Agricultural productivity

Agricultural productivity is measured as the ratio of agricultural outputs to agricultural inputs. While individual products are usually measured by weight, their varying densities make measuring overall agricultural output difficult. Therefore, output is usually measured as the market value of final output, which excludes intermediate products such as corn feed used in the meat industry. This output value may be compared to many different types of inputs such as labour and land (yield). These are called partial measures of productivity.

Agricultural productivity may also be measured by what is termed total factor productivity (TFP). This method of calculating agricultural productivity compares an index of agricultural inputs to an index of outputs. This measure of agricultural productivity was established to remedy the shortcomings of the partial measures of productivity; notably that it is often hard to identify the factors cause them to change. Changes in TFP are usually attributed to technological improvements.

Some sources of agricultural productivity are:

See: Productivity improving technologies (historical) Section: 2.4.1: Mechanization: Agriculture, Section 2.6: Scientific agriculture.

The productivity of a region's farms is important for many reasons. Aside from providing more food, increasing the productivity of farms affects the region's prospects for growth and competitiveness on the agricultural market, income distribution and savings, and labour migration. An increase in a region's agricultural productivity implies a more efficient distribution of scarce resources. As farmers adopt new techniques and differences, the more productive farmers benefit from an increase in their welfare while farmers who are not productive enough will exit the market to seek success elsewhere.

As a region's farms become more productive, its comparative advantage in agricultural products increases, which means that it can produce these products at a lower opportunity cost than can other regions. Therefore, the region becomes more competitive on the world market, which means that it can attract more consumers since they are able to buy more of the products offered for the same amount of money.

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