Productivity growth and resource degradation in Pakistan's Punjab - a decomposition analysis

The introduction of green revolution technologies in wheat, and rice production in Asia, in the mid 1960s reversed the food crisis, and stimulated rapid agricultural, and economic growth. But the sustainability of this intensification strategy is being questioned, in light of the heavy use of external inputs, and growing evidence of a slowdown in productivity growth, and degradation of the resource base. The authors address the critical issue of long-term productivity, and the sustainability of Pakistan's irrigated agriculture. To estimate changes in total factor productivity in four production systems of Punjab province, they assemble district-level data on 33 crops, 8 livestock products, and 17 input categories. They find that average annual growth in total factor productivity was moderately high (1.26 percent) for both crops, and livestock for the period 1966-94, but observe wide variation in productivity growth by cropping system. A second, disaggregated data set on soil, and water quality reveals significant resource degradation. The authors use the two data sets to decompose the effects of technical change, and resource degradation through application of a cost function. They find that continuous, and widespread resource degradation (as measured by soil and water quality variables) has had a significant negative effect on productivity, especially in the wheat-rice system, where resource degradation has more than offset the productivity effects of technological change. Degradation of the health of the agro-ecosystem was related in part, to modern technologies, mono-cropping, and mismanagement of water resources. The results call for urgent analysis of technology, and options to arrest the degradation of resources.