TOTAL FACTOR PRODUCTIVITY GROWTH AND ITS CONTRIBUTION TO OUTPUT GROWTH OF MINOR CROPS IN PUNJAB, PAKISTAN

Abstract

Present study was carried out in Social Sciences Research Institute PARC, AARI Campus, Faisalabad during 2012 with the objective to work out the total factor productivity growth of minor crops i.e. gram, millet, sorghum and rapeseed & mustard in Punjab, Pakistan. The Tornqvist Theil Index number approach was used, which is the most frequently used approach. The average annual growth rate of total factor productivity of minor crops remained 1.5 percent during the whole study period (1980-2012). During this period, the study showed that 54 percent growth in output was due to growth in total factor productivity while remaining 46 percent growth was due to the contribution of inputs to the output growth. This showed the large contribution of total factor productivity in the output growth. Total factor productivity growth was highest during 2001-10 when TFP growth rate was 1.9 percent. The contribution of TFP to output growth was 73 percent, while the remaining 27 percent was the contribution of inputs whereas. TFP growth was lowest during 1991-2000 when TFP growth remained 1.3 percent and contribution of productivity to output growth was 69 percent, while, the remaining 31 percent was the inputs contribution. So, the gap between output and input growth was bridged by the total factor productivity. Output growth of 2.6 percent was maximum during 2001-2010 while it remained minimum (2%) percent during 1991-2000. Input growth of 1.2 percent was maximum during 1981-90 while it remained minimum 0.6 percent during 2001-10. This shows the large proportional decline in use of inputs in comparison with substantial gain in production during the study period. The reason of this large yield gain is that TFP has become major factor contributing towards output growth.