Total Factor Productivity: A Framework for Measuring Agri-food Supply Chain Performance Towards Sustainability

Sustainable agricultural commodities should be favored in international trade negotiations to meet the growing demand for food in a context of environmental conservation, population growth, and globalization. There is a need for a metric that allows for the differentiation of traded agricultural commodities according to how sustainably they were produced. In this context, this paper develops two single metrics, based on a Total Factor Productivity indexing approach, for benchmarking products in terms of their sustainability performance. Both metrics are adjusted to internalize the social and environmental externalities of food production, and to account for the sustainability effects of stages along agri-food supply chains. Key aspects such as data availability, the selection of variables, and the selection of sustainability standards and targets are discussed.