Agricultural productivity growth sounds rather boring and arcane, but it is perhaps the most important concept related to the health of the food and agricultural economy. At a basic level productivity growth occurs when the growth in all agricultural outputs exceeds the growth in use of all inputs. Crop yields are a partial measure of productivity growth - it measures one output (e.g., corn bushels) divided by one input (acres of land), but what economists really focus on is TOTAL factor productivity growth (all outputs and all inputs). Total factor productivity growth is intricately linked to sustainability, farm profitability, farm labor, consumer food prices, and more.
Phil Pardey and Julian Alston have written a new paper entitled “Unpacking the Agricultural Black Box: The Rise and Fall of American Farm Productivity Growth” that was just released by the Journal of Economic History. If you read one paper on trends and causes of agricultural productivity growth in the United States, this should probably be it. It is packed full of interesting data and discussion.
The key phenomenon they identify and attempt to explain is the following:
“... we present robust and compelling evidence of a structural slowing of productivity growth in U.S. agriculture, following a mid-century surge ... [R]ather than a constant rate of productivity growth the data are more consistent with a “big wave” surge in productivity growth peaking in the 1960s; a secular pattern in U.S. agricultural productivity similar to what others have found with reference to the economy as a whole, but with different timing”
Pardey and Alston provide a number of interesting figures related to these phenomena; here is one related to adoption of different technologies over time.
Source: Pardey and Alston, Journal of Economic History, 2021
Here is a bit from their conclusions:
At issue in many minds is whether anything like the rapid growth in measured farm productivity during the third quarter of the twentieth century could be recaptured in the coming decades. Was this productivity surge (and the subsequent slowdown) a one-time phenomenon, or something that can be repeated with new waves of innovation in genetics, informatics, and robotics, which can save on costs of labor (which remain stubbornly large as a share of total costs) or other increasingly scarce inputs—especially land and water? More concisely: What might have accounted for the surge and slowdown in American farm productivity?
To address these questions, we examined three alternative (albeit related and not entirely mutually exclusive) explanations for the surge slowdown phenomenon.
Those three explanations are:
A decline in investments in agricultural research and development and the slowing growth in knowledge stocks;
A “big wave of technological progress through the middle of the century contributed to a sustained burst of faster-than-normal productivity growth throughout the third quarter of that century” (see the figure above); and
“the dynamics of the structural transformation of the U.S. farm economy and the role of asset fixity” … “This structural transformation involved a one-time shift, to reduce the number of farmers and the total farm labor force by two-thirds or more”
Do read the whole thing.