In the Long Run: Productivity Continues To Be the Engine of Growth in Agriculture

The dominant source of economic growth for the aggregate economy has usually been growth in inputs to production. Agriculture turns out to be one of the few exceptions: productivity growth dominates input growth. Output growth equals the sum of contributions of the factors of production (capital, land, labor, intermediate inputs) and growth in productivity. Agricultural productivity growth averaged 1.68 percent from 1948 to 1999. However, the net contribution of all inputs to growth in output was less than one-tenth of one percentage point per year. Thus, growth in total factor productivity has been responsible for almost all of agriculture’s output growth since World War II, an impressive record.