Resource reallocation and its contribution to productivity growth in Australian broadacre agriculture

This technical report uses farm survey data to measure the contribution of cross-farm resource reallocation to industry-level productivity growth within Australian broadacre agriculture. The results show that resource reallocation between farms accounted for around half the industry-level productivity growth that occurred between 1978 and 2010, and its contribution appears to have increased over time. This effect is mainly caused by the asymetric impact of technological progress on incumbent farms, as reflected in difference in productivity growth and the relative mobility of different production factors. These findings provide useful insights for policy-makers considering industry-level reforms as a means of imrpving aggregate agricultural productivity.