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Economic progress and changes in the structure of Canadian agriculture

University of British Columbia

This study is based on the hypothesis that (1) economic progress has altered the input structure of Canadian agriculture and (2) that this alteration has been associated with growth in the economic efficiency of the industry. The method used to test this hypothesis has been to measure changes in; (1) the absolute and relative importance of inputs; (2) the absolute and relative importance of various categories of output and (3) the economic efficiency of Canadian agriculture over the period 1926 to 1952. Inputs have been divided into eight categories, viz., labor, land, non-land capital, cost of operating farm machinery, depreciation, taxes, fertilizers and miscellaneous items. Output was divided into four broad categories of; crops, livestock, forest products and house rent. Efficiency was measured as the ratio of total output to total input within a given year. The results of the study strongly support the hypothesis. They indicate that economic progress has resulted in significant shifts within the input structure of Canadian agriculture as follows: (1) A decline in the absolute and relative importance of labor; (2) A decline in the relative importance of land; (3) A large increase in the relative and absolute importance of capital input. This shift in input structure has resulted in only a small change in the total of all inputs (about 10 percent over the whole period). On the other hand, the total volume of output has increased about 40 percent in the period under study. Consequently the ratio of output to input (economic efficiency) has increased in the same period by about 30 percent. Thus the indications are that economic progress has resulted in significant adjustments in Canadian agriculture. These adjustments cannot, however, be viewed as independent events. They are part of a change resulting from technological development and the economic growth of the Nation. Thus changes in the structure and the economic efficiency in the agricultural sector of the economy are dependent upon events in the other sectors of the economy. The results of the empirical study in this thesis indicate where emphasis might be placed in order that the economic efficiency of agriculture may continue to increase.

Text

2012-02-03

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http://hdl.handle.net/2429/40478

Agricultural Economics

University of British Columbia

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