Climate, Environment and Socio-Economic Drivers of Global Agricultural Productivity Growth

Abstract

Growth in total factor productivity (TFP) indicates the sustainable and/or judicious use of scarce resources, including non-renewables. This paper identifies sources of growth in global agricultural TFP and its finer components, ranging from climate, production environment, and socio-economic factors, using a panel data of 104 countries, covering a 45-year period (1969–2013); and, finally, projects changes in TFP from increased climate variability. The results revealed that global agricultural productivity grew consistently at a rate of 0.44% p.a., driven by technological progress and mix-efficiency change, with negligible contributions from technical- and scale-efficiency changes; albeit with variations across regions. Both long-term and short-term climatic factors and the natural production environment significantly reduce global agricultural productivity, whereas a host of socio-economic factors have a significant but varied influence. The projected increased level of future climate variability will significantly reduce future agricultural productivity. Policy implications include investments in crop diversification, education, agricultural spending, number of researchers, and country specific R&D.