Agricultural figures boost overall productivity

Jtaylor March 14, 2012 0
Agricultural figures boost overall productivity

Saskatchewan’s farmers are pretty smart.

And now, there’s proof — in a Statistics Canada report on productivity that says no other Saskatchewan business sector increased its productivity over the last 15 years as much as agriculture.

The report, “Factors in the growth of labour productivity in the provinces,” offers several reasons why productivity can rise.

One is investment in human capital. Doug Elliott, publisher of the monthly statistical newsletter SaskTrends Monitor, cites as an example training workers to be more efficient.

Another is “capital intensity”, which involves putting equipment to work.

Then, there’s what Statistics Canada calls “multifactor productivity,” which means everything else — like technological changes, organizational innovations and the economies of scale.

And what emerges from StatsCan’s report, released Monday, is that overall labour productivity in Saskatchewan increased by an average of 1.8 per cent per year between 1997 and 2010.

That was the highest in the country save for another agricultural province, Manitoba, and for Newfoundland and Labrador, where those years saw an oil boom.

Looking further into those figures, Ellott said Saskatchewan was one of five provinces to increase productivity through human capital by 0.3 per cent per year, right on line with the national average.

In “capital intensity,” we were at 2.7 per cent, highest of all provinces and rivalled only by Alberta, at 2.6 per cent per year.

Elliott says this pattern reflects Saskatchewan’s economy, with relatively few people, but with a lot of expensive equipment, at work. It also illustrates increases in productivity brought by shrewd capital spending in agriculture, where productivity grew by a whopping 5.5 per cent per year over that 13-year period.

“Farmers knows precisely what they need to buy …. this airseeder with that particular tractor,” said Elliott. “In that case, they can seed, say, twice as many acres with one-third of the manpower and get twice the yield.”

But our multifactor productivity fell by an average of 1.2 per cent annually, prompting Elliott to say, “fundamentally, what’s happened in Saskatchewan is that our productivity has gone down — our total productivity — and that turns out not to be our labour productivity, but our capital productivity.

“We seem to be using it in an inefficient way — we’re buying the wrong kind of stuff.”

Given that Saskatchewan’s economy is heavily dependent on resources, “I’m thinking that all we’re measuring here is how difficult it is to invest $1 million and strike oil — or potash or uranium — the way we used to be able to.”

[Vancouver Sun]

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