It is widely agreed that increased productivity, arising from innovation and changes in technology, is the main contributor to economic growth in U.S. agriculture. ERS data, research, and analyses quantify productivity improvements, the sources of improvement, and investigate the role of the public and private sectors in fostering U.S. agricultural productivity growth through research, education, infrastructure, and technological advances. Research on global agricultural productivity focuses on quantifying comparable productivity growth measures for countries and regions worldwide.
- ERS' productivity accounts provide estimates of productivity growth for the aggregate U.S. farm sector for the period 1948-2015, and estimates of the growth and relative levels of productivity for the individual States for the period 1960-2004. According to the statistics (see the ERS data product, Agricultural Productivity in the U.S.), growth in farm sector output was due almost entirely to productivity growth over the post-war period.
- Though total annual use of agricultural inputs has changed little since 1948, the mix of inputs shifted significantly, with intermediate inputs (e.g., agricultural chemicals and purchased services) use increasing and labor/land input use decreasing. The output mix has changed as well, with crop production growing faster than livestock production. See the ERS report, Agricultural Productivity Growth in the United States: Measurement, Trends, and Drivers (ERR-189, July 2015) for more information.
- Studies have shown that public investment in agricultural research has resulted in large economic benefits with annual rates of return between 20 and 60 percent, see Economic Returns to Public Agricultural Research (EB-10, 2007). The Agricultural Act of 2014 authorized funding for research, extension, and education—including competitive grants and capacity funding (i.e., awarded by formula) to Land Grant institutions and State agricultural experiment stations, and intramural funding for USDA research agencies, and identified high-priority research areas and new research initiatives. See Agricultural Act of 2014: Highlights and Implications and the section under Research for more information.
ERS-compiled data (see Agricultural Research Funding in the Public and Private Sectors) show that since about 1980, growth rates in public R&D have been generally slow. Levels of private investment have generally been higher, but with greater variation. In the early 2000s, public and private agricultural research investments began to diverge more rapidly. Real (inflation-adjusted) spending for private agricultural and food R&D nearly doubled between 2003 and 2013, while real public R&D spending fell. By 2010, private R&D for agricultural inputs alone surpassed the public level for all research.
- To estimate the likely impacts of public research and development (R&D) funding choices on productivity growth, ERS projected future productivity growth with alternative public R&D investment scenarios. This analysis found that declines in public R&D have a more pronounced effects in the longrun than in the short-term. Even if public R&D investment recovers, future productivity growth (in terms of total factor productivity) would take some time to resume due to the lag between research investment and application. See the September 2015 Amber Waves feature, U.S. Agricultural Productivity Growth: The Past, Challenges, and the Future for more information.
- Models and data decompose the sources of growth in global agricultural output. Globally, productivity growth accounts for a rising share of the increase in agricultural production, easing pressure on natural resources to supply the rising demand for food and agricultural commodities (see the ERS data product, International Agricultural Productivity, Growth in Global Agricultural Productivity: An Update (Amber Waves magazine, November 2013), and Accelerating Productivity Growth Offsets Decline in Resource Expansion in Global Agriculture (Amber Waves, September 2010).