Agricultural Productivity in Europe and North America

One of the problems of economic policy concerns the best use of the resources available to the nation, whether they are distributed in the best way between the sectors of production and whether they are used in an optimal way within each sector. Clearly this is a “productivity” problem. It is said that neither the distribution of resources between sectors, nor the use that is made of them within each sector is optimal either in Europe or North America. One of the most important examples is in agriculture, to which too much labour is allocated and sub‐optimal use is made of the resources available. Thus agricultural productivity is low, and there are regional and international differences. To answer questions about the level of agricultural productivity it is necessary to have a method of measurement and on this there has been a lot of discussion. The object of this note is to define the optimal yardstick and to use it to estimate the differences in agricultural productivity between the countries in Eastern and Western Europe and North America.