Agricultural Productivity - Importance of Agricultural Productivity

Importance of Agricultural Productivity

The productivity of a region's farms is important for many reasons. Aside from providing more food, increasing the productivity of farms affects the region's prospects for growth and competitiveness on the agricultural market, income distribution and savings, and labour migration. An increase in a region's agricultural productivity implies a more efficient distribution of scarce resources. As farmers adopt new techniques and differences in productivity arise, the more productive farmers benefit from an increase in their welfare while farmers who are not productive enough will exit the market to seek success elsewhere.

As a region's farms become more productive, its comparative advantage in agricultural products increases, which means that it can produce these products at a lower opportunity cost than can other regions. Therefore, the region becomes more competitive on the world market, which means that it can attract more consumers since they are able to buy more of the products offered for the same amount of money.

Increases in agricultural productivity lead also to agricultural growth and can help to alleviate poverty in poor and developing countries, where agriculture often employs the greatest portion of the population. As farms become more productive, the wages earned by those who work in agriculture increase. At the same time, food prices decrease and food supplies become more stable. Labourers therefore have more money to spend on food as well as other products. This also leads to agricultural growth. People see that there is a greater opportunity earn their living by farming and are attracted to agriculture either as owners of farms themselves or as labourers.

However, it is not only the people employed in agriculture who benefit from increases in agricultural productivity. Those employed in other sectors also enjoy lower food prices and a more stable food supply. Their wages may also increase.

Agricultural productivity is becoming increasingly important as the world population continues to grow. India, one of the world's most populous countries, has taken steps in the past decades to increase its land productivity. Forty years ago, North India produced only wheat, but with the advent of the earlier maturing high-yielding wheats and rices, the wheat could be harvested in time to plant rice. This wheat/rice combination is now widely used throughout the Punjab, Haryana, and parts of Uttar Pradesh. The wheat yield of three tons and rice yield of two tons combine for five tons of grain per hectare, helping to feed India's 1.1 billion people.