Two different patterns in input-output relations can be distinguished in agricultural production. For the first, yields are obtained at zero rates of certain external inputs, such as in wheat growing, or dairying based on grazing. For a second type of input-output relation, inputs are required before any yield can be obtained, such as in irrigation schemes in desert areas, or industrial production at large. Inputs for agricultural production, unlike in industry or commerce, generally consist of natural resources such as rain and soil nutrients, and of external inputs involving cash, such as industrial fertilizer or pumped irrigation water. If the share of these natural or internal resources is taken into account, constant marginal returns to input application may occur where, at first sight, decreasing returns (for the first relation) or increasing returns (for the second) appear to apply. These hidden risks of misinterpretation of field data or survey statistics occur, e.g., in crop physiology, dairy management, irrigation and the economy at large. Some implications are sketched for agricultural research and policy in low input husbandry systems, for energy use efficiency and land use programmes in developed and developing countries. It is argued that, for a wise and responsible resource use policy, a narrow economic view is misdirected; instead, a broader, long-term agro-ecosystems perspective is needed (C) 2000 Elsevier Science B.V. All rights reserved.
