Q. How does resource quality affect agricultural productivity
worldwide?
A. Most differences in agricultural
productivity, whether across countries or over time, can
be attributed to differences in the quantity of conventional
inputs used in agricultural production, such as land,
labor, fertilizer, and machinery. But agricultural productivity
also depends critically on the quality of inputs used,
including land. Nevertheless, resource quality has received
insufficient attention in the past because appropriate
data have been scarce. Recent advances in data
and analytical methods allow improved understanding
of the ways in which land quality affects agricultural
productivity, both directly and through other inputs and
factors.
Land Quality
Land—embodying
soils, climate, and other characteristics—is one
of the most basic resources used in agricultural production.
Based on assessments
by USDA's Natural Resources Conservation Service of
the suitability of soils and climate for agricultural
production, land quality varies widely both between countries
and within countries. Annual rainfall also varies both
geographically and over time. Poor soils and climate do
not preclude agricultural production, but they do tend
to raise costs of production and reduce yields and net
returns relative to those realized in more favorable environments.
Satellite
data on land cover compiled by the U.S. Geological
Survey show that crop production areas correspond closely
to areas of high land quality, although other physical
and economic characteristics (such as market proximity)
are also important in determining the location of crop
production. Combining this information on soils, climate,
and land cover allows us to compare the quality of cropland
by country and region. Cropland quality is highest, on
average, in Eastern Europe and lowest in sub-Saharan Africa.
Agricultural Productivity
Not surprisingly, econometric
analysis of data from 110 countries over 1961-97 reveals
that, after taking into account other factors such as
input levels, differences in the quality of cropland soils
and climate are significantly related to differences in
agricultural productivity.
- In sub-Saharan Africa, the productivity of agricultural
land is 28 percent higher, on average, in countries
with high land quality than it is in countries with
poor land quality.
- In Asia, the productivity gain attributable to high
land quality is 34 percent.
- In high-income countries (including the United States),
the productivity gain attributable to high land quality
is 22 percent.
- In Latin America, where most countries lie above
the global median in terms of land quality, only the
best soils and climate are significantly associated
with increased agricultural productivity.
Conventional Inputs and Other Factors
Land quality also affects the impact on agricultural
productivity of more conventional inputs, such as quantities
of land, labor, and fertilizer. In sub-Saharan African
countries with good soils and climate, agricultural
land productivity rises significantly with increases
in labor, livestock, tractors, fertilizer, and annual
rainfall. Productivity also improves with irrigation,
labor quality (as measured by longer life expectancy
and higher literacy rates), and transportation infrastructure,
and falls significantly with the occurrence of armed
conflict. In sub-Saharan African countries with poor
soils and climate, productivity responds even more strongly
to fertilizer application, irrigation, and political
instability, but is not sensitive to improvements in
tractors, labor quality, or infrastructure.
Overall, the results suggest a land quality-related hierarchy
of constraints limiting agricultural productivity in sub-Saharan
Africa. In countries poorly endowed with soils and climate,
basic inputs such as fertilizer, water (in the form of
irrigation), and institutional stability are more important
than they are in countries that are relatively well endowed.
The evidence suggests that only when these land quality
constraints have been overcome do factors such as labor
quality, road density, and mechanization become significantly
associated with improvements in agricultural productivity—as
they are in countries with better soils and climate.
Similar patterns characterize other developing regions.
In Latin America, increases in labor, fertilizer, and
irrigation are associated with increased productivity
of agricultural land in countries with poor soils and
climate, but not in countries with good soils and climate.
Improvements in literacy and transportation infrastructure
are associated with increased productivity in countries
with good soils and climate, but not in those that are
poorly endowed.
In Asia, additional land, labor, and roads increase agricultural
productivity in countries with good soils and climate,
but not in those that are poorly endowed, where productivity
is relatively more sensitive to increased irrigation.
In the Middle East and North Africa, agricultural productivity
is sensitive to levels of labor, tractors, and literacy
in well-endowed countries, but not in countries with poor
soils and climate, where (as in Asia) productivity is
relatively more sensitive to increased irrigation.
Land Degradation
Analysis of differences in land quality across countries
and regions also provides an initial indication of the
potential impact on agricultural productivity of changes
in land quality, such as land degradation, over time.
Data on land degradation rates and impacts remain even
more scarce than data on land quality, but most studies
to date find that productivity losses due to processes
such as soil erosion, nutrient
depletion, and salinization are small (around 0.1 - 0.2
percent per year) in relation to historic gains in productivity
(around 2 percent per year) due to improvements in technology
and input use. Nevertheless, in some areas characterized
by poor or fragile soils and inappropriate agricultural
management practices, productivity losses could be significantly
higher.
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