Energy Balance Closure in Agriculture and Its Implications for Economic Growth

Abstract

Energy is one of the basic inputs in agricultural production systems and in a decisive role in determining the national economic performance. The proper registration of energy inputs and outputs, i.e. energy balance closure, is the key to the concept of the agricultural efficiency, sustainability, and contribution to Gross Domestic Product (GDP). Although energy balance closure has received a lot of focus in the micrometeorology and ecosystem science, little has been done to apply it to the agricultural economics. In this paper, a conceptual and analytical overview of the energy balance closure in agricultural systems, as well as an assessment of its implication in terms of productivity improvement, cost efficiency and sustainability, and macro economic growth, will be provided. The paper has been drawn upon interdisciplinary literature to suggest that partiality in energy accounting results in misguided productivity estimates, inefficient policy intervention and inefficient resource distribution. The paper concludes that including energy balance closure principles in agricultural and economic planning, in turn, can help to increase the contribution of agriculture to GDP substantially and contribute to the long-term sustainability objectives. Keywords: EBC, agricultural productivity, energy efficiency, GDP, sustainable agriculture.