Reassessing agricultural growth: Introducing a sustainable productivity index for Latin America and the Caribbean

Nin-Pratt, Alejandro

Reassessing agricultural growth: Introducing a sustainable productivity index for Latin America and the Caribbean

Autores

Nin-Pratt, Alejandro

Editor

Inter-American Development Bank

Descripción

This chapter introduces a sustainable productivity index (SPI) to evaluate agricultural growth in Latin America and the Caribbean (LAC) between 1995 and 2021, integrating economic output with environmental costs. While LAC doubled its agricultural output and led global productivity gains during this period, this progress came with significant environmental degradation, including a 50% rise in pollution and pressures on natural resources, such as water stress, soil erosion, and deforestation. The SPI adjusts conventional total factor productivity (TFP) by penalizing undesirable outputs like greenhouse gas emissions and nutrient runoff, offering a more accurate picture of sustainable growth. Findings reveal that while productivity increased by 60%, sustainability-adjusted productivity rose by only 13%, with sharp disparities across subregions. The Southern Cone achieved the highest output and productivity growth but also incurred the steepest environmental costs. Central America and the Andean region recorded moderate gains with varying environmental impacts, while the Caribbean fell behind. The study underscores that agricultural modernization in LAC has often been capital-intensive and export-driven, marginalizing smallholders and degrading ecosystems. The results call for a policy shift toward integrated, context-sensitive strategies that balance productivity with environmental stewardship. Technological innovations—such as precision fertilization and biological alternatives—combined with policy incentives like payments for ecosystem services and environmental taxes, institutional reforms to strengthen interministerial coordination, and public investment in dual-purpose R+D+i systems, are essential to support sustainable and resilient agricultural systems across the region.