Producing more with less

Published on: Oct 31, 2013

BY 2050, agricultural output will have to double to keep pace with population growth, changing diets and increasing demand, and the most effective way of doing this is by increasing total factor productivity (TFP). TFP increases when outputs rise while inputs remain constant.

A new "Global Agricultural Productivity" (GAP) report from the Global Harvest Initiative, a consortium of major companies seeking a private-sector voice in the call for productivity growth throughout the supply chain, provides a snapshot of agricultural productivity growth measured against growth in global population and food demand.

In order to increase output, farmers around the world have typically looked to land expansion or irrigation as well as intensification by increasing the application of fertilizer, machinery, labor or other inputs on land used to grow crops or raise livestock.

However, in recent years, efficiencies have been gained by adopting technologies and practices that result in more output from existing resources, which is measured by TFP.

TFP is the ratio of agricultural outputs (gross crop and livestock output) to inputs (land, labor, fertilizer, machinery and livestock).

"When TFP rises, the bigger the ratio, the more efficient we are at producing our food," explained Erika Seitzer, senior policy associate for GHI.

TFP is becoming a major source of output growth, Seitzer said. The report notes that TFP has become the largest contributor to expanded global agricultural output over the past 20 years.

Achieving higher agricultural productivity through TFP is important in supplying sufficient food, fiber and fuel for a growing population; reducing costs to farmers and improving their incomes; stabilizing prices of food for consumers, and reducing the impact on the natural resource base.

GHI calculated that TFP must grow by an average rate of at least 1.75% annually to double the supply using current resources. From 2001 to 2010, the average annual rate of TFP growth was 1.81%.

However, Seitzer warned that it's imperative that continued investment in agricultural research and adoption of new technologies and practices must be maintained and even expanded to keep on track.

"The most minor shortfalls of output can derail the success we're currently having," she said.

 

Variation by income

Producing more with lessThe GAP report finds significant differences in the rate of productivity growth depending on per capita gross national income and recommends country-level policy changes to help advance growth in the differing sectors.

High-income countries, such as the U.S., Australia, Canada and European nations, have already achieved significant gains in TFP growth and now must maintain investments to ensure that productivity does not fall behind.

Science-based technologies, including advances in genomics, irrigation, mechanization and precision analytics that optimize the timing of production and management of weather risk, all contribute to agricultural TFP growth in these countries (Figure 1).

William Conrad, who worked with GHI on behalf of John Deere, noted that, until only recently, low-income countries relied predominantly on bringing new land into production or intensification on current land to increase productivity. Today, TFP is playing an increasingly larger role in these areas, which will need new approaches to help advance those increases (Figure 2).

The report identifies that raising productivity in low-income countries will require a comprehensive approach to create enabling environments for new investments, technologies and practices. A special focus on smallholder farmers and women will be required to help them participate in more inclusive agricultural value chains.

Continuing public/private partnerships and building the capacity of agricultural research and extension programs are key actions that low-income developing countries must take to improve TFP, the GAP report states.

 

Success stories

Several upper-middle-income countries, particularly China and Brazil, have sustained robust TFP growth over the past two decades due to supportive agricultural policies and investments.

Conrad said Brazil has made significant economic policy changes and investments in research, technology and infrastructure. The result has been a 4.3% increase in output, with 3.3% of that coming from TFP.

Since 1991, more than 76% of Brazil's output growth has been the result of improvements in TFP.

Biotechnology and precision farming, which identifies soil types and topsoil depth and targets inputs very precisely within the field by using information technology embedded in farm equipment, are expected to show further significant yield improvements over the next decade, the GAP report states.

By 2030, Brazil's agricultural output is expected to be double its projected domestic food needs. In Latin America and the Caribbean, overall regional production is expected to exceed demand by more than 50%, with Brazil leading this increase in productivity.

China, too, has seen significant enhancements in its TFP but will need the likes of Brazil to help meet the demands of China's growing and more affluent and urban population.

Due to favorable government policies, more efficient use of inputs and improved practices, China's TFP-driven agricultural output increased more than 30% from 2000 to 2010, the GAP report says. The robust average TFP growth of 2.97% per year was made possible through significant investments in agricultural research and adoption of improved technologies.

Specifically, China doubled its spending on agricultural research and development from $1.9 billion to $4 billion between 2000 and 2008 and is estimated to have increased that spending by a further 50% during 2009-10.

"The 2013 GAP report shows that raising productivity across all regions requires long-term investments and sustained focus if we are going to have sufficient nutritious and affordable food and agriculture," GHI executive director Dr. Margaret Zeigler said. "To more sustainably increase output from every resource we use for food production, we need greater investment in agricultural research and development, better trade agreements for facilitation of global and regional trade in agriculture and a commitment to apply information and science-based technologies."

Read the full report at www.globalharvestinitiative.org.

Volume:85 Issue:45