Productivity Growth in Indonesian Agriculture, 1961-2000

We use an index number and production function approach to measure total factor productivity (TFP) growth in Indonesian crop and livestock agriculture between 1961-2000. Tornqvist indices of output, input and TPF changes are developed to minimize biases that may result from relative price changes in factor and output weights. The results indicate that agricultural TFP growth accelerated in the 1970s and 1980s. Agricultural productivity growth was not limited to rice but also extended to other food and horticultural crops. However, TPF growth stagnated in the 1990s. Without new measures to increase productivity in agriculture, Indonesia’s efforts to generate broad-based economic development and further reduce poverty may be undermined. Key word