Perceived productivity, foregone future farm fruitfulness and rural research resource rationalisation

Abstract

Conventional economic analysis ignores or understates the consumption of the natural resource stock by agricultural production. So-called "improved technology" may involve a faster rate of consumption of exhaustible (often unpriced or underpriced) resources and a semblance of greater productivity that might vanish if natural resource stocks were accounted for properly in the measures of input use. This paper illustrates implications of leaving out an input, the natural resource stock, or an output, environmental amenities, from models used for measuring agricultural productivity and for agricultural research evaluation and priority setting.