Agricultural Productivity and Concurrent Production of Ecosystem Services

October 13, 2023

Agricultural productivity is a core element in strengthening sustainable agricultural systems nationally and globally. The 2023 Global Agricultural Productivity (GAP) report recently released finds the average total factor productivity (TFP) growth rate of 1.14% annually between 2011-2021 has consistently fallen below a target annual growth rate of 1.91% TFP. The GAP index based on TFP, first published in 2010, tracks changes in how efficient agricultural inputs (land, labor, fertilizer, feed, machinery and livestock) are transformed into outputs (crops, livestock and aquaculture products). TFP growth occurs when producers increase the output of agricultural products while using the same amount or less land, labor capital, fertilizer, feed and livestock. Growth and declining rates based on this system of accounting respond to efficiencies and optimization of resource inputs. Report authors conclude that the source of increased efficiencies and optimization (and increasing TFP growth rates) is producer access to and adoption of productivity enhancing tools and technologies. The report recommends that policies, infrastructure, research and investments focused on innovation, tools and technologies are the key to increasing the TFP growth rates necessary to meet annual targets.

Solutions from the Land agrees that major and minor shocks and uncertainties-climate variability,  fluctuations in demand and supply, and internal country and global conflicts are disrupting agricultural production and its supply chains. Further we concur with several of the key messages of this report:

1) producers at all scales should have access to proven, appropriate and productivity enhancing tools and technologies,

2) strengthening policy, infrastructure, markets, and agricultural research and extension can increase innovation and the variety of tools and technologies available to improve sustainability of agricultural systems, and

3) collaboration among public, private, and civil society sectors will be necessary to create cross-boundary solutions to increasing access and adoption of proven technologies and tools.

However, SfL finds the report has a number of critical shortcomings.

Water access, availability and management is missing as an explicit domain in the framework for tools and technologies needed to increase TFP growth. We agree that the seven 7 key strategic domains: genetics, precision agriculture, soil health, integrated production system, pest & disease management, mechanism and automation, and knowledge sharing platforms are important. The glaring omission is water management and soil-water relationships which are central to productivity.

Of greater concern is the treatment of ecosystem services as an externality to TFP calculations. SfL farmers believe the challenge to achieving global sustainable development goals–no poverty, zero hunger, good health and well-being, clean water, robust livelihoods, health of life on land and below water, and other SDGs is for agriculture to concurrently deliver productively and profitability AND ecosystem health and well-being. This entails going beyond treating the agro-ecosystem as a resource and input only to achieve efficiency and optimization of productivity. Healthy local and global ecosystems provide direct and indirect value to human and earth communities that the TFP does not capture. Although the current 2023 report is silent on this shortcoming, the 2021 GAP Report acknowledges that water, particularly rainfed regions is difficult to value (and therefore not measured) and that environment outputs impact the productivity, health and resilience of ecosystems. The 2021 Report further proposed the need for total resource productivity (TRP) output measures to be integrated into the total factor productivity.  This is no small matter, and results in TFP indices over time that never account for improvement or severe degradation to agro-ecosystems. As a result, tools and technologies that target increasing the TFP growth miss their mark and risk mis-representing progress (or regression) toward improved farm household and global quality of life.

This brings us to the bigger question, “Is continuous improvement of agricultural productivity the right goal?” Are we using the wrong metric to measure and track the success of agriculture and the multiple benefits it can provide to society? The wrong metric can lead to mis-directed investments.

Productivity is not the same as a profitable livelihood or high quality of life.  A Virigina grain farmer concedes that technology can increase productivity at all scales. “However,” he admits, “technology can be difficult to access depending on the scale of the farm. Smaller farms with less liquidity have issues with keeping up with modern technology and often find it difficult to continually add new technologies to their production.”  Continual investment in new, top of the line equipment is expensive and difficult to maintain. It can increase the debt load of the producer without bringing in the return needed to be profitable. He observes, “for farmers to be willing to invest in new technology, it has to be worth in investing, reliable and useful over several years.”

SfL encourages the authors of the next GAP Report to pro-actively strive to develop reliable measures of water, indigenous seed, livestock and plant varieties and other ecosystem services and a methodology for integrating the value of ecosystem resources into the TFP index. Even more important is to re-orient agriculture’s goal structure towards multi benefit capacity rather than the singular goal of productivity.  Efficiency and optimization of productivity is a linear approach that misses opportunities for agriculture to achieve many of societal needs. The concurrent delivery of agricultural products and ecosystem services will require new pathways and circular system approaches that utilize innovation and adoption of technologies that improve the sustainability of agricultural systems and earth systems and new metrics for measuring progress.

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An Agricultural Renaissance, led by innovative and entrepreneurial farmers, ranchers and foresters constructing sustainable, profitable and resilient systems that lay the foundation for a world of abundance on many scales capable of producing nutritious food, feed, fiber, clean energy, healthy ecosystems, quality livelihoods, and strong rural economies.