Sense and sustainability revisited: the limits of total factor productivity measures of sustainable agricultural systems

Many economists have advocated and applied total social factor productivity (TSFP) (i.e., total factor productivity estimated with both market and non -market inputs and externalities, and with all factors valued at social pri ces) as a single all-embracing measure of agricultural sustainability. This paper reviews the conceptual and practical issues in measuring TSFP and sh ows that no one measure alone will be theoretically or empirically robust a s an indicator of sustainability. TSFP is a conceptually flawed measure sin ce inclusion of non-mark-et inputs and outputs and social price-based valua tion, in most cases, violates the theoretical basis underlying those estima tes. Trends in TSFP also have limited value in diagnosing the nature of sus tainability problems, unless changes in productivity are related to underly ing changes in technology, human and physical infrastructure, and indicator s of resource quality. More attention needs to be given to defining key indicators of agro-ecosyst em health and relating these measures to trends in productivity. This analy sis must be sufficiently disaggregated and for a long enough time period to allow for spatial and temporal variability inherent in agricultural produc tion. Secondary data at the district level on both conventional inputs and outputs and resource quality have recently allowed more quantitative estima tes of sustainability and its causes. With limited data, yield growth decom position analysis can often be used to provide valuable insights into susta inability problems. Meanwhile, there is a need to invest in long-term exper imental and panel surveys of farmers and their fields for key production sy stems in order to provide long-term data that will allow full productivity accounting, using more formal statistical procedures. Regardless of the app roach selected, the findings of this paper strongly suggest a need for econ omists, agronomists and soil scientists to collaborate in integrating appro aches in order to provide more robust and informative measures of sustainab ility. (C) 2001 Elsevier Science B.V. All rights reserved.