Agricultural productivity: Measurement, forecasting and implications for trade

This dissertation studies agricultural productivity growth in developing countries and its implications for world trade. It begins by examining one of the most controversial aspects in the empirical literature: the evidence of negative agricultural productivity growth in developing countries. It then narrows in on livestock productivity, potential convergence, and the implications for international trade. The first part of this dissertation examines measurement problems of total factor productivity in developing countries. The evidence from the literature shows that most developing countries have experienced relatively rapid technical regress over the past three decades. The plausibility of these non-parametric results is discussed and it is argued that they are the consequence of the combination of biased technical change and a particular definition of technology. When the non-parametric Malmquist index is reestimated using a broader definition of technology, a more plausible finding is obtained, namely that most developing countries have experienced positive productivity growth, driven largely by technical change. The second part of the dissertation examines evolving trends in livestock productivity and makes projections to the year 2010. Here, it is assumed that observable growth in productivity can be modeled as a diffusion process of new technologies in which the cumulative adoption path follows a logistic curve. While analysis of historical rates of productivity growth shows that developing countries have lagged behind producers in high income countries, projections suggest that this will be reversed in the coming decade due to catching-up in the developing countries and a slowdown of productivity growth in the high income countries. A global general equilibrium approach is used to analyze the impact of projected national productivity growth rates on future trade in livestock products. Results show that projected acceleration in the productivity growth rate in developing countries for the coming decade is insufficient to satisfy their emerging demand for meats. Therefore, increasing net imports are expected. In light of the substantial uncertainty inherent in productivity forecasts, a systematic sensitivity analysis is also performed. This highlights the importance of macro-economic uncertainty in the future of world livestock trade, particularly in the case of the Chinese economy