V. Eldon Ball

Agricultural Productivity Revisited

This paper describes production accounts for agriculture. Output is defined as gross production leaving the farm as opposed to real value added. Inputs are not limited to capital and labor but include intermediate inputs as well. We derive index numbers of gross output, capital, labor, and intermediate inputs. These data are used to construct indexes of total factor productivity. We then compare the contributions of input growth and productivity growth to economic growth. The important role of productivity growth in agriculture becomes immediately apparent. Copyright 1997, Oxford University Press.

Output, Input, and Productivity Measurement in U.S. Agriculture 1948–79

Tornqvist-Theil indexes of outputs and inputs are constructed. These data are used to construct indexes of productivity growth over the postwar period. The productivity indexes can be derived from a flexible multioutput-multifactor representation of the structure of production constrained to constant returns to scale. Total factor productivity grew at an average annual rate of 1.75%, compared with 1.70% per year estimated by the U.S. Department of Agriculture. The similar estimates of productivity growth overshadow some important differences in measurement of individual inputs.

Patterns of State Productivity Growth in the U.S. Farm Sector: Linking State and Aggregate Models

This article focuses on agricultural productivity growth at both sector and state levels. It does so in a way that preserves the economic integrity of national and state production accounts. A model accounting for interstate transactions in farm goods links sectorwide and state-specific measures of total factor productivity growth. An interesting conclusion is that the smooth, persistently positive trend typically observed for farm sector productivity growth masks considerable variation across states and regions. The results also indicate that farm sector productivity growth is wholly a function of productivity trends in the individual states. Interstate shifts in production activity and resource reallocations have had little impact. Copyright 1999, Oxford University Press.

An Economic Analysis of Technology in the Meat Products Industry

A nonhomothetic cost function allowing for variable elasticities of scale and substitution and neutral, as well as factor-using, technical change is estimated for the meat products industry. Empirical results suggest that over the period 1972–76 this industry was characterized by increasing returns to scale. The nonhomothetic and nonneutral specification implies that returns to scale and the rate of technical progress are significantly affected by factor price changes and the level of output. Higher labor prices lead to greater scale economies and to greater cost reductions through technological advances.

Modeling Supply Response in a Multiproduct Framework

The paper models multiproduct supply response in agriculture and tests key assumptions traditionally maintained in supply response studies. The technology is approximated by a restricted profit function. The properties of the restricted profit function are imposed during estimation. The hypothesis that maintains the existence of output price and quantity indexes that satisfy the adding-up property is rejected. The existence of individual production functions for each output is also rejected. Unless joint production is permitted, the estimates of responsiveness of a particular commodity to changes in own price or prices of competing outputs are likely to be considerably understated.

Productivity Growth in U.S. Agriculture

Innovation and changes in technology have been a driving force for gains in productivity growth in U.S. agriculture. USDAs Economic Research Service has developed annual indexes of agricultural inputs, outputs, and total factor productivity (TFP) for 1948 through 2004. American agriculture relies almost entirely on productivity growth to raise output. By lowering the cost of agricultural commodities, productivity growth benefits not only farmers but also food manufacturers and consumers.

Effective Costs and Chemical Use in United States Agricultural Production: Using the Environment as a “Free” Input

A cost-function-based production model is used to represent patterns of input use and output production in U.S. agriculture, and the implied costs of induced reductions in risk from agricultural chemicals (“bad outputs”). We estimate and evaluate shadow values for these harmful outputs, and the implied input- and output-specific substitution patterns, with a focus on the impacts on pesticide demand and its quality and quantity components. Using state-level data we find these measures to be statistically significant, vary substantively by region, and imply increased demand for effective pesticides associated with improvements in quality from embodied technology. Copyright 2002, Oxford University Press.

Input Demands and Inefficiency in U.S. Agriculture

Markov Chain Monte Carlo (MCMC) methods are used to estimate a seemingly unrelated regression (SUR) system of input demand functions for U.S. agriculture. Our demand functions have flexible forms and allow for nonrandom technical inefficiency. Concavity constraints are imposed at individual data points, and the distributions of measures of relative technical efficiency are constrained to the unit interval. Results are evaluated in terms of characteristics of the posterior distributions of parameters, measures of relative technical efficiency, and other nonlinear functions of the parameters. Copyright 1999, Oxford University Press.

U.S. Agriculture, 1960–96: A Multilateral Comparison of Total Factor Productivity

This study provides estimates of the growth and relative levels of agricultural productivity for the 48 contiguous States for the period 1960 to 1996. For the full 1960-96 period, every State exhibits a positive and generally substantial average annual rate of productivity growth. There is considerable variance, however. The wide disparity in growth rates resulted in substantial changes in the ranking order of States by productivity. For each year, we calculate the coefficient of variation of productivity levels. We use these coefficients to show that the range of levels of productivity has narrowed over time, although the pattern of convergence was far from uniform. The fact that in some States, productivity grew faster than others and yet the cross-section dispersion decreased, implies that the States whose productivity grew most rapidly were those with lower initial levels of productivity. This result is consistent with Gerschenkrons notion of the advantage of relative backwardness. The States that were particularly far behind the productivity leaders had the most to gain from the diffusion of technical knowledge and proceeded to grow most rapidly. We also observe a positive relation between capital accumulation and productivity growth, implying embodiment of technology in capital.

Cap reform: modelling supply response subject to the land set-aside

This paper uses duality theory to develop a model of European Community agriculture. The model is used to investigate the impact of the land set-aside provision of the recent package of reforms of the Common Agricultural Policy. We assume that producers chose output and variable input levels that maximize difference between revenue and variable cost. By including first-order conditions for the allocation of land across its uses, we impose that the observed allocations are profit-maximizing allocations. To overcome the problem of incorporating many outputs into an estimable production structure, we imposed a priori the restriction that the technology was weakly separable in major categories of outputs. With this restriction, it was possible to model production decisions in stages using consistent aggregates in the latter stages.