Agricultural Productivity and the Impact of Regulation: Transatlantic Agriculture & Regulation Working Paper Series: No. 2

Agriculture trade
by Aryamala Prasad & Zhoudan Xie
September 26, 2017

Produced via a cooperative agreement sponsored by The United States Department of Agriculture

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Abstract

As part of a cooperative agreement with the United States Department of Agriculture (USDA), the George Washington University Regulatory Studies Center produced a five-chapter report on regulatory differences between the United States (U.S.) and the European Union (EU) and their effects on agricultural productivity. Those chapters are published here as a working paper series with five parts. This chapter provides focuses on the impact of agricultural policy, specifically regulation, in influencing agricultural productivity across jurisdictions. It begins by tracing agricultural growth in the EU and U.S. to illustrate their respective trends for agricultural productivity. Then, drawing from the literature, it identifies measures and methodologies used to estimate the impact of regulation on productivity. Finally, it outlines important differences regarding how regulations can affect agricultural productivity and other measures of agricultural performance such as output and production costs in the EU and the U.S.

Introduction

In recent years both the EU and the U.S. exhibit continued growth in agricultural output with simultaneous decreases in agricultural inputs. This suggests that productivity gains (increased output per unit of input) remain an important factor in the agriculture sector.

Unless otherwise noted, data for the EU include only the EU-15 countries prior to several rounds of enlargement that occurred after May 1, 2004. There are at least two reasons for this approach. First, holding the number of Member States constant for EU data allows for more useful comparisons between jurisdictions. For example, it allows us to illustrate changes in land area used for agriculture between jurisdictions that are likely the result of different policy choices rather than the result of adding additional member states to the EU. Second, EU-15 countries collectively make up over 80% of current EU-28 gross agricultural production value.[1] Additionally, the EU-15 countries are more similar to the U.S. (e.g., in their general economic profile) relative to other countries within the EU-28. This allows our comparisons to benefit from consistent jurisdictions while remaining highly representative of EU-wide trends.

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[1]    FAOSTAT. FAOSTAT Database. 2015. http://faostat3.fao.org/home/E (accessed May 30, 2016).


See also: Agricultural Statistics: Transatlantic Agriculture & Regulation Working Paper Series: No. 1, by Susan E. Dudley, Lydia Holmes, Peter Linquiti, Brian Mannix, Daniel R. Pérez, Aryamala Prasad & Zhoudan Xie