MULTI-FACTOR AGRICULTURAL PRODUCTIVITY AND CONVERGENCE IN BOTSWANA, 1981–96

Abstract

This paper calculates multi-lateral Malmquist multi-factor productivity (MFP) indices for agriculture in the eighteen regions and the commercial sector of Botswana from 1981 to 1996. The Malmquist is appropriate because prices do really exist for major inputs such as land and labour. The small size of the cross section is overcome by using the sequential version of the Malmquist, which accumulates the annual data, so increasing the stability of the frontier. The regional MFPs are the natural peer group for producing a national MFP, so the problem of choosing peers, in earlier work on international comparisons does not arise. The results show that the national MFP grew at an average rate 1.57% per annum. However, disaggregation by enterprise shows that the livestock MFP declined at a rate of 0.34% per annum while that for crops grew at 3.37% per annum. Decomposition of the Malmquist shows that there was positive technological change combined with decreasing efficiency. Comparisons of the regional results show a very clear pattern whereby the advantaged regions are able to exploit new technologies whereas the resource poor, geographically disadvantaged areas have been stagnant and have thereby fallen further and further behind the best practice frontier.