• TABLE OF CONTENTS
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 Front Cover
 Title Page
 Preface
 Table of Contents
 Introduction
 Nature of technological change
 Adoption process for agricultural...
 Impact of changes in agricultural...
 High-yielding varieties of...
 Mechanization of agriculture
 Policy implications of technological...
 Bibliography






Title: Technological change in agriculture : effects and implications for the developing nations
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Table of Contents
    Front Cover
        Front Cover
    Title Page
        Page i
    Preface
        Page ii
    Table of Contents
        Page iii
        Page iv
        Page v
    Introduction
        Page 1
        Page 2
        Page 3
        Page 4
    Nature of technological change
        Page 5
        Page 6
        Page 7
        Page 8
        Page 9
    Adoption process for agricultural technology
        Page 10
        Page 11
        Page 12
        Page 13
        Page 14
        Page 15
        Page 16
        Page 17
        Page 18
        Page 19
        Page 20
    Impact of changes in agricultural technology
        Page 21
        Page 22
        Page 23
        Page 24
        Page 25
        Page 26
        Page 27
        Page 28
        Page 29
        Page 30
        Page 31
        Page 32
        Page 33
        Page 34
    High-yielding varieties of grain
        Page 35
        Page 36
        Page 37
        Page 38
        Page 39
        Page 40
        Page 41
        Page 42
        Page 43
        Page 44
        Page 45
        Page 46
        Page 47
        Page 48
        Page 49
        Page 50
        Page 51
    Mechanization of agriculture
        Page 52
        Page 53
        Page 54
        Page 55
        Page 56
        Page 57
        Page 58
        Page 59
        Page 60
        Page 61
        Page 62
        Page 63
        Page 64
        Page 65
    Policy implications of technological change
        Page 66
        Page 67
        Page 68
        Page 69
        Page 70
        Page 71
        Page 72
        Page 73
        Page 74
        Page 75
    Bibliography
        Page 76
        Page 77
        Page 78
        Page 79
        Page 80
        Page 81
        Page 82
Full Text
t 17


6P-4 1 C''S


APRIL 1969


TECHNOLOGICAL CHANGE
IN AGRICULTURE
Effects and Implications
for the Developing Nations


















TECHNOLOGICAL CHANGE IN AGRICULTURE


Effects and Implications for the Developing Nations


by

Dana G. Dalrymple
International Economist


International Development
Foreign Agricultural Service
U. S. Department of Agriculture

in cooperation with
Agency for International Development


Washington, D. C. 20250














PREFACE


The effects of technological changes in agriculture in the less deve-
loped nations are a matter of increasing concern. As efforts to
expand agricultural production begin to pay off, the many and com-
plex ramifications of technological change become more and more evi-
dent.

Untangling the effects of technology is a vast and difficult project.
It is one which requires knowledge of many disciplines: economics,
political science, anthropology, sociology, and others. It is one
which could be the subject of many booklength studies. Yet, curious-
ly, little seems to have been done.

The purpose of this bulletin is to provide an introduction to some of
the major effects of technological change in agriculture. Primary
attention is given to economic aspects, but an attempt has been made
to reflect a broader viewpoint. The report is basically a survey; it
is based in part on materials reviewed or prepared for administrative
use.

Hopefully, the bulletin will be of value as a reference for those
actually engaged in development programs or development planning. In
addition, it may provide useful background for development scholars
and/or serve as a catalyst for further thought and research. It is,
in any case, only a start.





ACKNOWLEDGEMENTS

A number of individuals were of assistance in the preparation of
this report. Among these were colleagues in the Department of
Agriculture who reviewed earlier drafts of the manuscript.
Drs. Dale Adams of the Agency for International Development and
Vernon Ruttan of the University of Minnesota provided helpful
references and suggestions.








CONTENTS


I. INTRODUCTION 1

A. Need for Broader Perspective 1
B. Interrelations of Technology 2
C. Terms of Reference 3

II. NATURE OF TECHNOLOGICAL CHANGE 5

A. Economic Definitions of Technological Change 5
1. Changes in Production Functions 5
2. Addition of Production/Functions 6
B. Technological Change Within Agriculture 7

III. ADOPTION PROCESS FOR AGRICULTURAL TECHNOLOGY 10

A. General Characteristics 10
B. Why is Technology Adopted? 11
1. Farm Level Decisions 11
a. Economic Reasons for Adoption 11
b. Other Reasons for Adoption 12
2. Governmental Level Decisions 13
C. Factors Influencing Rate of Adoption of
Technology 14
1. Characteristics of the Technology 14
2. Characteristics of the Adopter 15
3. Characteristics of the Economy 15
D. Possible Rejection of Technology 16

IV. IMPACT OF CHANGES IN AGRICULTURAL TECHNOLOGY 21

A. Impact of the Farm Level 21
1. Economic Implications 21
a. Primary Effects of Technology 21
(1) Influence on Supply 21
(2) Influence on Farm Income 22
(3) Influence on Employment 25
b. Secondary Effects of Technology 25
2. Social/Political Implications 27
B. Impact at the National Level 27
1. Economic Effects 27
2. Social/Political Effects 28
3. Ecological Effects 29
C. Impact at the International Level 30
1. Comparative Advantage and New Products 30
2. Role of Export Industries 30
D. Interrelationships 31








V. HIGH-YIELDING VARIETIES OF GRAIN


A. Background of New Varieties 35
1. Foundation-Sponsored Research 35
2. Spread of New Varieties 36
B. Nature of Technical Changes 36
1. Functions Involved 36
2. Need for Technical Base 38
C. Adoption Process for New Varieties 39
1. Factors Influencing Rate of Adoption 39
2. Role of Government in Adoption 40
3. Permanency of Adoption 41
D. Impact of the New Varieties 41
1. Economic Impact 41
a. Agricultural Output 41
(1) Quantitative Effect 42
(2) Qualitative Effect 43
(3) Influence on Cropping Pattern 43
b. Financial Returns 44
(1) Changes in Farm Prices and Costs 44
(2) Changes in Farm Income 45
2. Social/Political Impact 45
3. National and International Implications 47

VI. MECHANIZATION OF AGRICULTURE 52

A. Background of Mechanization 52
1. Development and Spread 52
2. Power Available 54
B. Nature of Technical Changes 54
1. Functions Involved 54
2. Need for Technical Base 55
C. Adoption Process for Machinery 56
1. Size and Nature of Farms Involved 56
2. Reasons for Adopting 57
3. Acquisition Process 58
D. Impact of Mechanization 59
1. Economic Impact 59
a. Primary Effects of Mechanization 59
(1) Production and Costs 59
(2) Reduced Losses 60
(3) Farm Organization 60
b. Secondary Effects of Mechanization 60
2. Social/Political Impact 61
3. Balancing Economic and Social
Considerations 62








VII. POLICY IMPLICATIONS OF TECHNOLOGICAL CHANGE


A. Need for Evaluation 66
1. Benefits of Technology 66
2. Problems of Technological Change 66
a. Uneven Distribution of Benefits 66
b. Disruptions Associated with Change 67
B. Criteria for Evaluation 68
C. Policy Issues 69
1. Factor Combinations and Investments 69
2. Distribution of Gains and Losses 70
a. Within Agriculture 70
b. Between Producers and Consumers 72
D. Concluding Remarks 72

VIII. SELECTED BIBLIOGRAPHY 76

A. Books 76
B. Bulletins and Reports 77
C. Articles 77
D. Unpublished Papers 81



TABLES

1. Effect of Technological Change in Agriculture
.on Net Farm Income Under Varying Conditions 24

2. Estimated Area Planted to New High-Yielding
Varieties of Wheat and Rice in the Less
Developed Nations 37

3. Estimated Number of Tractors in Use in Major
Regions of the World 53


FIGURES

1. Adoption Process for a New Technology 10

2. Proportion of Corn Acreage Planted with
Hybrid Seed 10

3. Power Available for Agricultural Field
Production 54









I. INTRODUCTION*


For a strategy of technological improvement
to succeed on a sustained basis, it must in-
clude plans to cope with the consequences of
its success.
-FAO, 1968 1/

Recent years have witnessed sharply expanded efforts to bring about tech-
nological improvement in agriculture in the less developed nations.
Primary emphasis has been placed on changes in the technology of produc-
tion in order to increase food supplies -- in many cases simply to keep
output in step with population growth. In view of the historical close-
ness of the race between "the stork and the plow" in some nations, this
emphasis has been well placed. But changes are beginning to take place
in agricultural production which will create a need to look beyond
physical increases in agricultural output.

A. Need for Broader Perspective

Significant technological breakthroughs have recently been made in the
production of key food crops in a few areas of the less developed world.
Perhaps the best are the new varieties of wheat and rice which, when com-
bined with appropriate inputs, produce dramatic increases in yields.
These varieties have, in turn, stimulated interest in mechanization and
other aspects of agricultural development. The success of the new variety
package has led some to speak of an agricultural -- or green -- "revolu-
tion" in Asia.2/

But revolutions are not tidy affairs; they can have all kinds of dimen-
sions which may not be fully anticipated. Such is the case, at least
to some extent, with the new agricultural technologies. Where the break-
throughs have begun to show, a host of new problems are often found
waiting in the wings. Some relate to keeping the production advances
going; others involve the effects of expanded production on farmers;
still others involve problems in income distribution or with by-passed
groups. Many are probably not yet apparent. All will need attention
at some point.

Technological change in agricultural has traditionally, and perhaps too
often, been viewed solely in terms of its immediate impact on increasing
food output. Yet technology must be studied in broader terms if second
generation problems and issues are to be avoided or mitigated and the
pace of agricultural development maintained. While some aspects of tech-
nological change in agriculture in the developed world can either be taken


* References and notes for this chapter are found on p. 4.





- 2 -


for granted or are well known, the process is considerably less well
understood in the many less developed nations of the world -- in part
because there have been far fewer technical changes.

What this means is that in planning technological change in agriculture,
it is increasingly necessary to move from physical and biological con-
siderations not only to economics, but beyond to social and political
relationships. Both quantitative and qualitative aspects need to be con-
sidered. Moreover, all these factors must be viewed in terms of their
(1) primary and secondary effects, as well as (2) short and long run
influence. In total, broad-scale analysis is called for.

B. Interrelations of Technology

Technological change is dynamic. It is both influenced by and influences
the environment. On the one hand, as Baranson has noted, feasibility of
production techniques is conditioned by the economic, social, and physical
aspects of the environment. On the other hand, technology acts as an
instrument of environmental change.3/

If we are appraising technical change in terms of economic growth, we
similarly find that the relationship is reciprocal -- and that the con-
nections are by no means simple or clear. There are examples of growth
causing changes in technology, and changes in technology causing changes
in growth. DeGregori suggests that:

/'.....not only does growth depend on technological
Salchsange~lbut^'also a sustained growth is necessary for
technological change. Insofar as a new technology
7, requires modification of other elements of the
Technological complex, continued technological
change requires a dynamic economy constantly adjust-
ing to changing circumstances.4/

The relationship, however, does not always lead to an upward spiral:
emphasis on economic growth to the exclusion of other factors can lead to
serious social costs.5/

Concentration on production technology may also lead to neglect of socio-

the longer run. These can be of particular importance in less developed
nations. It has been suggested, for example, that the lesson of develop-
ment of Taiwanese agriculture may be that science alone cannot transform
agriculture without certain rural organizations being created first or at
least concurrently. 6/

As a result of these many interrelationships, agriculture has developed
slowly and unevenly. As the Woodruffs have put it: there is no widespread
onrush of science and technology in agriculture. Instead, there is a
halting movement which is highly localized and connected with special
circumstances. Advanced scientific and technological methods in agriculture





- 3-


are, they point out, concentrated in a small part of the world, and often
in a small part of a region's or nation's economy.7/

In view of the dynamic nature of technological change, planners and
development officials need to consider both the influence of changing
environment on the adoption of agricultural technology and the in-
fluence of technology on environment.

C. Terms of Reference

The agricultural breakthroughs in Asia have pointed up the need for a
broader and more dynamic analysis of technological change. This report
will attempt to help meet that need by providing a general review of the
nature and effects of technological innovation. Special attention will
be given to the impacts of new grain varieties and of mechanization.
Implications for public policy will also be examined.

A rather broad interpretation will be taken of agriculture. Both farm
and off-farm elements will be included: the supply of inputs, produc-
tion, and processing and marketing of farm products. While this suggests
emphasis on commercial agriculture, the report should be of some relevance
to subsistence agriculture.

The report will not, however, focus on the generation of technology. Its
availability will largely be assumed. This is not, of course, entirely
realistic in the context of less developed nations because the existence
of technology cannot be taken for granted. But the generation of tech-
nology is an immense subject -- one that is deserving of study in its own
right -- and is beyond the scope of this project.

The effects of technology can take many forms. Here we shall speak of
two main types: economic, and social/political. Both may make them-
selves felt at many different levels: farm, local regional, national,
and international. We shall place primary focus on economic effects at
the farm and local level. Secondary emphasis will be given to (1).
economic implications at the national and international level, and (2)
social and political implications at all levels.

We turn first to an examination of the nature of technological change.




-4-


References and Notes

1/ "Raising Agricultural Productivity in Developing Countries Through
Technological Improvement," The State of Food and Agriculture, 1968,
Food and Agriculture Organization, 1968, p. 113.

2/ Lester R. Brown, "The Agricultural Revolution in Asia," Foreign Affairs,
July 1968, pp. 688-698; "Green Revolution to Fight Hunger,"
Washington Post, April 11, 1968.

3/ Jack Baranson, "The Challenge of Underdevelopment," in Technology and
Western Civilization (ed. by Melvin Kranzberg and C. W. Pursell, Jr.),
Oxford University Press, Vol. II, 1967, p. 517.

4/ Thomas R. DeGregori, review of The Transfer of Technology to Developing
Countries, in Technology and Culture, October 1968, p. 632.

5/ For a detailed discussion of this matter in the context of Western
civilization, see Ezra J. Mishan, The Costs of Economic Growth, Praeger,
Praeger, 1967, 190 pp.

6/ Samuel Pao-San Ho, "Agricultural Transformation Under Colonialism:
The Case of Taiwan," The Journal of Economic History, September 1968,
p. 327.

7/ William and Helga Woodruff, "Economic Growth: Myth or Reality,"
Technology and Culture, Fall 1966, p. 474.





-5 -


II. NATURE OF TECHNOLOGICAL CHANGE*


Technological change may mean different things to different people. No
one definition seems to be standard for all disciplines. Here we shall
use an economic approach. This definition will be followed by a brief
review of the nature of technological change within agriculture.

A. Economic Definitions of Technological Change**

Technology, initially, may be thought of as the broad spectrum of ways
or means of carrying out economic activity. It includes "...all those
available means which may be used by men to convert scarce natural
resources into forms which satisfy human needs."l/

In a more operational sense, economists view such activities in terms
of production functions. These functions--which are'usually presented
in mathematical form--express the role of selected factors in the
production of a certain good. Land, labor and capital are the tradi-
tional inputs for economic activity. All the technically feasible
combinations of these inputs set the limits (or parameters) for the
production function.

Technological changes, therefore, may be viewed in terms of (1) modifi-
cations of existing production functions or (2) the creation of
additional production functions. We will examine both briefly.

1. Changes in Production Functions

Most economists think of technological change in terms of modifications
of production functions for existing products.2/ The modification takes
place through the addition of new production techniques to the existing
stock. New techniques, in turn, may be attained by adding, dropping, or
changing at least one of the factors of production. This can mean the
adoption of previously unknown or unavailable production or organiza-
tional techniques, and the substitution of an existing technique for
another. An improvement in quality in an input can also be treated as
equivalent to a new factor of production. Many functions are physically
possible but relatively few are economically feasible.3/

The optimum economic combination of resources for the production of a
commodity will depend on: (1) the form of the relevant production
functions, and (2) relative factor and product price ratios. Technolog-
ical change in agriculture will directly influence the shape of the
production function, and can indirectly influence factor and product
prices. Technological change in other sectors of society will more
directly influence factor and product prices.4/



* Reference and notes for this chapter are found on p. 9.

** The general reader may wish to skip this unit and move instead to
section B, p. 7.





- 6 -


The development of a modified production function manifests itself in
terms of expanding output at the same cost, or producing the same output
at lower costs. While some distinction is thence drawn between output-
increasing and cost-reducing technological change, this dichotomy may
be arbitrary:

Innovations designed to lower costs ...have a
curious propensity to result in expanded output.
Indeed it is difficultto conceive of an innovation
that successfully lowers costs which does not ex-
pand output (and hence lower prices) under free
market conditions.5/

In either case, technological improvement must at least momentarily in-
crease the profits (or decrease the losses) of the firm if it is to be
adopted. The only exception would be the case where the innovation in-
creased future profit expectations through reduction of risk or un-
certainty.6/

Positive technological change may take one of two general conceptual forms.
The first is characterized as neutral technical progress: output is ex-
panded without changing factor proportions. The second is characterized
as biased technical progress: in expanding output the marginal physical
rates of substitution are altered in favor of one factor by specific
innovations. In the case of some technologies, both neutral and biased
forms may be involved.7/

In any event, complex factor problems may arise. It may not be easy or
possible to increase the supply of all factors in the case of neutral
change. And the change in factor proportions associated with biased
progress may create profound adjustment problems for the disadvantaged
factor of production. We shall say more of these difficulties later in
this report.

2. Addition of Production Functions

The production function approach is essentially static; among other
limitations it is tied to the production of a given item. As one econo-
mist recently commented in appraising a study of this type in Peru:

...the model assumes no new products, but essentially
deals with the problems of producing the old products
(including improved versions, however) by better methods.

In some important cases in Africa ...the transformation
of traditional agriculture has involved the introduction
of new outputs and has then changed incomes rather drama-
tically.8/
Jones, in fact states that in Africa the greatest technical change of
modern times has been the introduction of a complete set of food crops
from the Americas.9/




- 7 -


Innovations of this sort can, however, be conceived of in terms of a
new production function. In Schumpeter's words:

...we will simply define innovation as the setting
up of a new production function. This covers the
case of a new commodity as well as those of a new
form of organization or a merger, or the opening up
of new markets.12/

This sort of conceptual treatment seems eminently well suited to handling
certain forms of technological change.



On balance then, we may think of technological advance in agriculture
in terms of (1) changes in existing production functions or (2) the
establishment of additional production functions. This approach is in
tune with one used by Kendrick a few years ago: in defining technical
change he included both increases in productivity in resource use, and
improvements in the quality and variety of consumer goods.ll/ In the
case of complex technologies, both forms may be involved; and in these
and other cases it may be difficult to distinguish between the two.


B. Technological Change Within Agriculture

So far we have discussed technological change in fairly academic terms.
How can we more clearly identify the main types of change which actual-
ly may be found in agriculture? What are the main characteristics of
these changes?

Heady has suggested that technological changes in agriculture can be
divided into three main types: biological, mechanical, and biological-
mechanical. Biological changes, such as new varieties, have a physio-
logical effect in increasing timeliness of operations, or have some
other direct influence on plants or animals.12/ Each of the three types
might involve changes in existing production functions or the establish-
ment of additional functions.

The various types of technical change can take place at any number of
levels of complexity. Bohlen has distinguished three: (1) a simple
change in materials and equipment, (2) an improved, practice, and (3) an
innovation. The simple change involves only variations in accepted
behavior patterns. The improved practice means handling two or more
variables, but within the general framework of the farmers' general
attitudes and activities: e.g. changing from broadcasting to side dress-
ing fertilizer. Innovation requires sharp changes in attitudes and
activities: hybrid corn is considered an example because farmers had to
realign their values in regard to the source of seed supply and the appear-
ance of the seed.13/ While all three types of change are involved in
the improvement of agriculture in less developed nations, some of the
most striking gains have reflected innovations.




-8 -


Although technology is generally veiwed in terms of increasing production,
it may also take the form of stopping losses. This may be primarily
associated with the reduction of losses in storage, but also includes
the reduction of production losses (due to insects and diseases) and har-
vesting losses (due to inadequate labor, etc.). These improvements can
involve the same types and levels of change as is true of production.

Exapnded production or reduced losses may lead to quite different factor
combinations and levels. Simple biological changes may not, for example,
require large quantities of capital; some in fact may even be labor
intensive. Mechanical innovations, on the other hand, may require large
amounts of capital and lead to labor displacement. Some practices, like
double cropping, may require more of both. Both neutral and biased
technological change may be involved in agricultural advance.




Clearly, technological change in agriculture has many faces and forms.
The development of definitions of change that cover this range of
activities, yet are both precise and easily understood, is not a simple
project. It is an area that deserves further attention.




- 9 -


References and Notes

1/ Nathan Rosenberg, "The Economic Consequences of Technological Change,
1830-1880," in Kranzberg and Pursell, op. cit., Vol. I, 1967, p. 515.

2/ For a dissenting view, see Thomas Balogh, The Economics of Poverty,
Macmillan, 1966, p. 75.

3/ Vernon W. Ruttan, "Research on the Economics of Technological Change
in American Agriculture," Journal of Farm Economics, November 1960,
p. 736; Theodore W. Schultz, Transforming Traditional Agriculture,
Yale University Press, 1964, pp. 133, 138; Ruttan, op. cit., p. 736.

4/ F. H. Gruen, "Agriculture and Technical Change," Journal of Farm
Economics, November 1961, p. 846.

5/ Ruttan, op. cit., pp. 749-750. Also see Gruen, op. cit., p. 838.

6/ Earl 0. Heady, "Basic Economic and Welfare Aspects of Farm Technolo-
gical Advance," Journal of Farm Economics, May 1949, p. 295.

7/ Ibid., pp. 294, 302; Harry Johnson, "Economic Development and Inter-
national Trade", in Readings in International Economics (ed. by
R. E. Caves and H. G. Johnson), Irwin, 1968, pp. 291-292.

8/ Wolfgang F. Stolper, "Discussion" of "Impact of Technology on Tradition-
al Agriculture: The Peru Case" (by Joseph D. Coffey), Journal of Farm
Economics, May 1967, p. 458.

9/ William 0. Jones, "Environment, Technical Knowledge, and Economic Deve-
lopment in Tropical Africa," Food Research Institute Studies, 1965
(No. 2), p. 105.

10/ Joseph A. Schumpeter, Business Cycles, McGraw Hill, 1939, Vol. I,
pp. 87-88; as cited by Vernon W. Ruttan in "Usher and Schumpeter on
Invention, Innovation and Technological Change," quarterly Journal of
Economics, November 1959, p. 598.

11/ John W. Kendrick, "The Gains and Losses from Technological Change,"
Journal of Farm Economics, December 1964, p. 1065.

12/ Heady, op. cit., pp. 296-297.

13/ Joe M. Bohlen, "Research Needed on Adoption Models," in Diffusion
Research Needs, North Central Regional Research Bulletin 186
/January 1968/ (published by University of Missouri), p. 18.




- 10 -


III. ADOPTION PROCESS FOR AGRICULTURAL TECHNOLOGY*


The adoption process for agricultural technology has received considerable
study. Most of this work,however, has been done in the developed nations;
relatively little seems to have been reported for the less developed
nations.1/

A. General Characteristics


The adoption of a new technology
acceptance varies geographically
and country to country -- as well
tion process follows the S-shaped


is a very uneven process. The rate of
-- farmer to farmer, region to region,
as among crops. But in general the adop-
growth curve. (Figure 1)


Figure 1. ADOPTION PROCESS FOR A NEW TECHNOLOGY


Source: Herbert F. Lionberger, Adoption of New Ideas
and Practices, Iowa State University Press,
1960, p. 34.


The combination of variable rate of adoption and the
curve is vividly represented in the adoption pattern
the United States. (Figure 2)


S-shaped adoption
for hybrid corn in


Figure 2. PROPORTION OF CORN ACREAGE PLANTED WITH HYBRID SEED


1932 '34 36 '38 1940 '42 '44 '46 '48 1950 '52 '54 '56
YEARS
Source: Zvi Griliches, "Hybrid Corn: An Exploration
in the Economics of Technological Change,"
Econometrica, October 1957, p. 502.


notes for this chapter are found on pp.18-20.


* References and





- 11 -


Hybrid corn was not a single innovation immediately acceptable elsewhere:
the actual breeding of adaptable hybrids had to be done separately for
each area. Griliches notes that:

The lag in the development of adaptable hybrids
for particular areas and the lag in the entry
of seed producers into these areas can be ex-
plained on the basis of varying profitability....

Where the profits from the innovation were large
and clear cut, the change-over was very rapid.
In areas where the profitability was lower, the
adjustment was also slower.2/

Whereas the relative superiority of hybrids may have been the same in
different areas, the absolute difference in yield in better corn areas was
one of the major factors responsible for the differential acceptance rate.3/

While this analysis was cast in economic terms, Griliches acknowledged
that knowledge of sociological variables would be helpful in determining
which individual will be first or last to adopt a particular technique.4/

How do these findings relate to the problems of the less developed nations?
We will explore this matter in the remainder of this chapter. Our emphasis
will be on the farmer who has left subsistence agriculture, at least in
part, and moved into the market economy..5/

B. Why is Technology Adopted?

New technologies may be adopted for a host of reasons: some obvious, others
less so. But in any case, decisions are made at both the farm and govern-
mental level.

1. Farm Level Decisions

The major reasons for farm adoption of new technologies are usually economic
in nature, but non-economic variables can sometimes be important.

a. Economic Reasons for Adoption

Direct income improvement would logically seem a prime goal for those using
new technologies. Indeed, this is suggested by many studies which in-
dicate that producers in less developed nations respond positively to price
incentives. Yet the direct evidence on the motivations for adopting new
technologies is slender.

One of the few studies aimed specifically at this point was conducted by
Sturt in 1962 in four villages in West Pakistan. His work suggested that
cultivators making changes were indeed economically motivated. About 97%
of the reasons for making changes were economic. Almost all were directed
at obtaining more production; 4% of the reasons were cast in terms of reduc-
ing costs and 1% in terms of making things easier.-6/





- 12 -


Why did the producers want more production? The primary reason was to have
more food for direct family consumption. The second reason was to have
more product to sell or barter in order to make expenditures for consumption
or production investments. The consumption expenditures were largely for
clothes, followed by food. The production expenditures were about equally
divided between bullocks, seeds, and fertilizers.

Unfortunately, little other study of the use of cash income seems to be
available. An article by Mohammad suggests that West Pakistan farmers
have traditionally had little outlet for savings: the price of land was
extremely high and returns on investment were low. Recently, however,
many farmers have found tubewells to be a low cost investment with high
returns.7/ In India, the AID Mission has reported that while there is
little firm evidence as to what is being done with increased incomes the
demand for such inputs as tubewells, fertilizer, high-yielding variety
seeds, and machinery (including tractors) is very strong.8/

New technologies also could be adopted for indirect economic reasons --to
take advantage of (or because of) existing resource patterns. The human
side could reflect an abundance of, or lack of, management or labor; in
some of the less developed nations, for instance, there are seasonal short-
ages of labor which have spurred the adoption of various forms of mechani-
zation. Or a new technology could be adopted to take advantage of some
special resource endowment or previously adopted technology; the adoption
of high-yielding varieties of grains, for instance, is facilitated by the
presence of irrigation.

In a somewhat different vein, a technology could be adopted by some farmers
or in some areas simply to maintain comparative advantage with other areas --
because the others (a) have a greater natural resource endowment, and/or
(b) have already adopted a technology which has provided them with an advan-
tage. Growers may not realize the specific reasons, but market forces will
help them sense the need to make changes.

b. Other Reasons for Adoption

There are undoubtedly a number of other reasons of a less economic nature
which affect adoption of new technologies. We shall focus on only two
categories: lack of knowledge, and psychological factors.

Lack of knowledge is a rather negative reason for adoption. Still, many
farmers take on new technologies without really knowing whether they make
economic sense. This process may represent a calculated gamble, or it may
be simply what rural sociologists call "overadoption." Rogers cites three
U.S. examples: the use of self-propelled tobacco harvesters in North
Carolina, the adoption of hybrid sorghums in Kansas, and the use of four-
row corn planters in Indiana.9/ Over the years, a number of technological
crazes have swept U.S. agriculture, in part from lack of knowledge.10/

The situation is doubtless less extreme in the less developed nations, if
only because low income levels limit adoption of new technology. But at
the same time the individual farmer may have less information to form the





- 13 -


basis of an enlightened choice. And since many live close to the margin,
a mistake could have disastrous consequences. In such a context we might
keep in mind Rogers' statement that "...county extension agents may be
more effective at preventing the adoption of non-recommended innovations
than in promoting the adoption of recommended ideas."ll/

Psychological reasons for adopting new technologies are probably more
common in developed nations than in developing ones. In developing
countries society is more attuned to change: in many less developed
nations, tradition is likely to inhibit innovation. In either case, some
new technologies may be adopted because the farmer is an innovator at
heart. Moreover, the technology may be so new that there is no way to
determine its feasibility except by trying it.

2. Governmental Level Decisions

In many societies, the key decisions regarding the implementation of new
technologies are made directly or indirectly at the governmental level.
The government may influence the availability of inputs (e.g. through im-
port control), the price of products, the nature of technical assistance,
etc. As at the farm level, decisions may be motivated by economic and non-
economic reasons.

Governments may be largely interested in using new technologies to increase
output and provide the basis for increased economic growth. Increased pro-
duction makes it possible to increase exports and/or reduce imports. It
can provide the basis for improving national nutritional levels. The role
of agriculture in stimulating economic development, however, has been dis-
cussed at length by others and we shall not dwell on it here.12-

Governments can also be influenced by psychological and political factors.
Where nationalism is strong, as in many emerging nations, a new technology
in agriculture may serve as a symbol of progress. The form can vary, but
there must be some dramatic aspect: this means that a more advanced tech-
nology may be selected than would otherwise be the case.13/ Tractors have
often filled this role, but it is also met by dams, irrigation projects,
etc. In some well-known cases -- such as the infamous groundnut scheme in
Tanzania (Tanganyika) -- additional drama is provided by the magnitude of
failure of the project.14/ But certainly not always.

The political attitudes of the countryside can often have a marked in-
fluence on the stability of national governments during periods of politi-
cal modernization. The attitudes of the peasants are, in turn, strongly
influenced by economic conditions. Huntington has observed:

Someone once said that the glory of the British Navy
was that its men never mutinied, or at least hardly
ever mutined, except for higher pay. Much the same
can be said of peasants.15/

So if a government can improve economic conditions in the countryside, even
for relatively short periods, it may reduce political instability. To the





- 14 -


extent that technological innovations can make an economic contribution
to the countryside, then, they may be favored by the government. But as
we shall see in later chapters, this can be a treacherous course and may
not work out quite as anticipated.

C. Factors Influencing Rate of Adoption of Technology

Perhaps the major factor influencing the rate of adoption, as the previous
portions of this chapter have suggested, is the real or anticipated pro-
fitability of a technology.16/ In this section we move on to other
characteristics influencing adoption. These include (1) the technology
itself, (2) the adopter, (3) the economy, and (4) the society.

1. Characteristics of the Technology

Technologies may represent varying degrees of complexity -- from a slight
modification of current practices to a broader scale innovation. Obvious-
ly those which are least complex are apt to be adopted first (unless the
payoff is so minor that no one bothers with it). Similarly, a technology
which is divisible and can be adopted in parts or stages is apt to find
more rapid use.

A study of the adoption of four farming practices in Japan indicated the
following attitudes and rate of use:177
Favorable
Practice Attitude Tried Adopted
------ percent------
1. Testing soil for ferti- ------percent-----
lizer needs 96 82 73
2. Seeding recommended
amounts of rice 84 78 66
3. Using Norin No. 30 Soy-
bean seed 57 38 33
4. Drying soil and planting
two crops a year 67 21 12

The first two practices called only for slight changes in techniques; they
were favorably received and widely tried and adopted. The use of a new
soybean seed was less favorably received, but most of whom tried the prac-
tice adopted it. Drying of soil and planting of two crops was more favor-
ably viewed than the seed, but a much smaller portion both tried and
adopted the practice. The latter practice would have called for basic
changes in farm operation.

Similarly, a study of the adoption of soybeans in the Yaqui Valley of
Mexico revealed that the compatibility of soybean production with existing
practices,and the ease with which it could be carried out,were decisive
factors in its rapid adoption by the farmers of the region.18/

Other factors influencing rate of adoption include communicability and
technical "appropriateness". The latter, as defined by Byrnes, is the
relevance of the innovation or practice for the particular farmer, given




- 15 -


his educational, social, agricultural, and economic situation.19/

2. Characteristics of the Adopter

Those who are the most rapid to adopt new technology generally have similar
characteristics. These might be classed as economic (or situational) and
social (or personal).

As might be expected, the farmers who are most apt to adopt new practices
are among the more economically favored: they are relatively well-to-do
and have large operations. They can afford to take the risk involved in
adopting the technology--and at the same time stand to reap the most
economic benefits.20/ (The related question of land tenure, however, is a
more cumbersome one: there is no categorical answer except that owner-
operators are generally more willing to invest in their farms than absentee
landlords.)21/

The nature of the farmer's cropping pattern is also of economic influence.
If the good produced is of relatively high income elasticity of demand
and designed for export, it may be grown under more technologically advan-
ced conditions than if it is destined for local markets. Mexico provides
a well documented case: the greatest growth has been achieved on (1)
irrigated export crops -- especially fruits and vegetables -- produced on
private lands in the Pacific North Region, and (2) relatively extensive
crops such as cotton and wheat grown on a small number of large scale farms.
Change has proved most difficult in Mexico where a traditional domestic
crop such as corn is grown intensively near the margin.22/

Social characteristics of adopters may be closely linked to their economic
status. Those who make technical changes are more apt to be well educated,
socially active, and have more contacts outside the village than is true
of those who do not. As Bose indicated in 1961, following a study in
Indian villages: "...those who adopted more belonged to higher castes,
were literate, and had higher participation in community activities."
Similar findings have been obtained in a more recent study in India.23/

Sociologists place considerable emphasis on the role of the interaction
effect in spreading technology. It is "...the process through which in-
dividuals in a social system who have adopted an innovation influence those
who have not yet." In certain Oriental or tribal societies, social and
cultural conditions of rural life may also have a significant influence on
the introduction of new techniques.24/

3. Characteristics of the Economy

The rate of adoption of technology will also be influenced by the nature
of the economy: the nature of the infrastructure, the demand for agricul-
tural products, off-farm employment, and government policies. 25/

Infrastructure includes the availability of inputs necessary for the change,
the availability of credit, and the nature of the marketing system
(communication, transportation). It might also be said to include research
and education. In most less developed nations, these vital ingredients




- 16 -


are all seriously lacking to various degrees.

Demand for the products produced or marketed under the influence of new
technologies will play a key role in determining their profitability,
and hence as their rate of adoption. High grain prices in India during
the mid 1960's, in part due to drought, undoubtedly accelerated the adop-
tion of improved cultural practices. Demand, however, needs to be con-
sidered in terms of both domestic and foreign markets.

Off-farm employment can play an important role in tempering the pace of
technological improvement. Labor-saving technologies, for instance, will
be of less merit if there is no place for displaced labor. In Japan,
technological development of agriculture has been accelerated because of
the availability of off-farm employment: the opportunity cost of labor
was raised, providing greater incentive to adopt new practices.

Government policies can have a most significant impact on the adoption of
technologies. The rapid increase in private tubewells in West Pakistan
during the 1960's, for instance, was aided by (1) higher and more stable
prices for agricultural products, (2) lower cost power as a result of the
government's electrification program, and (3) increased availability of
pump materials due to the import liberalization program. Pakistan, as do
other nations, also provides subsidies on the cost of inputs such as
fertilizer, crop protection, and improved seed.26/

D. Possible Rejection of Technology

Few new technologies, even when adopted or used once, are permanent.
They may eventually be replaced by more improved technologies or they may
gradually or suddenly be dropped. There are many factors influencing
the partial or total rejection of a technology. Here we shall note only
a few.

There are numerous instances of technologies being introduced without
adequate research on some key phase of production or marketing. Miracle
cites three examples in Africa:27/

--rejection of chemical fertilizers by farmers in
Eastern Nigeria because the fertilizers introduced
caused their rice to develop too much straw and
their yams to store poorly.

--the abortive attempt to introduce pigeon peas and
soybeans to the northern Congo Basin without research
into how pulses are processed by people involved.

--attempts to introduce improved maize varieties in
the Congo Basin that failed because of lack of
research on consumer preferences as to hardness and
color of the grain.

A related problem is that production research may have been conducted under
conditions which cannot be equaled by the average farmer. Demonstration




- 17 -


plots are a way around this problem.

Misapplication is probably a major reason for rejection of technologies.
Once again there are probably endless examples, but one from a Community
Development Program in India suggests the major difficulties:

In this particular village the government workers
had already urged the farmers to try some ferti-
lizer. They applied it too liberally, and the
crops withered and died. Next year, the same
villagers, still friendly, accepted the advice to
plant wheat in an empty irrigation reservoir. Rust
attacked the crop. After that the men ruined an
expensive German sprayer in an effort to kill the
rust. Government officials ended up by regarding
the peasants as hopelessly stupid and lazy.
Peasants who could not afford to risk their crops
stuck to traditional ways they knew would work
after a fashion.28/

Misapplication, it will be noted, can come about because of failures or
inadequacies of all parties involved -- from government official down to
peasant.

Farmers may try new techniques -- such as high-yielding varieties of grain --
then turn from them because of shortages of inputs such as water, ferti-
lizer, or insect and disease controls. Reding, for instance, found that
Mexican growers who dropped hybrid corn were generally those without
irrigation.29/

Moreover, a technology which may seem profitable under one set of economic
conditions may become uneconomic under another. An increase in costs and/
or a decrease in returns can lead to discontinuance, or more limited use,
of a technology. Price declines brought about by production increases
may limit grower interest in new varieties of rice. Government taxation
policies can also play a role: Chauhan has reported the case of a village
in India which had -- after learning new methods of cultivation -- adopt-
ed the cultivation of a new crop (tobacco), but which reverted to tradi-
tional crops (cotton and maize) following the third increase in taxes.30/

All or part of the preceding factors may interact to discourage use of
technology. So might the lack of complementary inputs. These points may
not be specifically recognized by the farmer, who only knows that the
technology isn't working out the way it was expected. But the result is
the same. Many of the problems may be worked out over time, but changing
economic relations remain a constant threat. The degree to which a
farmer retrenches will be influenced by his technical and capital resources,
and his outlook.



These, then, are some of the major characteristics of the adoption-- or
rejection -- of agricultural technology.




- 18 -


References and Notes

1/ AID has, however, sponsored studies under the direction of Everett
Rogers of Michigan State University in India, Brazil and Nigeria.
The India studies have been published and will be noted in this
chapter.

2/ Reproduced from Zvi Griliches, "Hybrid Corn: An Exploration in the
Economics of Technological Change," Econometrica, October 1957,
p. 522.

3/ Zvi Griliches, "Congruence Versus Profitability: A False Dichotomy,"
Rural Sociology, September 1960, p. 354. Some other comments pertain-
ing to the relative roles of economic vs. sociological variables un-
leashed an extended debate in Rural Sociology. See the following
issues: December 1959, pp. 381-383; September 1960, pp. 354-356;
December 1961, pp. 409-414, September 1962, pp. 327-332.

4/ Griliches, op. cit. (1957), p. 522.

5/ Technological change in subsistence economies is a somewhat special
matter involving more attention to risk and survival than is true of
the cases discussed here. For a perceptive and comprehensive review
of this matter, see Clifton R. Wharton, Jr., "Risk, Uncertainty and
the Subsistence Farmer: Technological Innovation and Resistance to
Change in the Context of Survival," Agricultural Development Council,
December 1968, 60 pp.

6/ Daniel W. Sturt, "Producer Response to Technological Change in West
Pakistan," Journal of Farm Economics, August 1965, pp. 630, 632-633.
A more general survey of growers wanting to make changes gave the
following breakdown: increase production, 71%; less effort, 21%;
reduce expenses, 7%. (p. 632)

7/ Ghulam Mohammad, "Private Tubewell Development and Cropping Patterns
in West Pakistan," The Pakistan Development Review, Spring 1965, p. 45.
Also see W. P. Falcon and Carl H. Gotsch, "Lessons in Agricultural
Development Pakistan," in Development Policy Theory and Practice
(ed. by G. F. Papanek), Harvard University Press, 1968, pp. 272-278.

8/ "India Program Memorandum, FY 1970," US/AID Mission, New Delhi,
Annex D, September 1968, p. D-66.

9/ Everett M. Rogers, Diffusion of Innovations, The Free Press, 1962,
p. 144. For details on the tobacco harvester case see: W. D.
Toussaint and P.S. Stone, "Evaluating a Farm Machine Prior to its
Introduction," Journal of Farm Economics, May 1960, pp. 241-251.

10/ For examples, see: Arthur H. Cole, "Agricultural Crazes," American
Economic Review, December 1926, pp. 622-639;.Earl W. Hayter, The
Troubled Farmer, 1850-1900; Rural Adjustment to Industrialism,
Northern Illinois University Press, 1968 (see index).





- 19 -


II/ Rogers, op. cit., p. 145.

12/ See, for example, John W. Mellor, The Economics of Agricultural Develop-
ment, Cornell University Press, 1966, pp. 3-130 (Part I).

13/ Baranson, op. cit. (see fn. 3, chp. I), p. 520.

14/ See Alan Wood, The Groundnut Affair, The Bodley Head (London), 1950,
264 pp.

15/ Samuel P. Huntington, Political Order in Changing Societies, Yale Uni-
versity Press, 1968, p. 374. Also pp. 291-300, 374-376.

16/ A sociologist suggests that "what really determines the rate of adoption
of an innovation is the adopter's perception of profitability and not
objective profitability" (Rogers, op. cit., 1962, p. 140).

17/ David E. Lindstrom, "Diffusion of Agricultural and Home Economics Prac-
tices in a Japanese Rural Community," Rural Sociology, June 1958,
pp. 174-175. A somewhat similar breakdown is provided for India in
Prodipto Roy, et al., Agricultural Innovations in Indian Villages, Na-
tional Institute of Community Development (Hyderabad), 1968, pp. 13-24.

18/ Abdo Magdum M. "The Diffusion and Adoption of Soybean Cultivation in
the Yaqui Valley,"in Communications in Agricultural Development (First
Inter-American Research Symposium, October 1964), ed. by D. T. Myren,
Mexico City, p. 142.

19/ Francis C. Byrnes, "Some Missing Variables in Diffusion Research and
Innovation Strategy," Agricultural Development Council (New York),
ADC Reprint, March 1968, p. 2.

20/ Tagumpay-Castillo, however, suggests that smaller farmers have a greater
propensity to adopt new practices during "the trying out" period. But
their unwillingness and inability to borrow money for the costs incident
to full adoption limit the extent of adoption. (Gelia Tagumpay-Castillo,
"Propensity to Invest in Agriculture. Observations from a Developing
Country the Philippines," International Journal of Agrarian Affairs,
July 1968, p. 309.)

21/ Santi Priya Bose, "Characteristics of Farmers Who Adopt Agricultural
Practices in Indian Villages," Rural Sociology, June 1961, p. 138;
Lindstrom, op. cit., p. 181; Lionberger, op. cit., p. 34; Rogers,op.cit.,
p. 175 ff.; Roy, op. cit., pp. 30-44, 100; Tagumpay-Castillo, op. cit.,
p. 309.

22/ Reed Hertford, "The Development of Mexican Agriculture: A Skeleton
Specification," Journal of Farm Economics, December 1967, p. 1175;
Bruce F. Johnston, "Agriculture and Economic Development: The Relevance
of the Japanese Experience," Food Research Institute Studies, 1966 (No. 3)
p. 286; W. Whitney Hicks, "Agricultural Development in Northern Mexico,
1940-1960," Land Economics, November 1967, pp. 401-402.





- 20 -


23/ Lionberger, op. cit., p. 34; Bose, op. cit., p. 138; Roy, op. cit.,
pp. 45-54, 101.

24/ Rogers, op. cit., p. 138. Also see George M. Foster, Traditional
Cultures and the Impact of Technological Change, Harper, 1962, 292 pp.

25/ For a recent study in variation in rates of adoption between villages
in India, see Frederick C. Fliegel, et al., Agricultural Innovations in
Indian Villages, National Institute of Community Development
(Hyderabad), 1968.

26/ Falcon and Gotsch, op. cit., p. 277. For information on fertilizer
subsidies in various nations, see Fertilizers: An Annual Review, 1967,
Food and Agriculture Organization, 1968, pp. 36-44.

27/ Marvin P. Miracle, Agriculture in the Congo Basin, University of Wis-
consin Press, 1967, p. 288.

28/ Barrington Moore, Social Origins of Dictatorship and Democracy: Lord
and Peasant in the Making of the Modern World, Beacon Press, 1966,
p. 401. For background on the program see Douglass Engminger "Over-
coming the Obstacles to Farm Economic Development in Less Developed
Countries," Journal of Farm Economics, December 1962, pp. 1376-1377.

29/ Jesus M. Reding, "Social and Economic Factors Which Influence the
Diffusion and Adoption of Hybrid Corn in the Bajio," in Communications
in Agricultural Development, op. cit. (see fn. 18, this chapter), pp.
132-136.

30/ Brij Raj Chauhan, "Rise and Decline of a Cash Crop in an Indian Village,"
Journal of Farm Economics, August 1960, pp. 663-666.





- 21


IV. IMPACT OF CHANGES IN AGRICULTURAL TECHNOLOGY*

The effects of new technologies are normally first felt at the farm
level, and then spread through the rest of society. We shall follow the
same pattern here -- starting with a discussion of the impact of technolo-
gies at the farm and then turning to effects at the national and inter-
national levels.

A. Impact at the Farm Level

The effects of technological advance may make themselves felt in many
ways. We shall look at two categories: economic and social/political.
Primary emphasis will be placed on the former.

1. Economic Implications

Technologies have both primary and secondary economic effects. The pri-
mary effects are more obvious than the secondary effects, but not always
more important in the long run.

a. Primary Effects of Technology

The most obvious direct effects of agricultural technologies are in terms
of supply and farm income, but they may also provide a powerful influence
on employment and the use of other technologies.

(1) Influence on Supply. Most technological changes in agri-
culture have the effect of increasing the supply of agricultural products.
Increased supply is, of course, largely traceable to improvements in pro-
duction practices, but may also be related to improvements in storage.
Both factors, especially the latter, may also have an effect on the quality
of the product.

Examples of production increases are legion. Perhaps the most striking
recent example has been, as we have suggested, the adoption of new high-
yielding varieties of grains. Related multiple cropping practices, often
associated with mechanization, offer further possibilities of sharply in-
creasing output per unit of land. These innovations will be discussed
in considerable detail in the next two chapters.

The need for improved storage and marketing systems in reducing losses in
less developed countries has been widely accepted. Kriesberg has cited
the following examples of losses:

-In India, insects reportedly cause post-harvest losses
of at least 10% of cereals; rodents are reputed to cause
an added loss of 10 to 20% of stored grains.

-In Syria and Lebanon, losses of 10 to 20% have been
reported for stored grain.


* References and notes for this chapter are found on pp. 32-34.





- 22 -


-In Brazil, a survey of processors, merchandisers and
producers placed losses of stored grain at 15-20%.

By comparison, he reports that the massive grain storage program in the
U.S. operates with losses of only 0.5% annually.!/ Much attention is
being given to these matters, but there is a wide range for improvement --
especially for more perishable commodities.

In addition to increasing supply, improved technologies can also reduce
variability in supply. This is obvious for storage but may also be
true in terms of production. Shaw and Durost, after studying changes in
the U. S. corn belt, reported that the use of better varieties of corn
and improved cultivation and fertilization practices reduced variations
in yields in good and bad weather.2/ It is not certain how much has been
accomplished along this line in the less developed nations, but irrigation
and multiple cropping have undoubtedly had some effect.

(2) Influence on Farm Income. If the effect of many new
technologies on increasing production is clear, their influence on farm
income is considerably less so. While our discussion in this section will
be necessarily based on the situation in the developed world, the basic
points should have relevance for the developing nations.

The income gains to agriculture are relative in nature: they come to those
who first adopt technological advances but are competed away over the
longer run. As Wilcox and Cochrane put it, the operators who first adopt
a new technology reap the income benefits (the difference between the old
price and new lower costs). The first farmers undertake a new method or
practice for the obvious reason that they benefit directly.2/

Within the innovative group, it is possible that those who quickly follow
the pioneers -- the early imitative firms, as Kendrick calls them --
could realize even greater returns because of the fewer problems involved
in the application of more perfected innovations. Wilcox and Cochrane go
on to note that the higher profits of the superior farm managers tend to
result from their ability to single out the profitable new techniques and
to adopt them promptly.4/

The amount of profit received by the early adopters depends in part on the
rate of adoption of the innovation: the faster the diffusion of an
innovation, the smaller the total abnormal profit. In the farm sector,
competitive conditions are such that the time lag and the rate of profit
accruing to the farm sector for innovations is kept to the absolute
minimum. The latter point however, may be more true of developed than
less developed economies.2-

As more and more farmers adopt the new technological advance, the income
situation begins to change character. Two things happen: (1) in the
usual case where output is significantly increased, the price of the
commodity falls;6/ (2) in the less common case where costs are reduced
(output remaining the same), the gains from the new practice or technique
are capitalized into the value of the fixed asset involved. Consequently,




- 23 -


in the long run, by the time most farmers have adopted the technology,
the income benefits realized by the first farmers have disappeared/

If this is the case, why do later groups of farmers follow in adopting
the innovation? The reason, as Wilcox and Cochrane have expressed it, is
that they are caught on a technological treadmill. As the technology is
more widely adopted, and production increases, prices go down; yet costs
for non-innovative farmers do not decrease. Thus the farmer who does not
adopt new technology is squeezed. To stay even with the more progressive
farmers he is forced to adopt the new technology. The position of the
farmer who is not able to make a change -- because of lack of capitaliga-
tion or inapplicability to specific farming operation -- is not a fortunate
one. He is clearly disadvantaged.8/

The treadmill concept, however, may not be fully appropriate for less deve-
loped societies. This is because, in part, the non-adopters are more
likely to be self-sufficient and not so affected by market pressures.
The worst that may happen to them in an absolute economic sense is that
they are bypassed by progress: this has, for instance, clearly been the
case of the small farms or "ejidos" in Mexico.V/ Also, increased produc-
tion could merely replace imports with minimal adverse effect on price.
Still, the concept provides a useful conceptual starting point.

The type of influence that technical change has on the net revenue of agri-
culture will depend to some extent on the type of innovation and the price
elasticity of demand. In an earlier chapter we referred to Heady's
categorization of innovations into three main types: biological, mechani-
cal, and biological-mechanical. In the same reference he related these
to elasticity of demand, made allowance for differing effects on output
and cost, and then offered conclusions on the effect on net revenue of
agriculture. His analysis is summarized in Table 1.

While the various combinations can result in differing effects on income,
some are more probable than others. One of the most likely combinations,
for instance, is a biological-mechanical innovation influencing a crop with
inelastic demand where output and costs increase: this results in a net
decrease of revenue. But the demand for the products of an individual
farm is more elastic than for the industry, so that the effect at the farm
level may be more favorable than for agriculture as a whole.

On balance, we can see that the adoption of technical advances makes some
farmers better off, and some worse off. An important economic question,
though, is whether the farmers in the latter category are worse off in a
relative or in an absolute sense. If their income position remains the
same while that of others improves, they are relatively disadvantaged; if
their income decreases, they are also absolutely disadvantaged. The
number of farmers who are relatively disadvantaged by a technological
innovation undoubtedly exceeds those who are absolutely disadvantaged.

We should not, however, limit our analysis only to existing practices.
As we have noted earlier, new technologies may make it possible to introduce
new income-earning products and services.








Table 1. EFFECT OF TECHNOLOGICAL CHANGE IN AGRICULTURE
ON NET FARM INCOME UNDER VARYING CONDITIONS


Type of
Innovation


Biological


Mechanical


Price Elasticity
of Demand


Elastic
Inelastic

{ Elastic
-Inelastic


Elastic
Biological -
Mechanical
Inelastic


Effect of Technological
Advance on Total'
Output Cost

Increase Increase
Increase Increase

Constant Decrease
Constant Decrease

Increase or
Increase Decrease



Increase Increase or
CDecrease


Effect on Net
Revenue of Agriculture



Increase or decreased/
Decrease

Increase
Increase

Increase or decreased/
Increase


Decrease
Increase or decreased/


Notes: 1/


Total revenue will be more. Net revenue will increase if the increase in
total revenue is greater than the increase in total costs. Net revenue
will decrease if total revenue is increased by a smaller amount than the
increase in total costs.


2/ Total revenue will be less. Net revenue will increase if the decrease in
t6tal revenue is less than the decrease in total costs. Net revenue will
decrease if the decrease in total revenue is greater than the decrease in
total cost.

Source: Adapted from Earl 0. Heady, "Basic Economic and Welfare Aspects of Farm Tech-
nological Advance," Journal of Farm Economics, May 1949, pp. 298-299.




- 25


For example, the tropical latitudes, high elevation,
and sufficient rainfall encountered in certain
regions of Kenya were found to be particularly suit-
ed to growing the pyrethrum flower. Pyrethrum pro-
vided a cash crop to help offset the risk associated
with the cultivation of coffee and tea; it did not
require the years of investment prior to productive
return nor did it involve the hazard of world price
fluctuations. Continued research to expand the end use
of pyrethrum havereduced processing costs and have
helped to create a world market (over $10 million
worth sold as insecticide) that has expanded three-
fold during the period 1958-1961.10/

In this sort of situation, the outcome is likely to largely be both
absolute and relative advantage, with only limited relative and absolute
disadvantages.

In any case, the effects of technological change go beyond their immediate
effect on income at the farm level.

(3) Influence on Employment. New agricultural technologies
can have both positive and negative impacts on labor. Mechanical innov-
ations in agriculture as well as industry, it is widely recognized, gene-
rally result in displacement of labor. In fact, Kendrick suggests that
the major absolute loss may be the earnings lost by those unemployed persons
who lost their jobs because of technological change.11/

For those employees who remain in agriculture, incomes are not necessarily
reduced. It depends on the impact of the technology on output (and in
turn on prices and revenue) and costs. Wilcox and Cochrane point out that
the average labor income of those remaining in agriculture derives from a
three-sided struggle between declining total revenue, declining total
costs, and declining number of workers. The displacement of labor is a
particular problem with nations which are lower on the ladder of development
and have limited off-farm employment opportunities.12/

But there are examples of agricultural development stabilizing or increasing
the demand for labor. Technical improvements in Japanese agriculture, for
example, led to increased double cropping: peak work loads for the new
crops were scheduled to coincide with slack periods for the old, resulting
in a more even spread of work during the year. The same was true in Taiwan.
In other areas new technologies are setting the stage for new and more
intensive types of agriculture. As Mellor suggests, there is considerable
evidence in most low income countries that technological advance requires
a complementary input of labor.13/

b. Secondary Effects of Technology

The secondary economic effects of technological advances at the farm level
are often no less important that the primary effects.




- 26 -


Economists have, for instance, tended to view increases in production in
terms of short-run demand interrelationships. Longer-run supply reactions,
as Gruen has noted, have been relatively overlooked. Technological change
can have expansion and substitution effects. The expansion effect is the
encouragement to switch resources from other avenues of production. The
substitution effect sets in after production has increased and prices are
reduced, and influences both demand and supply.14/

As an example of these effects, Gruen cites the example of virus disease
which was introduced into Australia in 1950 and killed about 95% of the
rabbit population. This occurred at a time when they provided a major
obstacle to increases in wool production. Reduction of rabbit numbers
made it possible and profitable to expand wool production: the expansion
effect was to redirect available investment funds to wool production.
As a consequence, wool prices declined, setting in motion the substitution
effect: on the demand side, Australian wool consumption was encouraged,
possibly at the expense of the rate of growth of rival wool suppliers and
synthetic fibers; on the supply side, Australian farmers started switching
from wool to other products, some of them outside agriculture.--

The influence of technological change on supply and demand relationships
may materially change existing patterns of comparative advantage --
between crops, farms and areas.. Severe disruptions can result, as is
illustrated by the example of the Colombian cotton industry. The introduc-
tion of American upland cotton, grown under modern conditions, proved too
much for the native types of cotton grown under traditional conditions:
the old "colonial" sector of the cotton industry was progressively elimin-
ated and in its place, a new type of production unit was built, with its
own special technological and organizational weaknesses.-6/

Technical changes can also lead to pronounced changes in farming organi-
zation. Perhaps the most pronounced change is the impetus it gives to
moving from a non-market to a market orientation.

Adoption of new technology has usually increased
agriculture's dependence on the non-farm sector
of the economy and has lessened agriculture's
dependence upon land inputs.17/

In order to obtain these inputs -- such as machinery, fertilizer, etc. --
the farmer needs cash or its equivalent. This can generally only be
secured by selling or exchanging products.18/

A slightly different impact may take place with respect to structure.
Depending on the existing type of agriculture, technological improvement
may result in (1) a shift from extensive to intensive production, or (2)
an expansion in farm size. Herr suggests that in Australia, technological
changes resulted in a shift from extensive grazing to intensive livestock
and agricultural production; in the United States the principal reaction
was an increase in size.19/

Furthermore, technological change in one sphere of agriculture can influence
the need for -- or opportunity for -- technological change within other





- 27 -


spheres. Not only are improved production techniques needed, but marketing
will need to be improved. Thus the introduction of one technology may set
into motion a whole train of related technologies.

2. Social/Political Implications

Technological changes at the farm level may well have significant social
and political implications. This is a matter that can, and probably should,
better be explored by others. Still, a few observations may not be out of
order.

The social impacts may take several forms. Perhaps the best known is the
influence on rural social structure. As Forbes has put it:

Changing the type of agriculture literally
changes the way of life, for agriculture is
deeply rooted in the material civilization of
these /the underdeveloped/ countries and rapid,
basic change can offset its undoubted benefits
with a profound disruption of social fabric.20/

Another social problem stems from the fact that some farmers are advantaged
while other farmers may be disadvantaged -- both relatively and absolutely.
The situation of the rural unemployed may be particularly unfortunate. In
any case, the result can be a growing gap between certain sectors of the
agricultural community.

Such impacts are not likely to guarantee economic or social stability in the
countryside. Moreover, the rural under-employed may be forced to move --
as in the United States -- to the cities, exacerbating already serious
urban problems. We shall return to the national aspects of these problems
later in this chapter.

B. Impact at the National Level

The effects of technical change in agriculture extend well beyond the farm.
In fact, the most lasting benefits fall to consumers as a whole. As at
the farm level, these effects may be primarily economic or social/ political
in nature. But biological and/or ecological implications should also be
noted.

1. Economic Effects

The main economic gain from new technology ultimately falls to consumers in
the form of increased output of agricultural goods at lower prices. In
addition to increases in quantity, quality (including nutritional value)
may also be improved. These contributions form the basis for economic growth.

As we have noted, at the early stages in the introduction of an innovation,
the impact on quantity is not great. It is only as the technology is more
widely adopted that there is a significant increase in supply. Thus it is
the masses who follow the first few farmers who:





- 28 -


...are the ones who make the greatest absolute
contribution to lessening the real price of food
and to freeing resources from agriculture. Yet
these producers are promised negative payoffs or
costs for the contribution, because their incomes
are reduced from the process under inelastic
demand.21/

Just how closely this process will be followed in the less developed
nations remains to be seen, but it does provide a useful starting point.

In any case, it may seem that there is an intra-industry transfer of
income. (Measure needs to be taken of the public resources devoted to
agricultural research and education, irrigation, roads, subsidies on
inputs such .as fertilizer, etc.) This transfer may lead to conflicts
in public policy because, as Heady points out, groups which sacrifice
from aggregate change are likely to have different policy preferences
than those who gain from the overall change.22/

The gradual -- and sometimes sudden -- shifts in comparative advantage
that result from technical change can set the stage for serious adjust-
ment problems of broad concern. We have seen this in the United States
where improvements in transportation provided low freight rates for the
agricultural products of the American Midwest and led to the decline of
New England farming.23/

More recently, as a result of agricultural modernization in India, com-
parative advantage is shifting to the northern portions (the Ganges
plains) and to the major rice bowls of the southern parts. As a result,
Schultz points out:

A very large triangle in Central India is losing
out competitively. Scores of millions of people
who are dependent upon agricultu e reside in this
area that will be left behind.24/

And within these regions in India there are gaps between the large, relat-
ively modern farms and the small family holdings. Moisy states that there
is a risk of famine pockets in the regions bypassed in the development
process, partly because of an inadequate marketing and distribution
system..25/

2. Social/Political Effects

Technological change can have social and political ramifications at the
national level. They may range from moderate to severe in effect; the
determination depends in part on who is affected and how.

India offers a clear example. As a result of recent technological changes,
the middle class in agriculture in some regions has been strengthened
while the landless laboring class has not found its position significantly
improved. The middle class group is reacting by demanding:





- 29 -


a continued flow of yield-increasing technology
and related inputs

adequate price-cost benefits

better schools, better housing, improved rural
roads and transportation, electricity etc.

They are backing up their demands by increased participation in village,
district, state, and national political affairs.26/ The less advantaged
group is also increasing their participation in political matters, but
often in a less orderly way: through uprisings and unrest.

Peasant reaction to modernization will, as Moore indicates, be strongly
influenced by the types of social organization, and the timing and charac-
ter of the modernization process. Their response may be passive or it
can go as far as revolutionary potential.

Whether or not this potential becomes politically
effective depends on the possibility of a fusion
between peasant grievances'and those of other strata.
By themselves the peasants have never been able to
accomplish a revolution.27/

The social and political ramifications of most technological changes in
agriculture are, of course,of a much more modest level. But the point is
that some effects of this nature can be expected from almost every innov-
ation -- and in some cases these can be of significance at the national
level.

3. Ecological Effects

One aspect of technical change that has been almost completely overlooked
by most contemporary observers is its impact on ecological balance.
Such an effect,however, is more likely seen in retrospect.

Jones has noted the ecological influence of the cultivation of maize in
Africa:

Although this crop will outperform the millets and
sorghums when rainfall is sufficient and properly
distributed, it suffers more from deficiencies in
moisture supply; farming communities that have
shifted heavily to maize may find that the incidence
of famines, or its severity, has increased. Culti-
vation of maize in pure stand can also result in
heavy losses of soil through erosion.28/

Similarly, Ripley has observed that expanding human populations and im-
proved veterinary medicine are causing widespread overstocking of range
lands with numbers of livestock far in excess of the capacity of the natural





- 30 -


vegetation to support them. He adds that the downward trend in produc-
tivity of the world's arid lands is indisputable, and that it is acceler-
ating at an unprecedented rate.29/

But technology can do as much or more to improve conditions as its unwise
use can lead to deterioration. It is a two-edged sword and those res-
ponsible for its use should keep this in mind.30/

C. Impact at the International Level

The effects of technological change can show themselves at the international
level in both obvious and less obvious ways. We shall note two of the
most important.

1. Comparative Advantage and New Products

Technical change can lead to sharp changes in international comparative
advantage for agricultural economies -- both in terms of production of
traditional products and the introduction of new products.

History provides a number of examples. The development of the steamship
and railroads, for example, opened up vast areas in the United States
and Oceania and made it possible for them to provide food and raw material
products to Great Britain at prices with which British agriculture could
not compete: this led to a sharp decline in the agricultural sector in
Britain.31/ Innovations have also, as Baranson has pointed out, provided
the basis for agricultural commodities entering world trade:

...cases in point are a decortication process to
reduce the bulk of sisal hemp, a milling process
to prevent deterioration of sugar cane, the
sulfate process for wood pulp, and the mechanical 32/
cream separator that commercialized Danish butter.--

Similar innovations might work to the advantage of present or potential
products of the less developed nations.

Other examples are less dramatic. But it should be recognized, however,
that developed countries-- as well as less-developed-- may have compara-
tive advantage tilted in their favor by technological change. In other
words, the less developed nations may have to step up use of technology
just to stay even in the international market place.

2. Role of Export Industries

Foreign investments in plantations and other export-oriented industries
have been an important source of technological change.

The degree to which such innovations have had an impact on the national
economy is a moot point. It depends on the degree to which the foreign
firm is integrated into the economy. If it is a foreign-owned and
managed plantation producing exclusively for export -- in essence an




- 31 -


enclave -- the influence may be minimal. But if it influences production
on farmer-owned units which is purchased under contract, the influence
on the national economy may be somewhat more substantial.

Either case, however, presents further analytical difficulties. The
problem lies in the potential export of "consumers surplus." The economic
advantages of new agricultural technologies primarily accrue to consumers
in the country where they are produced. Thus the technologies work to the
national -- if not to the farmers' -- interest in the long run.

The situation is changed, however, if the products influenced by the tech-
nology are exported. The consumers are not at home but abroad. The
"consumers surplus" is not retained but is lost to the producing nation to
the extent that the product is exported. Thus Singer indicates that:

...The main requirement of underdeveloped countries
would seem to be to provide for some method of in-
come absorption to ensure that the results of techni-
cal progress are retained ...3./

Furthermore, this absorption needs to be re-invested. This means that

...a flow of international investment into the
underdeveloped countries will contribute to
their economic development only if it is absorbed
into their economic system; i.e., if a good deal
of complementary domestic investment is generated
and the requisite domestic resources are found.34-

These considerations begin to take us into complex matters of trade and
development policy and are beyond the scope of this report.35/ But as
foreign investment can be an important source of technology, the matter
needs to be considered at the policy level.

D. Interrelationships

The separation of the effects of technological change by farm, national,
and international levels has, of course, been arbitrary. The three are
highly interrelated. A change at the farm level, like a stone tossed in
water, sends out waves in all directions. The economic stages, for
example, have been summarized as follows:36/

(1) Effect on the cost structure or product mix of the
individual farm in which new techniques are adopted.

(2) Shifts in industry demand curves for factors of
production and supply curves of final products.

(3) Change in rate of growth and distribution of total
and per capital income or leisure in the whole
economy.




- 32


The challenge for policy makers is to determine the various economic,
social, and political interrelationships and to take steps to capitalize
on the benefits and minimize the possible disruptions.



In the next two chapters we shall review the interrelationships of tech-
nology in terms of two relatively recent and important innovations in
the less developed world: new high-yielding varieties and mechanization.
The discussion of each will follow the chapter sequence used so far in
this report: introduction (background), nature of technological change,
adoption process, and impact of changes. Hopefully this process will pro-
vide not only empirical example but also a framework which will be of
value in analyzing other technological changes.




References and Notes

1/ Martin Kriesberg, "Marketing Food in Developing Nations -- Second
Phase of War on Hunger," Journal of Marketing, October 1968, p. 58.

2/ Lawrence H. Shaw and Donald D. Durost, The Effect of Weather and Tech-
nology on Corn Yields in the Corn Belt, 1929-62, U. S. Department of
Agriculture, Agricultural Economics Report No. 80, July 1965, p. iv.

3/ W. W. Wilcox and W. W. Cochrane, Economics of American Agriculture,
Prentice Hall, 1960, pp. 325-326. Also see Earl O. Heady, Agricul-
tural Policy Under Economic Development, Iowa State University Press,
1962, p. 10.

4/ Kendrick, op. cit. (see fn. 11, chp. II), p. 1068; Wilcox and
Cochrane, op. cit., p. 52.

5/ Kendrick, op. cit., p. 1069; Wyn F. Owen, "The Double Developmental
Squeeze on Agriculture," American Economic Review, March 1966, p. 55.

6/ And in the general case where the price elasticity of demand at the
farm level is less than 1.0 (that is, demand is inelastic), gross
returns to all producers must fall.

7/ Wilcox and Cochrane, op. cit., p. 326. A rather special case has been
provided by controlled atmosphere storage of apples. Though relatively
widely adopted since WW II in the U.S., its use through the mid-1960's
was not associated with any particular increase in the proportion of
the apple crop stored. Rather, it brought about a significant increase
in quality of late season fruit and led to premium prices for storage
fruit -- premiums which held up well through the mid-1960's.
(Dana G. Dalrymple, "The Development of an Agricultural Technology:
Controlled Atmosphere Storage of Fruit," Technology and Culture,
January 1969, p. 47.)




- 33 -


8/ Wilcox and Cochrane, op. cit., p. 326. The situation may be less
pressing in the special case where the primary effect of the techno-
logy is to reduce costs (which in turn is capitalized into the value
of assets). "The individual whose resource inventory has increased
in value can transfer the greater post-innovation wealth if he chooses
to do so." But where "...the capitalized value of assets has decreased,
the resource owner cannot transfer his pre-innovation wealth to other
industries." (Heady, op. cit., p. 306.)

9/ Hertford, op. cit., p. 1175; Johnston, op. cit., p. 286; John W. Mellor,
"Growth of the Market and the Place of Agricultural Development in Low
Income Nations," Cornell International Agricultural Development Mimeo-
graph 22, June 1967, pp. 9-10.

10/ Jack Baranson, "Economic and Social Considerations in Adapting Techno-
logies for Developing Nations," Technology and Culture, Winter 1963,
p. 28.

11/ Kendrick, op. cit., p. 1066.

12/ Wilcox and Cochrane, op. cit., p. 327.

13/ Moore, op. cit. (see fn. 28, chp. III), p. 267; John W. Mellor, The
Economics of Agricultural Development, Cornell University Press,
1966, p. 157.

14/ Gruen, op. cit. (see fn. 4, chp. II), pp. 838-851.

15/ Ibid.

16/ Philippe P. Leurquin, "Cotton Growing in Colombia: Achievements and
Uncertainties," Food Research Institute Studies, 1966 (No. 2), pp. 128,
148.

17/ Ruttan, op. cit. (see fn. 2, chp. II), p. 740.

18/ Also see Marion Clawson, "The Implications of Urbanization for the
Village and Rural Sector," in Social Problems of Development and
Urbanization (Vol. VII of Science, Technology and Development),
Washington, 1963, pp. 49-50.

19/ William McD. Herr, "Technological Change in the Agriculture of the
United States and Australia," Journal of Farm Economics, May 1966,
pp. 267-268.

20/ R. J. Forbes, The Conquest of Nature: Technology and Its Consequences,
Praeger, 1968, pp. 42-43.

21/ Heady, op. cit. (1962; see fn. 3 this chapter), p. 10.


22/ Ibid., p. 184.




- 34 -


23/ Rosenberg, op. cit. (see fn. 1, chp. II), p. 516.

24/ T. W. Schultz, "Production Opportunities in Asian Agriculture: An
Economist's Agenda," University of Chicago, Agricultural Economics
Paper No. 68:12, revised July 12, 1968, p. 17. (Reprinted in
Development and Change in Traditional Agriculture: Focus on South
Asia, Michigan State University, Asian Study Center, Occasional
Paper, November 1968.)

25/ Claude Moisy, "Enough Wheat for Export?" Ceres, July-August 1968,
p. 30.

26/ Dorris D. Brown, "Capital Formation and Agribusiness in India,"
Columbia Journal of World Business, January-February 1969, p. 62.

27/ Moore, op. cit. (see fn. 28, chp. III), p. 467.

28/ Jones, op. cit. (1965; see fn. 9, chp. II), p. 106.

29/ Cited in I. M. Destler, "Ecological Imbalance -- Man's Pressure on
the Land," International Agricultural Development, February 1968,
p. 18.

30/ For further discussion, see the following reports based on a Con-
ference on "The Ecological Aspects of International Development
Programs": The Unforeseen International Ecologic Boomerang, sup-
plement to Natural History, February 1969, pp. 41-72 (reprints
available from the Conservation Foundation, Washington, D.C.); and
"Development in the Poor Nations: How to Avoid Fouling the Nest,"
Science, March 7, 1969, pp. 1046-1048.

31/ Rosenberg, op. cit. (seefn. 1, chp. II), p. 531.

32/ Baranson, op. cit. (1967; see fn. 3, chp. I), p. 524.

33/ H. W. Singer, "The Distribution of Gains Between Investing and Borrow-
ing Countries," American Economic Review, May 1950 (as reprinted in
Readings in International Economics, ed. by R. E. Caves and H. G.
Johnson, Irwin, 1968, pp. 316, 317).

34/ Ibid.

35/ For further discussion, see: Singer, op cit., pp. 306-317; Robert E.
Baldwin, "Export Technology and Development from a Subsistence Level,"
The Economic Journal, March 1963, pp. 80-92; Jones, op. cit., p. 108."


36/ Ruttan, op. cit. (1960; seefn. 3, chp. II), p. 737.




- 35 -


V. HIGH YIELDING VARIETIES OF GRAIN*


During the late 1960's a great deal of public attention has been given
to the role of improved varieties of wheat and rice in expanding food
production in the less developed nations. Although some of the public
statements have been overdone (e.g. "miracle seeds"), the new varieties
have indeed brought about significant changes in agriculture.

A. Background of New Varieties

Breeding for improved varieties of grains has been underway for many years
in the developed world, but it is only since WW II that significant pro-
gress has been made in more than a handful of the less developed nations.!/

1. Foundation-Sponsored Research

National breeding efforts received a significant boost with the establish-
ment of the Agricultural Program of the Rockefeller Foundation in Mexico
in 1943. Emphasis was placed on developing improved varieties of corn and
wheat as well as vegetables. Extension of the Mexican work subsequently
led to the establishment of other programs in South America and India, and
eventually to an International Wheat Program. The Central American corn
project, established in 1954, grew into an International Corn Program. In
1966, the two programs were merged with the formal establishment of the
International Maize and Wheat Improvement Center (CIMMYT Centro Internacion-
al de Mejoramiento de Maiz y Trigo) in Chapingo, Mexico. The Center, now
jointly financed by the Rockefeller and Ford Foundations, presently has
programs underway throughout the world.2/

Foundation interests in rice date back to 1952 when Rockefeller sent a
preliminary study team to the Far East. It was subsequently decided that
Rockefeller and the Ford Foundations would join forces to establish an
International Rice Research Institute (IRRI) in the Philippines. The Insti-
tute was organized in 1960 and dedicated in 1962. Starting in 1965,
scientists employed by the Institute and the Foundations were stationed at
key research centers in other countries; they have become intimately invol-
ved with the research programs of the host nations.3/

Thus it can be seen that the two Foundation-sponsored efforts in grain im-
provement are closely intertwined with national programs. / Part of the
main concept is that the Institutes do the "basic" research work, while
"adaptive" research -- tailoring of the variety to local conditions -- is
done at the national level. Not all the new grain varieties have been deve-
loped under this cooperative program, but a surprising number tie in in some
way -- through parent stocks, training of researchers, etc. Accelerated
breeding programs are now underway at many points throughout the less deve-
loped world.


*References and notes for this chapter are found on pp. 48-51.





- 36 -


2. Spread of New Varieties

There has been a sharp expansion in the area planted to improved varieties
of grains in the less developed nations within just the last few years.
Most of the increase has been in improved varieties of wheat and rice.
Precise data are not available on the exact area planted, but a general
picture for wheat and rice is provided in Table 2. Essentially all of the
area reported planted to wheat and rice is in Asia (primarily in India and
Pakistan), but shipments of improved seeds have been made to many regions.

In India and Pakistan, plantings of improved varieties of corn and other
grains expanded as follows:5/

Crop Year Corn Others*

---- acres ----

1966/67 563,000 388,000

1967/68 1,012,000 2,519,000

1968/69 (goal)** (3,000,000) (5,000,000)


Grain sorghum, spiked millet, and barley; almost
entirely in India.
** Considerable shortfall expected because of dry weather.

In some countries, plantings of the improved varieties represent only a
small proportion of the total planted to that crop. In others it is be-
ginning to reach an appreciable proportion: around 20% in the case of
wheat in India and Pakistan in 1968. In any case, there has been a strik-
ing -- possibly unparalleled increase in the area planted to new varieties.

B. Nature of Technical Changes

The use of the new varieties entails substantial changes in the agricultural
functions involved and the technical base needed.

1. Functions Involved

The main functional changes involved center around production, harvesting,
and marketing. Improved varieties of grains require a "package" of inputs
if they are to attain their maximum production potential. While any variety
will respond to inputs such as fertilizer and water, they will do so only
up to a point, and then diminishing returns set in. The new varieties have
a much higher response threshold.

This is most easily seen with respect to fertilizer. Unimproved native
varieties have only a limited response to fertilizer in terms of yield:
much of the added growth goes into the stalk, which, as it becomes taller,





- 37 -


Table 2. ESTIMATED AREA PLANTED TO NEW HIGH-YIELDING VARIETIES
OF WHEAT AND RICE IN THE LESS DEVELOPED NATIONS


Acres (rounded)


Crop Year

1964/65

1965/66

1966/67


1967/68


1968/69 (goal)


Wheat 1/

negl.

23,000

1,554,000


9,658,000


(14,750,000)2/


Rice 2/

negl.

14,000

2,343,000


6,762,000


(12,300,000)


Total

negl.

37,000

3,897,000

16,420,000

(27,050,000)


Notes:


1/ Essentially all Mexican or Mexican-type varieties. Excludes
Mexico (where an average of 1.85 million acres was planted to
improved varieties during the 1960-64 period).

2/ Primarily International Rice Research Institute varieties (IR-8,
IR-5), but also includes substantial quantity of: (1) ADT-27
and Taichung (Native) I in India; and (2) BPI-76 in Philippines.
Does not include area planted to long-standing improved local
varieties in Ceylon and Taiwan.

3/ Plus an unestimated quantity of improved wheat in Nepal.


Source:

Dana G. Dalrymple, "Imports and Plantings of High- yielding Varieties
of Wheat and Rice in the Less Developed Nations," International Agri-
cultural Development Service, December 17, 1968, 18 pp.; as updated
for India and Afghanistan. (The reference to wheat acreage in Mexico
in fn. 1 was obtained from figures compiled by Reed Hertford of the
Economic Research Service.)





- 38 -


is more apt to lodge (bend or break). On the other hand, the high-yielding
varieties have semi-dwarf characteristics: as fertilizer is added, the
response is in terms of grain yield, not stalk growth. Furthermore, the
partly-dwarfed varieties have a stiffer stalk./ Thus the point of diminish-
ing returns becomes much higher for fertilizer.

The same is true of water. Consequently, most of the new varieties of
wheat and rice are grown on irrigated land. Recently, however, a new dry-
land wheat variety has been developed (the wheat still requires water
but can be planted earlier and matures before the summer dry weather sets
in). It, too, requires a package of inputs, including increased ferti-
lization for maximum payoff.7/

Other inputs required include deeper plowing, drill or straight row plant-
ing (wheat), improved insect and disease control, more attention to weed-
ing, better management, etc.8/

Even without adequate inputs, the new varieties generally slightly out-
yield native stock. It is reported that the new dryland wheat, for instance,
will by itself increase yields 15 to 25% over older varieties. But if no
provision is to be made for increased inputs for most of the new varieties,
it may not be worth bothering with them. Thus the adoption of new vari-
eties almost always goes hand in hand with the adoption of new cultural
practices and new inputs.

Use of new production technologies also leads to a need for changes in
harvesting and marketing. The new varieties, especially rice, are quicker
maturing than native varieties. This means an earlier harvesting period;
in the case of rice this can come during the wet season, which in turn
steps up the need for improved drying equipment. Also the increase in
yields can overwhelm existing harvesting and marketing techniques, creating
a need for further changes.

'2. Need for Technical Base

The preceding changes in functions must, to be carried out effectively,
be built on a sound technical base. First, the seeds themselves must be
available and of proper quality. High quality seed multiplication requires
exacting technical and ethical standards. These are often difficult to
meet under the conditions that exist in the less developed nations.
Second, manufactured inputs must be available for production purposes.
These include: (1) inputs for direct use such as fertilizer, insecticides
and pesticides; and (2) inputs for the manufacture or application of the
previous items (electricity or gasoline engines may, for instance, be
needed to drive the water pumps for irrigation). Thirdly, manufactured
inputs may be necessary for harvesting, drying, and storage of grains. In
addition, improved communications and transportation may be essential.
Thus, a fairly elaborate technical base -- both in terms of knowledge and
physical inputs -- is necessary to capitalize on the new varieties.




- 39 -


C. Adoption Process for New Varieties

As with other technologies the adoption of new varieties has moved uneven-
ly. Here we shall consider some of the major characteristics of the
process.

1. Factors Influencing Rate of Adoption

The early adopters of the new varieties tend, as might be expected, to be
better-than-average farmers. They are also usually the larger farmers.
In Mexico, for instance, wheat was most quickly adopted by the large,
irrigated holdings of the commercially-oriented wheat farmers. This is
not, however, always the case: in Kenya in 1967 about two thirds of the
300,000 acres planted to corn was in the lands of small farms,while in
Turkey the 420,000 acres planted to wheat were divided up among approxi-
mately 60,000 farmers. All told, the new varieties are probably more
neutral with respect to farm size than many other technologies/

The rate of adoption of new varieties varies widely -- both in terms of
type of grain and farm and region involved. With respect to the grains,
Mexican progress in wheat has not been matched by progress in corn; Indian
progress in wheat has not yet been matched by progress in rice. Similarly,
adoption has moved faster in some regions than others.

Barker has identified nine factors which he feels have influenced the rate
of adoption of new rice varieties:10/

-- water control
-- insect and disease problems
-- availability of complementary inputs (seed, fertilizer,
labor, credit, etc.).
-- quality of farm management
-- farm institutional structure
-- relative advantage of new over existing varieties
-- acceptability of the quality of the new grain
-- availability of marketing resources
-- government institutional structure, pricing policy,
and initiative

Water control is needed because the new shorter stemmed varieties cannot
survive under flooded conditions: at present about 20% of the rice-growing
area in tropical Asia is irrigated. More attention is needed for insect
and disease control for any crop grown under intensive high-input condi-
tions; moreover, some of the varieties (particularly IR-8) may not have
as much natural resistance as local varieties.

In some regions where the new varieties have been grown successfully for
several years, the problems may take on a different complexion. Such is
the case in the Thanjavur area of Madras state in India. There the expan-
sion in the use of the new varieties may have hit a plateau because of
problems of reviving an ancient irrigation system, tight official control
over the rice price (the price in Madras City is reportedly the lowest





- 40 -


in any major Indian city), uncertainty over land tenure, and problems
in making improvements on rented land.I/ Variations of some of these
problems may influence the rate of adoption elsewhere.

2. Role of Government in Adoption

The major role in the spread of the new varieties has been played by the
national governments of the LDC's in cooperation with IRRI, CIMMYT, and/
or the Agency for International Development (AID).

National political leaders have taken a particular interest in the variety
programs:12/

Afghanistan. Former Prime Minister Maiwandal was
so impressed with the production potential of the
Mexican wheats and with the urgent need to arrest
Afghanistan's growing dependence on imported wheat
that he assessed each of the Ministries 2.5% of its
current year's development budget to create a fund
to launch an accelerated wheat-production program.

India. C. Subramaniam, former Food and Agriculture
Minister, took advantage of the food crisis to
mobilize support for and launch the accelerated food-
production effort responsible for much of India's gains.

Turkey. Prime Minister Demirel feels strongly enough
about the crash program in wheat production, initiated
at his behest less than two years ago, to have it
directed and monitored from his office.

Vigorous support has also been provided by President Marcos in the
Philippines and Prime Minister Senanayake in Ceylon.13/

The motivation for such support may not be entirely altruistic. In addition
to obvious economic and social advantages to increased production, some
political leaders see them as a path to re-election. At least such seems
to be the case for President Marcos and Prime Minister Senanayake.14/

Government support has come at many levels -- from exhortations to increased
supplies of technical inputs. But because the new varieties require a
"package" of inputs, the programs generally tend to be comprehensive in
nature. This means accompanying the seeds with: increased quantities of
inputs such as fertilizer,.broadscale educational efforts, attention to
increasing credit supplies, establishment of demonstration plots, initi-
ation of price support and purchase programs, and many other steps.

In some cases these programs were virtually a cooperative effort of the
national government and AID. Such was the case for rice in the Philippines,
Vietnam, and Laos, and for wheat in Turkey. In the Philippines, among
other activities, AID developed a do-it-yourself rice kit which has proved
very popular. AID has -lso been connected with new variety introduction
in other nations such as India and Pakistan.15/





- 41 -


Burma is somewhat an exception in that it has largely made its way alone.
The route, if not the temper, has been much the same:

The government has exerted great efforts to induce
the Burmese farmer to expand IR-8 production. It
has lauded the qualities of IR-8, offered the farmer
important material inducements, and mobilized the
entire government apparatus and controlled press to
support the program.16/

Once initial adoption is secured, continuing government support is neces-
sary to keep the program going. The Philippines has, for example,
developed a wide range of activities since 1967.17/ Other nations may
find it all tooeasy to let things slide.

3. Permanency of Adoption

The adoption of new varieties is not a permanent thing. Growers may try
a specific variety for a year or so and then decide to drop it with no
particular capital loss.

Reasons for dropping a variety probably tend to center around economic
matters. Two surveys of farmers in the Philippines who decided not to
grow improved rice varieties another season indicated that over 50% of
the reasons were due to low price or added expenses; another 10 to 15%
related to the added labor involved. A Burmese village reduced acreage
because of the poor demand on both the free and black markets.18/

But if growers should drop a variety, there is the possibility that they
may continue to use some of the improved practices, with beneficial
effects on yields. Moreover, it is quite possible that some of the grow-
ers may adopt subsequently improved varieties.

Thus for any one grower, use of new varieties does not represent a locked-
in technology, but one where there is, or is likely to be, a continual
state of flux.

D. Impact of the New Varieties

The effects of the new variety package of technology are multifold. Some
are quite apparent already; others are just beginning to emerge. Here
we shall concentrate on the economic and social/political effects at the
farm level.

1. Economic Impact

Economic effects of the new varieties center about their effect on produc-
tion and their consequent influence on financial returns.

a. Agricultural Output

The new varieties have had both qualitative and quantitative impacts on
output and have also influenced cropping patterns.





- 42 -


(1) Quantitative Effect. The increase in yields accruing
from the use of new varieties is quite variable. It is one thing to talk
about'yields attained under experimental conditions or by top growers,
and quite another to talk about average increases actually attained by
ordinary growers (who may not fully follow recommendations 19/). On the
whole yield increases associated with the new variety package have probably
averaged 50 to 100% if the comparison is drawn with conventional culti-
vation in the better growing areas. In other instances, of course, the
increases may be quite different (and they might vary between wheat and
rice).20/

Not all arable land is planted to the new varieties. In 1967/68, new
varieties accounted for about (a) 6% of the area planted to rice in South
and Southeast Asia and (b) about 16% of the area planted to wheat in
South and West Asia.21/ The proportions in individual nations varied
widely. Just what percentage will be reached over the next few years will
depend on a number of conditions. Since most of the varieties to date
(except for the new dryland wheat developed in Lebanon) are grown to best
advantage under irrigation, the area of irrigated land available will set
an upper limit. The actual figure might well be less than this due to
other cultural influences, as well as economic and social factors. On the
other hand, the new varieties which have a shorter growing season will
increasingly make double cropping possible.

Analyses carried out by the AID missions in India and Pakistan in mid-1968
shed some light on the role played by new variety technology. The studies
were cast in terms of the factors contributing to the record increase in
production in 1968 (1967/68 for rice) over 1967. Their relative influence
was estimated to be as follows:22/


West
India Pakistan

High-yielding varieties including -- percent --
fertilizer and irrigation 30.3 15.4

Increased fertilization and irri-
gation of local varieties 28.2 7.5

Expansion of area 6.2 30.0

Weather (other) 35.4 47.1

TOTAL 100 100


It is not clear what portion of the expansion of area, if any, was due
to the new varieties.

More generally, it has been estimated that during the 1968/69 crop year
improved varieties may have increased rice output about 7% and wheat out-
put 20% in the Asian area, compared to what production would have been




- 43 -


without them.23/ As the area planted to new varieties expands they will,
of course, play a greater role in increasing production.

(2) Qualitative Effect. In terms of demand, the new varieties
of grains are often -- if not nearly always -- considered to be of lower
quality than local varieties. There are at least three interrelated
reasons for this: (a) genetic characteristics of quality may actually be
less desirable, and/or (b) the new varieties may require improved methods
of harvesting, drying and storing which are not as yet available, and/or
(c) the difference may be more imagined than real. We shall look briefly
at the first two.

Genetic characteristics of the grain may indeed differ. In the case of
rice, texture and taste differences can lead to lower milling and eating
qualities -- influencing both domestic and export markets.24/ Some of the
Mexican wheats initially used in South Asia varied from local preferences
in terms of grain color (they were red rather than white) and baking qual-
ities. Breeding programs, however, are expected to solve many of these
problems. Current rice varieties will soon be replaced with new strains
developed at IRRI and elsewhere: an IR-8 cross with Basmati, for example,
appears promising for export purposes. Numerous white-grained types of
wheat have been developed for use in South Asia. More are to come.25/

Problems with harvesting, drying and storing can arise from at least two
sources. One is the fact that the sharply increased yields from the new
varieties may simply swamp existing harvesting, drying and storage facili-
ties; this in turn may lead to a consequent loss of grain quality. Or,
as in the case of rice, there may be a problem of timing:

The IR-8 was harvested approximately one month earlier
than local varieties during the end of the wet season.
Rice sold wet in the field received a price discount
well in excess of normal drying charges due to the risk
involved in drying and milling before the rice spoiled.26/

To some extent, the difficulties involved with earlier harvesting of rice
could be avoided if better equipment or facilities were available. But
all too often they are not. Increased attention is being given to these
matters at IRRI and elsewhere.

(3) Influence on Cropping Patterns. The preceding quantitative
and qualitative effects could have pronounced effect on cropping patterns.

In the short run, the increased returns available from the high-yielding
varieties have in some cases led to a shift in production from other crops
to rice and wheat. In India, for instance, during the fall of 1968 far-
mers appeared to show a preference for wheat while the area planted to
some other crops such as gram, barley, and pulses showed a small reduction.
Alternatively, short-term success with grains may lead nations to overlook
other promising crops: one crop economist claims that in Vietnam, for
example, preoccupation with rice has led to the neglect 6f bananas as a
potential export crop.27/




- 44 -


Over the longer run, the increased output possible with the new varieties,
and the impetus they give to multiple cropping, could well increase grain
supplies in some areas to the point where some land is freed or shifted
to other crops. This appears to have occurred already among some rice
farmers in the Philippines and wheat growers in Mexico (in the latter
case, the shift was encouraged by the government's price support program).28/
The other crops might well take the form of fruits and vegetables, or
feedgrains for livestock production. In other words, the new varieties
may in effect lay the ground work for the diversification of agricultural
production.29/

b. Financial Returns

The net returns to farmers from using the new varieties are influenced by
changes in returns and costs. It was suggested in Chapter IV that in-
creased returns are most likely to go to those who first adopt a technology,
whereas later adopters may find little if any improvement. Our emphasis
here will necessarily be on the shorter run.

(1) Changes in Farm Prices and Costs. The increased output
associated with the new variety technology lays the base for increased
income in the short run. The big questions concern the direction and mag-
nitude of the price changes. These are directly determined by two factors:
the quality of the product and the speed with which production increases.

There is, as we have noted, at least a temporary grain quality differential --
one which has not favored the new varieties. In the Philippines, as of late
1968, IR-8 rice was selling at about 20% below local varieties on the open
market, even though the government buys at the same price. Out of 153
farmers surveyed in the Philippines during the wet season in 1967, 148 re-
ported a lower price. In India, the reddish grain produced by the Mexican
types of wheat often sells at 10 to 15% less than the best white grain
Indian types. The international situation in late 1968 appeared to be
particularly difficult for IR-8: one big sale made by the Philippines to
India late in October was concluded at a price which reportedly represented
a loss. Discounts for the new varieties are not, however, the rule in every
market.30/

The price of grain is, of course, influenced by the quantity available -
both nationally and on the world market-- and the nature of demand. During
the late 1960's world production of wheat and rice increased substantially.
The demand for these two commodities, moreover, is generally inelastic.31/
Thus it is not surprising that there was a decrease in some prices during
the latter part of 1968. The FAO world export price index for rice, for
example, moved as follows:32/

Jan. 145 May 149 Sept. 145
Feb. 150 June 148 Oct. 139
March 158 July 149 Nov. 139
April 152 Aug. 147 Dec. 141
(Jan. 138)
Similarly, the wholesale price index for wheat in India during the June to
November period was over 12% below that of a year earlier.a3/ Thus, while




- 45


providing the basis for an increase in production, the new varieties
also likely contributed to a drop in prices.

In some of the less developed nations, the price drop was mitigated at
the farm level by government price support and purchase program -- such
as that for wheat in India or rice in the Philippines. But this was done
at no little strain to government treasuries. The Philippines, in fact,
was led to propose an international rice agreement. Production increases
in Mexico threatened to create surpluses and in 1966 the government
reduced support prices for irrigated corn and wheat grown in leading areas.34/

The added inputs involved in the production of new varieties clearly will
raise the costs of production per acre, though not necessarily per ton.
In one study in the Philippines, the increase in variable costs per
hectare for growing BPI-76 and IR-8 instead of native varieties under
traditional practices brought the total costs up by 1/2 to 3/4; costs per
cavan of output, however, were little different (and were less for
IR-8).35/ Comparable illustrative data are not at hand for wheat.

(2) Changes in Farm Income. It has been widely assumed that the
increased returns from growing the new varieties have exceeded the costs.
Incomes have probably generally been increased in the short run. Yet
there is little solid evidence on this point.

The returns on rice have not been uniform either seasonally or by market.
Farm management studies on rice in the Philippines in 1967 suggested that
net returns per hectare for IR-8 were two-thirds higher than traditional
varieties during the wet season but only slightly higher during the dry
season.36/ The situation in Burma varies by market: as of late 1968 it
was (a) profitable to raise IR-8 for sale to the government, because the
purchase price was the same as for other types of rice,37/ but (b) not
profitable to grow it for the free or black markets because of a lack of
demand brought on by quality problems.

Returns can also be viewed on a macro or micro basis. The gross value of
the increased wheat production in Turkey during the 1967/68 season was
estimated at $23.6 million, while total additional costs to farmers were
placed at $18.0 million, giving very roughly a net return of more than
$5 million. A linear programming study of foodgrain production in the
Punjab in India in the mid 1960's, however, suggested that net income per
acre would not be significantly increased until fertilizer levels were
increased substantially and capital was not a constraint.38/ Much more
study is needed on the nature of short and long-run changes in farm income.

2. Social/Political Impact

Social/political problems can arise from the fact that certain groups may
not share evenly in the benefits accruing from the new varieties. Within
regions there are farmers who may not adopt the new varieties because
of economic or other reasons; similarly there may be differences in
rate of adoption between regions. While those who adopt the varieties




- 46 -


will face, as we have seen, further adjustments, their economic situation
may well be better than those who did not adopt them.

Where this is so, there may be a growing or widening economic gap between
sectors of the population. This may be less of a problem with the wheat
and rice varieties than with more mechanical technologies because they
can be relatively widely adopted. In Turkey, for instance, it has been
reported that farmers who did not adopt the new wheats were "... those
who because of inadequate rating could not borrow money, or those who
were rational non-adopters..." 39/

But there is an added dimension to the problem. Not all new varieties
have moved as quickly as wheat and rice. Corn in Mexico is a prominent
example. Although improved hybrid corn varieties were developed in
Mexico along with wheat, a much lower portion of total area has been
planted to them. Part of the reason is that corn is the staple crop of the
small low-income farmer who usually doesn't have irrigation. Moreover,
he may not have the opportunity or resources to buy new seed each year,
not to mention the other inputs. The result has been that small farmers
have largely been bypassed by technological change.40/

Technology is, moreover, apt to change much more rapidly than institutions.
One of the most severe difficulties in many areas concerns land tenure
arrangements:

Feudal land tenure relationships,which were successfully
transformed in postwar Japan.and Taiwan by decree, are
providing wretchedly durable in southeast and south Asia.
Unless legislation keeps pace with economic changes, the
agricultural revolution will roll by leaving the rural
population dispossessed.41/

The problem in many of these areas is that the pay-off from innovations
is capitalized into land values, resulting in increased rents for tenants.

But the adoption of new varieties has not -- unlike many new technologies --
tended to directly result in the displacement of labor. If anything, it
may have led to increased employment in the short run, especially in
rice areas. The same may be true over the longer run, particularly as
increased grain production provides the basis for diversification in-
volving labor-intensive crops.42/

If there has not been a sharp quantitative drop in employment, however,
there may have been a qualitative shift in wealth. The farmers who have
been the first to adopt the new varieties have been made, temporarily at
least, financially better off. This increased wealth has not necessarily
been passed on to the workers in improved wages. The result has been
growing social tension in some areas. In the State of Madras in India,
for instance, the uneven returns from the new varieties have led to serious
clashes between owners or tenants and agricultural laborers: "Wages have
increased unevenly throughout the district, and the landless laborers
have been agitating for an even bigger share of the new prosperity."43/





- 47 -


The problem, as Mellor puts it, is that the new technologies may
provide their benefits in proportion to landholdings rather than in pro-
portion to labor inputs.44/ Thus if social/political problems of the
sort discussed here are to be avoided, landlords may have to adopt a
more enlightened policy on land tenure, while farmers may have to pro-
vide more equitable wages for landless laborers. Neither will be easily
accomplished.

3. National and International Implications

We have discussed the effects of the new variety technology largely in
terms of their influence with respect to agriculture. There are, of
course, many potential effects at the national and international level.

At the national level, supplies of grains will be increased and prices
reduced. Depending on the degree to which marketing and food distribution
are improved, the result may be a reduction of undernutrition. To the
extent that increases in grain supplies permit increased production of
other crops, there may also be a reduction in malnutrition. The improve-
ment in nutrition, together with the possibility of reduced imports and
increased exports, will contribute to national economic growth. The
results, however, may not be favorable: the temporary increase in con-
sumer income (due to lower prices) and in the income of at least some
farmers has caused concern about inflationary pressures in at least one
nation.45/

Impacts at the international level may be more complex, particularly
with respect to trade. As less developed nations increase grain production,
they will first move to economic self-sufficiency and then possibly into
an exporting situation. Self-sufficiency will mean a reduction in depend-
ence on foodgrain imports-- especially those of a concessionary nature;
this in turn may create some short-run adjustment problems for food grain
exporting nations (though over the longer run, with economic development,
the market for some agricultural products may improve). But as the less
developed countries move into the international grain market for grain,
they will face a host of new and sophisticated problems-- involving
questions of product quality, comparative disadvantage, trade barriers,
etc; in this market the established exporters may well have the edge.
Issues of this nature will doubtless be of increasing concern.46/





- 48 -


References and Notes

1/ Exceptions include Taiwan where the Japanese initiated breeding work
early in the century (for details, see: S. C. Hsieh and V. W. Ruttan,
"Environmental, Technological and Institutional Factors in the Growth
of Rice Production: Philippines, Thailand and Taiwan," Food Research
Institute Studies, 1967 (No. 3), pp. 331-333; and Raymond P.
Christensen, Taiwan's Agricultural Development: Its Relevance for
Developing Countries Today, U.S. Department of Agriculture, Foreign
Agricultural Economic Report No. 39, 1968, pp. 36-37).

2/ E. C. Stakman, Richard Bradfield and P. C. Mangelsdorf, Campaigns
Against Hunger, Belknap Press of Harvard University Press, 1967,
328 pp.; 1966-67 Report Cimmyt, 93 pp; Cimmyt Report, 1967/68, 99 pp;
J. George Harrar and Sterling Wortman, "Expanding Food Production in
Hungry Nations; the Promise, the Problems," in Overcoming World Hunger
(ed. by Clifford M. Hardin), Prentice Hall, 1969, pp. 89-135.

3/ Stakman, op. cit., pp. 285-299; Randolph Barker, "The Role of the
International Rice Research Institute in the Development and Dissemin-
ation of New Rice Varieties," International Rice Research Institute,
(Los Banos), 1968, 47 pp.

4/ AID has contributed funds to both centers to extend research and train-
ing programs. Two additional centers are now being organized: the
International Center for Tropical Agriculture (CIAT) in Palmira,
Colombia, and the International Institute of Tropical Agriculture (IITA)
in Ibadan, Nigeria.

5/ Based on: "India PM," op. cit. (see fn. 10, chp. III), p. D-55;
"Pakistan Program Memorandum, FY 1970," US/AID Mission, Ralwapindi,
Summer 1968, p. A-53; and Foreign Agricultural Service report IN 9025
from New Delhi, February 1969, p. 4.

6/ A triple-dwarf wheat is now under test in India. It will have even
greater resistance to lodging than present varieties. (Cimmyt Report,
1967/68, p. 70; "Indian Rice Crop Seen at Record," Journal of Commerce,
December 4, 1968.)

7/ "Dryland Wheat Strain Developed in Beirut," Journal of Commerce,
September 13, 1968; "New Wheat to Double Yield," New York Times,
September 29, 1968. (Also see Najah, A Dryland Wheat, American
University of Beirut, Faculty of Agricultural Sciences, Publication
No. 27, January 1967)

8/ Randolph Barker and E. U. Quintana, "Farm Management Studies of Costs
and Returns in Rice Production," in The Seminar-Workshop on the
Economics of Rice Production (December 1967), International Rice
Research Institute, p. 45; David S. H. Liao, "Studies on Adoption of
New Rice Varieties," International Rice Research Institute, September
1968, Table 13, figure 2; "Intoduction of Mexican Wheat in Turkey,
1967-68," US/AID, Ankara, July 1968, p. 58.




- 49


9/ Barker, op. cit. (1968), p. 28; "Kenya Demonstrates for More Corn,"
War on Hunger, September 1968, p. 8; "Introduction in Turkey,"
op. cit., p. 23.

10/ Barker, op. cit. (1968), p. 24.

11/ Adam Clymer, "Madras Rice Progress Imperiled," The Sun (Baltimore),
November 19, 1968.

12/ Brown, op. cit. (see fn. 2, chp. I), p. 695.

13/ "Rice -- Miracle, Maybe," The Economist (London), October 19, 1968,
pp. 54, 57.

14/ Ibid.; Brown, op. cit., p. 695; Joseph Lelyveld, "Food is Key Issue
in Ceylon Politics," New York Times, November 11, 1968.

15/ No comprehensive summary of AID's contributions is presently available.
However, a broad-scale review of the new varieties was initiated by
AID in late 1968 and should be available in 1969. In the interim, the
experience in Turkey has been well reported and may be illustrative:
see Ralph N. Gleason in "Turkey's 'Green Revolution' in Wheat-Self-Help
in Action," War on Hunger, September 1968, pp. 3-5. Further details
are provided in "Introduction," op. cit. (see fn. 8, this chapter) and
Department of State Airgrams from Ankara: A-1658, November 29, 1968;
A-1706, December 17, 1968; and A-68, February 4, 1969.

16/ Department of State Airgram A-364 from Rangoon, November 23, 1968.

17/ James F. Keefer, "An Afterlook at the Philippine Rice Breakthrough,"
Foreign Agriculture, March 31, 1969, pp. 4-5.

18/ Barker and Quintana, op. cit., p. 46; Liao, op. cit., Table 12;
Department of State Airgram A-910 from Djakarta, November 25, 1968.

19/ A survey in India during the summer of 1967 revealed that farmers par-
ticipating in the high yielding varieties program were applying only
about 50% of the recommended dose of nitrogen and about 70% of the
recommended quantity of phosphates ("India PM," op. cit., pp.D-8, D-9).

20/ Less spectacular success has been obtained with rice than wheat in
India because rice requires more complex management, especially with
respect to water (Ibid., p. D-56).

21/ Donald Chrisler, The World Agricultural Situation, U. S. Department of
Agriculture, Foreign Agricultural Economic Report No. 50, February 1969,
p. 13.

22/ Based on: "India PM," op. cit., pp. D-8, D-9; "Pakistan PM," op. cit.,
p. A-5.

23/ Joseph Willett and Donald Chrisler, "The Impact of New Varieties of
Grain," U. S. Department of Agriculture, Economic Research Service,
December 1968 (draft), pp. 13, 14.





- 50


24/ A survey of 153 Philippine rice farmers in 1967 indicated that 144
thought that the eating quality was worse, 5 the same, and 4 better
(Liao, op. cit., Table 13). For a graphic reaction to the eating
qualities of IR-8 in Vietnam, see Peter Kann, "Miracle in Vietnam;
New Rice May be Key to Economic Stability After War Ends in Land,"
Wall Street Journal, December 18, 1968.

25/ Cimmyt Report, 1967/68, pp. 68-69; Barker, op. cit., p. 30; "Rice --
Miracle, Maybe," op. cit., p. 54; Foreign Agricultural Service report
AGR-195 from Ralwalpindi, November 7, 1968.

26/ Barker, op. cit., p. 29.

27/ "Commodity Ring: Indian Wheat Sowings Complete," The Journal of
Commerce, December 12, 1968; Kann, op. cit.

28/ Liao, op. cit., p. 12; Foreign Agricultural Service report MX 9008
from Mexico City, February 7, 1969.

29/ For further discussion, see Dana G. Dalrymple, The Diversification of
Agricultural Production in Less Developed Nations, U. S. Department
of Agriculture, International Agricultural Development Service, August
1968, 56 pp.

30/ Randolph Barker, International Rice Research Institute, personal com-
munication, October 31, 1968; Liao, op. cit., Table 13; Cimmyt Report,
1967/68, pp. 68-69; Romeo M. del Castillo, "RP Prospects Not Too Bright,"
Manila Times, October 29, 1968; AGR-195 from Ralwalpindi, op. cit.;
Foreign Agricultural Service report AGR-76 from Manila, September 30, 1968.

31/ The price elasticity of demand for wheat in India, for instance, has
been estimated at -0.55 (John W. Mellor and Ashok K. Dar, "Determinants
and Development Implications of Foodgrains Prices in India, 1949-1964,"
American Journal of Agricultural Economics, November 1968, p. 973).

32/ "Rice Price Intelligence," FAO, February 10, 1969, p. 1. By comparison,
the monthly indexes for the 1957 to 1965 period varied no more than 9
points per year and on the average varied only 4. (Computed from data
in The World Rice Economy in Figures, 1909-1963, FAO, Commodity Reference
Series 3, 1965, pp. 107-108.)

33/ Foreign Agricultural Service report IN 9025 from New Delhi, February 6,
1969.

34/ Foreign Agricultural Service report AGR-92 from Manila, December l, 1968;
John C. Scholl, "Mexico's Grain Problem: A Production Boom That Won't
Turn Off," Foreign Agriculture, July 3, 1967, p. 7.


35/ Barker and Quintana, op. cit., p. 34.




- 51 -


36/ Ibid., p. 47.

37/ Government purchase prices are not always the same in other nations.

38/ Gleason, op. cit., pp. 3-5; K. S. Mann, C. V. Moore and S. S. Johl,
"Estimates of Potential Effects of New Technology on Agriculture in
Punjab, India," American Journal of Agricultural Economics, May 1968,
pp. 281-290.

39/ "Introduction in Turkey," op. cit., p. 46.

40/ See Henry S. Reuss, Food for Progress in Latin America, House of
Representatives (Subcommittee Print), February 1967, p. 9. The problems
of this group, however, are being given special attention by Cimmyt
in the Mexican State of Puebla, initiated in 1967 with a grant from the
Rockefeller Foundation (Cimmyt Report, 1967/68, p. 13). Also see:
Donald K. Freebairn, "The Dichotomy of Prosperity and Poverty in
Mexican Agriculture," Land Economics, February 1969, pp. 36-39.

41/ "Rice Miracle, Maybe," op. cit., p. 57.

42/ Farm management studies in the Philippines suggest that the labor cost
of growing IR-8 and BPI-76 was about 50% higher than for growing a
native variety under traditional conditions. (Barker and Quintana,
op. cit., p. 34.)

43/ "Madras is Reaping a Bitter Harvest of Rural Terrorism," New York Times,
January 15, 1969, p. 12; also see Clymer, op. cit. The "rich" land-
lords, on the other hand, consider themselves in a cost-price squeeze
because of more stable rice prices and higher fertilizer costs ("India
Dilemma: Farm Riches For Few Only," Chicago Tribune, February 16,1969).
Also see "The Rich Get Richer," Science News, April 5, 1969, pp. 335-336.

44/ John W. Mellor, et al., Developing Rural India: Plan and Practices,
Cornell University Press, 1968, pp. 359-363.

45/ A rather unusual problem is reported in Vietnam. According to Kann:
"The Vietcong are buying seed at black market prices and distributing
it in areas they control -- while spreading rumors in other areas that
IR-8 causes leprosy and impotence" (Kann, op. cit.).

46/ For a more extended discussion of these issues, see: V. W. Ruttan, J. P.
Houck, and E. E. Evenson, "Technical Change and Agricultural Trade:
Three Examples (Sugar Cane, Bananas, and Rice)," University of Minnesota,
Agricultural Economics Staff Paper P68-4, December 1968, pp. 74-75;
Lyle P. Schertz, "World Agriculture in the 1970's," U. S. Department of
Agriculture, International Agricultural Development Service, February
1969, 21 pp.; and Clifton R. Wharton, Jr., "The Green Revolution: Corn-
ucopia or Pandora's Box?" Foreign Affairs, April 1969, pp. 472-473.




- 52 -


VI. MECHANIZATION OF AGRICULTURE*

Technological improvement in agriculture is synonymous, to varying degrees,
with the mechanization of agriculture. The tractor is often the symbol
of modernization in less developed nations.

A. Background of Mechanization

Mechanization is a broad term. What does it encompass? Here we shall
consider it as the application of power provided by an internal combustion
engine to field operations. In other words, it is the use of tractors
and associated implements in the production and harvesting of agricultural
products. Excluded from this definition are animal drawn equipment or
stationary power sources (this is not to say that these items are not to
be considered forms of mechanization, only that they are not covered here).
The definition, however, intentionally allows for the inclusion of small
garden-type tractors.

1. Development and Spread

The tractor and associated equipment are hardly new to the developed
world. The first gasoline driven tractors in the United States date back
to the turn of the century. Widespread commercial use began to climb
rapidly after WW I.I/

In the post-war period, the use of tractors in other nations -- particular-
ly in the relatively developed areas -- began to increase also. Through
the twenties, many, if not most, of these tractors were supplied by the
United States.Z/ But gradually thereafter, U. S. exports played a dimin-
ishing role as tractor plants were established overseas, in some cases as
subsidiaries of U. S. firms. In recent years the Communist nations have
become important suppliers of tractors to the less developed world.3/

The numbers of tractors in use in the major regions of the world during
the period from 1930 to 1964 are summarized in Table 3. It will be noted
that through the late 1950's, over half of the world's reported tractors
were in the United States and Canada. Growth in numbers in Europe was
slower than in the United States, but by the mid 1960's the total numbers
were about equal. The less developed areas of the world -- Latin America,
Africa, and the Near and Far East -- accounted for less than 3% of the
total in 1930; the proportion did not change markedly until 1957 when it
increased to 6% and 1966 when it reached 8%. The market for tractors in
some less developed nations such as India was very strong in 1968.4/

A special characteristic of the post-WW II period has been the sharp ex-
pansion in the number of garden tractors (power tillers). Although used
in Europe since the late 40's, they have continued to grow in popularity.
The most significant increase has taken place in Japan where they are
used in rice culture: the average number in use during the 1948-52 period
in Japan was 62,000; by the mid-1960's this number increased to 2.5
million.!/ They show considerable promise for other wetland areas of Asia.6/


* References and notes for this chapter are found on pp. 63-65.




- 53 -


Table 3. ESTIMATED NUMBER OF TRACTORS IN USE
IN MAJOR REGIONS OF THE WORLD 1/


Region


North America

Europe

USSR

Oceania-l/


Latin America

Africa

Near East

Far East3/


World/


1930 1939

--------------
1,020 1,597

130 265

72 523

32 53


20

10

2

1


1,287


35

17

5

3


2,498


1947

in thousands
2,890

512

400

90


62

30

10

10


4,004


1957 1966

----------------
5,207 5,425

2,619 5,244

924 1,660

300 406


287

182

70

45


9,634


512

303

135

127


13,951


Notes:

1/ Includes garden tractors in some countries (but not Japan).

2/ Australia, New Zealand.

3/ Excluding Mainland China.

Sources:

1930-1957. "Progress in Farm Mechanization." Monthly Bulletin


1966.


of


Agricultural Economics and Statistics, FAO, May 1966, p.l.

Production Yearbook, 1967, FAO, 1968, pp. 460-468.




- 54 -


2. Power Available

As the numbers of tractors would suggest, there is a wide range in the
amount of tractor power available. This becomes more meaningful when
expressed in terms of land under field production (arable land and land
under permanent crops). Giles has prepared such estimates for the main
regions and/or countries of the world. (Figure 3)

Figure 3 1.71 2.30
1.5 POWER AVAILABLE FOR a
AGRICULTURAL FIELD PRODUCTION 1964-65
(ARABLE LAND AND LAND UNDER PERMANENT CROPS)

0 1.02
1.0
85 ~93
.75


.37
P4 .35 .36
5 1 .27 .27 .
.20 .21
.05


S s II II II I
S o -
Source: G. W. Giles, "Agricultural Power and Develop-
ment," in The World Food Problem, The White
House, Vol. III, September 1967, p. 172.


He suggests that the minimum amount of power per hectare needed to opti-
mize yields is in the range of 0.5 to 0.8 hp. It will be noted that all
the less developed regions or countries on the average fall well below
this figure. Within certain areas, of course, the figure may be well
above average levels.Z/

B. Nature of Technical Changes

The primary characteristic of mechanization is that it represents a sub-
stitution of mechanical power for draft animals and in some cases humans.
Mechanization can, as Schertz has pointed out: (1) permit the completion
of tasks with more precision; (2) accomplish work more quickly; (3) deve-
lop resources not presently being utilized; and (4) accomplish tasks not
possible with traditional techniques.8/

1. Functions Involved

The functions involved in mechanization run the gamut from field clearing
and preparation to road hauling. Actual use depends in part on the size
of tractor. In the Allahabad area in India, it has been reported that





- 55 -


small riding and walking tractors were used in three main ways: field
work, powering irrigation pumps, and carting work (irrigation occupied the
greatest number of hours -- more than 40% for many of the tractors).
In the Punjab area, larger tractors were primarily used for presowing
operations, and to a lesser extent for harvesting. In some regions, road
hauling is probably important.9/

Comprehensive information is not available on the types of implements used
with tractors. In Allahabad, intensive use is made of only a few: a
tiller, a pump, and a trailer. More implements are expected to move into
general use, but only over a period of time.10/ Giles has prepared a
general priority list of farm operations which may give some idea of re-
lative importance:l/

Priority Operations and Equipment

Seed and Plant Bed Preparation
1 Plows, mouldboard or disc (principally
for dry land)
1 Power tiller (primarily for wet land)
3 Peg harrow

Seeding and Fertilizer
1-2 Seed drill or row planter with fertilizer
distributor
3 Broadcast fertilizer distributor

Pest Control
1 Knapsack power duster-sprayer
2 Row cultivator
3 Tractor mounted duster-sprayer

Harvesting and Threshing
1 Reaper and stationary thresher
2 Self-propelled combines


2. Need for Technical Base

One of the basic prerequisites for mechanization is the existence or deve-
lopment of a technological base. Men must be trained in the proper use
and repair of machinery. Spare parts and shop facilities and tools must
be available. All of this seems very obvious and is easy to take for
granted, but it has been a major stumbling block for mechanization programs
in country after country.

As Azam explains the repair situation alone in West Pakistan:

...even for the minor repairs the supplying firm
has to be contacted, because only a few diesel
technicians are available, who are employed by the





- 56 -


tractor firms. The time taken by the agents of
the firm to reach the farm and undertake repairs
causes delay in performing the operations, especial-
ly during the cultivation or sowing season, which
ultimately causes financial loss. Most of the dealers
do not import sufficient spare parts along with
tractors, which creates bottlenecks later on.12/

Indeed, if there is any one characteristic that appears virtually histori-
cally consistent for the less developed nations, it is the sight of
tractors standing idle for lack of mechanics and/or some key part. In
1930, Hindus spoke of fleets of disabled tractors dotting the Russian
landscape. And it has recently been reported that in India more than 40%
of the imported tractors are idle due to lack of spare parts.13/

C. Adoption Process for Machinery

How is the adoption of machinery related to size of operation? Why is
machinery purchased? What is the acquisition process?

1. Size and Nature of Farms Involved

Whether mechanization is adopted -- and the form it takes -- is in gene-
ral related to the size of farms involved.

In India, a study of mechanization in the Punjab area in the early 1960's
indicated that tractor owners were both the larger and wealthier farmers.
For the nation as a whole, it has been suggested that:

11% of the area is in small farms (less than
5 acres) which need good hand implements.

25% is in medium size farms (5 15 acres) which
need bullock implements.

25% is in medium large farms which could use
power tillers and matching equipment.

40% is in large farms which could use tractors.

Similarly, in the case of West Pakistan -- where a relatively extensive
agriculture is practiced -- Giles indicates that holdings of under 25
acres can be classed for animal-powered farming, and those above 25 acres
for tractor-powered farms.14/

A somewhat similar situation is found in Latin America. In Colombia,
Lidman noted that tractor distributors would sell on credit to owners of
asfew as 37 acres (15 ha.). The tractor dealers assume that the smaller
owners will be able to do rental or custom work; the State Bank is less
optimistic and insists that a farmer be able to employ his equipment full-
time on his own holding. Adams observed in Colombia, however, that small
size of farm operation was more a barrier to ownership than to mechani-
zation because of the availability of rental equipment.15/





- 57 -


In Africa, de Wilde indicates that hand cultivation will continue to be
necessary or economic where:

(1) topography makes plowing too difficult or un-
desirable; (2) demographic pressures make holdings
too small for cultivation with tractors or for sup-
porting draft animals; (3) the forest cover is so
dense as to preclude economic clearing except for
hand cultivation; (4) tree crops can be grown ...;
(5) enough labor can be hired at reasonable cost to
cope with peak labor requirements.16/

From all of this it is not surprising that the first to mechanize --
topographical and biological factors permitting -- are the large farmers,
followed more slowly by those who are smaller. The pace would depend on
the availability of rental equipment and the suitability of relatively
low-cost garden tractors. There is, however, a minimum size below which
it may pay to stay with livestock and hand power.

Those in the forefront of tractor purchases are not exclusively full-time
farmers. The group may include businessmen and political leaders who
have farm holdings. This appears to be the case in Laos and West Pakistan,
and is probably true in other nations.17/

2. Reasons for Adopting

The main reasons for adopting mechanization are economic, although social,
political and other reasons are sometimes important. Some of the main
types of benefits which may be presumed to exist by adopters are as
follows:

Increased Production. Mechanization can conceptually
make it possible to (a) increase the amount of land farmed as well as
(b) to increase the intensity of land use. With mechanization the farmer
may farm more land than he can handle with livestock: a tractor can plow
far more land in a day than can an ox. Furthermore, the farmer can add
to his land resources by plowing land that couldn't be tilled by oxen.
He can also add to his resources by reducing the amount of land necessary
for forage production for the draft animals. Mechanization also makes it
possible to increase output on existing lands. With tractor-drawn equip-
ment, farms can plow deeper and carry out other tillage jobs better. Work
can be done much faster. Timing of planting and cultivation can be im-
proved.

Reduced Production Costs. It is usually expected that
mechanization will lower per unit costs by increasing yields and reducing
labor costs. Although labor is a relatively abundant good in most less
developed nations (Japan being an exception), there are generally peak
periods of demand -- at planting and harvest time -- when it is apt to be in-
adequate for the tasks at hand. Moreover, during this period wages are
apt to increase. Therefore, many growers hope to use machinery to break
labor bottlenecks. Reduction of labor may also lead to management savings.





- 58 -


Reduced Harvesting Losses. Mechanization permits more
rapid farm operations. This may be of considerable importance in harvest-
ing as well as planting. For most crops, harvesting is best carried out
during a certain limited period; where it is difficult to do this because
of labor shortages or unfavorable weather conditions, losses can result.
In West Pakistan during the 1968 spring wheat crop harvest, sufficient
and qualified labor was not forthcoming on larger farms, resulting in a
long drawn out threshing period and an increased threat of spoilage; this
has increased interest in combine harvesters.18/

Reduced Drudgery. Mechanization, especially where it
replaces hand labor, can result in a significant reduction in drudgery.
This can have economic implications that might not be immediately consider-
ed: for instance, in Northeastern Japan it is estimated that farmers
become unable to operate animal-driven plows, heavy loaded carts or weeders
in the field by the time they are 44; mechanization can, in effect, expand
their useful lifespan.19/ Still, as deWilde has noted:

Mechanization is unlikely to be economic unless
the farmer understands from the beginning that
it is not designed to lighten his total work
burden but rather to enable him to work more and
produce more.20/

Farmers and government officials may also be attracted to mechanization
for prestige or psychological reasons. Mechanization is a tangible,
physical example of modernization. There have also been less innocent
reasons for mechanization: the tractor, for example, played a key role in
the collectivization of Soviet agriculture.21/

3. Acquisition Process

Mechanization involving large equipment can require a fairly high initial
investment. Full utilization is normally necessary to make the invest-
ment worthwhile in a less developed nation.

Thus, large tractors are normally purchased outright by the larger farmers
or by those who have worked out arrangements to do contract work for other
farmers. While much of the contracting work is probably done on a relative-
ly informal basis for neighboring farms, more formal contracting services
are provided in some nations by private firms or the government. A
recent FAO report indicates that private contracting services have been
developed successfully in a number of countries, including Argentina,
Ceylon, Chile, Kenya, Malaysia, the Sudan and Thailand. The same report,
however, states that nearly all of the government contracting services
have failed to cover costs and have had to be abandoned or continuously
subsidized.22/

Other procedures for providing multifarm use include pooling and/or cooper-
ative ownership. Where the land holdings are too small and scattered to
permit economical operation, they may be consolidated. Structurally dif-
ferent forms of farming such as settlement schemes, collective, or state
farms also permit mechanization, though they may be undesirable on other
counts.




- 59 -


Thus the advantages of mechanization can be made available to a wider
range of farmers than those who are able to buy the equipment. Just how
much of this is done in the less developed nations, however, is not known.
A report from Laos indicates that more farmers there would use custom
services if they were reasonably sure of the availability of service and
could secure credit to defray costs until harvest. Similarly, a survey
of rice farmers in the central Philippines revealed that over 50% would
use a garden tractor for land preparation if they could conveniently hire
it done.23/

D. Impact of Mechanization

How well do the presumed reasons for the adoption of mechanization match
up with reality? What are economic and social/political effects? How
do they balance each other?

1. Economic Impact

The economic effects of mechanization may be primary and secondary in
nature. For our purposes, the primary effects will be considered as those
that accrue at the farm level and have their main effect on income. The
secondary effects are those which have broader interrelationships.

a. Primary Effects of Mechanization

There seems to be relatively little quantitative information available
on the economic effects of mechanization in the less developed nations.
This is not entirely surprising in view of the relatively low level of
mechanization in the past and the wide variety of conditions in these
countries. Several studies have recently been conducted in Asia which,
when published, may shed more light on the matter. We shall divide our
few comments here between production and harvesting.

(1) Production and Costs. Mechanization is presumed to lead
to increased output and lower costs. There is particularly little docu-
mentation on the former point. Typical is the rather general statement
by Ballis that: "The impression and estimates of the farmers are unanimous
that tractor cultivated land produced significantly more..."24/

There is more information available on costs of machinery relative to
livestock. At a conference in Japan in December 1967, a number of studies
pertaining to Asia were summarized. The results varied widely, depending
on the type of equipment, its purchase and maintenance costs, and the
season. In general, however, garden tractors seemed to be relatively more
efficient during the wet season, while larger tractors fared better during
the dry season when their greater power is needed for tillage.25/

In some instances, the bullock has been the cheapest source of power in
Asia, but its position has been eroded by the more exacting requirements
of an increasingly intensive agriculture, and increased labor and feed
costs. One Philippine study indicated that one of the factors that prompt-
ed rice growers to give up carabaos for garden tractors was the high cost




- 60 -


and short average useful life of the carabao (many died of chemical
poisoning).26/

In some areas, such as India, the cost of owning a tractor has been high
largely because they were used for only limited functions (tillage and
transport) a limited portion of the year. Increasing the number of opera-
tions performed over a greater portion of the year will make them more
economical.27/

(2) Reduced Losses. Mechanization makes it possible to carry
out harvesting operations more quickly and with less loss. Nervik and
Haghjoo indicate, for instance, that combining can reduce the harvest
period from 2 to 3 months to 1 to 2 weeks, greatly reducing the risk of
losses through spoilage and weather hazards. Giles suggests that in
West Pakistan, mechanical harvesting and threshing can save the estimated
10 to 15% of the grains now being lost.28/

Proper timing is particularly important with rice:

Where early harvesting is carried out, wastage
will be high because of the presence of chalky
and immature grains. Where harvest is late
the greater number of sun-cracked grains results
in a high percentage of broken and wastage in
the milled product.29/

Work underway at IRRI, under AID sponsorship, has produced a promising
drum-type field thresher which will, for the first time, handle wet rice.30

(3) Farm Organization. Mechanization can both stimulate an
increase in farm size or lead to increased intensity through multiple
cropping. Leurquin reports that in Colombia increased use of machinery
in rice production has tended to expand the optimum size of farms. On
the other hand, deWilde suggests that in Africa, the introduction of
machinery sooner or later makes it necessary to intensify production.-1/

In any case, it is clear that a primary effect of mechanization is to give
the farmer more time -- which he may spend on enlarging and/or intensifying
his farm operation. At the same time mechanization is likely to bring the
farmer further into the market economy: as Moerman observed in a Thai
village, "Shortly after the introduction of the tractor ...price and pro-
fit became major standards for crop selection."32/

b. Secondary Effects of Mechanization

With production and harvesting changes, along with market entry, there
will be a greater need for improvements in marketing. This may be due to
the interrelated nature of technical improvements. A recent example from
the American midwest is illustrative:

Because of changes in the method of harvesting,
from ear corn to shelled corn, this once storable
commodity is now a perishable commodity requiring




- 61 -


almost instant conditioning to preserve it for
year-around consumption.33!

In the case of the LDC's, we have seen that crop changes -- such as in-
creased production of IR-8 -- will lead to a need for improved drying and
storing facilities.

Alternatively, the need for marketing improvements may come from a
different direction. It may be that if society is to benefit from the
fruits of production technology, it will be necessary to make public in-
vestment in marketing infrastructure such as roads, communications, etc.

Beyond marketing, there are many other potential secondary economic
effects of national concern. The influence on farming patterns can work
several ways. On one hand, for example, the decrease in livestock numbers
brought about by mechanization means a decrease in the direct supply of
manure, meat and hides. On the other hand, production of other types of
livestock may be increased: a study of mechanization in the Punjab and
Bahawalpur areas of India revealed that:

..with the eviction of bullocks from farms, increased
quantities of fodder and husk became available, which
resulted in an increased number of milch /milk/ cattle
on farms.34/

Or interest may be stimulated in poultry or hog farming as elsewhere in
Asia.35/

Numerous other economic impacts could be* traced out such as the usual
need to import petroleum products and parts, bringing in foreign exchange
considerations -- but perhaps enough have been mentioned to suggest the
complex and intertwined nature of secondary influences.

2. Social/Political Impact

Most of the really disruptive problems of mechanization show up at the
social/political level. These may take many forms but we shall concen-
trate on two of the most critical: labor displacement and by-passed
groups.6/

Perhaps the biggest difficulty with mechanization is in the displace-
ment of labor. This does not always occur -- as in the case where
mechanization leads to intensified production -- but is usually at least
a strong potential problem. From a qualitative point of view, there will
be a lessening of demand for unskilled labor and an increase in demand
for scarce skilled labor -- machinery operators and repairmen. Quanti-
tatively, there still may well be an overall decrease in demand for labor.
Bose and Clark, in a study of mechanization in the Punjab area of West
Pakistan, learned that the labor force had been reduced about 50% from
the pre-mechanization period.37/

These changes can lead to alterations in the structure of rural society.
Farmers dislocated from the farm may first move to the local village,




-62-


and from there to urban centers. Or the move may be directly from
farm to city. In any case the result will be the same for the urban area:
a further influx of relatively untrained individuals and a dearth of jobs.

Not all of the effects may be quite so obviously disruptive as the labor
question. It may be that social problems arise because mechanization has
little to contribute to improving the status of the more disadvantaged
farmers. As Lidman put it:

Unfortunately, these machines will not and cannot
be instrumental in the solution of Peru's most
pressing agricultural problem: the social an 9/
economic state of the subsistence minifundia.--

Similarly, tenants may find that a disturbingly large portion of any pro-
fits they might make from mechanical improvements are passed on to land
owners through a rise in land rentals.40/ The fact that these farmers
remain static while others push ahead can widen the economic and social
gap between the upper and lower sectors of society.

3. Balancing Economic and Social Considerations

In total, we see that mechanization may bring pronounced economic benefits
in the form of increased output at lower costs. This can mean more food
at lower cost to society. On the other hand, it may bring a displacement
of rural labor. How do we balance economic benefits against social costs?

One of the first studies to treat this matter, at least in part, was con-
ducted by Lidman in two areas of Peru. Mechanization in two valleys was
evaluated in terms of economic rationality for farmers and social welfare.
He concluded that in one region, the Mantaro Valley, the use of tractors
was both economically and socially desirable. However, in another region,
the Jequetepeque Valley, the use of a combine was economically rational
for farmers, but of "...doubtful value to society as a whole."'41/

Economic and social aspects of mechanization in West Pakistan have recently
been examined in two excellent -- though as yet unpublished -- papers: one
by Bose and Clark and the other by Johnston and Cownie.42/ Both studies
independently indicated that the private benefit to those who introduce
tractors is much greater than the social benefit. Private returns were en-
hanced by the fact that tractors were being imported duty free at official
exchange rates. Social benefit was reduced, of course, because of the
adverse effect on employment. Both studies went on to suggest that a maxi-
mum rate of expansion might not be optimal -- that a slower pace of mechani-
zation may be called for.

Ruttan adds that the problem is not so much one of balance as it is one
of distorted economics. Mechanization may be encouraged in situations
which otherwise might not be economic as a result of subsidized interest
rates, unrealistic exchange rates, or other institutional devices.43/


These are important questions and deserve further study.




- 63 -


References and Notes

1/ For a brief history, see E. M. Dieffenbach and R. B. Gray, "The Deve-
lopment of the Tractor," in Power to Produce (The Yearbook of Agricul-
ture), 1960, pp. 25-45.

2/ In 1926, the United States provided the following proportions of trac-
tors purchased: France 80%, Australia 80%, Mexico 100% (Robert E.
Linneman, "A Case for Minimum Marketing Efforts in International Markets"
Mississippi Valley Journal of Business and Economics, Fall 1965, pp. 75,
79, 83). Virtually all of the tractors used in the Soviet Union during
the mid-1920's came from the U. S. (Dana G. Dalrymple, "American Tech-
nology and Soviet Agricultural Development, 1924-1933," Agricultural
History, July 1966, p. 193).

3/ India for instance, plans to make the following purchases from Communist
nations in 1969: 6,500 from the Soviet Union (6,000 of 18 hp. size),
5,000 from Czechoslovakia, 3,000 from East Germany, and 500 from Rumania
(Department of State Airgram A-5 from New Delhi, January 2, 1969).

4/ According to the U. S. AID Mission in India, there was a backlog of
20,000 to 30,000 orders for tractors as of the summer of 1968 ("India
PM," op. cit. (see fn. 8, chp. III), p. D-61). For a recent review of
the tractor supply situation, see /John Parker/ "Tractor Takeover in
South Asia," The Farm Index, January 1969, pp. 15-17.

5/ Production Yearbook, 1967, Food and Agriculture Organization, 1968,
p. 470.

6/ A large body of information on the use of tillers and tractors in Asia
is presented in Expert Group Meetihg on Agricultural Mechanization
(December 1967), Asian Productivity Organization (Tokyo), Vol. I,
June 1968, Vol. II, October 1968.

7/ G. W. Giles, "Agricultural Power and Development," in The World Food
Problem, The White House, Vol. III, September 1967, p. 177, 179.

8/ Lyle P. Schertz, "The Role of Farm Mechanization in the Developing
Countries," Foreign Agriculture, November 25, 1968, p. 3.(Also pub-
lished as "Food, Man and Machines," War on Hunger, January 1969.)

9/ John S. Ballis, "Summary of Tractor Evaluation Project, Allahabad
Agricultural Institute," Progress Report No. 14, March 1967, pp. 8-9;
Bhagat Singh, "Economics of Tractor Cultivation A Case Study,"
Indian Journal of Agricultural Economics, January-March 1968, p. 85.

10/ Ballis, op. cit., p. 12.

11/ Giles, op. cit., pp. 189-190.

12/ K. M. Azam, "Economics of Farm Mechanization," in his Planning and
Economic Growth, Maktaba-tul- Arafat (Lahore), 1968, p. 117.





- 64 -


13/ Maurice Hindus, Red Bread, Jonathan Cape, 1931, pp. 357-358 (I have
discussed Soviet maintenance problems elsewhere: see "The American
Tractor Comes to Soviet Agriculture: The Transfer of a Technology,"
Technology and Culture, Spring 1964, pp. 206-207); Expert Group,
op. cit.: Vol. I, p. 307, Vol. II, p. 116.

14/ A. C. Pandya, "Rationale for Agricultural Implements and Power
Programmes for Five Year Plans," Farm Journal (India), November 1967,
p. 15; Singh, op. cit., p. 84; Giles, op. cit., p. 2.

15/ Russell M. Lidman, "The Tractor Factor: Agricultural Mechanization
in Peru," Public and International Affairs (Princeton University),
1968 (No. 1) p. 18; comments of Dale W. Adams, Office of Program and
Policy Coordination, Agency for International Development, January
1969.

16/ John C. DeWilde, Experiences with Agricultural Development in Tropical
Africa, Johns Hopkins University Press, 1967, Vol. I, pp. 96-97.

17/ Department of State Airgram A-1010 from Vientiane, April 8, 1968;
S. R. Bose and E. H. Clark, "Some Basic Considerations On Agricultural
Mechanization in West Pakistan," Williams College, November 1968
(unpublished manuscript), p. 50.

18/ "Economic Trends and Their Implications for the United States,"
American Embassy, Rawalpindi, July 20, 1968.

19/ Expert Group, op. cit., Vol. II, p. 6.

20/ de Wilde, op. cit., p. 116.

21/ Dalrymple: op. cit. (1964), pp. 191-214; op. cit. (1966), pp. 187-206.

22/ "Raising Agricultural Productivity," op. cit. (see fn. 1, chp. I),
p. 96. For an account of the sociological relationships between
farmers and tractor owners in a Thai village, see Michael Moerman,
Agricultural Change and Peasant Choice in a Thai Village, University
of California Press, 1968, pp. 69-79. For an example of a program
that failed, see Herman J. Van Wersch, "Rural Development in Morocco:
Operation Labour," Economic Development and Cultural Change, October
1968, pp. 33-49.

23/ Airgram A-1010 from Vientiane, op. cit.; S. S. Johnson, E. U. Quintana,
and Loyd Johnson, "Mechanization of Rice Production," in The Seminar-
Workshop on the Economics of Rice Production (December 1967), Inter-
national Rice Research Institute, pp. 3-18.

24/ Ballis, op. cit., p. 8.

25/ Expert Group, op. cit., Vol. II, Chp. IV, pp. 85-112.

26/ Tagumpay-Castillo, op. cit. (see fn. 20, chp. III), p. 291.




- 65 -


27/ /Howard E. Ray/ New Opportunities Through IADP for Growth in India's
Agriculture, Report to the Secretary of Agriculture by the Ford
Foundation in India, 1968, pp. 16, 56-58.

28/ Ottar Nervik and E. Haghjoo, "Mechanization in Underdeveloped Coun-
tries," Journal of Farm Economics, August 1961, pp. 663-664;
G. W. Giles, "Towards a More Powerful Agriculture," distributed by
The Planning Cell, Agriculture Department, Government of West Pakistan,
Lahore, November 1967, p. 12.

29/ "Rice in the World Food Economy," The State of Food and Agriculture,
1966, Food and Agriculture Organization, 1966, p. 167.

30/ See "Thresher Developed in the Philippines," War on Hunger, January
1969, p. 15.

31/ Philippe P. Leurquin, "Rice in Colombia: A Case Study in Agricultural
Development," Food Research Institute Studies, 1967 (No. 2), p. 268;
de Wilde, op. cit., p. 103.

32/ Moerman, op. cit., p. 68.

33/ James Hanscom, "Corn Exports to Double by '72," Journal of Commerce,
September 9, 1968.

34/ Azam, op. cit., p. 123.

35/ Expert Group, op. cit., Vol. II, p. 7.

36/ For a discussion of other social/anthropological influences of mechani-
zation in a Thai village, see Moerman, op. cit., pp. 62-87.

37/ Bose and Clark, op. cit., p. 35.

38/ This, at least, has been the response to the early stages of mechani-
zation.in the Mississippi Delta (see Richard H. Day, "The Economics
of Technological Change and the Demise of the Sharecropper," American
Economic Review, June 1967, pp. 441-442).

39/ Lidman, op. cit., p. 30.

40/ Leurquin, op. cit. (1967), p. 268.

41/ Lidman, op. cit., pp. 15, 29.

42/ Bose and Clark, op. cit., 53 pp., esp. p. 52; Bruce F. Johnston and
John Cownie, "The Seed-Fertilizer Revolution and the Labor Force
Absorption Problem," Food Research Institute, Stanford University,
January 1969 (unpublished manuscript) 38 pp.; and letter from Johnston,
February 11, 1969.
43/ Letter from Vernon W. Ruttan, University of Minnesota, March 18, 1969.





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VII. POLICY IMPLICATIONS OF TECHNOLOGICAL CHANGE*


The preceding chapters have suggested a number of questions of public
policy concerning technological change. In this chapter we shall
approach the matter in four stages: need for evaluation, criteria for
evaluation, policy problems, and concluding remarks.

A. Need for Evaluation

Technological change in agriculture, while resulting in great benefits to
society, also can bring with it substantial problems. Many of these have
already been noted. Here we shall summarize and comment on some of those
which are most important from a policy viewpoint.

1. Benefits of Technology

There is little question of the overall benefits to society from tech-
nological change. Quantitatively, more food and agricultural products
are available at lower cost. Qualitatively, the food may be of the type
more desired by consumers and may be of higher nutritional value. In
addition, relatively new foods may appear or traditional products may
become available over a longer season. Furthermore, a greater output
may be produced with the same or fewer resources, and growers are drawn
into the market economy. The combined result of these changes is that
economic development is in general stimulated.

2. Problems of Technological Change

The difficulties with technical change in agriculture arise because of
the uneven distribution of benefits and the disruption associated with
change.

a. Uneven Distribution of Benefits

The distribution of benefits from technological change is uneven (1)
within agriculture and (2) between agriculture and the rest of society.

We have seen that within agriculture, the first few who adopt a tech-
nology are apt to benefit financially, but as the technology moves into
widespread use, this advantage is competed away. Thus those that
follow may not receive any positive payoff, but they may be better off
than those who were unable to adjust at all.

The benefits of widespread technological advance, over the longer run,
flow instead to consumers. Whether they are evenly distributed among
all consumers is difficult to say -- but certainly more so than among
producers. To a varying extent producers are also consumers of marketed
food so some farmers may gain in this way. In any case, the transfer
of income is clearly not an orderly process from a welfare point of view:


* References and notes for this chapter are found on pp. 74-75.




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"...consumers who realize gains in the form of more food for less money
are not generally poor and farmers whose income may diminish are not
universally wealthy."l/

In assessing the payoff from technological change, a distinction should
be drawn between absolute and relative benefits. In absolute terms,
nearly everyone is economically as well or better off with technological
improvements (the prominent exceptions being entrepreneurs who were un-
able to adjust and displaced laborers). But it is in the nature of
technological change that the benefits accrue relatively unevenly. Thus,
as Tweeten and Tyner put it, if farm income has suffered, it is in
relative rather than in absolute terms.2/

b. Disruptions Associated with Change

The essence of technological improvement is change: change directed
toward economic growth. This process can only, as Heady describes it,
"...result in continuous instability of subsistence or primary product
industries."3/ The dislocations can manifest themselves in social and
political forms.

The relationship between economic growth and political stability is a
complex one. Huntington suggests that it may vary with the level of
economic development. He points out that at one extreme some measure of
economic growth is necessary to make instability possible: in
Eric Hoffer's words, there is a "conservatism of the destitute." On the
other hand, in countries which have reached a relatively high level of
development, a high rate of growth is compatible with political stability.4/

In an underdeveloped society which has started on the path of economic
growth, then, problems of political instability may be expected. This
is especially true where growth is rapid:

...rapid economic growth, far from being the source
of domestic tranquility it is sometimes supposed to
be, is rather a disrupting and destabilizing force
that leads to political instability. This does not
mean that rapid economic growth is undesirable. It
means, rather, that no one should promote the first
without bracing to meet the second.5/

Economic growth and/or political change can also lead to social disrup-
tions. Traditional social arrangements or relationships will be altered
and new ones substituted. The adoption of new agricultural technologies
almost inevitably means, for instance, that traditional subsistence
farmers are drawn into the market economy. But the differing allocation
of returns, even in relative terms, can stimulate social unrest.

The various disruptions associated with economic growth may be wide-
spread, but they are perhaps most concentrated in the agricultural
sector. Moore, after a massive historical study, has concluded that the
poor inevitably bear the heaviest costs of modernization -- whether they
occur under socialist or capitalist auspices:




- 68 -


The only justification for imposing the costs is
that they would become steadily worse off with-
out it. As the situation stands, the dilemma is
indeed a cruel one.6/

All of this may seem a bit extreme if one is thinking of some relative-
ly modest technical changes in agriculture. And it may well be. But
it is not beyond the realm of possibility. We have only to remember
that the use of new varieties of rice has already led to political dis-
turbances in some areas of India. Nearly every change will introduce
some disruptions; attempts should be made to evaluate them in advance
and then, where called for, "brace" to meet them.

B. Criteria for Evaluation

Evaluation of the effects of technological advance necessitates the esta-
blishment or recognition of criteria. The criteria, in turn, will depend
on the goals and values of society.

The direction given farm technical advance, as Heady has pointed out,
might differ depending on the specific ends to be achieved. He identi-
fies three potential economic goals:

1. Increasing the total net income of the agricultural
industry.

2. Increasing the total utility or welfare of individuals
now in the agricultural industry.

3. Maximizing aggregate economic progress.

These goals, he indicates, are not identical and are not without conflict/
Moreover, they suggest a certain tendency to judge growth solely in terms
of economic criteria.

Recently, it has become increasingly recognized that a broader interpre-
tation is needed. The tendency to view development as essentially an
economic process has masked the need to also measure social progress and
social justice in the less developed nations (the latter, of course, would
involve the development of new criteria and measurements). In the fall
of 1968, for example, the Pakistan Planning Commission asked whether the
time had not come to shift the emphasis in the country's economic planning
from growth to social justice; subsequent political events in Pakistan have
underscored this need. A high rate of economic growth, as the National
Planning Association recently pointed out, cannot be sustained for very
long without related political and sociocultural changes. Thus,technolo-
gical advance needs to be evaluated in terms of its composite economic
social and political effects.8/

It should not be forgotten, however, that despite the many political, social,
and cultural interrelationships, development remains primarily an economic
process. In this context, as Drucker has indicated, "...the essence of




- 69 -


development is not to make the poor wealthy, it is to make the poor
productive."9/

It is clearly impossible to say what or how broad a perspective should be
taken for judging agricultural technologies; this will depend on the
specific circumstances. But it is clear that it might well be desirable
to move beyond a narrow input-output analysis to a broader spectrum --
both in the short and long run.

C. Policy Issues

Among the many policy issues that may be raised by the introduction of a
new technology, two of the more important from an agricultural point of
view are: (1) the choice of factor combinations in agriculture, and (2)
distribution of the gains and losses.

1. Factor Combinations and Investments

Evaluation of factor choices can vary depending on whether market condi-
tions or developmental criteria are used.

For example, firms choose optimal production techniques
based upon factor prices (which are usually determined
by market conditions), but these do not always reflect
the relative scarcity of foreign exchange and capital
equipment (which must be taken into account by those
concerned with the overall economic development of the
country).10/

Even if one starts with development criteria in mind, it must be remembered
that farmers will make their decisions on the'basis of market conditions.

One of the traditional questions concerns the balance to be struck between
investment in biological and mechanical factors. In addition to being
influenced by the foreign exchange position of the country -- for mechani-
zation usually involves imports -- this question is influenced to a large
extent by the degree of development.

It seems to be generally recognized that (barring unusual circumstances)
at low levels of development the nod should be given to biological innov-
ations. This is because (a) they are needed to increase the response of
plants to technical inputs or change yield potentials to provide scope for
the introduction of engineering improvements, and (b) they often do not
require large capital investments or severe displacement of labor.11/

But as agricultural development takes place, and crop changes set the stage
for mechanization -- e.g. as increased double cropping made possible by
new varieties increases the need for mechanization -- the labor capital
cost ratio begins to swing toward mechanization. Mechanization, moreover,
can initially be a relatively simple process -- involving the use of power
tiller or garden tractor. Then,as conditions call for it, larger tractors
can be adopted. At the later stages of development (and in some cases




- 70 -


well before), improvements in crop production may provide the basis for
livestock production; concurrent growth in income provides the basis for
an expansion in demand.

There are, of course, numerous exceptions to a sequence placing crops
first, followed by mechanization and livestock improvement. Irrigation
may be involved at a number of levels and can even be a necessary pre-
cedent for crop improvement. Some mechanization may be necessary to clear
land for crops. In any case, the link between crops and mechanization
is much closer than the relationship between mechanization and livestock
improvement.

Emphasis in agricultural development programs has traditionally and right-
ly been placed on production. But as programs to improve production begin
to pay off, other second stage problems begin to become more important.
Perhaps the most significant from a technological point of view is the
need to improve marketing facilities for both inputs and final products.
Included will be such items as improved roads, storage and processing.
At some point, therefore, a decision will have to be made on the balance
of resources allocated to production and marketing.

In the short run, conflicts can also arise between allocations for consump-
tion and for investment. Should policy-makers, for instance, use scarce
foreign exchange to import food as opposed to fertilizer or (to go a step
further) for machinery for a fertilizer plant? Or at the national level,
should policy makers discourage farm investment in consumption goods such
as household items and encourage investment in farm improvements such as
tubewells?12/

The answer would have to be: some balance. But this may not be easily
arrived at. It is tempting, for instance, to place a relatively low
priority on consumption goods, but they can play an important role in
providing incentives which lead to mobilization of under-employed resources
for increased production and income.13/ The problem is not so much with
long-term goals, which are to maximize welfare, but how to get there.

2. Distribution of Gains and Losses

The distribution of the gains and losses from technical progress provides
one of the main bases for the policy problems of American agriculture.14/
Much the same problem is true in less developed nations which have experi-
enced technological breakthroughs.

a. Distribution Within Agriculture

A policy planning dilemma that faces many less developed nations is whether
to allocate limited resources to (1) the more favored areas or the more
progressive producers, or to (2) spread measures to promote technologi-
cal advance more thinly over the country. The first measure will gene-
rally result in greater economic efficiency but the second has undeniable
social and welfare advantages. The choice is not an easy one.




- 71 -


Conflicting opinions have recently been expressed by two authors which
illustrate some of the dimensions of the problems. Etienne, writing in
an Indian context, states:

Regional differences in pace do not matter, provided
the nationwide growth rate overtakes and keeps ahead
of the population rate. This strategy might be
challenged on the grounds that it is antisocial,
since it benefits mainly the more favored regions and
the middle classes of farm society. Can we approve
such an agricultural policy? Yes, for this is the
only way out, even from the social standpoint.15/

Schickele, on the other hand, states:

It surely is not enough to depend only on the top 10%
of present producers .... They alone will not be able
to sustain economic growth because there will not be
necessary concomitant expansion of demand ..../More-
over/ whatever head start might be gained by an
initial dependence on a small producer elite is
fraught with social and political dangers and economic
setbacks.16/

One effort which in some ways avoids these two extremes has been conduc-
ted in India since 1960. It is known as the Intensive Agricultural
Districts Program and involves providing growers with a "package" of im-
proved practices. The program avoids individual selectivity in Shat it
is available to all groups in a chosen area; it avoids a mass approach
in that the areas selected were generally among the more productive in
the country. Although we do not have a review of the social aspects of
the national effort, it is reported that in the Tanjore District by 1965
there had been a broadscale adoption of new practices: both large and
small farmer, and owner and tenant participated.17/ The subsequent
economic benefits, however, are a moot point: one recent study questions
whether the overall program stimulated production increases beyond those
which would have occurred anyway.18/ (Part of the problem was that
several critical aspects of the original program were not carried out;
also, in retrospect, not enough attention was given to the development
of new technology.19/) But in view of experience to date, it should be
possible to design an improved program.

Still, it may be that programs which stress improved income distribution
within agriculture will usually do so at some cost in terms of potential
agricultural output. Where this in the case, the challenge will be to
strike a balance between the two which will be acceptable in both the
short and long run. Further, the policy should encourage adequate techno-
logical change in agriculture, yet not lead to a major transfer of
income to large or wealthy farmers.20/ All of this, however, is much
more easily said than done.





- 72 -


b. Distribution Between Producers and Consumers

There is little than can be done to prevent the flow of benefits from
technical change from farm to consumers. But it might be possible, as
Ruttan has put it, to design programs which both encourage technological
change in agriculture and at the same time slow the transfer of savings
from farmers to consumers sufficiently to ease the downward pressure on
farm income.21/

Tweeten and Tyner have suggested three possible rates of advance that
farmers might consider optimum:

1. A zero rate of technological advance, with rising
prices and income through a fixed or static supply
and inelastic product demand.

2. Maintain farm resource returns at opportunity cost
levels without aggregate farm resource adjustments.

3. Allow farm output needs to be produced with 1%
fewer conventional inputs per year. The necessary
rate of productivity increase is 2.8% annually.

The latter rate most nearly illustrates the route society has adopted. 2/

The idea of adjusting rates of technological change has been given re-
latively little thought in the United States and undoubtedly even less
in underdeveloped countries. My own reaction is that this route is not
a very promising one because (1) it is not necessarily to the direct
advantage of consumers as a whole, and (2) it would be very difficult to
carry out, in part because of the many sources of technical change.23/
Still, some adjustments might be possible, and the matter is important
enough to be worth further study.


We have discussed only a few of the possible policy issues resulting from
technological change. Others such as renewed interest in rural taxation
or overloading of administrative structures-- may well become important
in the future. Hopefully the background information provided in this report
will be of use in dealing with these and other questions.

D. Concluding Remarks

In a hungry world, the natural inclination is to view technological
changes in agriculture largely in terms of their immediate effect on agri-
cultural production and food supplies. But changes which have short-run
effect also have longer-term implications. And changes which initially
affect food supply set in motion a chain of interrelated economic, social
and political factors. Many of these in turn will react back on agri-
culture.




- 73


Emphasis on short-run physical increases in production is a logical first
step for nations faced with the threat of hunger. Increasing agricultural
production is no small task: in most cases it cannot effectively be
carried out if diluted by a myriad of other goals.24/ But where these
production efforts begin to pay off, or in nationswith a more advanced
agriculture, a broader outlook is called for: social and political
factors become of increased importance.

Perhaps both past and prologue for agriculture in the less developed
nations are well illustrated by analogy. A recent review of developments
in civil engineering in the United States concluded that:25/

/The works/ ...discussed in this book have been
triumphs of the human spirit because of the obstacles
men overcame in building them; tomorrow's structures
must be triumphs for the human spirit, built to
enhance life for man in all respects.

These will be built, not by engineers building
alone as masters of their specialty but by
synthesizers who take into consideration the whole
range of human needs and technical possibilities.

To be sure, this situation may seem remote for agriculture in many less
developed nations. But it is inevitable that technical change -- long a
way of life in the developed nations -- will play an ever-increasing role
in the agriculture of less developed countries.

Since technical change inevitably brings disruptions with it, the outlook
for the developing nations is hardly one of serenity. But with develop-
ment, the problems change in character: they change from ones of
scarcity to those of abundance. This represents absolute improvement but
does not do away with problems of relative imbalance.

The answer is not to try to do away with technical change, or even to try
to sharply slow it, but to anticipate the problems that it may bring and
plan to alleviate or mitigate them. In carrying out this assessment, it
is necessary to look beyond immediate economic impact at the farm level
to a longer-term analysis reflecting social and political factors at a
regional, national, and possibly international level.





- 74 -


References and Notes

1/ T. W. Schultz, "A Policy to Redistribute Losses from Economic Progress,"
Journal of Farm Economics, August 1961, p. 557; Heady, op. cit.(1949;
see fn. 6, chp. II), p. 311 (source of quote).

2/ L. G. Tweeten and F. H. Tyner, "Toward an Optimum Rate of Technologi-
cal Change," Journal of Farm Economics, December 1964, p. 1080.

3/ Heady, op. cit. (1949), p. 310.

4/ Huntington, op. cit. (fn. 15, chp. III), pp. 52-53. Quote from
Eric Hoffer, The True Believer, New American Library, 1951, p. 17.

5/ Mancur Olson, Jr., "Rapid Economic Growth as a Destabilizing Force,"
The Journal of Economic History, December 1963, p. 552.

6/ Moore, op. cit. (see fn. 28, chp. III), p. 410.

7/ Heady, op. cit. (1949) pp. 306-307.

8/ Robert E. Asher, "A Development Assistance Program for the 1970's,"
Brookings Institution, September 1968 (unpublished manuscript), p. 51;
Joseph Lelyveld, "Pakistani Economic Panel Questions Own Plans," The
New York Times, December 1, 1968 ; A New Conception of U. S. Foreign
Aid, National Planning Association, Special Report No. 64, March 1969,
p. 5.

9/ Peter Drucker, "A Warning to the Rich White World," Harper's, Decem-
ber 1968, p. 75.

10/ Baranson, op. cit. (see fn. 3, chp. I), p. 520.

11/ Vernon W. Ruttan, "Engineering and Agricultural Development," Univer-
sity of Minnesota, Department of Agricultural Economics, July 1967,
p. 40; Earl 0. Heady, "Processes and Priorities in Agricultural Devel-
opment," in Economic Development of Tropical Agriculture (ed. by
W. W. McPherson), University of Florida Press, 1968, pp. 66-69.

12/ Mellor, op. cit. (1966; see fn. 13, chp. IV), p. 124.

13/ Ibid., p. 126.

14/ Heady, op. cit. (1962, see fn. 3, chp. IV), p. 10.

15/ Gilbert Etienne, "Manchala and Pilkhi -- Techniques are Not Enough,"
Ceres, July-August 1968, p. 43.

16/ Ranier Schickele, Agrarian Revolution and Economic Progress, Praeger
(Special Studies Series), 1968, pp. 47-48.




- 75 -


17/ Carl C. Malone, "Some Responses of Rice Farmers to the Package Program
in Tanjore District, India," Journal of Farm Economics, May 1965,
pp. 257, 264, 267. Landless laborers did not participate in this pro-
cess, resulting in the social problems noted earlier in this report.

18/ Dorris D. Brown, "Agricultural Development in India's Districts:
The Intensive Agricultural Districts Programme," unpublished manu-
script, 1969, pp. 35-71 (to be published by the Development Advisory
Service, Harvard University). Also see Carl Malone, "The Intensive
Agricultural District Programme," paper presented at the International
Seminar on Change in Agriculture, Reading, England, September 1968.

19/ Critical aspects of the original package plan which were not carried
out included: the use of the whole farm plan, large amounts of
medium-term credit to extend minor irrigation and improve land, tech-
nical engineering assistance, and incentive level foodgrain prices.
Consequently, much of the remaining emphasis was placed on increasing
the number of extension workers (D. Brown, op. cit., pp. 18-19, 25-32,
115-118).

20/ John H. Sanders and Vernon W. Ruttan, "Another Look at the World Food
Problem," Minnesota Agricultural Economist, February 1969, p. 3.

21/ Ruttan, op. cit. (1960, see fn. 3, chp. II), p. 751.

22/ Tweeten and Tyner, op. cit., pp. 1079-1080.

23/ I have discussed some of the limitations inherent in the Tweeten-
Tyner paper, and in an earlier paper-by Heady, in several notes in
the Journal of Farm Economics: "The Public Investment in Agricultural
Research and Education: Some comments," November 1965, pp. 1020-1022;
"Comments on Public Purpose in Agricultural Research and Education,"
May 1962, pp. 444-453.

24/ One problem with some development programs is that more emphasis has
been placed on the social and political concerns of the national elites
than on raising food production (W. David Hopper, "Investment in Agri-
culture: The Essentials for Payoff," in Strategy For the Conquest of
Hunger /Proceedings of a Symposium, April 1968/, The Rockefeller
Foundation, pp. 104-105).

25/ David Jacobs and Anthony E. Neville, Bridges, Canals and Tunnels,
Van Nostrand, 1968, p. 128.




- 76 -


VIII. SELECTED BIBLIOGRAPHY*


A. Books

John C. de Wilde, et al., Experiences with Agricultural Development in
Tropical Africa, Johns Hopkins University Press, 1967, Vol. I.

R. J. Forbes, The Conquest of Nature: Technology and its Consequences,
Praeger, 1968.

Earl 0. Heady, Agricultural Policy Under Economic Development, Iowa State
University Press, 1962.

Samuel P. Huntington, Political Order in Changing Societies, Yale
University Press, 1968.

Herbert F. Lionberger, Adoption of New Ideas and Practices, Iowa State
University Press, 1960.

Edwin Mansfield, The Economics of Technological Change, Norton, 1968
(not cited).

John W. Mellor, The Economics of Agricultural Development, Cornell
University Press, 1966.

John W. Mellor, et al., Developing Rural India: Plan and Practices,
Cornell University Press, 1968.

Ezra J. Mishan, The Costs of Economic Growth, Praeger, 1967.

Michael Moerman, Agricultural Change and Peasant Choice in a Thai Village,
University of California Press, 1968.

Barrington Moore, Jr., Social Origins of Dictatorship and Democracy: Lord
and Peasant in the Making of the Modern World Beacon Press, 1966.

Everett M. Rogers, Diffusion of Innovations, The Free Press, 1962.

Prodipto Roy, et al., Agricultural Innovation Among Indian Farmers,
National Institute of Community Development (Hyderabad), 1968.

Walter W. Wilcox and Willard W. Cochrane, Economics of American Agriculture,
Prentice Hall, 1960.

E. C. Stakman, Richard Bradfield and P.. C. Managelsdorf, Campaigns Against
Hunger, Belknap Press of Harvard University Press, 1967.


*Selected from published references only (except for items listed in
Section D.)




- 77 -


B. Bulletins and Reports

Dana G. Dalrymple, The Diversification of Agricultural Production in Less
Developed Nations, U.S. Department of Agriculture, International Agri-
cultural Development Service, August 1968.

**

Development and Change in Traditional Agriculture: Focus on South Asia,
Michigan State University, Asian Studies Center, Occasional Paper,
November 1968 (symposium papers).

Expert Group Meeting on Agricultural Mechanization (December 1967), Asian
Productivity Organization (Toyko), Vol. I June 1968, Vol. II October 1968.

Five Years of Research on Dwarf Wheats, Indian Agricultural Research
Institute (New Delhi), 1968 (not cited).

The Rockefeller Program in the Agricultural Sciences (Progress Report:
Toward the Conquest of Hunger), 1965-1966; Strategy For the Conquest of
Hunger (Proceedings of a Symposium, 1968), The Rockefeller Foundation.

1966/67 Report, Cimmyt, Cimmyt Report, 1967/68, International Maize and
Wheat Improvement Center (Mexico City).


C. Articles

1. In Books

K. M. Azam, "Economics of Farm Mechanization," in his Planning and Economic
Growth, Maktaba-tul-Arafat (Lahore), 1968 (originally published in
Trade and Industry, Karachi, July 1965).

Jack Baranson, "The Challenge of Underdevelopment," in Technology in
Western Civilization (ed. by M. Kransberg and C. W. Pursell, Jr.),
Oxford University Press, 1967, Vol. II.

Walter P. Falcon and Carl H. Gotsch, "Lessons in Agricultural Development -
Pakistan," in Development Policy Theory and Practice (ed. by G. F.
Papanek), Harvard University Press, 1968.

J. George Harrar and Sterling Wortman, "Expanding Food Production in Hungry
Nations; The Promise, the Problems," in Overcoming World Hunger (ed. by
Clifford M. Hardin), Prentice Hall, 1969.

Earl O. Heady, "Processes and Priorities in Agricultural Development" in
Economic Development of Tropical Agriculture (ed. by W. W. McPherson),
University of Florida Press, 1968.

Nathan Rosenberg, "The Economic Consequences of Technological Change,
1830-1880," in Technology in Western Civilization (ed. by M. Kransberg and
C. W. Pursell, Jr.), Oxford University Press, 1967, Vol. I.




- 78 -


2. Journal Articles

Jack Baranson, "Economic and Social Considerations in Adapting Technologies
for Developing Nations," Technology and Culture, Winter 1963.

Santi Priya Bose, "Characteristics of Farmers who Adopt Agricultural
Practices in Indian Villages," Rural Sociology, June 1961.

Dorris D. Brown, "Capital Formation and Agribusiness in India," Columbia
Journal of World Business, January February 1969.

Lester R. Brown, "The Agricultural Revolution in Asia," Foreign Affairs,
July 1968.

Dana G. Dalrymple, "The American Tractor Comes to Soviet Agriculture: The
Transfer of a Technology," Technology and Culture, Spring 1964.

Dana G. Dalrymple, "American Technology and Soviet Agricultural Develop-
ment, 1924-1933," Agricultural History, July 1966.

Richard H. Day, "The Economics of Technological Change and the Demise of
the Sharecropper," American Economic Review, June 1967.

ZviGriliches, "Hybrid Corn: An Exploration in the Economicsof Technologi-
cal Change," Econometrica, October 1957.

ZviGriliches, "Congruence Versus Profitability: A False Dichotomy,"
Rural Sociology, September 1960.

F. H. Gruen, "Agriculture and Technical Change," Journal of Farm Economics,
November 1961.

Earl 0. Heady, "Basic Economic and Welfare Aspects of Farm Technological
Advance," Journal of Farm Economics, May 1949.

William McD. Herr, "Technological Change in the Agriculture of the United
States and Australia," Journal of Farm Economics, May 1966.

Samuel Pao-San Ho, "Agricultural Transformation Under Colonialism: The
Case of Taiwan," The Journal of Economic History, September 1968.

Bruce F. Johnston, "Agriculture and Economic Development: The Relevance
of the Japanese Experience," Food Research Institute Studies, 1966 (No. 3).


William 0. Jones, "Environment, Technical Knowledge, and Economic Develop-
ment in Tropical Africa," Food Research Institute Studies, 1965 (No. 2).

John W. Kendrick, "The Gains and Losses from Technological Change,"
Journal of Farm Economics, December 1964.

Martin Kriesberg, "Marketing Food in Developing Nations -- Second Phase
of War on Hunger," Journal of Marketing, October 1968.




- 79 -


Journal Articles cont'd

Russell M. Lidman, "The Tractor Factor: Agricultural Mechanization in
Peru," Public and International Affairs (Princeton University), 1968 (No. 1).

David E. Lindstrom, "Diffusion of Agricultural and Home Economics Practices
in a Japanese Rural Community," Rural Sociology, June 1958.

Philippe P. Leurquin, "Cotton Growing in Colombia: Achievements and Uncer-
tainties," Food Research Institute Studies, 1966 (No. 2).

Philippe P. Leurquin, "Rice in Colombia: A Case Study in Agricultural
Development," Food Research Institute Studies, 1967 (No. 2).

Carl C. Malone, "Some Responses of Rice Farmers to the Package Program in
Tanjore District, India," Journal of Farm Economics, May 1965.

Ghulam Mohammad, "Private Tubewell Development and Cropping Patterns in
West Pakistan," The Pakistan Development Review, Spring 1965.

Ottar Nervik and E. Haghjoo, "Mechanization in Underdeveloped Countries,"
Journal of Farm Economics, August 1961.

Mancur Olson, Jr., "Rapid Economic Growth as a Destabilizing Force," The
Journal of Economic History, December 1963.

Vernon W. Ruttan, "Research on the Economics of Technological Change in
American Agriculture," Journal of Farm Economics, November 1960.

Theodore W. Schultz, "A Policy to Redistribute Losses from Economic Pro-
gress," Journal of Farm Economics, August 1961.

H. W. Singer, "The Distribution of Gains Between Investing and Borrowing
Countries," American Economic Review, May 1950 (Reprinted in Readings in
International Economics (ed. by R. E. Gaves and H. G. Johnson), Irwin,
1968).

Daniel W. Sturt, "Producer Response to Technological Change in West
Pakistan," Journal of Farm Economics, August 1965.

Luther G. Tweeten and Fred H. Tyner, "Toward an Optimum Rate of Technolo-
gical Change," Journal of Farm Economics, December 1964.

William and Helga Woodruff, "Economic Growth: Myth or Reality," Technology
and Culture, Fall 1966.


3. Magazine Articles

James M. Blume, "Consequences of the Green Revolution," War on Hunger,
August 1968 (not cited).

Peter F. Drucker, "A Warning to the Rich White World," Harper's, December
1968.




- 80 -


Magazine Articles cont'd

Gilbert Etienne, "Manchala and Pilkhi -- Techniques are Not Enough,"
Ceres (FAO Review), July-August 1968.

Theodore R. Freeman, Jr., "New Wheats Power Bigger Pakistan Harvests,"
Foreign Agriculture, April 7, 1969 (not cited).

Ralph W. Gleason, "Turkey's 'Green Revolution' in Wheat: Self Help in
Action," War on Hunger, September 1968.

James F. Keefer, "An Afterlook at the Philippine Rice Breakthrough,"
Foreign Agriculture, March 31, 1969.

Claude Moisy, "Enough Wheat for Export?" Ceres (FAO Review), July-August
1968.

Lyle P. Schertz, "The Role of Farm Mechanization in the Developing
Countries," Foreign Agriculture, November 25, 1968.

John C. School, "Mexico's Grain Problem: A Production Boom That Won't
Turn Off," Foreign Agriculture, July 3, 1967.

Clifton R. Wharton, Jr., "The Green Revolution: Cornucopia or Pandora's
Box?" Foreign Affairs, April 1969.



"Rice Miracle, Maybe," The Economist, October 19, 1968.

4. Newspaper Articles

Adam Clymer, "Madras Rice Progress Imperiled," The Sun, Baltimore,
November 19, 1968.

Peter R. Kann, "Miracle in Vietnam; New Rice May be Key to Economic
Stability After War Ends in Land," Wall Street Journal, December 18, 1968.

Joseph Lelyveld, "Food is Key Issue in Ceylon Politics," New York Times,
November 11, 1968.

Joseph Lelyveld, "Pakistani Economic Panel Questions Own Plans," New
York Times, December 1, 1968.


"Madras is Reaping a Bitter Harvest of Rural Terrorism," New York Times,
January 15, 1969.

5. Articles in Other Publications

Randolph Barker and E. U. Quintana, "Farm Management Studies of Costs and
Returns in Rice Production," in The Seminar-Workshop on the Economics of
Rice Production (December 1967, International Rice Research Institute.




- 81


Articles in Other Publications cont'd

Marion Clawson, "The Implications of Urbanization for the Village and
Rural Sector," in Social Problems of Development and Urbanization
(Vol. VII of Science, Technology and Development), Washington, 1963.

G. W. Giles, "Agricultural Power and Equipment," in The World Food Problem,
The White House, Vol. III, September 1967.

S. S. Johnson, E. U. Quintana, and Loyd Johnson, "Mechanization of Rice
Production," in The Seminar-Workshop on the Economics of Rice Production
(December 1967), International Rice Research Institute.


**

"Raising Agricultural Productivity in Developing Countries Through Tech-
nological Improvement," in The State of Food and Agriculture 1968, FAO,
September 1968.


D. Unpublished (Mimeographed) Papers*

Randolph Barker, "The Role of the International Rice Research Institute
in the Development and Dissemination of New Rice Varieties," International
Rice Research Institute, September 1968.

Swadesh R. Bose and Edwin H. Clark II, "Some Basic Considerations on Agri-
cultural Mechanization in West Pakistan," Williams College, November 1968.

Dana G. Dalrymple, "Imports and Plantings of High-Yielding Varieties of
Wheat and Rice in Less Developed Nations," U. S. Department of Agriculture,
International Agricultural Development Service, December 1968.

Bruce F. Johnston and John Cownie, "The Seed-Fertilizer Revolution and the
Labor Force Absorption Problem," Stanford University, Food Research Insti-
tute, January 1969.

David S. H. Liao, "Studies on Adoption of New Rice Varieties," International
Rice Research Institute, November 1968.

V. W. Ruttan, J. P. Houck and R. E. Evenson, "Technological Change and
Agricultural Trade: Three Examples (Sugarcane, Bananas, and Rice)," Univer-
sity of Minnesota, Agricultural Economics Staff Paper P68-4, December 1968.

Lyle P. Schertz, "World Agriculture in the 1970's',U. S. Department of
Agriculture. International Agricultural Development Service, February 1969.



* Most of these papers were prepared for seminars or talks and will
eventually be published.





82 -



D. Unpublished (Mimeographed) Papers cont'd

Clifton R. Wharton, Jr., "Risk, Uncertainty, and the Subsistence Farmer:
Technological Innovation and Resistance to Change in the Context of
Survival," Agricultural Development Council, December 1968.

Joseph Willett and Donald Chrisler, "The Impact of New Varieties of Grain,"
U. S. Department of Agriculture, Economic Research Service, December 1968.




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