Impact of Agricultural Productivity Changes on Agricultural Exports

Abstract

This study uses linear programming and econometric tools to determine the impact of agricultural productivity (technology) on agricultural exports. The study determines total factor productivity (TFP) using the Malmquist index method for a panel of 64 countries. Productivity impact on exports is determined by a two-stage estimation procedure. The results show agricultural productivity affects agricultural exports. This has important implications for developing countries. A 1 unit change in cumulative TFP increases agricultural output by .79% and a 1% increase in estimated agricultural output increases exports by .37%. Therefore, the total effect of technology on exports of primary and processed commodities is .29%. Developed countries generally have higher TFP rates, leading to higher export earnings; meanwhile, developing countries are not getting the benefits from agricultural exports because they have a relatively lower level of agricultural productivity. Investing in research and development for agriculture can improve technology, which, in turn, can Increase agricultural exports.