Agricultural Total Factor Productivity and the environment
A guide to emerging best practices in measurement
Increased productivity and sustainability of the agricultural sector are core policy
objectives in OECD and non-OECD countries. This Guide provides an overview of the
current state of the art in measuring sustainable productivity of the agricultural
sector and analysing sources of growth in a reliable and comparable manner across
countries in a way useful for policy makers. It draws on the contributions from members
of the OECD Network on Agricultural Total Factor Productivity (TFP) and the Environment
that brings together relevant experts from academia and national statistical agencies.
Its insights will be key for designing policies necessary to meet the triple challenge
of feeding a growing world population and providing incomes to food system actors
whilst ensuring environmental sustainability.The Guide presents recommendations in
two areas. First, on how to improve the traditional calculation of TFP based on market
prices inputs and outputs, proposing harmonised methods on capital measurement, land
pricing, output aggregation and quality adjustment. Second, on how to account for
environmental outcomes, considering a reduction in pollution or emissions as a productivity
gain, but the increased use of natural capital as a productivity loss. A main challenge
is the estimation of “shadow prices” for non-market inputs and outputs. It is recommended
to pursue several complementary avenues: investing in improving TFP methodologies
and data; continuing investigating its expansion to include environmental outcomes;
and mapping traditional TFP with other indicators of agri-environmental performance.
Published on May 30, 2022
In series:OECD Food, Agriculture and Fisheries Papersview more titles