Productivity growth in Irish agriculture

Abstract

Agricultural productivity growth is an important parameter in assessing the likely competitiveness of Irish agriculture in the more market-oriented environment that the industry will face in the next decade. Although growth in Irish agricultural output compares well with the performance of other EU countries, there is evidence that this growth has been unduly dependent on increased input use rather than increased productivity. Resource-intensive as opposed to knowledge-intensive growth is more likely to face diminishing returns over time. To evaluate this issue requires information on the rate and nature of agricultural productivity growth. This paper discusses the issues in constructing an index of total factor productivity (TFP) growth in Irish agriculture, presents an updated TFP series and discusses the implications for future policies dealing with agricultural innovation, structures and competitiveness.