III - Productivity and Its Relationships

Summary

Productivity

Four types of productivity are considered here: labour productivity, land productivity, capital-output ratio, and total productivity index (see Table 6).

Labour Productivity

This is the ratio of agricultural net output to labour force employed in agriculture for a given year. Three points are noted regarding the labour productivity trend from 1974/75 to 1984/85:

the labour productivity increased by 54 per cent from 470 in 1974/75 to 723 in 1985/86;

the annual compound rate of growth is 4 per cent, which is lower than that of output; and

the momentum gained through the period has slowed down since the 1981/82 agricultural season.

Land Productivity

This is the ratio of net agricultural output to agricultural land comprising net area sown (net cultivated area) and fallow land for a given year. As far as land productivity is concerned, as for labour productivity, three features stand out:

the land productivity increased by 87 per cent from 152 in 1974/75 to 284 in 1985/86;

the annual compound rate of growth is 5.85 per cent, which is very close to that of the output (5.91 per cent); and

the momentum of change through the period has slowed down since the 1981/82 agricultural season.

Capital-Output Ratio

This is the ratio of fixed capital — consisting of capital expenditure (moving average for four successive years), value of tractors deployed, and value of draught cattled used — to net agricultural output. As for the above cases, three distinct features are noted:

the capital-output ratio decreased by 25 per cent from 1.52 in 1974/75 to 1.14 in 1985/86;

the annual compound rate of growth is -1.02, which is very low compared with that of labour and land productivities; and

the momentum of change through the period slowed down from 1980/81 up to the end of the 1985/86 agricultural season.

Total Productivity Index

This index is the ratio of the net total output index to the net total input index, which is the weighted aggregate of the indices of labour, land, fixed capital, and current inputs (factor shares in 1975/76 are used as weights for the years 1974/75 to 1979/80 and those in 1980/81 are used for the years 1980/81 to 1984/85, as shown in Table 7).