Study Shows Ag’s Productivity Growth Lags World’s Demand

15 Oct Study Shows Ag’s Productivity Growth Lags World’s Demand

Friday, October 15th, 2010

 

The current rate of agricultural productivity growth is lagging the world’s expanding demands, according to a new report released today.

The Global Harvest Initiative’s 2010 GAP Report, developed with the Farm Foundation, NFP and U.S. Department of Agriculture’s Economics Research Service (ERS), quantifies for the first time the difference between the current rate of global agricultural productivity growth and the pace required to meet future needs.

Doubling agricultural output to meet global demand by 2050 will require an annual average growth of at least 1.75 percent in total factor productivity (TFP), said Neil Conklin, president of the Farm Foundation, NFP and author of the report. Total factor productivity is the increase in output per unit of total resources employed in production. Between 2000 and 2007, ERS estimates global agricultural TFP growth averaged 1.4 percent per year.

“To close the gap without additional land and resources, we must increase the rate of productivity growth an average of 25 percent more per year over the next 40 years,” said Conklin. “And, productivity will need to grow faster than that during the next two decades, when the population will be increasing more rapidly than it will as it levels off by 2050.”

Bill Lesher, executive director of Global Harvest Initiative, told a group of agricultural industry and governmental leaders assembled in Des Moines for the World Food Prize Symposium that the new annual report brings the urgent need to boost the rate of global agricultural productivity growth to the forefront of world issues.

“We need to do more with less and we must start implementing measures and policies that increase productivity today,” said Lesher. “A ramp up of this order is achievable, as the public and private sectors demonstrated during the Green Revolution. Now we must provide public and private support for an Evergreen Revolution that is twice as long as and even more productive than the last- without drawing on additional natural resources and other inputs. Modern, productive agriculture has many new innovations in the pipeline. However, more must be done. With the right combination of smart policies and public/private sector investments around the globe beginning now, agriculture will be poised to sustainably meet the world’s needs in 2050.”

New Model Profiles Historical Rate of Production Increase

The Farm Foundation, NFP developed the calculations in the report based on USDA Economic Research Services total factor productivity data to provide a comprehensive understanding of long-run sources of agricultural growth.

“Assessing total factor productivity – the amount of output per unit of total factors, or inputs, used for production – for the entire global agricultural sector provides a more comprehensive picture of changes in resource requirements to produce farm commodities,” said Keith Fuglie, branch chief for Resource, Environmental and Science Policy in the Resource and Rural Economics Division of the U.S. Department of Agriculture’s Economic Research Service. “A 1 percent increase in TFP, for example, means that 1 percent fewer agricultural resources are required to produce a given bundle of crop and livestock outputs.”

While economists have developed estimates of agricultural TFP for most industrialized nations, these measures have only recently become available for major developing countries. ERS has combined country-specific studies together with additional analysis of productivity growth in other regions in order to construct a global measure of agricultural TFP growth since 1961. This index identifies how much of total agricultural production growth has been due to “expanding resource use,” such as use of additional land, labor, fertilizer and water in production, and how much has been due to improving TFP.

“Most people cannot comprehend what it might take to meet the needs of an additional 3 billion people with increasing incomes,” said Lesher. “For world leaders in a position to impact policy and resource allocation to sustainably increase the rate of productivity, the GAP Report provides very real data globally and regionally upon which to make informed decisions on policies and research investments.”

The Global Harvest Initiative GAP Report will be updated annually and released each October to chronicle progress toward achieving sufficient and sustainable global production to meet the needs of 9.2 billion people by 2050. With GHI’s help, the Farm Foundation, NFP and the U.S. Department of Agriculture’s ERS have formed a global agricultural productivity research network to continually monitor and analyze data trends, constraints, causes and consequences of international productivity growth. Each subsequent GAP Report will provide an updated benchmark and eventually prescriptive actions that will help to strategically increase productivity in selected regions of the world.

“Simply put, the challenge we face in 2010 and looking forward to 2050 is not unlike the challenge the late Norman Borlaug and others faced in the 1950s and 1960s when they tripled crop yields in India and increased yields six-fold in Mexico during the Green Revolution,” said Lesher. “We have 40 years in which to double agricultural output, but we have to do it in a sustainable fashion with the same amount of land, less water and reduced inputs. The GAP Report provides a metric to monitor our progress toward that goal.”

Global Harvest Initiative