The study used time series data for the period 1981 to 2016. Agricultural productivity, comparative advantage and. Purchase of industrial products such as pesticides, farm machinery etc. Agricultural productivity growth and economic development. Unravelling the links between agriculture and economic growth wur.
The role of agriculture in economic development and poverty. Does agriculture really matter for economic growth in. Over the past five decades, global agricultural output grew, on average, by 2. Global economic growth and agricultural land conversion. As a result, the correlations between agricultural productivity growth and economic growth are empirically well demonstrated, but the causal relationships are less clear. More recently, rapid agricultural growth in china, india, and vietnam was the precursor to the rise of industry. Impact of agricultural sector on economic growth of nigeria. Jun, 2018 some researchers posit that the role of agriculture has been fundamental, if underappreciated, in promoting growth in non agricultural sectors, including through channels of structural transformation from low productivity rural sectors to higher productivity urban sectors e. The relationships of inflationary trend, agricultural.
The world bank agriculture, rural development, and pro. Previous studies on economic effects of extension service have used two types of statistical frameworks to measure the effect of agricultural extension on farm productivity, namely, the meta production function and the total productivity index see e. The adb economics working paper series is a forum for stimulating discussion and eliciting feedback on ongoing and recently completed research and policy studies undertaken by the asian development bank adb staff, consultants, or resource persons. The adb economics working paper series is a forum for stimulating discussion and eliciting. The classical economists like adam smith and david ricardo have argued that international trade is the main source. Economic research service economic research report 189 july 2015 united states department of agriculture agricultural productivity growth in the united states.
June 2017 global economic growth and agricultural land conversion under uncertain productivity improvements in agriculture bruno lanz1, simon dietz2 and tim swanson3 abstract. Challenges and opportunities for raising agricultural. The study specifically aimed to investigate the long run relationship between agricultural productivity and economic growth. Agricultural surplusagricultural productivity growth generates surplus towards the development of the nonagricultural sector. Agricultural productivity growth in the united states. The past two decades have seen subsaharan africa emphasizing improved agricultural productivity as a major source of economic breakthrough. The impact of infrastructure on agricultural productivity. Aside from providing more food, increasing the productivity of farms affects the regions prospects for growth and competitiveness on the agricultural market, income distribution and savings, and labour migration. Agriculture and economic growth computable general equilibrium cge models typically use data on the production structure of a given country to estimate how an economy responds to a shock or a change in policy. At this point in nigerias development, the best approach is to focus on the agricultural sector.
Still on,, impact of agricultural sector on nigeria economic growth and development 19812015. Agricultural productivity and economic growth pseudoerasmus. It argues that agricultural productivity growth is neither a necessary nor sufficient condition for economic growthbut that in many developing countries, agricultural productivity growth is nevertheless the first and most important source of economic growth. Productivity is also approached through cross cutting issues. Department of agriculture, economic research service, july 2015. Schultzs view was later echoed in writings by many economists who argued that agricultural productivity increases drive the.
Moreover, the study aimed to determine the direction of causality between agricultural productivity and economic growth. However, in the open economy case there is a negative link between agricultural productivity and overall growth. The time series properties of the data were analyzed using augmented dickey fuller and philip peron unit root tests. Schultzs view was later echoed in writings by many economists who argued that agricultural productivity increases drive the structural.
N2 the role of agricultural productivity in economic development is addressed in a twosector model of endogenous growth in which a preferences are nonhomothetic and the income elasticity of demand for the agricultural good. The 2018 global agricultural productivity index gap. If improved agricultural productivity leads to higher incomes of the poor who spend it on domestic nontradables, then agricultural growth will induce non agricultural rural growth and via employment multipliers to decreases in poverty. Shutterstock use of commercial and trade names does not imply approval or constitute endorsement by usda.
Agricultural productivity, comparative advantage and economic. Electricity and roads are significant determinants of agricultural productivity. The results of the analyses indicate a unidirectional causality from. Agricultural productivity, comparative advantage, and. Agricultural growth program agp ii social assessment report final february 4, 2015. If improved agricultural productivity leads to higher incomes of the poor who spend it on domestic nontradables, then agricultural growth will induce nonagricultural rural growth and via. Since the introduction of economic planning in india, agricultural development has been receiving a special emphasis. In this paper, we argue that despite the fact that agriculture still remains the main engine for economic growth and poverty reduction in malawi, the sector has not received the necessary support in terms of investments for research and development. This paper investigates the growth experience of one country in detail in order to enhance our understanding of important factors that a. Innovations in animal and crop genetics, chemicals, equipment, and farm organization have enabled continuing output growth while using much less labor and farmland. Some researchers posit that the role of agriculture has been fundamental, if underappreciated, in promoting growth in nonagricultural sectors, including through channels of structural transformation from lowproductivity rural sectors to higherproductivity urban sectors e. Chapter 73 agricultural productivity and economic growth.
Agriculture, aid, and economic growth in africa the world. Poverty reduction, productivity growth, and economic transformation 2 trends in land and labor productivity 7 conceptualizing sources of agricultural growth 8 the increasing importance of tfp in driving. Impact of agricultural sector on economic growth of. Improved food security, reflected in better nutritional status, is a prerequisite for human resource development and resulting gains in productivity and economic growth. As a result, total agricultural output nearly tripled between 1948 and 2015even as the amount. N2 the role of agricultural productivity in economic development is addressed in a twosector model of endogenous growth in which a preferences are nonhomothetic and the income elasticity of demand for the agricultural good is less than unitary, and. The new kenya economic update shows that boosting agricultural productivity can help reduce poverty, particularly in rural areas the report notes that increasing agricultural productivity and market access can enable more rural poor households to grow enough food to begin selling it, leading to welfare gains and poverty reduction. Agriculture, aid, and economic growth in africa the. Using a twosector model, we identify low productivity growth in the agricultural sector as the main reason for the divergence of income per capita between turkey and its peer countries. Also, the partial productivity growth rate of labor and capital in the agricultural sector, during the years. The determinants of agricultural productivity and rural. Pdf agricultural output and economic growth in nigeria.
Higher agricultural productivity can deliver a triple dividend. In the closed economy case, an increase in agricultural productivity as measured by total factor productivity spurs overall economic growth since this eases the expansion of learning by doing via manufacturing. By focusing on agricultural development, nigeria can speed up its economic growth in the coming decade 3. Agriculture productivity and macroeconomic stability 10 context matters 10 empirical evidence 11 agricultural sectors contribution to the national economy 11 agriculture s contribution to economic growth 12 agriculture, longterm economic growth and structural transformation 15. Agricultural productivity and economic growth researchgate. Higher agricultural productivity also increases the income of the rural population, raising demand for domestic industrial output dethier and effenberger. The first section gives a background of agricultural productivity in south africa and an indication of why the report has.
It also considers the additional demand generated by achieving the sdg 8 target for economic growth. Thus, aside from its growth benefits, agricultural productivity has significant poverty reduction effects. An increase in a regions agricultural productivity implies a more. Higher agricultural productivity is vital for economic growth, especially in africa, because of strong growth linkages and comparative advantages in trade. Doubling agricultural productivity from 2005 to 2050 is aligned with the sdg 2 target of doubling agricultural productivity and incomes of smallscale farmers and food producers. Pdf agricultural productivity and sustained economic growth in. The papers overall empirical results indicate a significant link between rural infrastructure and agricultural productivity. The case of ghana share this project reducing poverty in subsaharan africa will entail the movement of people out of quasisubsistence agriculture, the sector in which most of the poor currently earn their livelihoods.
This average, however, masks a slowdown in agricultural output growth in the 1970s and 1980s, after which it reaccelerated in the 1990s and 2000s. However, improving agricultural productivity may dampen economic growth, contrary to the prescription of some. The role of agricultural productivity in economic development is addressed in a twosector model of endogenous growth in which a preferences are nonhomothetic and the income elasticity of demand for the agricultural good is less than unitary, and b the engine of growth is learningbydoing in the manufacturing sector. We use the solow residual model to measure the productivity growth share in the valueadded growth of the agricultural sector. Introduction ethiopia is one of the subsaharan african countries which liberalize its economy to maintain in all sectors a sustained economic growth and reduce poverty.
It argues that agricultural productivity growth is neither a necessary nor sufficient condition for economic growth but that in many developing countries, agricultural productivity growth is nevertheless the first and most important source of economic growth. Pdf the past two decades have seen subsaharan africa emphasizing improved agricultural productivity as a major source of economic. Agricultural productivity growth and economic development in an open economy. The role of agricultural sector productivity in economic growth arxiv.
Agricultural production and economic growth in nigeria. Agriculture has been the backbone of the economy in nigeria providing employment and source of livelihood for the increasing population it accounts for over half of the gdp of the nigerian economy as at independence in 1960 tonuchi, 2017. Further reflecting this negative view of agriculture in the development. Empirical evidence suggests that agricultural growth in lics is three times as effective in reducing extreme dollaraday poverty as growth in other sectors. The autoregressive distributed lag ardl model was employed to analyze the data. The determinants of agricultural productivity and rural household. Similarly improvement in the productivity of cash crops may pave the way for the promotion of exchange economy which may help the growth of non agricultural sector. The role of agriculture in economic development and.
Even if public research investment increases again, it would take time for tfp growth to catch up due to the long lag between research investment and technology adoption on the farm. It argues that agricultural productivity growth is. It is in line with these its fundamental role that this study makes a giant stride to examine the relationship between agricultural credit and economic growth. The 2018 global agricultural productivity index gap index. Usda ers growth in global agricultural productivity. Section 5 considers skeptical views of the relationship between agricultural productivity and growth and concludes by offering a summary and interpretation of the evidence. The results from africa in the 1990s, when growth in agricultural productivity per worker was comparable to that in other regions, offer some scope for optimism.
According to economic studies, a continuing decline in public agricultural research funding may result in slowing productivity growth in the long run. Economies that experience growth in aggregate output could be the beneficiaries of good institutions or good fortune that also helps the agricultural sector. Agricultural innovation, productivity, and economic growth. The role of agricultural productivity in economic development.
Measurement, trends, and drivers sun ling wang, paul heisey, david schimmelpfennig, and eldon ball. Using a two sector model we identify the low productivity growth in the agricultural sector as the main reason for the divergence of income per capita between turkey and its peer countries. The agricultural sector is the countrys major source of economic growth under ethiopias growth transformation plan gtp, with attention given to productivity and production increase which is crucial for the countrys effort. T1 agricultural productivity, comparative advantage, and economic growth. Economic fluctuations and growth the role of agricultural productivity in economic development is addressed in a twosector model of endogenous growth in which a preferences are nonhomothetic and the. Role of agriculture in the economic development of a country. Agricultural growth was the precursor to the industrial revolutions that spread across the temperate world, from england in the mid 18th century to japan in the late 19th century. Over the last ten years the sustainable economic growth brought. This study investigates the links existing between inflationary trend, agricultural productivity and economic growth in nigeria using time series data spanning from 1970 to 2011. The productivity of agricultural credit in india sudha narayanan 1 abstract this study examines the nature of the relationship between formal agricultural credit and agric ultural gdp in india, specifically the role of the former in supporting agricultural growth, using state level panel data covering the period 1995 96 to 2011 12.
This paper investigates the growth experience of one country in detail in order to enhance our understanding of important factors that affect economic growth. We study how stochasticity in the evolution of agricultural productivity interacts with economic and population growth at the global level. Pdf the relationships of inflationary trend, agricultural. Usda ers agricultural productivity growth in the united. Figure 1 above clearly shows that before 1965 growth of the agricultural. There is no shortage of empirical and theoretical studies regarding the role of exports in raising the economic growth and development of a country. Technological developments in agriculture have driven longterm growth in u. Agricultural productivity, comparative advantage and economic growth kiminori matsuyama. In the latest decade 200110, global output of total crop and livestock commodities expanded by 2. Agricultural productivity growth and economic development in. The productivity of a regions farms is important for many reasons. The world bank agriculture, rural development, and propoor.