Measures of Fixed Capital in Agriculture
Capital is a fundamental component of agricultural production, and the accumulation of capital is key to growth in agriculture and the process of development. Unfortunately, cross-country data sets on agricultural fixed capital are rare. Using a common methodology that allows comparisons across countries, as well as over time, this paper introduces a data series on fixed capital in agriculture, based on national accounts data. The fixed capital measure differs remarkably from the Food and Agriculture Organization's data series on tractors, which has been widely utilized as a proxy for agricultural fixed capital. The authors construct comparable measures of capital in livestock and tree stock. They examine the evolution of the capital stocks from 1970 to 2000, paying particular attention to the changing composition of agricultural capital, as well as differences in the accumulation of capital for high-income and middle and lower-income countries. Using the capital measures in agricultural productivity analyses, the data yield estimated input elasticities substantially different from those found previously in the literature. The authors show explicitly that this is due to the improved data set on agricultural capital stocks, as well as the methodology used in the study.