Research and extension expenditures and productivity in Japanese agriculture, 1960–1990

This paper investigates the cause for the decline in the growth of productivity in Japanese agriculture since the late 1960s. For this objective, it investigates the effects of research and extension (R&E) activities on the extent and the direction of the bias of technological change in Japanese agriculture for the period 1960–90 based on the translog cost function framework. Empirical results show that the cost-reducing effects of R&E measured in terms of the absolute value of the cost–R&E elasticity increased slightly from 0.194 in 1960 to 0.205 in 1965 and then decreased consistently to 0.110 in 1990. This finding is broadly consistent with the finding of the decline or slowdown in agricultural productivity since the late 1960s. The bias due to R&E was found to be toward labor, intermediate inputs, and other inputs saving on the one hand, and machinery and land using on the other. Labor-saving and machinery-using biases are consistent with the Hicksian induced innovation hypothesis.     

Structural and productivity change in US agriculture, 1950–1982

This paper tests whether structural change in US agriculture is an important channel to TFP growth and evaluates the relative impact of (i) public research and education policies, (ii) private R&D and market forces, and (iii) government farm programs on structural change. We specify a structural econometric model, fit it to US state aggregate data, 1953–1982, and use the associated reduced‐form model to perform counter‐factual policy simulations. The findings include: structural change is a channel to TFP growth in both crop and livestock subsector, i.e. specialization, size, and part‐time farming do impact TFP, holding other variables constant. Public R&D and education have been at least as important as private R&D and market forces for changing livestock specialization, farm size, and farmers’ off‐farm work participation over the study period, but private R&D and market forces have been relatively more important for crop specialization. Changes in farm commodity programs had little impact on farm structure over these study period. Overall, we conclude that if public R&D and education policies had been unchanged at their 1950 values over 1950–1982, major structural changes in US agriculture would have occurred anyway. The forces of private R&D and market forces were at work, including a decline in the price of machinery services and agricultural chemicals, relative to the farm wage.     

Research and productivity in Thai agriculture

This paper examines the impact that publicly funded agricultural research has on productivity in crop production within Thailand. It tests empirically the two hypotheses that, first, publicly funded research and development (R&D) in crop production is a significant determinant of total factor productivity (TFP) in the crop sector and, second, that its social rate of return is high. The statistical analysis applies error correction methods to national level time series data for Thailand, covering the period 1970–2006. Emphasis is given to public research in crop production, where most publicly funded agricultural R&D has occurred. The role of international research spillovers and other possible determinants of TFP are also taken into account. The results demonstrate that public investment in research has a positive and significant impact on TFP. International research spillovers have also contributed to TFP. The results support the finding of earlier studies that returns on public research investment have been high. This result holds even after controlling for possible sources of upward biases present in most such studies, due to the omission of alternative determinants of measured TFP. The findings raise a concern over declining public expenditure on crop research, in Thailand and many other developing countries.     

Convergence and divergence in regional agricultural productivity growth: evidence from Italian regions, 1951–2002

This article analyzes long‐term agricultural Total Factor Productivity (TFP) growth at regional level by testing its time‐series properties and identifying factors associated with divergence as opposed to convergence. The empirical application concerns Italian regions over the 1951–2002 time period. TFP growth decomposition ultimately attributes the observed productivity growth performance to these contrasting (convergence vs. divergence) forces. We find that technological spillovers are the key convergence force regardless of how the spillover effects are computed. At the same time, forces favoring convergence are almost offset by divergence forces (mainly scale or learning effects). This decomposition may explain the persistence of TFP growth rate differences in Italian agriculture, and could be applicable elsewhere.     

Credit constraints and productivity in Peruvian agriculture

This article evaluates the performance of a rural credit market in Peru. We develop a model that shows that collateral requirements imposed by lenders in response to asymmetric information can lead not just to quantity rationing but also to transaction cost rationing and risk rationing. Just like quantity rationing, these two additional forms of nonprice rationing adversely affect farm resource allocation and productivity. We test the insights of the model using a panel data set from Northern Peru. We estimate the returns to productive endowments for constrained and unconstrained households using a switching regression model. We find that, consistent with the theory, productivity is independent of endowments for unconstrained households but is tightly linked to endowments for constrained households. We estimate that credit constraints lower the value of agricultural output in the study region by 26%.     

China's regional agricultural productivity growth in 1985–2007: A multilateral comparison1

In this study, we estimate total factor productivity (TFP) growth as well as multilateral TFP index for 25 contiguous China provinces over the 1985–2007 period. Agricultural output growth for each province was decomposed into TFP growth and input growth, where input growth was further disaggregated into contributions from growth of labor, capital, land, and intermediate goods. Over the study period, TFP growth contributed 2.7 percentage points to output growth annually, which was slightly higher than the input growth contribution of 2.4 percentage points per annum. On average, the annual rate of productivity growth peaked during 1996–2000, at 5.1%. It slowed in 2000–2005 to a rate of 3.2% per annum and declined in the most recent years (2005–2007) to ?3.7%. Differences in productivity among regions persisted over the entire period. The tendency toward faster TFP growth in relatively well‐off coastal regions may imply a widening of regional inequality.     

‘Second-generation’ MVs and the evolution of the Green Revolution: the case of Central Luzon, 1966–90

By now new modern rice varieties (MVs) with multiple pest and disease resistance have completely replaced early MVs, such as IR5 and IR8, except in a few areas of Asia. This study attempts to identify the changing impacts of ‘first-generation’ and ‘second-generation’ MVs on productivity in rice farming by estimating the yield function, while correcting selectivity bias arising from the choice of varieties. For this purpose, we used farm-level survey data collected for eleven cropping seasons in Central Luzon in the Philippines from 1966 to 1990. We found that while the yield advantage of first-generation MVs over traditional varieties was limited, the yield-increasing effect of second-generation MVs over first-generation MVs was highly significant. In particular, the adoption of improved MVs significantly contributed to yield growth under the irrigated condition and during the dry season. Thus, we conclude that the Green Revolution would not have been revolutionary without the development and the diffusion of second-generation MVs with multiple pest and disease resistance.     

District-level total factor productivity in agriculture: Western Cape Province, South Africa, 1952–2002

This article measures total factor productivity (TFP) growth in Western Cape agriculture for 31 magisterial districts from 1952 to 2002 to illustrate the benefits of disaggregation compared with national TFPs. There is negative or low growth in the eastern districts and rapid growth in the western districts. The regions with substantial chicken, pigs, dairy, and, especially, export fruit production grew rapidly, whereas the sheep-dominated Karoo had negative growth. Productivity growth correlates mostly with output mix, which in turn depends on irrigation investment. A similar program will be needed at the national level if prosperity is to be extended to black smallholders who currently lack access to water and other modern infrastructure.     

Public infrastructure and productivity growth in Greek agriculture

Recent research has focused on the effect of public infrastructure on economic performance. In this paper, a model of Greek agriculture's technology and behaviour is constructed based on the dual cost function framework. The model provides a decomposition of productivity growth into the components technical change, returns to scale, and public infrastructure. The empirical estimates indicate that public infrastructure investment provides a significant return to agriculture and augments productivity growth. Over the period 1960–1995, the impact of public infrastructure on productivity growth in livestock and crop production is found to be positive, although it has been declining since the late 1970s. These results strongly suggest that a decline in public infrastructure investment can partly explain the observed decline in the productivity growth of Greek agriculture in the 1980s.     

Efficiency and total factor productivity in Ukrainian agriculture in transition

This article analyzes efficiency and total factor productivity (TFP) change of large agricultural enterprises during their transition to a market economy in Ukraine. Efficiency is calculated by Data Envelopment Analysis and productivity change is measured by the Malmquist Productivity Change Index in the period between 1990 and 1999. On average, TFP declined by 6% annually, dropping a total 42%. The main reason for the observed TFP decline is a decrease in technical efficiency, which is found to be remarkably significant. At the same time there is a high variation among individual enterprises: the distribution of efficiency scores widens, which indicates that the farms diverge with respect to their economic performance. A Tobit regression analysis is conducted in which efficiency scores are related to factors such as farm type, farm size, initial conditions, and legal form.