Food Boom

Agricultural productivity sustains the U.S. economy

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One of the least appreciated but most remarkable developments of the past 60 years is the extraordinary growth of American agriculture. Farming now accounts for about one tenth of the gross domestic product yet employs less than 1 percent of all workers. It has accomplished this feat through exceptionally high growth in productivity, which has kept prices of food low and thereby contributed to rising standards of living. Furthermore, the exportable surplus has kept the trade deficit from reaching unsupportable levels. Agriculture not only has one of the highest rates of productivity growth of all industries, but this growth appears to have accelerated during the past two decades.

Over the period 1948 to 2004, total farm production went up by 166 percent. But as the chart shows, productivity per person improved so much that only one quarter as many hands were needed in 2004 as in 1948. Furthermore, the arable land used for farming dropped by one quarter over the 56-year period, and investment in heavy farm equipment and other capital expenditures decreased by 12 percent.

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