Friday, 10 May 2019
UK Total Factor Productivity (TFP*) decreased 2.1% between 2017 and 2018, due to decreased outputs and a smaller increase in inputs.
Outputs fell 1.8%, driven by a 7.2% decrease in total crops, largely due to drought. This outweighed a 1.5% and 1.3% increase in livestock meat and products respectively. Inputs increased 0.3% (see below for more detail).
The past 30 years has seen the UK lagging behind key competitors across the globe, including its European counterparts operating under the same agricultural policy. While a number of factors will contribute to this, see here for more, the current uncertainty of Brexit is likely having a major impact in delaying investment decisions.
While a few years behind, USDA data shows how other countries have stepped away from the UK in previous years.
Low productivity growth reduces the industry’s long-term ability to compete, grow new markets and improve natural capital. This will be an urgent issue for the industry to address if it is to transform into a successful global competitor in the future.
*TFP is a measure of how well inputs are converted into outputs giving an indication of the efficiency and competitiveness of the agriculture industry. While external factors such as weather conditions or disease outbreaks may have short-term impact on productivity, developments in productivity over a longer period constitute one of the main drivers of agricultural income.