For farmers in the developing world, geography is not destiny

By THE DATA TEAM

ACCORDING to the UN, German farmers grew 7,200kg (15,873 lbs) of cereal crops for every hectare of land in 2016. Overall, farming is 0.6% of the German economy. Meanwhile, in Mozambique, which depends on agriculture for 25% of its GDP, farmers grew just 820kg per hectare, a little more than one-tenth of Germany’s yield. Farmers in rich countries are more productive than those in poor countries because they use better technology and infrastructure, and are subject to better government policies. Geography appears not to play much of a role. When it comes to land quality and climate, UN data suggest that Germany and Mozambique are similarly endowed.

Poor countries tend to fall short of their agricultural potential because they use geographic resources less efficiently. That is the conclusion of a new working paper by Tasso Adamopoulos of York University and Diego Restuccia of the University of Toronto. Messrs Adamopoulos and Restuccia analysed 30 years of geographic data from the UN’s Food and Agriculture Organisation, covering some 9m individual plots of land in 162 countries. The authors found that rich countries (the top 10% by GDP per person) are about three times as productive as poor ones (the bottom 10%). However, they estimated that if all the world’s farmers extracted the maximum potential output from their fields, the gap in yields between rich and poor countries would vanish almost entirely.

So what would it take for the developing world to catch up? Improving the mix of crops grown by farmers in poor countries, the authors reckon, would shrink the productivity gap by 20%. Improving efficiency—by adopting modern technologies and eliminating wasteful government policies, for example—would cover the remaining 80%. Such dramatic improvements have already been achieved in many places: according to the World Bank, today’s cereal-crop yields in lower-middle-income countries are three times higher than their historical level. The catch is that it has taken those economies 55 years to register those gains.