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Australian Government
abare.gov.au
Australian Agricultural and Resource Economics Society (AARES)
Has growth in productivity in Australian broadacre agriculture slowed?
    Abstract
      Introduction
      Productivity growth
      in Australian broadacre agriculture
      Is productivity growth in agriculture slowing?
      Methodology and
      estimation strategy
      Estimation results
      Conclusions
      Appendix
      Download PDF

Has growth in productivity in Australian broadacre agriculture slowed?

Yu Sheng*, John Denis Mullen** and Shiji Zhao***

Abstract

Agricultural productivity growth has been strong relative to other sectors in the Australian economy, and relative to the agricultural sectors of other developed countries. However, as commonly observed among other developed economies, growth in productivity in the broadacre sector of Australian agriculture seems to have slowed in the past decade. This paper uses the adjusted cumulative sum square (CUSQ) index to examine the trend stability of total factor productivity in Australian broadacre agriculture over the period 1952-53 to 2006-07. The results show that a significant slowdown occurred around the mid-1990s. Further analysis shows that the slowdown in productivity growth is driven by a long-term decline in public R&D investment in addition to poor seasonal conditions in the past decade.

Key words
Total factor productivity, structural change analysis, CUSUM index

* Yu Sheng
Principal Economist
Productivity Section, Productivity, Water and Fisheries Branch
Australian Bureau of Agricultural and Resource Economics
Tel: +61 2 6272 2051 Fax: +61 2 6272 2348
Email: yu.sheng@abare.gov.au

** John Denis Mullen
Adjunct professor, Institute for Land, Water and Society
Charles Sturt University
Tel: +61 2 6361 8615
Email: johnmullen2@bigpond.com

*** Shiji Zhao
Section Manager and Senior Economist
Productivity Section,
Productivity, Water and Fisheries Branch
Australian Bureau of Agricultural and Resource Economics
Tel: +61 2 6272 2047 Fax: +61 2 6272 2348
Email: shiji.zhao@abare.gov.au

Acknowledgements

Financial support from GRDC is gratefully acknowledged. The authors also want to thank Peter Gooday, Jammie Penm, Katarina Nossal, Professor Chris O’Donnell and all participants at the workshop ‘Measuring Agricultural Productivity’ hosted by the Centre for Efficiency and Productivity Analysis, School of Economics, University of Queensland for their useful comments and suggestions. All remaining errors belong to the authors.