Introduction to "Agricultural Productivity and Producer Behavior"
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Chapter in forthcoming NBER book Agricultural Productivity and Producer Behavior, Wolfram Schlenker, editor
Agricultural yields, i.e., production per unit area, have been increasing at a steady pace since the green revolution started in the middle of the 20th century. At the same time, inflation-adjusted agricultural commodity prices have been trending downward as increases in supply outpaced increases in demand. Recent bad weather events, biofuel mandates, and a switch to a meat-heavy diet in emerging economies that requires more calories in its production has increased commodity prices, at least temporarily. Food is an essential good, and while its price is currently low due to its abundance, it is responsible for a large consumer surplus given the highly inelastic demand. This book contains eight chapters that were presented at a NBER conference in May 2017. They examine in further detail recent factors that contributed to the remarkably steady increase in agricultural productivity. The first two chapters study drivers of long-term productivity growth, specifically the role of GMO crops and changing climatic factors. Chapters 3-5 discuss the role of farm production responses to government regulation, namely, crop insurance, transport subsidies, and electricity subsidies to pump irrigation water. The last three chapters study the role of specific farm practices: crop diversification, disease management and water-saving methods.
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