Global Agricultural Productivity


Public officials concerned with long-term world food security generally focus on 2050 when the world population will reach an expected peak at 9.1 billion people compared to 6.8 billion today. The larger population combined with a growing middle class and a desire to lower the one billion people currently with inadequate diets will require, depending on the assumptions used, a 70-100 percent increase in agricultural output. Achieving that increase in production without an increase in area farmed will require an accelerated increase in productivity, particularly over the next 20 years when demand will grow the most rapidly.


A recent analysis, 2010 GAP Report – Measuring Global Agricultural Productivity, from the Global Harvest Initiative, a group of for-profit companies involved in agriculture and non-profit organizations with interests in natural resource conservation, estimates that the annual growth in productivity for world agricultural output must increase from the current 1.4 percent to at least 1.75 percent, a 25 percent increase. The Farm Foundation developed these estimates based on data provided by the Economic Research Service (ERS) of USDA.

Most of the increase in demand will occur in developing countries because most developed countries are expected to have stable or declining populations. As incomes rise, the type of food demanded will also change. According to the Food and Agriculture Organization of the UN, cereals and root and tuber crops make up more than 60 percent of the world’s diet today and will decline to 54 percent by 2050. Animal proteins and vegetable oils will increase to 40 percent, up from one-third today. Fresh fruits and vegetables consumption is also expected to increase.

The report uses Total Factor Productivity (TFP) – the output per unit of total resources employed in production. Changes in TFP are caused by changes in technology and efficiencies in allocating inputs. Factors can also change, like less labor and more mechanization. A one percent gain in TFP is equivalent to a one percent reduction in resources needed to produce one ton of agricultural output. This is different from yield per acre where output produced is measured against only one factor, area harvested, without regard for other inputs used. According to the analysis, about one-third of the 2.2 percent per year growth in world crop and livestock production in the 1970s and 1980s was accounted for by improvements in TFP, the other two-thirds was from using more resources. From 1990-2007, output was still growing at just over 2 percent per year, but TFP accounted for over 70 percent of the growth. For 2000-2007, world TFP grew 1.4 percent per year.

According to ERS estimates, from 1970-2007 Malaysia’s TFP grew by 3.1 percent per year, China 2.5 percent and Brazil 2.4 percent. They are not likely to achieve those levels going forward, but they show the potential for developing countries to increase TFP. Sub-Saharan Africa had a 0.5 percent per year increase and the countries of the old Soviet Union averaged 0.6 percent per year. The U.S. and most developed countries had TFP growth of 1-2 percent per year from 1970-2007.

According to the report, over the last 35 years market prices have discourage research and investment that leads to the type of rapid growth in productivity now needed. The International Monetary Fund food commodity price index for 1975 to 2005 remained essentially unchanged in nominal terms and declined by about 4 percent per year in real terms. Over that time consumers benefited from a nearly 60-percent reduction in the real price of food commodities.

The public policy framework for increasing food production has changed from the Green Revolution of the 1960s and 1970s when production increased by introducing higher yield varieties and expanding land area, fertilizer application and irrigation. Agriculture is being asked to freeze or reduce its carbon footprint, to do more with less. Changes over the next 40 years will focus more on being better stewards of existing resources, technological innovations to increase efficiencies and public policy reforms to provide incentives for research. These will build on biotech crops, conservation tillage, drip irrigation, integrated pest management, precision agriculture, and new multiple cropping practices introduced over the last 30 years.

To no great surprise, the report recognizes that, “The primary lever for raising TFP growth is by increasing investments in science and technology.” The Green Revolution showed that increased research can lead to increases agricultural output. Those research activities take years to payoff, and funding for agricultural research and extension programs has been declining in recent years. Accelerated farmer outreach programs need to be implemented immediately to move proven practices onto farms in the near term, while expanded research efforts provide new technologies in the long term. More than half of the food demand growth from increasing populations and incomes to 2050 will occur in the next 20 years and requires TFP improvements to be front loaded. Reducing food waste in the supply chain from farms to consumers would also help to meet the food challenge.

The report notes that agricultural resources and population are not evenly spread around the world. Free trade in agricultural products must be allowed to provide incentives to produce where the efficiencies are largest and increase the TFP. Market opening can be a source of TFP growth if producers shift resources to grow more high-value commodities. At the same time, knowledge and technology must be allowed to flow freely among countries to increase the TFP in the short run and lower the cost of developing technologies for long-term improvements in TFP.

Higher agricultural commodity prices in 2007 and 2008 provided a wakeup call for the need to increase research to close the TFP gap, and the short wheat crops in the Black Sea region this summer were a reminder of the sensitivities of world markets. Given the environmental concerns present in develop and developing countries related to increasing areas cropped, increasing TFP is the only solution to feeding a growing world population. While increasing the annual TFP increase from 1.4 percent to 1.75 percent is a challenge, it appears doable given the opportunities for rapid advancements in some developing countries. 

Ross Korves

Ross Korves

Ross Korves served Truth about Trade & Technology, before it became Global Farmer Network, from 2004 – 2015 as the Economic and Trade Policy Analyst.

Researching and analyzing economic issues important to agricultural producers, Ross provided an intimate understanding regarding the interface of economic policy analysis and the political process.

Mr. Korves served the American Farm Bureau Federation as an Economist from 1980-2004. He served as Chief Economist from April 2001 through September 2003 and held the title of Senior Economist from September 2003 through August 2004.

Born and raised on a southern Illinois hog farm and educated at Southern Illinois University, Ross holds a Masters Degree in Agribusiness Economics. His studies and research expanded internationally through his work in Germany as a 1984 McCloy Agricultural Fellow and study travel to Japan in 1982, Zambia and Kenya in 1985 and Germany in 1987.

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