This paper tests whether structural change in US agriculture is an importan
t channel to TFP growth and evaluates the relative impact of (i) public res
earch and education policies, (ii) private R&D and market forces, and (iii)
government farm programs on structural change. We specify a structural eco
nometric model, fit it to US state aggregate data, 1953-1982, and use the a
ssociated reduced-form model to perform counter-factual policy simulations.
The findings include: structural change is a channel to TFP growth in both
crop and livestock subsector, i.e. specialization, size, and part-time far
ming do impact TFP holding other variables constant. Public R&D and educati
on have been at least as important as private R&D and market forces for cha
nging livestock specialization, farm size, and farmers' off-farm work parti
cipation over the study period, but private R&D and market forces have been
relatively more important for crop specialization. Changes in farm commodi
ty programs had little impact on farm structure over these study period. Ov
erall, we conclude that if public R&D and education policies had been uncha
nged at their 1950 values over 1950-1982, major structural changes in US ag
riculture would have occurred anyway. The forces of private R&D and market
forces were at work, including a decline in the price of machinery services
and agricultural chemicals, relative to the farm wage. (C) 2001 Elsevier S
cience B.V. All rights reserved.