Climatic Determinants Affecting Agricultural Total Factor Productivity in Eastern Thailand

Abstract

     This study estimates the rates of growth of the total factor productivity of agriculture and estimates the effects of climatic factors on agricultural total factor productivity growth in Eastern Thailand. The study employs secondary annual data during 1982-2009. The growth accounting method is used to estimate the total factor productivity growth (TFPG). The ordinary least squares method (OLS) is then used to estimate the TFPG determinants model in order to investigate the relationship between TFPG and climatic factors. The results indicate that an average growth rate of agricultural total factor productivity in Eastern Thailand during 1982-2009 is -2.5 percent per year. The contribution of TFPG to output growth became notable during 1994- 2009. The analysis of the agricultural TFPG determinants in Eastern Thailand shows that the climate change factors measured as seasonal average rainfalls have negative and significant impacts on agricultural TFPG. Specifically, the rates of change of the average rainfall in winter and at the end of the rainy season reduce TFPG. Besides the climate factors, agricultural extension is shown to have a positive and significant effect on TFPG. Therefore, the government should provide continuous support in agricultural extension to disseminate output-enhancing production techniques to farmers along with providing training and knowledge sharing so that the farmers can adjust and plan their production levels to cope with climate change.