Skip to main content
Article thumbnail
Location of Repository

Measurements of Agricultural Productivity and Efficiency Gains from NAFTA

By Osei-Agyeman Yeboah, Cihat Gunden, Saleem Shaik, Albert J. Allen and Tongzhe Li


The primary objective of this study is to empirically determine whether North American Free Trade Agreement (NAFTA) has contributed to increased agricultural productivity in any of its member countries. Implementation of the NAFTA began on January 1, 1994. This agreement removed most barriers to trade and investment among the United States, Canada, and Mexico, in which all non-tariff barriers to agricultural trade between these countries were eliminated. Data Envelopment Analysis (DEA) and the Malmquist Productivity Index were used to estimate the total factor productivity change, technical change, and efficiency change of agricultural production for each NAFTA country. Then, using time series data, the efficiency changes in countries were compared to determine whether NAFTA has been beneficial to the agricultural sector of a member country. , Total factor productivity, technical change, and efficiency change of agricultural production in NAFTA countries were analyzed for the period 1980-2007, and then a comparison between pre- and post-NAFTA periods was also made. In the analysis, aggregate agricultural production was used as the output, and five variables were considered as the inputs, which included: land, labor, capital, fertilizer and livestock. The results revealed that the average annual total factor productivity increased by 1.6 percent during the 1980-2007 period for NAFTA countries, mainly coming from technical change. Total factor productivity did not change obviously during the pre-NAFTA period. In contrast, it increased by 2.7 percent due to technical improvements in post-NAFTA period. Consequently, it is noticeable that compared to the pre-NAFTA period, the countries especially Mexico performed better by achieving higher levels of productivity in agricultural production.Agricultural Efficiency, Data Envelopment Analysis, Malmquist Index, NAFTA, Total Factor Productivity, International Relations/Trade,

OAI identifier:
Downloaded from

Suggested articles


  1. (2003). Agricultural productivity analysis of European Union and eastern regions.
  2. (1998). Agricultural productivity in developing countries.
  3. (1998). An introduction to efficiency and productivity analysis.
  4. (2009). and Agriculture Organization of the United Nations
  5. (2005). Explaining agricultural productivity levels and growth: an international perspective. CEPA working paper series,
  6. (1995). Growing world trade: causes and consequences.
  7. (2003). Intercountry agricultural efficiency and productivity: a malmquist index approach. Mimeo, World Bank,
  8. (2009). Measuring agricultural productivity growth in MENA countries.
  9. (1978). Measuring the efficiency of decision making units.
  10. (1993). Production frontiers and productive efficiency.
  11. (1994). Productivity growth, technical progress and efficiency change in industrialized countries.
  12. (1984). Some models for estimating technical and scale inefficiencies in data envelopment analysis.
  13. (1957). The measurement of productive efficiency.
  14. (2003). Total factor productivity growth in agriculture: a malmquist index analysis of 93 countries, 1980-2000. CEPA working paper series,
  15. (1998). Using a programming approach to measure international agricultural efficiency and productivity.
  16. (1997). Would free trade have emerged in North America without NAFTA? Mimeo, Federal Reserve Bank of Chicago.

To submit an update or takedown request for this paper, please submit an Update/Correction/Removal Request.