Along with the population, U.S. agricultural output has more than doubled since 1948, says a USDA report. “With little growth in total input use (0.07 percent per year) during that period, the extraordinary performance of the U.S. farm sector was driven mainly by productivity growth, at an annual rate of 1.42 percent,” according to the report. In that six-decade period, improved seeds, mechanization and agricultural chemicals came into play while the role of labor and land was diminished. In fact, growers use about 25 percent less farmland today than they did in 1950.
When crop yields slowed in the past two decades, it prompted questions about agricultural productivity. The report by USDA’s Economic Research Service “finds no statistical evidence of a productivity slowdown over the last six decades.”
The future is less certain, the report concludes, because of a decrease, in inflation-adjusted dollars, in public funding of agricultural research. Innovation is the major driver of productivity growth in the long term. Private sector spending has risen but it has mostly focused on marketable goods. The study says public and private spending on productivity research probably has increased at less than 1 percent a year since 2001.
If government funding continues to grow at 1 percent a year, productivity would grow at an average 1.46 percent annually through 2050, the report says. If funding holds steady at current rates, the productivity growth rate would slow to 0.86 percent. The difference in growth rates seems small but the long-term effect is large. The higher growth rate means an 80-percent increase in output at the end of four decades – enough to keep up with domestic and global demand for food. The slower rate equals a 40 percent growth in output and risks higher food prices, environmental damage from putting marginal land into food production, and heavier use of fertilizer and pesticides.