What Is TPF: Total Factor Productivity in Agriculture?
Why TPF in Agriculture?
Note!
This is the first of many KYA: KnowYourAgriculture, agri shots that I will write, where the idea is to educate and get educated in what is happening in the world of agriculture. Hope you enjoy and share your love
What Is TFP?
TFP stands for Total Factor Productivity in Agriculture. It is used to measure the overall efficiency of the agriculture sector in terms of the production of agri goods and services.
What Is It Used For?
It measures the overall efficacy of land, labor, feed, livestock, fertilizers, technology, implements, capital, etc as an input that is combined to generate the desired output
How do we calculate & read TPF?
The calculation of TFP involves comparing the total output of an economy or a firm with the combined inputs of labor and capital. The formula for TFP calculation is:
Economists and researchers use statistical techniques like growth accounting, production function estimation, and econometric methods to estimate TFP.
High TFP growth is an indicator of high agricultural production relative to the inputs used
Some stats from the GAP 2023 report on TFP:
As per the GAP report for the period 2011–2021, the TFP growth has only been hovering around 1.14 which is not as per the desired sustainable growth(1.73 targeted earlier ) required to be prepared for feeding 10 billion population (expected population by 2050 ).
The report points out that to sustainably meet the agricultural needs of a growing global population by 2050, we must now aim for 1.91(Revised from 1.73 to 1.91) percent average annual TFP growth).
TFP Basis Regions:
Between 2010–2021, China has been growing positively. Total factor productivity (TFP) growth continues to be strong in China and South Asia, Sub-Saharan Africa and the United States show especially low TFP growth.
To Sum Up :
TFP is a strong indicator of how well we are utilizing our agri inputs without putting too much strain on existing inputs. it has been observed that South Asian countries have shown significant growth (2.18 %)mostly due to technological changes, including technology adoption, mechanization, labor reallocation, and adoption of information and communications technology (ICT) to disseminate information related to agriculture.
So if we have to be in line with the revised target of 1.91 % globally, innovation in technological adoption and automation in agri sectors will be key.
Read more about GAP report : https://bit.ly/3NLbiqr
