Parkland Press

Tuesday, April 7, 2020

Guest View

Thursday, September 26, 2013 by JOHN BERRY Special to The Press in Opinion

Why don't more people farm?

We hear about how few farmers there are.

This may cause us to wonder why more people are not building careers as farmers.

One significant reason we don't have more farmers is productivity.

Because today's farmers are so productive, many do not have to farm in order for us all to eat.

We are free to pursue other careers such as bankers, manufacturers, teachers and nurses.

Productivity is the ratio of output to input in production; it is a measure of the efficiency of production.

Productivity has many benefits.

At the national level, productivity growth raises living standards because more real income improves people's ability to purchase goods and services, enjoy leisure, improve housing and education and contribute to social and environmental programs.

Productivity growth is important to a farm business because more real income means it can meet its obligations to customers, suppliers, workers and government (taxes and regulation), and still remain competitive or even improve its competitiveness in the market place.

It is widely agreed increased productivity is the main contributor to economic growth in U.S. agriculture.

The level of U.S. farm output in 2011 was 170 percent above its level in 1952, growing at an average annual rate of nearly 2 percent.

At the same time total input use increased a mere 0.11 percent annually, so the positive growth in farm sector output is substantially due to productivity growth.

For farmer single-factor measures of productivity, such as corn production per acre (yield or land productivity) or per hour of labor (labor productivity), have been used for many years because the underlying data are often easily available.

While useful, such measures can also mislead.

For example, yields could increase simply because farmers are adding more of other inputs, such as chemicals, labor, or machinery, to their land base.

Fortunately, our USDA produces measures of total factor productivity, taking account of the use of all inputs to the production process.

Specifically, annual productivity growth is the difference between growth of agricultural output and the growth of all inputs taken together.

Productivity therefore measures changes in the efficiency with which inputs are transformed into outputs.

Input measures are adjusted for changes in their quality, such as improvements in the efficacy of chemicals and seeds, changes in the demographics of the farm workforce, or innovations in machinery design.

As a result, agricultural productivity is driven by innovations in on-farm tasks, changes in the organization and structure of the farm sector, research aimed at improvements in farm production, and/or random events like weather.

On average in the U.S., we spend merely 8.5 percent of our income on total purchases of food, and beverage.

In France, it is closer to 17 percent, in Mexico it is 27 percent, 42 percent in Nigeria, and in Pakistan fully 50 percent of an average workers income is used for securing food and beverages.

We should all thank a farmer.

As the country with the lowest percentage of our disposable income needed to feed ourselves and our families, we have unique opportunities to consume and live as we wish.

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John Berry is the agricultural marketing educator for Penn State Extension, Lehigh County.