's Economic Research Service, July 1973-June 1974," Miscellaneous Publications 321806, United States Department of Agriculture, Economic Research Service.
    2. Pavelis, George A., 1985. "Natural Resource Capital Formation in American Agriculture: Irrigation, Drainage, and Conservation, 1855-1980," Staff Reports 277800, United States Department of Agriculture, Economic Research Service.

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