The relationship between staple food crops consumption and its impact on total factor productivity: does green economy matter?

Abstract

The agriculture sector is a key driver of economic growth and provides employment opportunities across the globe generally. However, in today's world, agricultural product demand is more influenced by taste, prices, and nutritional value due to climatic variation. The study has analyzed the current situation grain productivity by using the data of farm inputs and major grain crops of Pakistan from (1960-2020). The study consists of a two-stage analysis in the first stage, the total factor productivity (TFP) variable is obtained by using the parametric Tornqvisit-Theil index output-input-aggregation method separately for each crop; rice, maize, and wheat. After that, the unit root test is used to check the stationarity and trend of the variables in the long run. Subsequently, the autoregressive distributed lag (ARDL) model is applied to check the existence of cointegration in the long run and short run among the variables. The results of the study disclosed that the consumption of rice has a positive relationship with its total factor productivity, but, wheat and maize have a negative long-run cointegration relationship with the respective productivities. The study results have shown that the consumption pattern of staple crops has substantially changed, due to climatic variation, and the current food consumption trend is revealing new dimensions and trends owing to variation in climate change and anthropogenic pressure which demands to adapt climate resilient farm practices.

Keywords: ARDL; Agriculture sector; Economic growth; Green revolution; Tornqvisit-Theil index; Total factor productivity.