information on the initial capital stock is also needed to construct the capital series, which is rarely available. Researchers use several different techniques for fixing, or seeding, the initial value. They are often forced to choose among competing seeding techniques based on criteria such as whether the methods generate negative initial values (see for instance, Nehru and Dhareshwar, 1993). This choice would not be necessary if the investment series were sufficiently long (large _T_ ) because the productivity of old capital goods is low and their contribution to the current stock is small.

Therefore, our approach is to generate lengthier investment time series when they do not exist. We do this by regressing the logarithm of the investment-output ratio on time for the study period. We then use this regression to estimate past values of the investment-output ratio and apply them to the published output data to generate the needed missing investment values. If the output values are not available, we can estimate them from a regression of output on time.<sup>11</sup> The data series on fixed capital stock are constructed in constant local prices. To facilitate cross-country comparisons, the series need to be valued in comparable units. We value the series in current prices in local currency using national GDP deflators. Using “market exchange rates” from the International Monetary Fund, we convert the values to current US dollars. The series is then deflated by the US agricultural GDP deflator to obtain the capital stock series in constant (1990) US dollars.<sup>12</sup>

# **Livestock capital**

A considerable amount of agricultural capital is embodied in livestock, which are used to perform various roles – such as breeding and draft power. According to the United Nation’s accounting practices, animals that are not used for slaughter are included as fixed capital investments.<sup>13</sup>

> 11 Researchers at the FAO are introducing a more sophisticated method of estimating missing investment data, where they account for the possibility of structural breaks in the GDP and investment series (Anriquez and Daidone, 2010). 12 For more discussion, see Appendix A in Larson et al. (2000).

> 13 Based on the System of National Accounts (SNA) used by the United Nations, “Gross fixed capital formation includes outlays on reclamation and improvement of land and development and extension of timber tracts, mines, plantations, orchards, vineyards etc., and on breeding and dairy cattle, draft animals, and animals raised for wool." (United Nations, 1991, p. xiv). In the 1993 version of the SNA, cultivated assets are noted to be part of gross fixed capital formation; “Cultivated assets consist of livestock or trees that are used repeatedly or continuously over periods of time of more than one year to produce other goods or services. Thus, livestock that continue to be used in production year after year are fixed assets. They include, for example, breeding stock, dairy cattle, sheep reared for wool and draught animals. On the other hand, animals raised for slaughter, including poultry, are not fixed assets.  Similarly, trees (including shrubs) that are cultivated in plantations for the products they yield year after year – such as fruit trees, vines, rubber trees, palm trees, etc. – are fixed assets. On the other hand, trees grown for timber that yield a finished product once only when they are ultimately felled are not fixed assets, just as cereals and vegetables that produce only a single

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