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The Dynamics of Latin American Agricultural Production Growth, 1950–2008

  • Miguel Martín-Retortillo (a1), Vicente Pinilla (a2), Jackeline Velazco (a3) and Henry Willebald (a4)

Abstract

This article is the first of its kind to offer a quantitative estimation of the evolution of Latin American agricultural production and productivity between 1950 and 2008. It also uncovers the extent to which the increases in production were due to increases in factors of production or to efficiency gains. Our findings reveal that efficiency gains made a rather modest contribution to the substantial increase in production, although their role became increasingly large over time and were highly significant between 1994 and 2008. Capital was the most important productive factor in explaining increases in output.

Este artículo es el primero en ofrecer una estimación cuantitativa de la evolución de la producción y productividad agrícola latinoamericana entre 1950 y 2008. También explora hasta qué punto el incremento de la producción se ha debido al crecimiento del uso de factores de producción y hasta qué punto ha sido resultado de las mejoras en la eficiencia productiva. Nuestros hallazgos revelan que la mejora en la eficiencia contribuyó de forma modesta al incremento sustancial de la producción, aunque su papel fue cada vez mayor a lo largo del tiempo, siendo altamente significativo entre 1994 y 2008. El capital fue el factor productivo más importante para explicar los incrementos de producción.

Este artigo é o primeiro a oferecer uma estimativa quantitativa da evolução da produção e produtividade agrícolas na América Latina entre 1950 e 2008. Revela, também, o quanto aumentos de produção se deram devido ao aumento do uso de fatores de produção ou devido a ganhos em eficácia. Nossas conclusões revelam que ganhos em eficácia contribuíram modestamente ao substancial aumento em produção, embora tal contribuição foi-se aumentando ao longo do tempo até se tornar bastante significativa entre 1994 e 2008. Capital econômico foi o fator de produção mais importante no aumento da produção.

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Corresponding author

*Corresponding author. E-mail: miguel.martinr@uah.es.

References

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1 Comisión Económica para América Latina y el Caribe (CEPAL), 25 años en la agricultura de América Latina: Rasgos principales (1950–1975) (Santiago: CEPAL, 1978) is a precursor to our study as it also presents a joint vision of the Latin American agricultural sector between 1950 and 1975. The forestry sector does not form part of the study. This sector was very important in some countries and its expansion was highly coordinated with the industrialisation phases of the production process (fundamentally in the pulp and paper industry). It has different dynamics to the agricultural sector, although in cases where deforestation has taken place in order to farm new land there is a clear relationship between the two.

2 TFP is the difference between the growth in production and the growth in factors of production; in other words, this measurement of productivity represents efficiency gains or better allocation of resources.

3 Until 2004 the FAO published its data in yearbooks, variously named Production Yearbook (1947–75), FAO Production Yearbook (1976–87) and FAO Yearbook. Production (1988–2004). Data from 1961 are available on FAOSTAT's webpage (http://www.fao.org/faostat/en/#home); FAOSTAT is the FAO's Corporate Statistical Database. Our results depend on the quality of the data derived from the FAO; these have been validated by recent empirical analysis: Gollin, Douglas, Lagakos, David and Waugh, Michael E., ‘Agricultural Productivity Differences across Countries’, American Economic Review, 104: 5 (2014), pp. 165–70. The Appendix is available at doi.org/10.1017/S0022216X18001141 under the ‘Supplementary materials’ tab.

4 See, for example, Carlos Ludena, ‘Agricultural Productivity Growth, Efficiency Change and Technical Progress in Latin America and the Caribbean’, IDB Working Paper Series No. IDB-WP-186 (2010).

5 E.g. Spoor, Max, ‘Policy Regimes and Performance of the Agricultural Sector in Latin America and the Caribbean during the Last Three Decades’, Journal of Agrarian Change, 2: 3 (2002), pp. 381400; Solbrig, Otto T., ‘Structure, Performance, and Policy in Agriculture’, in Bulmer-Thomas, Victor, Coatsworth, John and Cortés-Conde, Roberto (eds.), The Cambridge Economic History of Latin America, vol. 2: The Long Twentieth Century (Cambridge: Cambridge University Press, 2008), pp. 483536.

6 Hopkins, Raúl, Desarrollo desigual y crisis en la agricultura peruana, 1944–1969 (Lima: Instituto de Estudios Peruanos, 1981); Sonnenfeld, David, ‘Mexico's “Green Revolution”, 1940–1980’, Environmental History Review, 16: 4 (1992), pp. 2852; Berry, Albert, Avance y fracaso en el agro colombiano, siglos XX y XXI (Bogotá: Editorial Universidad del Rosario, 2017).

7 For example, Kay, Cristóbal, ‘Rural Poverty and Development Strategies in Latin America’, Journal of Agrarian Change, 6: 4 (2006), pp. 455508.

8 See the per capita production growth rates for each product type in Serrano, Raúl and Pinilla, Vicente, ‘The Declining Role of Latin America in Global Agricultural Trade, 1963–2000’, Journal of Latin American Studies, 48: 1 (2016), pp. 115–46, Table 2.

9 Authors’ figures, based on data from FAOSTAT.

10 Oyhantçabal, Gabriel and Narbondo, Ignacio, Radiografía del agronegocio sojero. Descripción de los principales actores y los impactos socio-económicos en Uruguay (Montevideo: Redes AT, 2008).

11 It is possible to measure only those forms of capital for which there are data on an international scale and for a wide chronological horizon.

12 Evenson, Robert E. and Gollin, Douglas (eds.), Crop Variety Improvement and its Effect on Productivity. The Impact of International Agricultural Research (Wallingford: CABI Publishing, 2002). In 1970, 1980, 1990 and 1998 the averages of the utilisation in Latin America of modern crop varieties as a whole were 8, 23, 39 and 52 per cent respectively, as opposed to 13, 43, 62 and 82 per cent in Asia. See Robert E. Evenson, ‘Production Impacts of Crop Genetic Improvement’, in ibid., pp. 447–72.

13 Antonio F. D. Avila, Robert E. Evenson, Sanjaya de Silva and F. Afonso de Almeida, ‘Brazil’, in ibid., pp. 409–26.

14 Robert E. Evenson and Mark Rosegrant, ‘The Economic Consequences of Crop Genetic Improvement Programmes’, in ibid., pp. 473–98.

15 Fuglie, Keith O., ‘Total Factor Productivity in the Global Agricultural Economy: Evidence from FAO Data’, in Alston, Julian M., Babcock, Bruce Alan and Pardey, Philip G. (eds.), The Shifting Patterns of Agricultural Production and Productivity Worldwide (Ames, IA: Midwest Agribusiness Trade Research and Information Center, 2010), pp. 6395; Fuglie, Keith O., ‘Productivity Growth and Technology Capital in the Global Agricultural Economy’, in Fuglie, Keith O., Wang, Sun Ling and Ball, V. Eldon, Productivity Growth in Agriculture: An International Perspective (Wallingford and Cambridge, MA: CAB International, 2012), pp. 335–69.

16 The estimation of the growth of capital is carried out on the basis of the rates of capital for which we do have data (tractors, fertiliser, livestock units), and involves assuming that the growth in the rates of capital not considered (principally buildings, new seeds and insecticides) was the same as for those for which we do have information.

17 IFA data are available from https://www.ifastat.org/databases. For more details, see the online Appendix.

18 del Gatto, Massimo, di Liberto, Adriana and Petraglia, Carmelo, ‘Measuring Productivity’, Journal of Economic Surveys, 25: 5 (2011), pp. 9521008. These weightings for the calculation of TFP are not fixed, but are continuous along our sample (1950–2008). They include all of the changes in the quantity of the inputs in the function of production, which change in accordance with their returns; therefore, the effects of the changes are implicitly reflected in the relative prices.

19 Fuglie, ‘Total Factor Productivity’ and ‘Productivity Growth’.

20 The agricultural production used is the series generated in Table 1. See Table A.1.1 (in the online Appendix) for earlier studies of TFP in Latin America.

21 Mexico and Peru, though currently exporters of crude oil, were net importers until 1977 and 1978, respectively.

22 Bulmer-Thomas, Victor, The Economic History of Latin America since Independence (Cambridge: Cambridge University Press, 1994).

23 Bértola, Luis and Ocampo, José Antonio, The Economic Development of Latin America since Independence (Oxford: Oxford University Press, 2012).

24 Ibid., ch. 5; Bulmer-Thomas, The Economic History of Latin America, ch. 11.

25 Kejriwal, Mohitosh and Perron, Pierre, ‘A Sequential Procedure to Determine the Number of Breaks in Trend with an Integrated or Stationary Noise Component’, Journal of Time Series Analysis, 31: 5 (2010), pp. 305–28.

26 Not all countries adopted a clear ISI-type strategy from 1950. The small Central American republics would not fit within this typology. Of the rest of the countries analysed, the principal exception is Peru, which, until 1968, attempted to develop by promoting its exports. Venezuela continued to depend essentially on its exports of oil. In the 1960s, even in these countries, a certain shift toward industrialisation took place. See Bulmer-Thomas, The Economic History of Latin America.

27 Rosemary Thorp suggests a chronology of the structural reform measures implemented. Although Chile, Uruguay and Argentina began these reforms (programme of stabilisation, trade liberalisation, financial reform, privatisation, etc.) in the 1970s, the other countries implemented these types of reforms mostly from the beginning of the 1990s. See Thorp, Rosemary, Progreso, pobreza y exclusión. Una historia económica de América Latina en el siglo XXI (Washington, DC: Banco Interamericano de Desarrollo–Unión Europea, 1998).

28 Bértola and Ocampo, The Economic Development, pp. 179–89.

29 Borges, Alfredo Guerra, ‘El desarrollo económico’, in Pérez-Brignoli, Héctor (ed.), Historia general de Centroamérica, vol. 5: De la posguerra a la crisis (Madrid: Sociedad Estatal Quinto Centenario/FLACSO, 1993), pp. 1384.

30 Pinilla, Vicente and Aparicio, Gema, ‘Navigating in Troubled Waters: South American Exports of Food and Agricultural Products, 1900–1950’, Revista de Historia Económica, 33: 2 (2015), pp. 223–55.

31 Serrano and Pinilla, ‘The Declining Role’.

32 María Beatriz de A. David, César Morales and Mónica Rodrigues, ‘Modernidad y heterogeneidad: Estilo de desarrollo agrícola y rural en América Latina y el Caribe’, Paper presented at Seminario Internacional, Pontificia Universidad Javeriana, Bogotá, Aug. 2000, available at https://studylib.es/doc/8444589/modernidad-y-heterogeneidad--estilo-de-desarrollo, last access 18 Oct. 2018.

33 Serrano, Raúl and Pinilla, Vicente, ‘Terms of Trade for Agricultural and Food Products, 1951–2000’, Revista de Historia Económica/Journal of Iberian and Latin American Economic History, 29: 2 (2011), pp. 213–43.

34 Due to this solid Asian demand for primary products and their strong price performance, between 2000 and 2008 the percentage represented by the exports of basic products over the total exported by Latin American countries increased, interrupting the preceding decreasing trend. See CEPAL, Perspectivas del comercio internacional de América Latina y el Caribe: Recuperación en un contexto de incertidumbre (Santiago: United Nations, 2017), pp. 129–60.

35 Solbrig, ‘Structure, Performance, and Policy’.

36 Hernández, Juan Luis, Elementos claves para la discusión sobre la problemática agraria venezolana (Mérida: Ediciones del Rectorado, 2008); Hernández, Juan Luis, ‘Evolución y resultados del sector agroalimentario en la V República’, Cuaderno de CENDES, 28: 72 (2009), pp. 67100.

37 Gómez-Oliver, Luis, El papel de la agricultura en el desarrollo de México, Serie Rlac / 95 / 09 - Plan - 27 (Santiago: Oficina Regional de la FAO para América Latina y el Caribe, 1995).

38 Brown, Lester R., Seeds of Change: The Green Revolution and Development in the 1970s (New York: Praeger, 1970); Fernández-Cornejo, Jorge and Shumway, C. Richard, ‘Research and Productivity in Mexican Agriculture’, American Journal of Agricultural Economics, 79: 3 (1997), pp. 738–53; Cerutti, Mario, ‘La agriculturización del desierto. Estado, riego y agricultura en el norte de México (1925–1970)’, Apuntes, 77 (2015), pp. 91127.

39 Macroeconomic and microeconomic results were always subject to lobbying forces which, usually, transformed promising opportunities for achieving higher levels of social welfare into rent-seeking competition. For Argentina, see della Paolera, Gerardo and Taylor, Alan (eds.), A New Economic History of Argentina (New York: Cambridge University Press, 2003). For Uruguay, see Zurbriggen, Cristina, Estado, empresarios y redes rentistas durante el proceso sustitutivo de importaciones: Los condicionantes históricos de las reformas actuales (Montevideo: Ediciones de la Banda Oriental, 2006).

40 Sergio H. Lence, ‘The Agricultural Sector in Argentina: Major Trends and Recent Developments’, in Alston et al. (eds.), Shifting Pattern, pp. 409–48.

41 Barsky, Osvaldo and Gelman, Jorge, Historia del agro argentino. Desde la Conquista hasta fines del siglo XX (Buenos Aires: Grijalbo, 2001).

42 Morales, César, ‘La agricultura latinoamericana: Crisis y planificación’, in Talavera, Pedro (ed.), La crisis económica en América Latina (Hospitalet de Llobregat: Sendai Ediciones, 1991), pp. 6986.

43 Olavarría, Jaime A., Bravo-Ureta, Boris and Cocchi, Horacio, ‘Productividad total de los factores en la agricultura chilena: 1961–1996’, Economía Agraria y Recursos Naturales, 4: 8 (2004), pp. 121–32.

44 Kalmanovitz, Salomón and Enciso, Enrique López, La agricultura colombiana en el siglo XX (Bogotá: Fondo de Cultura Económica, 2005).

45 Yúnez, Antonio, ‘Las transformaciones del campo y el papel de las políticas públicas: 1929–2008’, in Kuntz, Sandra (ed.), Historia económica general de México. De la colonia a nuestros días (Mexico City: El Colegio de México/Secretaría de Economía, 2010), pp. 729–55.

46 Calva, José Luis, ‘El papel de la agricultura en el desarrollo económico de México: Retrospección y perspectiva’, Problemas del Desarrollo, 30: 18 (1999), pp. 3556; Gómez-Oliver, El papel de la agricultura.

47 Notaro, Jorge, La política económica en el Uruguay 1968–1984 (Montevideo: Ediciones de la Banda Oriental, 1984); Notaro, Jorge, ‘La batalla que ganó la economía. 1972–1984’, in Instituto de Economía (ed.), El Uruguay del siglo XX. La economía, vol. 1 (Montevideo: Ediciones de la Banda Oriental, 2003), pp. 95121; Gerchunoff, Pablo and Llach, Lucas, El ciclo de la ilusión al desencanto. Un siglo de políticas económicas argentinas (Buenos Aires: Ariel, 2003).

48 Álvarez, Elena, Política económica y agricultura en el Perú, 1969–1979 (Lima: Instituto de Estudios Peruanos, 1983).

49 León, Juan, ‘Política de estabilización y crisis agraria’, in Dancourt, Óscar, Mayer, Enrique and Monge, Carlos (eds.), Perú: El problema agrario en debate (Lima: Sepia V. Sepia, 1994); Escobal, Javier, El gran ausente: El agro (Lima: Serie Estudios. Instituto Peruano de Economía, 1999).

50 Hesse, Milton von, ‘Aspectos macroeconómicos’, in Hesse, Milton von, Trivelli, Carolina, Diez, Alejandro and Castillo, Laureano del, Desafíos del desarrollo rural en el Perú (Lima: Consorcio de Investigación Económica y Social, 2000), pp. 2333; Escobal, El gran ausente.

51 Rebati Mendali, Glenn C. W. Ames and Lewell F. Gunter, ‘Total Factor Productivity in Brazil's and Argentina's Agriculture: A Comparative Analysis’. Paper prepared for presentation at the Southern Agricultural Economics Association (SAEA) Annual Meeting (Orlando, FL, 3–5 Feb. 2013).

52 Kalmanovitz and López Enciso, La agricultura colombiana.

53 Yúnez, ‘Las transformaciones del campo’.

54 Barsky and Gelman, Historia del agro argentino.

55 Alejandro, Carlos Díaz, Essays on the Economic History of the Argentine Republic (New Haven, CT: Yale University Press, 1970); della Paolera and Taylor (eds.), A New Economic History of Argentina.

56 Long, Norman and Roberts, Bryan, ‘The Agrarian Structures of Latin America, 1930–1990’, in Bethell, Leslie (ed.), The Cambridge History of Latin America, vol. 6: 1930 to the Present, Part 3: Economy and Society (Cambridge: Cambridge University Press, 1995), pp. 325–90.

57 Matos, José and Mejía, José, La reforma agraria en el Perú (Lima: Instituto de Estudios Peruanos, 1980).

58 Velazco, Jackeline and Velazco, Julia, ‘Características del empleo agrícola en el Perú’, in Garavito, Cecilia and Muñoz, Ismael (eds.), Empleo y protección social (Lima: Fondo Editorial de la Pontificia Universidad Católica del Perú, 2012), pp. 161211.

59 Martín-Retortillo, Miguel and Pinilla, Vicente, ‘Patterns and Causes of the Growth of European Agricultural Production, 1950–2005’, Agricultural History Review, 63: 1 (2015), pp. 132–59.

60 Barsky and Gelman, Historia del agro argentino.

61 Gutiérrez, Alejandro, ‘Venezuela: Crisis, reformas económicas y reestructuración del sector agrícola’, Agroalimentaria, 4 (1997), pp. 1130.

62 Baer, Werner, The Brazilian Economy: Growth and Development (Boulder, CO, and London: Lynne Rienner, 2008).

63 Mendali et al., ‘Total Factor Productivity’.

64 Graham, Douglas H., Gauthier, Howard and de Barros, José Roberto Mendonça, ‘Thirty Years of Agricultural Growth in Brazil: Crop Performance, Regional Profile, and Recent Policy Review’, Economic Development and Cultural Change, 36: 1 (1987), pp. 134.

65 Barsky and Gelman, Historia del agro argentino.

66 Bértola and Ocampo, The Economic Development, p. 181.

67 Fernández-Cornejo and Shumway, ‘Research and Productivity’.

68 Gómez-Oliver, El papel de la agricultura.

69 Cerutti, ‘La agriculturización del desierto’.

70 Díaz Alejandro, Essays on the Economic History of the Argentine Republic.

71 Jarvis, Lovell, ‘Changing Private and Public Roles in Technological Development: Lessons from the Chilean Fruit Sector’, in Anderson, Jock R. (ed.), Agricultural Technology: Current Policy Issues for the International Community (Wallingford: CAB International, 2004), pp. 243–66.

72 Olavarría, et al. , ‘Productividad total de los factores’; Peter Winn and Cristóbal Kay, ‘Agrarian Reform and Rural Revolution in Allende's Chile’, Journal of Latin American Studies, 6: 1, (1974), pp. 135–59; Kay, Cristóbal and Silva, Patricio, Development and Social Change in the Chilean Countryside: From the Pre-Land Reform Period to the Democratic Transition (Amsterdam: CEDLA, 1992).

73 Graham et al., ‘Thirty Years of Agricultural Growth in Brazil’.

74 Mendali et al., ‘Total Factor Productivity’.

75 Gibson, David, ‘Brazil v. Argentina: Different Responses to the Rising Food Commodities Market’, The Law & Business Review of the Americas, 15: 4 (2009), pp. 851–62.

76 A ‘resource curse’ is a circumstance in which a country with an abundance of non-renewable natural resources suffers stagnant economic growth or economic contraction. This situation takes place when a country concentrates all of its production in a single industry, such as mining, and abandons investment in other major sectors. Badia-Miró, Marc, Pinilla, Vicente and Willebald, Henry (eds.), Natural Resources and Economic Growth: Learning from History (London and New York: Routledge, 2015).

77 Cristóbal Kay, ‘Rural Development and Agrarian Issues in Contemporary Latin America’, Working Paper No. 173, Institute of Social Studies, The Hague, 1994.

78 María Mercedes Campi, ‘Cambios históricos en la frontera agraria pampeana. La tecnología y el uso de la tierra’, Master's Thesis, Universidad de San Andrés, 2008.

79 ‘Sowing pools’ comprise temporary associations of investors in agriculture who lease land, use contractors to sow and reap the seed, then share the profit.

80 In almost all products, this growth in production exceeded 1 per cent in per capita terms between 1961 and 2000 (Serrano and Pinilla, ‘The Declining Role’, Table 2). If we compare it with that of other world regions, it is amongst the highest.

81 Federico, Giovanni, Feeding the World. An Economic History of Agriculture, 1800–2000 (Princeton, NJ: Princeton University Press, 2005); Martín-Retortillo, Miguel and Pinilla, Vicente, ‘On the Causes of Economic Growth in Europe: Why Did Agricultural Labour Productivity not Converge between 1950 and 2005?’, Cliometrica, 9: 3 (2015), pp. 359–96.

82 Mellor, John, Agricultural Development and Economic Transformation: Promoting Growth with Poverty Reduction (Berlin and Heidelberg: Springer, 2017).

83 Timmer, C. Peter, World without Agriculture. The Structural Transformation in Historical Perspective (Washington, DC: American Enterprise Institute, 2009).

84 Willebald, Henry and Pinilla, Vicente, ‘Agricultural Development in the World Periphery: A General Overview’, in Willebald, H. and Pinilla, V. (eds.), Agricultural Development in the World Periphery (London: Palgrave Macmillan, 2018), pp. 327.

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The Dynamics of Latin American Agricultural Production Growth, 1950–2008

  • Miguel Martín-Retortillo (a1), Vicente Pinilla (a2), Jackeline Velazco (a3) and Henry Willebald (a4)

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