Next Generation Modern Farmer
Agricultural productivity is a key target of the Common Agricultural Policy and one of its ten specific objectives for the period 2023-2027. Taken the fact that competitiveness is of crucial importance for European farmers, measuring agricultural productivity is a central indicator of progress under this objective.
Assessing productivity through the evolution of crops provides an incomplete picture because the values do not account of the inputs. For instance, milk and some cereals like barley demonstrate sustained increase of yields but it is impossible to evaluate the productivity without accounting of the changes in the input or production factors such as land, labour and capital. All of them are reflected in the calculation of the Total Factor Productivity (TFP).
The Total Factor Productivity tells us that the main driver of the increased agricultural productivity is the labour productivity combined with mechanisation and investments in equipment that compensates the degeneration of agricultural labour. Since TFP does not explicitly account of sustainability, the use of this tool for policy formation has its shortcomings.
TFP is a ratio that relates changes in the total output to changes in their production factors. The main inputs that are traditionally accounted in the agricultural productivity analysis are land, labour, capital and intermediate resources (energy, fodder, fertilizers etc.). A determinant of policy management and increased productivityis the understanding of the trends in the drivers.
The most notable upward trend detected by the measurementsis the labour productivity. The indicator shows that the EU is increasing its agriculturalproduction with significantly less labour investment. In other words, certain types of labour were replaced by agricultural machinery and equipment. An important point here is that the modern agricultural machines require workforce with higher qualifications.