Agricultural Productivity in Argentina: Not so far from Iowa but far from Sillicon Valley.

ARIEL COREMBERG Y ELDON BALL

Conferencia; ERS; 2011

The Argentine agriculture has undergone an important productive transformation that significantly increased its supply capacity both during the 1990s and in the present decade, under different macroeconomic regimes, and the international perspectives on its prices. The organizational changes and the spreading of new technologies have allowed the agricultural supply to respond to new challenges presented by the increasing international demand of agricultural commodities. Since the present and future evolution of agricultural productivity is essential to solve the macroeconomic problems in terms of Argentina´s economic growth sustainability, as well as external and social sustainability, it is of the utmost importance to comprehensively measure the sources of the agricultural yield through strict methodologies and reliable data. The study, based on ARKLEMS+Land and AGRIKLEMS series, presents a comprehensive estimate of the sources of the agricultural production growth which enables the accounting and comparability of agricultural growth and productivity with other sectors and economies, as well as recommendations of public policies aimed at that sector. The study empirically confirms that the growth profile of the agricultural sector is intense, based on productivity gains biased to capital and labor saving, and it is also intense as regards the use of inputs. However, the Argentine economy shows an erratic productivity behavior that does not take advantage of the externalities generated by the agricultural sector. If the role of agriculture in fiscal and external sustainability and its role as a "wage good" provider are acknowledged, it is essential to keep and increase sustainable productivity gains through appropriate incentives and non-distorting productivity-oriented economic policies in order to increase the exportable and domestic supply making way for fiscal, external and social sustainability without generating inflation.