| The study of agricultural productivity in Western Canada was disaggregated to the prairie grain sector. The analysis, based on five major grains and oilseeds, was further disaggregated to the provincial level and to the major prairie soil zones (brown, dark brown, black, and gray). Two main features of the empirical work included (1) the generation of zonal price data for wheat and barley based on grade distributions and (2) the derivation of input use figures for the grain sector which used census information to divide input use in agriculture between crops and livestock.Production relations were estimated for the Alberta grain sector using the translog cost function approach. Based on likelihood ratio tests, the non-homothetic translog cost function could not be rejected statistically while homothetic, Hicks-neutral, and Cobb-Douglas specifications were rejected. The estimated coefficients of the non-homothetic cost function were used to derive key production parameters such as elasticities of subsitution, own-price and cross-price elasticities of demand for various inputs, and the direction of technical change in the Alberta grain sector. For example, substitute relations were found between the land-fertilizer, labor-machinery and machinery-fertilizer input pairs whereas the land-labor, land-machinery and labor fertilizer input pairs were found to be complements. Finally, the general direction of technical change is strongly labor saving and machinery and fertilizer using.Tornqvist-Theil index procedures were utilized to derive output, input, and total factor productivity indexes. The rate of productivity advance for the prairie grain sector was estimated at 1.2 percent per year over the period from 1962 to 1983, with Manitoba having the highest provincial rate of productivity growth, followed by Alberta and Saskatchewan. The productivity growth rates for soil zones show the gray zone exhibiting the highest rate, followed by the black, brown, and dark brown zones. There is evidence that productivity performance in the black and gray soil zones was stronger since 1973, whereas productivity in the brown and dark brown soil zones appears to have slowed in the years since 1973. |
