THE STRUCTURE OF PRODUCTION, TECHNICAL CHANGE AND TOTAL FACTOR PRODUCTIVITY IN THE NORTHERN IRELAND AGRICULTURAL INDUSTRY, 1955–86

AuthorJ. C. Glass,D. G. McKillop
DOIhttp://doi.org/10.1111/j.1467-9485.1991.tb00310.x
Publication Date01 May 1991
Scofftsh
Journal
o,f
Polfftcul
Economy.
VoI.
38.
No.
2,
May
1991
1991
Scotlirh
Economic
Socieis
THE STRUCTURE
OF
PRODUCTION, TECHNICAL
CHANGE AND TOTAL FACTOR PRODUCTIVITY
IN THE NORTHERN IRELAND AGRICULTURAL
INDUSTRY,
1955-86
D.
G.
MCKILLOP
AND
J.
c.
GLASS*
I
INTRODUCT~ON
During the past three decades there have been important changes in the struc-
ture
of
production in N. Ireland agriculture. Increased competition for land use
has stimulated efforts
to
improve land quality and to bring previously non-
productive land into agricultural use. In addition, farm purchase and renting
has brought about an increase in the average size
of
farm worked.
Over the same period, income pressures within
N.
Ireland agriculture,
together with alternative, better-paid employment opportunities outside agri-
culture and the increased use
of
more capital-intensive production techniques
within agriculture, have led
to
a decline in both family workers and full-time
hired workers in agriculture.
Also,
the very high percentage
of
owner-occupied
farms, together with the special government assistance that has been available
to
N.
Ireland agriculture (over and above that available to the rest
of
the
United Kingdom), has resulted in
a
relatively high level
of
investment in
N.
Ireland agriculture as compared
to
Great Britain. Lastly, the relatively
greater profitability
of
dairying, over the period, has brought about
a
switch
in land use from cropping to dairying, accompanied by increased specialisation
in
livestock and livestock products and increases in average herd sizes.
To
gain an insight into the characteristics
of
the Northern Ireland agriculture
sector this study utilises a generalised form
of
the translog cost function. The
model employed is a one-output, four-input model capable
of
handling both
neutral and non-neutral technical change. This paper may thus be considered
as an extension
of
earlier work by Glass and McKillop
(1989)
which employed
a cost function model incorporating only neutral technical progress. In
addition to introducing biased technical change, the current study also utilizes
a
discrete approximation to the Divisia index
of
total factor productivity to
obtain an estimate
of
productivity growth. This productivity index is then
decomposed in order
to
estimate the respective contributions
of
technical
*The authors wish
to
acknowledge the helpful comments
of
those involved in the refereeing
of
this paper. Needless
to
say the views expressed in this article (and any errors) are the sole
responsibility
of
the authors.
Date
of
receipt
of
final manuscript: 12th January, 1990
192

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