Is the growth in agricultural productivity slowing?

Last week I gave a talk at the University of Nebraska, and Julian Alston from UC Davis was also there.  He presented some recent research with Matt Anderson and Phil Pardey about productivity growth in agriculture.  While I have seen some discussions about the possibility of a slowdown in productivity growth in developing countries, Alston's research suggest it is a phenomenon alive and well here at home.  This is important stuff.  Falling productivity growth has important implications for sustainability, food security, and research and development. They write: 

“We detect sizable and significant slowdowns in the rate of productivity growth. Across the 48 contiguous states for which we have very detailed data for 1949– 2007, U.S. multifactor productivity (MFP) growth averaged just 1.18 percent per year during 1990–2007 compared with 2.02 percent per year for the period 1949–1990. MFP in 44 of the 48 states has been growing at a statistically slower rate since 1990. Using a longer-run national series, since 1990 productivity growth has slowed compared with its longer-run growth rate, which averaged 1.52 percent per year for the entire period, 1910–2007. More subtly, the historically rapid rates of MFP growth during the 1960s, 1970s and 1980s can be seen as an aberration relative to the long-run trend. A cubic time-trend model fits the data very well, with an inflection around 1962. We speculate that a wave of technological progress through the middle of the twentieth century—reflecting the progressive adoption of various mechanical innovations, improved crop varieties, synthetic fertilizers and other chemicals, each in a decades long process—contributed to a sustained surge of faster-than-normal productivity growth throughout the third quarter of the century. A particular feature of this process was to move people off farms, a one-time transformation of agriculture that was largely completed by 1980.”

Here's a graph from their paper showing the change in proportional growth rate in yields (i.e., the log of yields) over time for 6 crops with the inflection point indicated for when growth rates began decelerating.  

Nutritional Guidelines Redux

By now, I'm sure many readers have seen the announcement that the secretaries of the USDA and HHS have announced that the latest dietary guidelines will NOT include issues of sustainability.

This is a topic I've commented on several times in the past, and I was interviewed by Stewart Varney on the Fox Business Network yesterday about the development (I haven't found a link yet to post).

Here are just a few scattered thoughts and comments.

First, it is a bit odd that the nutritional guidelines don't consider behavioral responses of consumers.  That is, if it is recommended not to eat food type X, then what will consumers switch to eating instead?  Note that the question isn't: what do we wish consumers would eat instead, but rather what substitutions will actually occur?  This issue was highlighted in a post by Aaron Carroll on the NYT Upshot blog when discussing a large study that showed reducing saturated fat intake didn't produce noticeable health benefits: 

“The study also resulted in a reduction of unsaturated fats and an increase in carbs. That’s specifically what the committee argues shouldn’t happen. It says that bad fats should be replaced with better fats. However, people did reduce their saturated fats to 10 percent of intake, and didn’t see real improvements in outcomes. This has led many to question whether the quantitative recommendation made by the committee is supported by research.”

In a day and age when behavioral economics is all the rage, and is even being required by the White House, it is a bit absurd to believe consumers will follow all the guidelines and recommendations to-a-tee.  A more pragmatic approach is to realize most people will devote enough attention to get a couple take-home messages, and then act.  We need to study how consumers will actually substitute given their preferences and the messages they digest.  This isn't necessarily a critique of information behind the guidelines themselves (after all, we do want some systematic, scientific summary of the state of nutritional knowledge), but rather a call for research on how the guidelines are actually implemented and communicated and are ultimately used by consumers.

Second, this article by Tania Lombrozo at NPR touches on an issue I addressed several months ago: when guidelines mix nutrition and "sustainability", it necessarily involves value judgments not  science.  She writes:

“Science can (and should) inform our decisions, but you can’t read off policy from science. Invoking science as an arbiter for questions of values isn’t just misguided, it’s dangerous — it fails to recognize what science can (and can’t) provide and it fails to make room for the conversations we should be having: conversations about the kinds of lives we ought to live, the obligations we have to each other, to future humans and to other animals, and — among other things — what that means for the food choices we make every day.”

Finally, looking at a lot of discussion surrounding this issue, while the guidelines purportedly discuss "sustainability" - the issue is often boiled down to a single issue: greenhouse gas emissions.  While it is clear that beef is a larger emitter of greenhouse gasses than most other animal and plant-based food, the impacts need to be placed in context.  In the US, livestock production probably accounts for a very small percentage of all all greenhouse gas emissions.  Telling people to eat less meat will likely have small effects on greenhouse gas emissions.  My gut feeling is that further investments in productivity-enhancing research will have a larger effect on greenhouse gas emissions than cajoling consumers.  

In other places discussing "sustainability" the issue of food security is mentioned, as is resource use.  To an economist's ears, when I hear "resource use", I immediately think of prices.  Prices are the mechanism by which resources get efficiently allocated in a market-based economy.  As such, it gives me pause when I think of a report by a a group of nutritionists making recommendations on proper resource use.   I'd never trust a dictator (or even a group of economists) on having enough knowledge to making optimal decisions on resource use.  Beef is a relatively expensive food.  That tells us it is using a lot of resources, and that higher price causes us to eat less than we otherwise would.  

But, what about externalities?  To the extent beef production uses a lot of corn or land, that's already reflected in the price of beef.  But, does the price of beef reflect water use and potential (long run) impacts of greenhouse has emissions?  Probably not fully.  So, the key there is to try to get the prices right.  Well functioning water markets would be a start.  Greg Mankiw recently had an interview on getting the price of carbon right.  Once the prices are right, then "recommendations" regarding resource use are somewhat meaningless: you're either willing to pay (and able) the price to buy the items you like to eat or not.  

Ecomodernism

I've never really considered myself much of an environmentalist.  Its not that I don't care about clean air, endangered species, or rain forests, only that so much of what I've read from self-described environmentalists tends to be anti-technology, anti-growth, and anti-free markets - basically "anti" many of the things I happen to believe are quite good for the planet overall.

Of course, those aren't the views of every environmentalist but they do seem to represent the modal view I read in the media.  For many years, I've been aware of organizations like PERC which advocates for free market environmentalism.  But, it was only this summer that I became aware of a related movement after a call from Michael Shellenberger who is the President of the Breakthrough Institute.  

He and others are heading up a movement they call Ecomodernism.  I'm sympathetic to many of the views espoused in the Ecomodernist Manifesto that was put out in April.  They write, for example:

“Intensifying many human activities — particularly farming, energy extraction, forestry, and settlement — so that they use less land and interfere less with the natural world is the key to decoupling human development from environmental impacts. These socioeconomic and technological processes are central to economic modernization and environmental protection. Together they allow people to mitigate climate change, to spare nature, and to alleviate global poverty.”

and

“We offer this statement in the belief that both human prosperity and an ecologically vibrant planet are not only possible but also inseparable. By committing to the real processes, already underway, that have begun to decouple human well-being from environmental destruction, we believe that such a future might be achieved. As such, we embrace an optimistic view toward human capacities and the future.”

I'm not yet ready so say I'm an ecomodernist, but this certainly seems a much more attractive kind of environmentalism than I've encountered in the past. 

End of Doom

Ronald Bailey has an excellent piece in the October print edition of Reason Magazine entitled, "The End of Doom" and a recently released book with the same title.  It's a nice counterweight to the oft-heard refrain that the world is going to hell.  

Here are a a few quotes I found particularly interesting.  In critiquing Rachel Carson's Silent Spring:

“At its heart is this belief: Nature is beneficent, stable, and even a source of moral good; humanity is arrogant, heedless, and often the source of moral evil. Carson, more than any other person, is responsible for the politicization of science that afflicts our contemporary public policy debates.”

In discussing our out-sized fears of cancers from synthetic chemicals and of biotechnology:

“It should always be borne in mind that environmentalist organizations raise money to support themselves by scaring people. More generally, Bonny observes, “For some people, especially many activists, biotechnology also symbolizes the negative aspects of globalization and economic liberalism.” She adds, “Since the collapse of the communist ideal has made direct opposition to capitalism more difficult today, it seems to have found new forms of expression including, in particular, criticism of globalization, certain aspects of consumption, technical developments, etc.””

He ends with some choice words about the precautionary principle.  

“Why does it matter if the population at large believes these dire predictions about humanity’s future? The primary danger is they may fuel a kind of pathological conservatism that could actually become a self-fulfilling prophecy.”

and

“The precautionary principle is the opposite of the scientific process of trial and error that is the modern engine of knowledge and prosperity. The precautionary principle impossibly demands trials without errors, successes without failures.

...

”An indirect implication of trial without error is that if trying new things is made more costly, there will be fewer departures from past practice; this very lack of change may itself be dangerous in forgoing chances to reduce existing hazards.” ”

Food Shortages, Climate Change, and GMOs

I filmed a spot on Fox Business Network this morning in response to this story about possible food shortages due to climate change.

I was glad one of the hosts asked me about GMOs - it wasn't a topic I had anticipated coming up.

By the way, if you want to see some good recent work on the effects of climate change on agriculture within the U.S., see this comment and reply in the American Economic Review by Fisher, Hanemann, and Roberts and by Deschênes and Greenstone.  Both sets of authors wind up at the conclusion that climate change is likely to have a negative effect on agricultural profits in the U.S., but the two sets of authors differ in their subjective views about whether the effects are "large".  Neither study considers the mitigating effects of trade on consumers (i.e., we could import food from other countries who benefit from warmer weather), neither considers the mitigating effects of technological development and adaptation (they assume we wake up tomorrow with 2100 temperatures and must live with today's technology), and neither considers the great deal of uncertainty in the predictions arising from climate change modeling.  These are good studies, but I'm saying there's still a lot we don't know, and probably a lot we can't know until it happens.