Identifying sources and trends for productivity growth in a sample of Queensland broad-acre beef enterprises

Abstract

The research reported in this paper considers the question of the possible sources of productivity change in the broad-acre beef sector in northern Australia over the last decade. Analysis is conducted over the components of total factor productivity growth for a subset of broad-acre beef production enterprises in Queensland. Specifically we consider the contributions of technological progress, scale changes (changes in the ‘size’ of an enterprise), and technical efficiency (how efficiently an enterprise combines their inputs to produce output) changes to total factor productivity growth using an index based on a decomposition of productivity change. The analysis employed a form for the production technology, which allowed for linear technological progress over time, accounted for rainfall and differences in land types and allowed for the testing of a range of sources of efficiency change. Results suggested that productivity growth within the sample was strong between 1999 and 2008 averaging 3.8% per year. The majority of this growth appeared to originate from technological progress (average growth of 2.7% per year) but there is the possibility that sample-leakage effects caused relatively low estimated contributions from technical efficiency growth (averaged 1.2% per year). Participation in a privately operated farm-business auditing program appeared to have a positive influence on enterprise technical efficiency.

Analyzing the impact of investment spikes on dynamic productivity growth

“…The overall average dynamic Luenberger productivity growth is negative, but close to zero. However, the analysis of the components of dynamic productivity growth reveals a more Overall, our findings are in contrast to these reported in the study of Gregg and Rolfe (2011), which for the Australian broad-acre beef production enterprises find strong productivity growth mainly due to technological progress. However, our results coincide also with Gregg and Rolfe (2011) in showing technical and scale efficiency improvements.…”

“…However, the analysis of the components of dynamic productivity growth reveals a more Overall, our findings are in contrast to these reported in the study of Gregg and Rolfe (2011), which for the Australian broad-acre beef production enterprises find strong productivity growth mainly due to technological progress. However, our results coincide also with Gregg and Rolfe (2011) in showing technical and scale efficiency improvements. Our findings are in contrast to Kim and Han (2001) that for Korean food manufacturing industry find technical progress, negative scale efficiency change and productivity growth.…”

Productivity and farm size inAustralian agriculture: reinvestigating the returns to scale

“…One is the presence of ‘economies of scale’ or increasing returns to scale (Knopke et al . , ; Gregg and Rolfe ). The other is that emerging technologies have favoured farms of relatively large size, leading to greater scope for input substitution, and improved access to capital for financing investments in new management and farming practices (Hooper et al .…”

“…Since the early 1980s, it has been observed that farm productivity has been increasing and also that the average operating size of farms in the Australian broadacre agricultural industry has also been increasing (Mullen ; Nossal and Sheng ; Gregg and Rolfe ). The relatively large farms in Australia have also demonstrated relatively high rates of return for investment and overall profits (Productivity Commission ; ABARES ; Nossal et al .…”

Measuring productivity change accounting for adjustment costs: evidence from the food industry in the European Union

“…In the context of Australian broad-acre beef production enterprises, Gregg and Rolfe (2011) found strong productivity growth due to technological progress and technical and scale efficiency improvements. Also in the Australian context, Doucouliagos and Hone (2001) found moderate productivity growth for the dairy processing industry, mainly driven by technical progress.…”