Total factor productivity in South African agriculture, 1947‐91

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Abstract
Indices of total factor productivity (TFP) measure aggregate output per unit of aggregate input, providing a guide to the efficiency of agricultural production. This article outlines the relationship between production functions and TFP indices. Then, an index is constructed for South African agriculture for the period 1947‐91. The index shows that TFP grew at an average rate of 1,3 per cent per annum. However, TFP growth has increased since the reforms of the early 1980s. Since capital has been more realistically priced relative to labour, greater productivity growth has gone together with increasing employment, which must have improved social welfare.