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2013 GAP Report® – Producing More With Less
Agricultural productivity is typically measured in terms of yield: how many bushels per acre, kilograms per hectare, pounds of meat per animal, or liters of milk per cow. To increase crop and livestock yields, producers may use a range of strategies:
- Expansion — extending irrigation to cropland;
- Intensification — increasing application of fertilizer, machinery, labor, or other inputs on land used to grow crops or raise livestock; or
- Efficiency — adopting technologies and practices that result in more output from existing resources, measured by total factor productivity (TFP).
Total factor productivity is the ratio of agricultural outputs (gross crop and livestock output) to inputs (land, labor, fertilizer, machinery and livestock). When TFP rises, more output can be produced from a fixed amount of inputs. TFP growth can result from increased effectiveness of inputs, more precise use of inputs or the adoption of improved production practices.
THE CRITICAL IMPORTANCE OF TFP
Achieving higher agricultural productivity through TFP is important for many reasons: to supply sufficient food, fiber and fuel for a growing population; to reduce costs to farmers and improve their incomes; to stabilize the prices of food for consumers; and to reduce impact on the natural resource base.
Figure 1: Total Factor Productivity
To produce more with less, farmers must adopt technologies and practices that obtain more output from existing resources. These increases can result from higher-yielding crop varieties, better and more timely cultivation and harvesting practices, or more precise information about when to plant and the amount of fertilizer to apply. Animal outputs benefit from inoculations that prevent common diseases and feed formulations that improve growth and production, as well as improved animal care and handling practices.
Agricultural innovation and technologies along the entire value chain are helping farmers become more efficient users of existing land, labor, fertilizer, machinery and livestock. Thanks to enhanced agricultural research and development and extension of these practices and technologies, TFP has become the largest contributor to expanded global agricultural output over the past 20 years.9
Figure 2: Sources of Growth in Global Agricultural Output (1961-2010)
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Producing More With Less