317 Journal of the Statistical and Social Inquiry Society of Ireland Vol. XXIX PRODUCTIVITY GROWTH IN IRISH AGRICULTURE ALAN MATTHEWS Trinity College Dublin (read before the Society, 18 May 2000) __________________________________________________________ Abstract: Agricultural productivity growth is an important parameter in assessing the likely competitiveness of Irish agriculture in the more market-oriented environment that the industry will face in the next decade. Although growth in Irish agricultural output compares well with the performance of other EU countries, there is evidence that this growth has been unduly dependent on increased input use rather than increased productivity. Resource-intensive as opposed to knowledge-intensive growth is more likely to face diminishing returns over time. To evaluate this issue requires information on the rate and nature of agricultural productivity growth. This paper discusses the issues in constructing an index of total factor productivity (TFP) growth in Irish agriculture, presents an updated TFP series and discusses the implications for future policies dealing with agricultural innovation, structures and competitiveness. Keywords: Agriculture, Productivity growth, Total Factor Productivity. JEL Classifications: Q120, Q130, R520. 1. INTRODUCTION Irish agriculture faces into a policy environment likely to undergo considerable change in the next decade. Since 1973, agricultural policy in Ireland has been synonymous with the EU’s Common Agricultural Policy (CAP). The prospect of Irish farmers benefiting from the protection of the CAP was one of the main factors favouring Irish membership of the then European Economic Community in 1973. Since then, the contradiction between trying to maintain high market prices in the face of an imbalance between the supply and demand of in Europe has led to increased restrictions on the support which is provided. The introduction of milk quotas in 1984 was a major policy shock. More recently, the MacSharry CAP reform, while maintaining the overall level of support to farmers, led to the substitution of direct payments for market price support in the case of cereals and beef production. While principally a re-instrumentation of EU agricultural policy rather than a reform (in the sense of a reduction of support), the introduction of ceilings on the numbers of livestock or grain hectares eligible for support was a