The main objectives of this study are first, to estimate total factor productivity at the production system level in the period since the advent of the Green Revolution in Pakistan's Punjab Province, and second, to relate productivity trends to changes in resource quality. Earlier studies have estimated resource productivity at the national or state level (e.g., Rosegrant and Evenson, 1992), or have been restricted to one crop in a region (e.g., Cassman and Pingali, 1995). Since sustainability is likely to relate to underlying agronomic and socioeconomic characteristics of the farming or production system, such as crop rotation, an important contribution of this study is to quantify productivity trends at the production system level defined in terms of the dominant cropping pattern. Considerable resources were invested in collecting the large amount of data on individual crop and livestock products, inputs, and prices that are required for the system-level analysis.

Further, a major contribution of the study is to quantify trends in resource quality and then to econometrically relate trends in productivity to indicators of resource quality. To do this, we establish a second comprehensive data set on soil and water quality variables based on records of tests in farmers' fields. This enables us to at least partially decompose productivity trends into the effects of technological change, improvements in human resources and infrastructure, and natural resource degradation.<sup>2</sup> This study focuses on the measurement of agricultural productivity change in the irrigated agriculture of Pakistan's Punjab province which is the agriculturally dominant province in the country, with a farming population of over 60 million people, and often described as Pakistan's bread basket. Over 80% of the cropped area of the province is irrigated. The Punjab was one of the earliest beneficiaries of the Green Revolution with the introduction of modern varieties of wheat and rice in the 1960s. However, recent studies have questioned the sustainability of current intensification strategies (Byerlee and Siddiq, 1994). In light of recent record imports of wheat, the staple food, the issue is clearly critical to agricultural development strategies and food security in Pakistan, as well as in neighboring areas of India.

The paper is developed as follows. The next two sections outline the analytical approach and the major data sources. This is followed by a description of major trends in the agricultural sector, especially those related to technical change and resource quality. Estimates of TFP growth are then presented and productivity growth decomposed into the effects of technology, resource degradation, human resources, and infrastructure through estimation of a cost function. The last section summarizes the main policy implications.

# **Analytical Approach**

Following Lynam and Herdt, a non-positive trend in TFP has been widely accepted, at least by economists, as an indicator of unsustainable resource management (e.g., Cassman and Pingali, 1995; Ehui and Spencer, 1993). However, many practical problems are encountered in choosing an acceptable measure of TFP apart from the fact that positive TFP growth by itself does not

> 2 Huang and Rozelle (1995) estimated the effects of technological change and environmental degradation using secondary statistics, such as area of land eroded. Preliminary work by Lindert (1996) has used soil testing data although he does not decompose the effects of technological change and resource degradation.

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