Identifying sources and trends for productivity growth in a sample of Queensland broad-acre beef enterprises

Abstract

The research reported in this paper considers the question of the possible sources of productivity change in the broad-acre beef sector in northern Australia over the last decade. Analysis is conducted over the components of total factor productivity growth for a subset of broad-acre beef production enterprises in Queensland. Specifically we consider the contributions of technological progress, scale changes (changes in the ‘size’ of an enterprise), and technical efficiency (how efficiently an enterprise combines their inputs to produce output) changes to total factor productivity growth using an index based on a decomposition of productivity change. The analysis employed a form for the production technology, which allowed for linear technological progress over time, accounted for rainfall and differences in land types and allowed for the testing of a range of sources of efficiency change. Results suggested that productivity growth within the sample was strong between 1999 and 2008 averaging 3.8% per year. The majority of this growth appeared to originate from technological progress (average growth of 2.7% per year) but there is the possibility that sample-leakage effects caused relatively low estimated contributions from technical efficiency growth (averaged 1.2% per year). Participation in a privately operated farm-business auditing program appeared to have a positive influence on enterprise technical efficiency.