Growth in U.S. agriculture is linked to the non-farm economy through domestic terms of trade and factor market adjustments. With almost stable input growth, the relatively large contributions from growth in Total Factor Productivity (TFP) are passed on to intermediate and final consumers in the form of declining real prices for primary farm products. The resulting net growth in the real value of farm output (GDP) is relatively low (0.25% per annum). The decomposition of TFP suggests that public agricultural stock of knowledge and infrastructure are "robustly" associated with TFP growth, while spill-overs from private agricultural and economy wide research and development (R&D) are positive but, relatively small.
- Public R&D
- U.S. Agriculture