Agricultural productivity is a big concept with a global impact, but it starts with efficient on-farm management.
How productive or efficient our global food production systems can become will significantly impact our future well-being. A high level of productivity in the agricultural sector ensures abundant and affordable food while fostering economic growth and food security and conserving limited natural resources like land and water. This is especially critical as we face expanding populations and climate change extremes predicted to tax our current food production systems.
But while agricultural productivity growth has far-reaching, planetary repercussions, improving agricultural efficiency always has and will continue to be accomplished at the farm level, using technological innovation to boost efficient farm management.
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Agricultural Productivity: What is It and its History
At the simplest level, agricultural productivity is defined as the ratio of agricultural outputs to inputs.
Productivity can be measured at many different levels. For instance, the production systems of a single farm, a multi-farm cooperative, a region, a country or even the planet can all be measured based on agricultural productivity. On a country level, agricultural productivity growth measures agricultural exports versus imports. A government that can sustain a higher level of agricultural exports supports a more robust economic growth rate, becomes more competitive globally, and maintains more sustainable food prices for its population.
History of Agricultural Productivity and Innovation
Significant events have boosted agricultural efficiency and, ultimately, productivity throughout history—with far-reaching results.
The early technological innovation of artificial irrigation in ancient Mesopotamia was the forerunner to early civilization, allowing early societies to plan and manage their harvests. The invention of the steel plow in 1837 by John Deere revolutionized farming, allowing farmers to turn fertile prairie sod into cropland quickly.
The “Green Revolution” of the 1960s and 70s was the most recent period of significant growth in agricultural productivity as the use of chemically-based fertilizers and pesticides plus rapid advancements in plant breeding allowed farmers to boost their production rates significantly, meeting the food demands of growing populations while lessening the need on land use, labor and other resources.
In recent years, farmers in developed countries have experienced a slower productivity growth rate because their agricultural output levels are already so high. Simply put, farmers in countries like the U.S. and U.K. are already farming using highly efficient practices making it difficult to improve upon their already high farm productivity rates.
But at the same time, farmers in developing regions of the world, like Asia, with already comparatively low agricultural productivity rates due to slower adoption of technological innovation, are seeing slowdowns in the growth of their productivity rates mainly due to the adverse effects of greenhouse gases inducing climate change weather extremes.
A 2021 study by Cornell University found that climate change has slowed down global agricultural productivity enough to have eliminated about seven years of agricultural output growth in the last 60 years. And according to the United States Department of Agriculture (USDA), growth in global agricultural productivity slowed between 2011 and 2019 compared to previous years, meaning the world is looking at the potential reduction in agricultural output during a time of increased food needs.
The key to reversing this trend and increasing the rate of agricultural outputs while not taxing land-use resources and inputs is through new technologies and innovation.
Measuring Agricultural Productivity
Getting a true sense of productivity and agricultural growth in food production at the business level is more complex than measuring yield increases or choosing the best crops suited for a specific region.
Most farms and farm businesses produce multiple products with many inputs. Oftentimes, those crop production systems support each other in a whole-farm ecosystem, such as corn planting following soybeans to break up disease cycles and lessen nutrient demands on soil health or grazing animals through harvested crops to add manure and reduce harvest residue. These sorts of operational complexities are typical in most farming businesses, whether smallholder farms or large agribusinesses, making measuring farm efficiency even more complicated.
Also, different regions and individual farms have varying degrees of obtainable agricultural productivity based on climate, soil types and other variables. Plus, farmers and cooperative farm businesses must always keep in mind the market economics of their productivity levels. A crop that grows well without significant inputs but sells for a low price because of low demand or high competition may not achieve profitability. On the other hand, if that farm can improve its efficiency metrics through new technology, it may, indeed, achieve positive economic benefits.
Tools for Measuring Productivity in the Agricultural Sector
There are multiple tools used for measuring agricultural productivity.
Total Factor Productivity (TFP)
A comparison of agricultural inputs to an index of agricultural outputs. TFP calculates the total agricultural output compared to the combination of land, labor, capital and material resources such as fertilizer, chemicals and seeds employed to generate that output.
If the total output is growing faster than the total inputs needed to produce it, then the TFP of a farm or farm business is increasing.
The maximum yield performance of a particular crop, or varietal, per hectare or unit of land area. Understanding the different crop yield productivity potential per crop or varietal is key to improving agricultural efficiency.
Technical Efficiency (TE)
Achieving technical efficiency means a farm is producing at the maximum level as allowed by the technology it has access to. Technology in this sense includes inputs like soil quality, human capital or labor availability, variable costs, capital expenses and even the age and education of the farmer can be calculated as potential factors of technical efficiency. Essentially, the measurement of TE is how efficient a farm’s management practices are based upon the inputs at its disposal.
The production frontier corresponds to the farm’s maximum attainable output potential, based upon its unique set of circumstances and inputs. It’s the highest level of best management practices a specific farm could hope to achieve. For instance, rice yields in a naturally dry arid region like sub-Saharan Africa are unlikely to reach what is obtained in climates more suitable for rice production like Asia.
How to Improve Agricultural Productivity?
There are many ways farmers can improve their agricultural productivity. Strategies include:
Precision farming practices
Technology like variable-rate seeding and fertilizing allows farmers to automatically seed and apply nutrients at the exact amount needed at the precise spot to optimize the best yields for required inputs based on soil types and other data inputs.
Soil Health Practices
Optimizing natural soil fertility and water-holding capacity using soil-building practices like cover cropping to support high yields and crop quality.
High-Quality Seed Stock
Vigorous seeds, climate-specific seeds or genetically-appropriate livestock suitable for a farm’s specific conditions and requirements to help increase yields.
Mechanization and Automation.
Mechanization and automation reduce labor needs and costs while improving efficiencies.
The Four R’s
Applying the right source, at the right rate, at the right time and the right place to support good nutrient management.
Installing a low-energy, water-efficient, and labor-friendly irrigation system supports lowered costs with better yield outcomes.
Integrated Pest Management (IPM)
Taking proactive measures to avoid, identify and treat pest and disease outbreaks when they occur.
Using farm software management to collect and analyze data for the purposes of informing real-time, in-season production decisions.
What Does Better Productivity Look Like for Big Farms, Cooperatives and Food Producers?
The same basic concepts for improving agricultural productivity apply to small farms as they do to big farms, agro-businesses, farm cooperatives and food producers. However, more extensive operations have both advantages and disadvantages in improving their agricultural productivity.
Easy Ways to Improve Agricultural Productivity for Large Farm Operations or Cooperatives
Large farm operations and cooperatives have many advantages in improving their overall farm efficiency, farm output and productivity measures.
They have purchasing power, which means they can buy inputs in volume to capture lower prices. They also have the power of capital, meaning they can more easily raise money at lower interest rates to invest in mechanization and technological innovations.
Larger farms and cooperatives also have the power to aggregate data. They have much information they can capture that, when analyzed, will reveal additional areas where operational efficiencies can be achieved.
Stumbling Blocks to Improving Agricultural Productivity on Large Farm Operations or Cooperatives
But large farms and cooperatives can also face stumbling blocks in improving their efficiencies because of their sheer size.
Time management can be a significant factor in more extensive operations, as more and more time is needed to run the complex operational side of the business.
Each farm in a cooperative or even multiple fields in a single farm operation must be looked at through a macro and micro lens. Even though the best economic efficiencies might appear to be achieved by applying uniform practices across an entire operation-like one specific cultivar or a specific fertilizer mix. Farms are not cookie-cutter examples of each other; each one is different and ideally should be optimized to reach its production frontier.
Ultimately, large farm operations have the disadvantage of an overwhelming amount of data, inputs, and people to analyze, manage and make best practice decisions about.
Case Studies of Agricultural Productivity Improvements in Developing Countries
Despite the challenges and recent setbacks in global agricultural productivity rates, the future horizon is optimistic for farm efficiency improvements and their potential impact on economic development. This is especially true in developing nations that have significant potential to improve their current productivity rates by intensifying their agricultural lands.
New advancements in on-farm data collection and analysis, IoT solutions, mechanization, automation, science-based breakthroughs and information technology are bringing novel new solutions to farms and farming regions, especially in developing nations lagging far behind in technological innovation.
Digital farm advancements are increasingly becoming part of national food policy goals, with the potential to improve livelihoods significantly, reduce low-income impacts and build resilient food supply systems. Organizations like the United Nations Food and Agricultural Organization (FAO), the UN’s Sustainable Development Goals, and the World Bank evaluate current agricultural research in the farm sector to determine productivity growth rates and set recommendations to aggregate areas of potential improvement.
Examples of successful gains in agricultural productivity using digital technological innovation include:
Digitizing Soils Maps for African Nations
The USDA Natural Resources Conservation Services makes high-quality soil maps digitally available to U.S. farmers. They provide a helpful tool that gives farmers valuable information about their soil quality, including their native fertility. U.S. farmers import these maps into other farm management digital services. However, that amenity has not been available to farmers in many other nations.
Recently Purdue University worked with a digital map delivery service to create updated, digital soil maps for rural areas of western Kenya. This enables efficient farm management decisions based on revised soil health science.
Using Blockchain to Connect Small Farmers with Small and Medium-Sized Vendors
In 2014, a food company in Kenya began connecting Kenyan small farmers with small and medium-size vendors using blockchain technology, eliminating the need for resource wasteful wholesale markets. Increasing access to the internet and mobile devices enables more web-based solutions to improve agricultural efficiencies in developing nations.
Using Smart Phone Apps to Stave off Crop Disease
African sweet potato farmers now have access to a disease-identifying smartphone app to recognize sweet potato virus infections and provide diagnostic advice. The technology was developed by CIGAR and Penn State University and included developing a database on sweet potato diseases.
Improving Productivity: Digital Farming for Increased Efficiency
Improving on-farm productivity has always been about not farming harder but smarter. Digital farming tools are the next giant leap forward in that natural progression to more efficient farm management practices no matter what the farm size.
AGRIVI’s farm management software helps farmers, large farm agro-business, farm cooperatives, and food producers make the next step in the efficient management of their whole farm production and the entire farm supply chain.
AGRIVI tracks activities at the field level, collecting and managing the data on crucial inputs like fertilizers, pesticides, work hours and mechanization. This data is then combined with financial reports for farm analysis at the field, farm and operational levels.
With this information, farm businesses can effectively analyze the productivity of their operations, identify weak points and determine where the best ROI can be had for investments in new farming techniques and approaches. In addition, AGRIVI’s IoT solution automates farm tasks like irrigation and keeps track of worker hours and work orders.
Farm smarter and use the AGRIVI system to improve your productivity!