Land Quality and International Agricultural Productivity: A Distance Function Approach
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Agricultural productivity measurement has been of great interest in recent years. Although analysts have long recognized that land quality plays an important role in agricultural productivity, land quality has been difficult to quantify and include in productivity models due to d ata limitations. Poor land quality, in the form of desertification, erosion, and poor soil quality, as well as climate and precipitation may limit growth in productivity over time. A Malmquist productivity index is proposed that decomposes productivity into efficiency change, technical change and land quality components and accounts for inter-country differences in land quality. The index is then applied to a 109-country data set covering 1980 to 2003. Many countries with lower productivity growth are limited by their resource endowment, and thus require policies and technology that reflect the needs of those environments.