This study analyzes the dynamic impacts of the production factors capital, labor and lands as well as total factor productivity (TFP) in agriculture economic growth for the period from 1972 to 2009. The results suggest that as the TFP increases labor decreases, and that the modernization of agriculture has brought technological innovations that uses less labor in the production process. The variance historical decomposition of forecast errors indicated that during the 1970´s and 1980´s, agricultural product was larger than expected. This was only possible due to the high productivity’s gains occurred at that time. During the 1990´s and 2000´s, while productivity continued to increase the potential output growth, factors such as low investment and decreasing land expansion limited the agricultural economic growth, which was lower than expected.


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