HISTORICAL REVIEW OF AGRICULTURAL PRODUCTIVITY STUDIES

This document provides a review of the agricultural productivity literature while identifying the various methodologies used and important results for policy formulation purposes. Agricultural productivity is a key driver for the well being of the farmers, the agro-based industry and mankind at large and has important policy implications. Results from the studies imply that productivity growth has been significant at the country level and more recently at the state/provincial/regional level even though there were some difference among states/provinces regarding productivity growth. There is some evidence of agricultural productivity growth slowdown. The literature review also revealed that methods, measures of variables and model specifications used to estimate productivity growth could affect the estimation of productivity growth and its determinants. Regarding method of estimation, overtime there has been a shift from simple indexing to econometric analysis and a complex combination of econometric analysis and non-parametric techniques. Overtime, studies have shifted from using national level aggregate data to regional/provincial level disaggregated data. R&D and technological progress have been identified as the most important determinant of agricultural productivity growth. However, agricultural research funding has been declining. Finally, the difference in productivity growth among countries could be explained by difference in resource endowment, research expenditures (R&D) and the resulting technological progress, and the accumulation of human capital. Hence, increasing funding for agricultural research that increases technical progress should be an essential part of the overall agriculture policies as it could improve agricultural productivity growth significantly. There is also the need for more studies in this important area. 1 2 3 Department of Economics University of Lethbridge, Alberta, Canada This research was financially supported by the CAIRN Research Network.