Title Page
 The two objectives: production...
 Major reforms
 Alternative producer strategie...
 Conclusions and AID program/policy...
 List of references

Title: production and equity in agricultural producer strategies
Full Citation
Permanent Link: http://ufdc.ufl.edu/UF00081798/00001
 Material Information
Title: production and equity in agricultural producer strategies
Physical Description: Book
Language: English
Creator: United States. Agency for International Development. Office of Policy Development and Analysis.
Publisher: United States. Agency for International Development. Office of Policy Development and Analysis.
Publication Date: 1975
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Bibliographic ID: UF00081798
Volume ID: VID00001
Source Institution: University of Florida
Rights Management: All rights reserved by the source institution and holding location.
Resource Identifier: oclc - 191867696

Table of Contents
    Title Page
        Title Page
    The two objectives: production and equity
        Page 1
        Page 2
        Page 3
        Page 4
    Major reforms
        Page 5
        Page 6
        Page 7
        Page 8
    Alternative producer strategies
        Page 9
        Page 10
        Page 11
        Page 12
        Page 13
        Page 14
        Page 15
        Page 16
        Page 17
        Page 18
        Page 19
        Page 20
        Page 21
        Page 22
        Page 23
        Page 24
        Page 25
        Page 26
        Page 27
    Conclusions and AID program/policy implications
        Page 28
        Page 29
        Page 30
        Page 31
        Page 32
    List of references
        Page 33
        Page 34
        Page 35
Full Text





This is a preliminary paper drafted by A.I.D. staff
and does not represent official Agency policy. It
was prepared principally by Martha Horsley and has
benefited from comments by Regional Bureau, TAB, and
PPC staff. The paper is intended to lead to a better
understanding of the many factors and complex relation-
ships involved in the analysis of production and equity
effects in agriculture and to serve as a point of departure
for discussion leading to better articulated AID policy.

U.S. Agency for INternational Development
Bureau for Program and Policy Coordination
Office of Policy Development and Anaysis
September 1975


The purpose of this paper is to investigate, at a very general level,

the compatibility of two agricultural sector objectives, food production

and equity (i.e. increasing the real incomes of the poor), under existing less

developed country (LDC) conditions. Both of these objectives should be viewed

as subordinate to the ultimate goal of establishing a minimum standard of living

for the bulk of the LDC population. The purpose of the restriction "under

existing LDC conditions," is to define the strategy choice in terms of options

which are obvious and may be feasible in most LDCs. In crude terms, the two

options considered are "small farmer development" and generally-unfocused

agricultural development, which in fact turns out to be large farmer biased.

The latter is therefore referred to as "large farmer development".

An optimum strategy in most LDCs would include major changes in the

distribution of productive resources, in pricing policies, and in organizational

forms; these are discussed briefly at the outset. The paper does not focus

on such changes in detail, however. Rather, it concentrates on the effects

of the two producer strategies under given organizational structures, forms

of land and other asset ownership, and overall pricing policies.

Alternative means of achieving production increases -- investment in

education, health, extension, credit or group-oriented institutions -- are

discussed, implicitly, on an ad hoc basis only. Any assessment of their

relative merits would require a more specific context.

1. The Two Objectives: Food Production and Equity

AID has two major objectives in its program of assistance for agricultural

development. One is a "production" objective to help the less developed

countries (LDCs) increase their domestic food production in order to alleviate

hunger and malnutrition. The other is an "equity" objective to help increase

the real incomes of the lower income groups, commonly referred to as the

"poor majority".

The objectives of food production and equity stem directly from the Agency's

Congressional Mandate as described in the Foreign Assistance Acts of 1973, 74,

and 75 plus relevant Committee reports, as well as U.S. commitments stated in the

World Food Conference.* Regarding the equity objective, the 1975 House of

Representatives bill states that assistance to the food and nutrition sector --

which claims the majority of AID's development assistance -- "shall be used

primarily for activities which are specifically designed to increase the

productivity and income of the rural poor." Regarding the production objective,

Resolution I of the Food Conference highlighted the seriousness of the world

food problem in the following terms:

An increase in agricultural productivity and sustained
expansion of food production in (LDCs) at a rate much
faster than in the past is essential in order to meet
the rapidly growing demand for food, due to rising
population and incomes (plus) the requirements for
security stocks,,and to raise the consumption of under-
nourished people to universally accepted standards...

The 1975 House Report of the Committee on International Relations states

its belief that concentrating development assistance on the smaller, and

hence poorer, farmers (which would have an equity impact in the sense that

*See refs 1, 19, 20, and 37.

Cheir real incomes would be increased) and increasing food production are

complementary activities .

the committee reiterates its belief that small-farm, labor-intensive
agriculture is the key to greater food production, as well
as to more equitable distribution of income in the rural areas
of the developing countries, where most of the world's poor live. (p.46)

The 1974 House Report, however, clearly recognizes the possibility that there

may be a conflict in attempting to satisfy both objectives simultaneously.

Thus the Report states, while a small farmer strategy is more consistent with

the Congressional injunction to support activities which "directly improve the

lives of the poorest people and their capacity to participate in the

development of their countries", there may be circumstances imposed by the

world food crisis which justify temporarily relinquishing a small farmer focus.

The Report goes on to say:

AID should, however, take care that its programs in support
of short-term production increases in certain countries, as
opposed to those in direct support of longer term structural
changes needed to increase the productivity of the small farmer,
are kept to the minimum required to deal with the current emergency
situation and are not used to the detriment of the small farz -.ana
the rural poor.

Perhaps the best way of looking at the issue is to say that the production

and equity objectives are both intermediary to the ultimate goal of achieving

a minimum standard of living for the bulk of the LDC population. Conceptually,

the food production objective can be interpreted as concern with the supply

side of the minimum standard of living objective, since food may account for

half or more of consumption requirements among lower income groups. The

equity objective can be interpreted as concern with the demand side. Unless

the real incomes of the poor are increased, they will not be able to purchase

the increased food supplies, or other goods necessary for a decent living

standard, in the market place. The question to be addressed here is: Given

the possibility of conflict, or trade-off, between the production and equity

objectives, what is the best means of achieving the combined minimum standard

of living objective? The balance of this first section of

will seek to clarify the meanings given to the objectives of food production and

equity before turning to this basic question.

Improved equity is defined here as improved ability on the part of those

who need it, the poor, to obtain a higher standard of living. It would thus

entail, at a minimum, an absolute increase in the real income of the poor,

and, ideally, a concomitant improvement in their real income relative to that

of higher income groups. The poor, or the "poor majority" in the terms of

the Congressional Mandate, have been defined in income, nutrition and health

status terms and probably include most LDC small farmers as defined below

in Section III A. An increase in real income could of course result from a

fall in food (or other basic consumer-good) prices or increased production

and consumption of home-grown food as well as an increase in cash income

(not offset by a rise in the general price level). A refinement of the

equity concept can be made by distinguishing between a "direct" equity

impact, where resources or benefits are channeled directly to the "poor

majority" target group, and an "indirect" equity impact, where real incomes

of the target group are raised through secondary effects, say, lowering

relative food prices or increasing demand for landless labor. This distinction

will be useful in subsequent sections which attempt to compare the equity

effects of two producer strategies.

Regarding the food production objective, it might be argued that

increasing aggregate supply rather than domestic food production alone,is

the appropriate objective since imports from food surplus countries could

provide an alternative means of increasing food supply. While not excluding

the possibility of trading non-food exports for food, this paper will focus

on increased domestic production as having the major potential for

increased LDC food supply. For some LDCs, such circumstances as relatively

small size, unfavorable physical environment for food crops, and favorable

foreign exchange position and prospects could justify significant reliance

on imports to meet food deficits. But reliance on imports to meet the bulk
most LDCs.
of LDC food needs does not appear feasible for/ Projections to 1985 based

on current trends of income, population and agricultural production yield

up to a five-fold increase (from 16 to 85 million tons) from 1970 to 1985
in the cereal deficit alone for LDCs.* Developed countries could conceivaUty

provide the imports required to meet such a massive deficit but this assumes

that the balance between demand and supply growth in these countries will

yield the requisite surplus and that developed countries will be willing to

provide concessional financing on a much larger scale than heretofore (see

USDA source cited in footnote for further discussion).

There are, on the other hand, several real political and economic

reasons why many LDCs desire self-sufficiency in food production. These

include continuing restrictions on world trade in agricultural commodities,

and the role of political considerations in influencing allocation of food

aid. Finally, the fact that agricultural yields are quite low in most LDCs

(including many with favorable natural endowments) relative to those prevailing

*This is an FAO estimate used by the World Food Conference (the base period
is an annual average for 1969-71). The figures exclude Asian centrally
planned economics. While alternative projections, based on different
definitions and assumptions, prepared by USDA result in somewhat lower
deficit the relative increase is still massive (from 20 million tons
in 1970 to 50 to 70 million tons in 1985, depending on assumptions).
For a comparison and discussion of various projections, see USDA, Economic
Research Service, Foreign Agricultural Economic Report No. 98, The World
Food Situation and Prospects to 1985, pV. 32-39. (ref.36 .)

in developed countries, tuKKgets both to LDCm and donor agencies the potential

for meeting the bulk of food needs within LDCs themselves through improved

mobilization and allocation of local resources -- supplemented with aid from

developed countries in the form of agricultural inputs, research and technical


Section II identifies some of the major reforms required in many LDCa to

create an environment conducive to achieving the minimum living standard goal.

Although the discussion is brief, the policy implications for AID are clear.

Section III, which constitutes the bulk of the paper, attempts to analyze the

food production and equity effects of alternative producer strategies (small

farmer and large farmer) under existing conditions, i.e. assuming no major

reforms take place. Section IV summarizes the conclusions of the previous

section and discusses briefly the program/policy implications for AID.

II. Major Reforms

There is considerable agreement among development experts that major

reforms are required in most LDCs to create an environment conducive to

achieving the minimum standard of living objective for the rural areas. There

is less agreement, of course, on the particular form and extent of the reforms

required although they can be generally characterized as falling into one

of three categories:

i. reforms affecting the distribution of productive resources,

ii. reforms related to pricing policies, and

iii. reforms related to organizational forms and development approaches.

Certainly one of the factors inhibiting greater participation of the

poor in the development process is their limited ownership of (or access to)

*This is not to argue that food aid cannot play a complementary role beyond
meeting emergency situations. It will be suggested later in the paper that
food aid can help meet short run food deficits in LDCs where broadly-based
food production efforts have longer gestation periods.

. productit,/v rehourcets: lian, phyHical capital, and "human capital". LanA

redistribution, land-to-the-tiller prograHm, and resettlement on new land are

alternative means of providing lower income farmers or landless agricultural
laborers with their complementary primary resource.* This is perhaps the most

powerful redistribution mechanism in the rural areas since it has broad

implications for political power and the distribution of government services.

The wide-spread availability of agricultural inputs, and financial capital

needed to acquire these inputs, can facilitate the accumulation of physical

capital; and improving the quality and quantity of rural education can help up-
grade the human capital factor by giving the individual the means of acquiring

additional knowledge and skills. Similarly, improved health and nutrition

will help him attain his potential. Finally, success in population control

will increase the per capital level of all these resources and hence the

likelihood that the minimum living standard objective will be achieved. The

problem is, of course, that all these reforms,with the possible exception

of the land redistribution and land-to-the-tiller program (and even these

require substantial resource inputs if production levels are to be sustained

require massive human and financial resource inputs.

The second category of reforms, i.e. those relating to pricing policies,

involve agricultural terms of trade with other sectors, the pricing -of inputs

and outputs so that proper and adequate production incentives are transmitted,

and monetary and fiscal pricing policies which encourage saving, investment,

adoption of appropriate technologies, and desired income redistribution. An

agricultural land tax, based on potential rather than actual productivity, is a

frequently recommended example of fiscal reform. Pricing policies are also

difficult to change, however. Poor input and product prices are often due to

*See ref. 13 for a recent summary of the relationship between land reform and
economic development.


'misconceptions and/or political design. Cheap credit for small farmers, for

example, sounds good but results in extremely limited total credit availability,

partly because of decapitalization. Political constraints on other policies,

e.g. the agricultural land tax, arise from the fact that political and economic

power coincide.*

The third category of major reform, organizational forms and development

approaches, would entail increased attention to spatial organization, regional

planning, and integrated rural development. Depending on existing constraints,

reaching the poor might involve rural infrastructure development, promotion

of market towns and rural industrial development, and/or agricultural re-

organization, including land consolidation, collectivization, or decommunalizatior

Proponents of more effective regional and rural development** argue that

significant long-run benefits are associated with establishing rural growth

poles even if there are short-run losses in efficiency. Rural industry tends

to be more labor-intensive, for example, thus providing income-generating

activities for a larger segment of the population. In addition, improved

rural economic organization tends to stimulate increased investment in agriculture

improved input and product markets and more widespread and rapid adoption of

innovations. There are problems, however. Although it has been shown in China

that comprehensive regional or rural development can be largely self-financed,

the typical LDC central government approach requires substantial resource

allocation (or reallocation). In order to conserve scarce resources, the

programs must be carefully integrated with pricing policies. In addition, it

may not be clear what specific strategy is optimum in a given situation.

As a result, few LDCs have made the necessary financial and manpower commitments.

*See ref 25 for general discussion of agricultural pricing policies
**See refs. 28, 29, and 30.

The reforms mentioned here, of course, have their less radical counterpartat

land tenure reform rather than land redistribution, agricultural subsidies

rather than basic pricing policy reform, and selected rural development project

support rather than comprehensive regional planning efforts. Government

action often takes these less radical forms, for both economic and political

reasons. And therefore the following discussions of the effects of alternative

producer strategies generally assumes existing patterns of resource holdings,

market imperfections, and organizational forms. This is not to imply that

change is impossible, only that it is slow in coming and, when it comes, it

is partial. *

To clarify somewhat further,it will be important to keep two points in

mind throughout the following discussion. One is that the assumption of no

major reforms lends a conservative bias to the discussion of small versus

large producer potential, i.e. more scepticism must be introduced about

the ability of the small farmer to contribute to production goals than if

major reform is assumed. In fact, in the terms of the following discussion,

if all three types of major reforms were instituted, there would be less

reason to specify a target group approach. The development process might

well exhibit major complementarities, rather than conflicts, between the production

and equity goals. The other point is that, despite the difficulty of reforms,

those mentioned probably constitute the most effective means of achieving

the minimum standard of living objective. Many development experts have come

to the conclusion that the forces of inequality are so strong that "pro-poor"

programs without the above reforms often end up primarily benefiting the non-

poor. Nothing short of major equity-oriented programs, undertaken on several

fronts simultaneously, will succeed in income redistribution.**

*Ref 31 provides an example of the economist's increasing interest in taking
into explicit account the institutional setting of development.
**See refs 9 and 16 for additional observations on the "elusiveness of equity.
< '

Thus, where LDC governments are interested and willing to undertake reforms,

AID might wisely adjust its funding priorities in favor of support efforts,

involving, for example, multiple goal sector analysis, regional planning, Land

reform and revision of agricultural policies.

III. Alternative Producer Strategies

The discussion in this section is confined to alternative producer strategies.

Producer strategies are considered important because they can affect both the

supply and the demand side of the minimum living standard objective and because

they directly involve the majority of the active agricultural population. No

further value judgment regarding their superiority over other possible strategies

-- focusing on say landless agricultural laborers or on increasing food

availabilities to the consumer by reducing losses from off-farm handling and

storage -- is intended. In particular, this section will analyze the food

production and equity implications of a small farmer strategy versus a strategy

which is neutral in intent with rerard to its beneficiaries. The latter, in the

absence of malor reforms, turns out in practice to be a large farmer strategy

and will be referred to as such below.

The selection of a small farmer target group as one strategy option is

an explicit attempt to introduce an equity bias into a production-oriented

program. The pros and cons of such a bias have been hotly debated among aid

donors and within LDCs for the last few years, although not necessarily in

the present context. It is sufficient to note here that although a small

farmer strategy by definition entails greater direct equity effects than

a large farmer strategy, the ultimate impact on a combined goal of food
production and equity (including indirect equity effects) is not obvious.

Section A below discusses alternative criteria for defining a mall

farmer target group and proposes farm size as perhaps the best available proxy

for income and wealth. Some rough target group definition is a prerequisite

to any further analysis, even at the general level. Section B Dren nfe w* iA--

S -10-

on relative productivittle by farm size, and Section investigates the

total equity effects of small versus large farmer strategies. Section D

attempts to draw the major implications of alternative stratiie for oera-i -

rural and national development.

A. Target Group Definitions

As noted earlier AID's Congressional Mandate requtirir -priority

attention to assisting the "poor majority", in LDCs. It is not entirely

clear, however, what constitutes a "small farmer" by reference to the poor

majority. The working definition of the poor majority elaborated by the

Congressional Mandate Implementation Task Force includes all individuals

with a per capital income less than $150 (alternative definitions pertaining

to nutrition and health status have also been offered -- see ref.l), however

income data are difficult to acquire in the rural areas. Moreover, the

ideal equity index in the agricultural sector would include a measure of

assets, which is even more difficult to acquire.

Farm size is a poor proxy for rural poverty for a variety of reasons:

(a) It does not reflect non-agricultural income obtained
by rural households;

(b) It may not reflect differences in yields resulting from
differences (1) in land quality (2) degrees of irrigation
and (3) cropping patterns;

(c) It may not reflect differences in price of given yields
resulting from market imperfections -- monopoly monopsony
problems in agricultural markets.

Nevertheless, it is probably the best income/assets proxy for which data

are available across countries,.and it has the advantage of being a convenient

definition for measuring the evidence on productivity effects of alternative

producer strategies.



Target Groups Relative Area Limits Proportion of Agricul- Proportion of Land
(hectares per holding) turalpopulation

Latin America

SuL r-ar4 inals*
~;.1ll Farmers
M'ediuai/large farmers

-- 2.49
2.5 to 14.9
-> 15

South Asia

Subrcarginals *
Small Farmers
Medi',L:,' large farmers

Tropical Africa

Small Farmers
Mt'.i.-- large fanners

-. 2.49
2.5 to 7.49
> 7.5

!!E- 1 1
1 to 4.9
> 5




not available

-".- : .-" inr.-lude landless agricultural workers, whi-ch
nag ;:..1 ral population in some countries.

constitute 30 per cent or more of the active

Source: .'apter V of ref. (6). The farn-size limitation for 'small farmer" has been expanded upward
.5 hectares for both South Asia and Tropical Africa in order to increase inter- gional
-'.parability of farm size and income.




The accompanying table gives a classification of agricultural populations

by farm size for three of the major developing regions of the world -- Latin

America, Tropical Africa, and South Asia. The agricultural population in

each region is divided into three groups:

submarginals (including landless agricultural workers), which constitute

approximately 50 percent of the populations; small farmers, which

constitute another 30 percent; and medium/large farmers, which make up

the remainder. The relative farm-area limits for the category "submar'ginals"

have been dictermined by using country-level estimates o' the size of

holding necessary to achieve minimum accepted standards of family

subsistence income. The smaller estimated subsistence holding in

Africa, for example, can be explained in part by the typically smaller

family ize. The "small farmer" category is also a relative concept,

base'i on regional norms.

Relating this table to AID's mandate to give direct assistance to

the "poor majority", we might include both the "submarginals" and the "small

farmers" in the target group. This would bring the percent of the agricultural

population included in the target group to about 80 percent in Latin America

and South Asia and 90 percent in Africa. (The percent directly covered by

the small producer strategy would be less, however, by the percent of

landless agricultural workers included under the submarginal category) The

percent of cultivated land eligible would amount to approximately 20 percent

in Latin America, 30 percent in South Asia, and perhaps about 30 percent

in Tropical Africa.


These regional averages disguise wide differences among countries and

among subregions within each country. They are only illustrative and have

limited operational significance. A small farmer strategy ultimately has

to be defined within the specific context of the individual country and

program examined. In such a definition, soil fertility and water availability

(rainfall or irrigation) characteristics might establish a "standardized

hectare" dividing line between small and large farmers. Besides farm size

other distinguishing behavorial characteristics of farm groups might also

be useful, e.g., a submarginal farmer might be distinguished from a small

farmer as a net buyer of food and a net seller of labor; "medium" farmers

might be defined to include only those interested in selective mechanization

to smooth out their seasonal demands for labor, while the definition, "large

farmers, might be reserved for those engaged in generalized labor-displacing

mechanization. Corporate plantations using traditional, labor-intensive

techniques for growing tea, rubber or sugar might form a fifth category.

The discussion in the following sections makes an arbitrary distinction

between the polar approaches of "small farmer" and "large" farmer" strategies,

though it is recognized that in practice there is a continuum of farm sizes

and groups, as well as of strategies that affect them. It does this for

purposes of presenting the broad conclusions from available investigations

which are typically country specific. Thus, the conclusions offered here

must be viewed only as broad tendencies and interpreted with care when they

are to be applied to specific countries or sub-regions.


R. Kvldenc:. on krel;at1vv Productivltilen

:itdli'. bnatie ,,r, ; irlcultural cetnrun data and sample surveys suggest

rhat net benefit (or value-added) from food production in the LDCs is similar

across farm size for a given value of resource inputs.* The findings draw

heavily on studies of foodgrains production but include some data on total

production by farm size. This emphasis is appropriate in view of our

concern with the food consumption patterns of the poor. Thus, in the

poorest countries, our primary concern might be for basic foodgrains

production. In somewhat more developed countries, this concern might

be extended to the supply of protein and food items satisfying other

basic nutrition needs.

The findings are typically reported in terms

of product per unit of labor, land, or capital (labor, land and capital

productivity, respectively). There is a clear tendency for labor

productivity to be higher on large farms, on the one hand, and for land

productivity to be higher on small farms, on the other. While the

relationship between capital productivity and farm size is less clear,

available evidence suggests a peak in the small to medium farm range

and a gradual decline as size increases. These countervailing relation-

ships reflect different technologies employed on different size farms

which, in turn, may be due to (a) different input and output prices

facing the small and large farmer, (b) varying degrees of risk aversion

and/or (c) different production possibilities due to different amounts

of fixed factor endowments (especially land/family labor). They thus

reflect a tendency for farmers to husband most carefully the resources)

which they perceive to be in relatively scarcest supply (clearly land

*See references 2, 4, 6, and 34 for cross-country evidence and 8 for
the Indian case.

for 'small farmers, and labor, especially in peak seasons, for large

farmers). These considerations lead small farmers to choose types of
intercropping and
crops and cropping systems (e.g./ multiple cropping) which require

intensive use of labor and result in relatively high yields per acre.

By contrast large farmers may engage in land extensive activities,

such as cattle raising, and enhance their labor input by combining

it with substantial amounts of agricultural machinery. At any rate,

the overall relationship, in terms of net returns per unit of total

resource costs, appears to be roughly one of constancy across farm


The significance of this constant ratio of net output to cost lies

in its implication of similar levels of economic efficiency across

farm size, and hence similar levels of food production for a given value

of resource inputs.** The ratio might in fact be better described as a

profitability measure rather than an economic efficiency measure, since

it includes the effects of crop choice as well as the effects of crop-

specific technology and input choice. In any case, the finding does bring

into question any unqualified pessimism about the viability of the small

farmer due to some inherent inefficiency.

*Reference 7 points out statistical biases in the U.S. farm data which
have led to the commonly held view that this relationship does not
hold true in the U.S. The author shows that when these biases -
related to farm class definition, estimated labor costs, and variations
in land quality -- are adjusted for, the U.S. data do show a rough constancy
of net returns to total resource inputs across farm size. (Note
that higher yields per hectare on large farms do not necessarily imply
higher net returns per.unit of cost.)

**There is a sizeable literature on the measurement and interpretation
of "efficiency" by farm size. The measure discussed here is a crude
one and is sensitive to the prices, or imputed prices, used to weigh
the components of the index. See ref26 and 32 for a more precise Mmeaure
which distinquishes price and technical efficiency.


A m;ji ]or.i., !.tatli of all the -fndings on productivity discussed

ilt,,ve I Iit i l# y dt.o I iL menjLur,e thl r lhin e in food production in

respond to a change In policies, resource inputs, institutions or

techniques. ( Kost'of them measure average productivity or yield per

hectare or per worker over a given time period.) One study attempting

to examine this question finds the results to vary depending upon the

input. Specifically, in the Punjab and Uttar Pradesh, India, production

response to increased fertilizer application was found to be higher for

small farmers, but it was found higher for large farmers in the case of

the provision of.irrigation.* A recent, less rigorous study looking at

adoption rates and productivity.changes in several Asian countries, due to

the introduction of new rice technologies, concludes that:

Farm size per .se has little meaning." It acquires significance
only when viewed within the context of the community, the
productivity of the land, the infrastructure, the services
available, the intensity of land use, population pressures, the
tenure system, and the social and economic values attached
to land ownership.**

Thus, it is apparently not farm size, but rather the conditions and

circumstances associated with farm size, that we must consider in any

assessment of potential production levels.

Perhaps the best available way to assess the potential change in relative

productivities is by looking at case history type studies of individual

projects and of *specific,.agricultural development efforts.*** These

studies often have a regional focus,' such as studies of the "Green

Revolution" in parts of Asia and Latin America. The time period turns

*See reference: to.study by'G.R. Saini In 6.

**See reference 10.

***See for example refs. 12, 15, and 21.


out to be an important consideration in analyzing the evidence.

The length of time it takes for program or policy actions to have an impact

will depend on several factors, including: (1) the differing technical

gestation periods of various inputs (application of fertilizer will have

a more immediate impact on production than construction of major infrastructure,

for example), (2) the time required to create or restructure institutions

to serve the agricultural sector or a particular group of farmers,and (3)

possible differences in the speed of adoption of new inputs and techniques

between small and large farmers, owing to lack of familiarity or skill in

employing new techniques, conflicting habits and customs, or aversion

to perceived risk.

In the short run (say 9 to 0 years), these studies suggest that

food production will be higher under a large farmer strategy than

under a small farmer strategy. The reasons for this lie largely in

the concept of access. Longer term inputs, such as irrigation, may

be available for large farmers but not yet completed for small farmers.

While seasonal inputs such as seeds, fertilizer and pesticides may

be theoretically available to small farmers, the lack of rural roads

and market facilities may inhibit physical access of the small farmer

to off-farm inputs. The large farmer orientation of the agricultural

credit and extension services may inhibit small farmers' institutional

access. Finally, although the evidence is mixed, small farmers may

be slower to adopt new practices than large farmers. The lag may be

due to labor or financial bottlenecks, risk aversion, or acculturation

problems -- unfamiliarity with new procedures, conflicting cultural

habits and customs. Improved analysis of factors determining small farmer

response requires additional empirical research.

Another factor related to access consideration is the degree of

divisibility of inputs. The greater the degree of divisibility, the

greater the accessibility of more productive inputs to small farmers.

Seeds,fertilizers,and pesticides are obviously highly divisible. Other

inputs may not be but can be rendered "divisible" with time and the proper

institutional arrangements. Irrigation and basic farm implements, for

example, can be made sufficiently divisible if appropriate technology is

employed (e.g., feeder canals and more efficient animal drawn implements).

Heavier equipment, where required (not for rice but perhaps for wheat

in some types of soils) can be made divisible through rental arrangements.

In sum, the implementation problems of helping small farmers obtain

increased access -- and in particular the requirement of sequential

programming -- may make it difficult to introduce changes in the short

run. Rural road construction, manpower training, and introduction of

new organizational modes all require both planning and execution time.
On the other hand, some experts believe yith proper extension advice,

there is considerable scope in the short run for increasing total farm

output through improved on-farm storage and more intensive land use. Also,

there is evidence in some areas that the small farmer -- due to his

intense commitment to the land -- may be more of a profit maximiser

than the typical large farmer and that, where ecological conditions

favor small-scale, labor-intensive farming, the small farmer will

invest proportionally more of his available resources.* Thus, one

might say that in the short run it is possible to get an increase in

agricultural production under a small farmer strategy equivalent to

that under a large farmer strategy but that it is not probable.

In the medium run, say from two to five years, where basic rural

infrastructure and trained manpower already exist or can be put in place

or trained quickly, and where appropriate organizational modes which

Sie reference 18


ke.ep corqt down ':nn bt. Iventilied, progress can be relatively quick.

1alti ircan re'iult. w.-re obtained f,:r example, in the early phase6of

the Comilla Program (East Pakistan) and the Ethiopia Minimum Package

Program in two or three years. It should be noted, however, that a

high-quality, intensive, pre-implementation planning effort was

involved in both cases. Also, we must be concerned with factors -- such as

manpower availabilities and political reaction from the elites -- required

for sustained success.

In the longer run, say 6 to 15 or 20 years, where physical

infrastructure can be extended to remote areas, where institutions --

for example, agricultural research institutions -- can be re-oriented toward

the small farmer, and where information, education, and new organizational

modes have had a chance to permeate the rural areas, food production

under a small farmer strategy should be as large for a given amount of

investment as under a large farmer strategy. Indeed, as explained below

in Section D, it may well be greater.

Despite these findings, the difference in the financial costs of credit

for small and large farmers is often cited as evidence of the inability of

small farmers to compete in the market place. Indeed project analysis shows

that interest rates charged to small farmers must clearly exceed those

currently paid by large farmers if the value of the portfolio is to be

maintained.* This may be a specious comparison, however, for several

reasons. First, sources of credit to which only large farmers have access

may be substantially subsidized below the opportunity cost of capital. An

observed difference between interest rates charged to large vs. small

*Note that this does not mean that small farmers will not be able to borrow
at the higher rate. If capital productivity is higher on small farms,
they may be able and willing to pay the premium.


farmers would in this instance be misleading. Second, assuming that no

subsidies exist, there are ways of reducing costs by administration of

small farmer credit through group approaches, as is apparently the case

for example in China. And third, even if higher costs of lending to
small farmers cannot be absorbed through group approaches, the difference

between total costs of all inputs per unit of output for small farms, as

compared with large farms, may not be as great as the lending cost difference

would suggest. This is because a smaller proportion of total inputs on

small farms may be credit financed.

Finally, it is worth noting under the general heading of cost

comparison that there are considerable "sunk costs" associated with

large farm development which are typically already in place. These

include roads to the farm gate, institutions oriented toward large producers,

fixed capital investment (including, for example, irrigation) and investment

in human capital There are few "aunk costs" associated with small farm

production however. Thus the short-run or "marginal cost" of financing

small farmer development is greater because it includes virtually all fixed

costs as well as variable costs, whereas the "marginal cost" of financing

large farm development may consist primarily of variable costs, e.g.,

seasonal production or marketing credit. In the long-run, however, total

costs of small farmer development need not exceed total costs of large

farmer development.

C. Equity Effects under Alternative Strategies

This section considers the impact of small and large farmer strategies

on equity; i.e., on increases in the real incomes of the poor. It concludes

that the ability of a large farmer strategy to match the equity effects of a

small farmer strategy in the short-to-medium run is open to question and even

more doubtful in the long run.


Sir.r.e smal farmers are taken to be included in the "pocr majority" (there

z=Iy Le exceptions in some countries, of course), a small farmer strategy, to

the extent it succeeds in raising the real incomes of small farmers, would appear

to be superior to a large farmer strategy on equity grounds by definition.

This ignores, however, the distinction suggested at the beginningof the paper

between a "direct" and an "indirect" equity impact. For a small farmer strategy

(and similarly for a large farmer strategy), the direct impact is the change in

real income accruing to participating small farmers from increased productivity

and returns.* The indirect impact is the change in real income accruing to

other groups in the poor majority (non-participating small farmers, the rural

landless poor, and the urban poor) who as (1) net buyers of food, benefit from

relative declines in food prices resulting from increased food production, as

(2) net sellers of labor, benefit from increases in real wages through increased

employment, and/or as (3) net sellers of food, suffer from a decline in product
price. The adverse/of (3) should be less under a small farmer strategy since

non-participating farmers (who are net sellers of food) will be fewer and

production increases (and henceproduct price declines) will be slower in coming.

Indirect equity effects through (1) and (2) are, however, uncertain.

In principle, it should be possible to (a) increase food production with a

large farmer strategy and (b) benefit those poor who are net buyers of food through

the income effect of lower food prices -- since food expenditures constitute a

large proportion of total expenditures by the "submarginals" and the utban poor --

or, (b') to the extent that food prices did not decline sufficiently to reduce

*Looking at the direct equity impact of a small farmer strategy, no distinction
need be made in financing food versus non-food crops, much less high value food
crops versus basic food crops. The indirect equity impacts discussed here, however,
do assume that primary emphasis in both strategies would be cubasic food crops.

profits to former levels, tax away either in income or in kind part of the large

farmer profits, using this revenue to finance poor-oriented production and/or

welfare projects.* In addition, in theory, since wages are linked to subsistence

needs, a decline in the price of food may result in a decline in wage costs

relative to other factor costs and possibly encourage a substitution of labor

for capital throughout the economy. This could generate additional employment

opportunities for the rural and the urban poor. Thus, both the food price decline

and the profits produced by a large farmer strategy could be linked to the equity

goal of benefiting the "poor majority."

The critical assumption of this approach is that retail food prices will

decline significantly or that part of the interim profits will be taxed away for

development purposes. However, where agricultural price supports are maintained

(at the retail as well as farm level) in the face of declining production costs--

for example
as they were at least in the early phase of the Mexican wheat production program--

food prices will not decline and food buyers among the poor will not be benefitted.

In addition, few countries have had the political will to tax away large profits

reaped by the rich under any circumstances. Referring again to the Mexican wheat

production program, after the initial period when large farmers benefited enormously

from (1) the new seed varieties, (2) the government-financed irrigation investment

concentrated on large farms in the northwest, and (3) government-maintained prices,

price supports were removed and product prices declined substantially. High

interim profits of large farmers -- due in part to subsidies on capital inputs -

were not taxed away for development purposes, however, and the net result of

the early years of the program was to further skew the distribution of income in

the wheat growing areas.

*Another possibility, which may be more politically feasible, is for the government
to finance say rural public works in part through deficit financing. Success
would depend on the inherent income elasticity of the tax system and the ability
of the economy to absorb inflationary pressures.

Thus, t'ie theoretically favorable indirect equity impact of a large

f::rmer ftratf-y Ir the .hr.rt-to-medium term is questionable. In the long-run

.t is even more doubtful,.since demand for staple foods is income inelastic.

fI:ce basic calorie needs are satisfied, staple food demand will grow only as

fast as population growth. An increase in staple foods obtained with short-run

production increases on large farms may, in fact, pre-empt the small farmer

for years to come. Not only will current incomes of small farmers fall with

the'decline in product price (depending on the relative size of their marketed

surplus), but also in the absence of substantial cost-reducing innovations, future

production incentives will be depressed.

Distinguishing the rural from the urban poor highlights another

fundamental flaw in the equity case for a large farmer strategy. Private and

public food distribution networks and programs in developing countries are largely

aimed at urban rather than rural areas. This may reflect the presence of more

efficient transportation and marketing channels for linking rural with urban

treas than for linking one rural area with another. It also reflects the fact

-haL the urban poor typically have greater political power than the rural poor.

lius, increased food production from large farmers is not as likely to reach the

.ural poor as it is the urban poor (or if it does, the price may not be much lower)..

similarly among the rural poor, the submarginals are most likely to be excluded

rom the food distribution networks.

Given the important relationship between employment and income, an equity

Sise for a large farmer strategy would exist if large farmers made intensive use

)f hired labor. Available evidence does not support this conjecture, however,


Farm management studies show that not only do small farmers use more labor

per acre initially, but, when large farmers are provided profit increasing

inputs, they tend to use less rather than more labor per acre (by investing

in labor displacing equipment -- often made artificially attractive through

subsidized credit and import advantages). Also, there is much controversy

about the yield-increasing contribution of mechanisation. Many studies

showing increased yields from tractorization, for example, have not adjusted

for increased use of other inputs. It is rather clear, however, that

the net effects of mechanisation on employment and income distribution have

been adverse.*

In sum, while conclusive quantitative evidence of equity effects

does not exist, a priori analysis of the various components of equity

impact and some historical evidence suggest that, although there are

potentially favorable indirect equity effects in the short-run, a large

farmer strategy will not have a favorable equity impact in the long run,

in either the direct or the indirect sense. The small farmer strategy,

on the other hand, clearly has a favorable direct equity impact since

the beneficiaries are members of the poor majority. The higher the

proportion of the poor majority accounted for by small farmers, the

greater the direct equity impact of the small farmer strategy.

If such a strategy included land reform, the impact would be even greater.

In addition, the long-run indirect equity impact of a small farmer strategy

should also be favorable. As discussed below, the small farmer strategy

appears to contribute more to sustained rural income generation in the

long run.

*See ref. 8, ch. 5, and ref 22 for evidence and further discussion.


D. Impact on Key Factors in Rural/National Development

The contribution of alternative producer strategies to food

production and equity objectives can be assessed at 3 given point in

time; however we must also be concerned with the establishment of a

self sustaining development process. This section discusses the probable

impact of these strategies on key factors in overall rural and national

development, namely on (1) the level of demand for domestic goods,

(2) the labor intensity of the prevailing consumption pattern, (3) savings

and (4) demographic trends.* The evidence suggests that the optimum
strategy may/depend on the time frame. In the short run, the high savings
are appealing.
rates and the large marketable surplus of large farmers/ As small farmer

incomes rise above the subsistence level,however, both savings and

marketable surplus will increase, thus eroding the principle arguments

for the large farmer approach and enhancing the superiority of the small

farmer strategy as a means of obtaining increased rural income generation

and sustained national growth.

Deficient demand, particularly in smaller countries, is recognized

as a major deterrent to economic growth in some LDCs. For a given level

of national income, the overall level of demand for domestic goods will

be determined by the amount of income spent at home versus abroad.

Typically, upper income agricultural producers have a higher marginal

propensity to import -- to satisfy both consumption and investment demand --

than lower income agricultural producers; thus, a small farmer strategy

is likely to generate more value-added activity in the domestic non-agricultural

sector than a large farmer strategy. Assuming equal export performance,

the balance of payments effect of the small farmer strategy would also

be favorable.

*Another key factor might be education of the labor force. A small farmer
strategy would appear superior here because of the broader participation


By contrast, because of the higher "reservation demand" of small

larnmers for their own f.rm products, a smaller proportion of their output

is actually sold on the market. This means that the income generated

through ancillary activities such as transportation, handling, and

processing is less, as is small farmer cash expenditures on other goods.

The smaller marketable surplus tends to be a temporary phenomenon, however;

research in the Philippines, for example, shows that annual per capital

consumption of rice rises with income up to about 264 kilograms ofpaddy

and then levels off.* Beyond this point, reservation demand declines and

marketable surplus rises.**

Another important factor in the establishment of self sustaining

growth in labor surplus economies is the labor-intensity of the prevailing

consumption patterns. The labor-intensity of the goods demanded is important

because of the employment generating effects, the higher propensity to

consume out of income to labor than out of income to capital, and the need

toconserve scarce capital. Most studies show that, except for the very low

income groups which consume foodgrains (which might be produced with capital

intensive methods), the labor-intensity of average consumption patterns

decreases with income.*** This implies that a small farmer strategy would

promote a more labor-intensive consumption pattern than a large farmer


*See ref 23 p. 73.
**Ref 17is a recent study of the effects of alternative farm sizes (small,
medium, and large) in the U.S. According to that study, the small-farm
structure generates an estimated 30 percent more in off-farm income,
primarily in the areas of agribusiness and consumer goods and services,
than the large-farm structure. Of course in the U.S., the typical small
farm is perhaps 100 hectares where it might be 1 or 2 hectares in the
LDCs. No comparable LDC studies are known.
**See rcfs 5, 27, 33, and 35.


Regarding savings, recent studies of small farmers in Korea, Taiwan,

Bangladesh, and Zambia show that their marginal private savings rates can be

as high as 50 percent if the incentives to save -- generally considered

to involve a profitable technology plus attractive deposit rates and

convenient savings institutions -- exist.* Of course, average savings

rates of large farmers are likely to be even higher than those of

small farmers, although the productivity of large farmers' capital

investments may be lower. On the other hand, heavier'public taxation

cf the agricultural surplus for development purposes is considered

more politically feasible under a small farmer approach than under a

continuing emphasis on large farmers since the latter are in a stronger

position than the former to exert restraining influence on tax rates

and, in addition, on the distribution of government expenditures. If

these behavior patterns are typical, reinvestment in the agricultural

sector could, on balance, generate as high a growth rate under a small

farmer approach as under a large farmer approach. One should note, however,

that the incentive and ability to save by tenant farmers or share croppers --

not to mention landless agricultural workers -- is considerably less than

for the owner-operator; thus the savings/investment potential will vary

with tenure patterns.

Finally,regarding demographic trends, migration to cities should be

discouraged by a small farmer strategy to the extent that the latter leads

to a relatively higher standard of living for the poor in the tural areas.

The increase in urban overhead costs associated with relieving congestion

and extending existing urban service levels to new migrants may well render

the provision of urban services more costly in the long run than the

*See ref 3


provision of comparable rural services. In addition, rising incomes

among a broad spectrum of rural families, when accompanied by other

modernizing influences -- such as education, mass communications, and

increased availability of consumer durables -- appears to be accompanied

by a decline in fertility among those families.* Given limited non-human

resources, this spontaneous decline in fertility permits per capital

incomes, hence standards of living, to rise faster than would be other-

wise possible.

IV. Conclusions and AID Program/Policy Implications

A. Conclusions

In summarizing the preceding discussion it is perhaps useful to begin

with the equity objective. While something of a case can be made for a

large farmer strategy serving the equity objective, it is a shaky one,

especially when the two following considerations are taken into account.

First, it may be more difficult (and costly) to shift to a small farmer

strategy in the future after programs and institutions biased toward

large farmers have been strengthened and after real incomes and production

incentives of small farmers have been reduced -- than to begin with a

small farmer strategy in the first place. Second, the case fcr the large

farmer strategy serving the equity objective is an indirect one based

essentially on its effect on lowering food prices to the consumer; however,

the price decline may not occur or may occur with some delay. The indirect

case is further weakened when the previously discussed problems entailed

by food distribution to the rural poor are taken into account. It

*See ref 24


follows that if a small farmer strategy has a roughly equivalent impact

on food production, it must *- since small farmers are the primary bene-

ficiaries -- have a superior impact on equity.

Thus, the assessment of the small farmer strategy in meeting the

equity objective rests in part on Its success in meeting the food production

objective. The main conclusion from the analysis on relative productivities

is that the choice of a small or large farmer strategy will depend largely

upon the time period for achieving the food production objective. Consideration

of the strategy choice impact on key factors in rural and national development

reinforces this conclusion. The shorter the time period, or the more

urgent the food crisis in a given country, the less appropriate strategies

at the small farmer end of the spectrum are likely to be.

But this conclusion rests on two important assumptions. First, it

rests on the assumption that existing physical and institutional infrastructure

are seriously deficient for small farmers and/or a profitable technology

does not exist in a readily usable form. To the extent that this is not

true, the time period becomes less of a constraint. Second, it rests on

the assumption that there are not alternative ways of meeting a short run

food crisis. Countries with high-cost domestic production and/or limited

agricultural resources might find it more economical to meet'expanded needs

through imports than through expanding domestic output. Thus, increases
in these cases
in domestic food production can be seen/as a long-run objective, not a

short-run requirement. Also, a relatively small country in a favorable

foreign exchange situation has the option of importing some food and,

assuming it has some physical potential for food production, can accordingly

be more free to pursue a small farmer strategy even in the short run than

a large country in an unfavorable foreign exchange situation. Even the

latter type of country could be provided some "degrees of freedom", however,

:. pur,. .. t. A trmei slrnteg\ in the hort run, h 1 eing provided foo~

aid until growth in .lomeAtic fnnol prndu'tit.n rprArh.q nn Arcptahle levl.

Ilh pirecetlding analysis suggests that, to the extent possible, AID

should support major reforms which might allow a more rapid attainment

of both food production and equity objectives. Where such reforms are

not in progress, a small farmer strategy better meets a combined food

production and equity objective. Thus, as is consistent with the Congressional

Mandate, AID should concentrate its assistance to agricultural producers

in the small farm sector. The implications for AID programs and policies

arising in this context are even stronger if we keep two points in mind.

The first is that other aid donors and LDC governments will continue to

finance generally unfocused agricultural production programs which do not

have a target group orientation; and the second is that, although small

farms may occupy a small proportion of total agricultural land (as small

Sas 20 percent according to Table 1), AID could not expect to affect a

much larger area in any case, in view of the Agency's limited development
budget. Thus, AID can focus on small farmers while other resources are

allocated more broadly within the sector. It is also worth noting that

a small farm strategy appears to better ensure the participation of women

as decision-makers. Individual country studies in Africa, for example,

show a significant number of female heads of farm in small farm areas

where one or more males seek supplementary income through off-farm


At the agricultural project and program level, the weight of the

Congressional Mandate and the evidence discussed in this paper would appear

sufficient, notwithstanding the various qualifications, to suggest that the

Agency should, indeed, require agricultural production projects to be

small-farmer oriented (some elements of such a strategy may also benefit


Of course the ease of implementation will vary by country. There may be

some countries, for example, which appear to have only small producers.

Must we establish a cut-off point? There may be other countries where

AID is financing large resource transfers. Is it possible to program

large resources in the small farm sector in short time periods? AID

must find reasonable answers to these questions which uphold the spirit

of the Congressional Mandate.

Another obvious policy implication for AID is that carefully programmed

PL 480 food aid -- certainly Title II and perhaps Title I -- be provided

to those countries which, of course, have a need for the food aid for both

domestic and balance of payments reasons, but also where AID is collaborating

in mounting a small farmer-oriented development strategy. A major concern

with food aid programs has been possible disincentive effects on domestic

production. But if food aid is linked to a major small farmer oriented

food production strategy, including provision of relevant physical

infrastructure through labor-intensive rural works programs, which would

increase the demand for food, prices and incentives for producers could

be maintained.
It is recognized that small farmer assistance is more difficult to

program and will therefore require maximum programming flexibility, including

local currency use in DLs, freedom to choose the most appropriate inputs and

outputs, more use of technical assistance funds for local hire and local

procurement, and rapid response and assistance from AID/W. A first

operational step in pursuing this policy would be for each Mission to define

more precisely, ideally in collaboration with the host government, the "small


/target groups appropriate to that country, employing some of the notions

discussed in Section III A above suitably amended to fit individual country

situations. This definition would be employed as one criterion for identifying,

designing and approving agricultural project proposals.

Additional research, analysis of existing research, and guidance is clearly

in order. In devising specific strategy options attention should be given

to decreasing small farmer costs'of production relative to those of the large

farmer. This can best be accomplished through a combination of small farmer

oriented agricultural research and farm management studies for typical small

farms. We need in particular to address the difficult problem of helping

"submarginal" small farmers to increase their food production in cost-effective

ways. Although the limited size and/or quality of their land holdings may preclude

their ever being full-time farmers, and their inaccessibility by reason of

location or fragmented holdings may make the cost of reaching them directly with

small farmer institutions prohibitive, financial and technical assistance on

pricing policies, markets, input supplies and research could help them, as well

as more "viable" small farmers, substantially increase food production. The

problem of submarginal farmers takes on particular importance in view of the

fact that they, along with completely landless laborers (who constitute 30

per cent or more of the active agricultural population in some countries),

constitute the poorest and worst-nourished of the poor majority, and that their

position, if not taken explicitly into account, could be worsened. Small farmer

projects should be carefully designed to facilitate the participation of submarginals.


List of References*

1. AID/PPC. A-263, 4-30-75, Congressional Mandate and attached paper,
"The Congressional Mandate: Aiding the Poor Majority."

2. AID/TAB. "Small Producers Economics" (Rough draft of AID paper).

3. AID. Spring Review of Small Farmer Credit (1973). Papers by Dale
Adams and Richard Roberts.

4. Bachman, Kenneth L. and Raymond P. Christensen. "The Economics of
Farm Size" in Southworth and Johnston, editors, Agricultural Development
and Economic Growth, 1967.

5. Ballentine, Gregory, and Ronald Soligo. "Consumption and Earnings Patterns,
and Income Redistribution: The Case of Colombia: (unpublished draft, 1974).

6. Berry, Albert. "Cross Country Evidence on Farm Size/Factor Productivity
Relationships," (unpublished paper presented at The Purdue Workshop
on Empirical Studies on Small Farm Agriculture in Developing Nations,
Purdue University, November 1972).

7. Berry, R.A. "Farm Size and Factor Productivity in U.S. Agriculture"
(unpublished draft, January 1973).

8. Bharadwaj, Krishna. Production Conditions in Indian Agriculture: A
Study Based on Farm Management Surveys. University of Cambridge,
Department of Applied Economics, Occasional Paper No. 35. (London
and New York: Cambridge University Press, 1974).

9. Blair, Harry W. "The Elusiveness of Equity: Institutional Approaches
to Rural Development In Bangladesh", Cornell University Special Series
on Rural Local Government, November 1974.

10. Castillo, Gelia T. "Diversity in Unity: The Social Component of Changes
in Rice Farming in Asian Villages" in Changes in Rice Farming in Selected
Areas of Asia, International Rice Research Institute, 1975.

11. Chenery, Hollis et al. Redistribution with Growth, 1974.

12. Dalrymple, Dana and William I. Jones. "Evaluating the Green Revoluticn"
(June 1973).

13. Dorner, Peter. Land Reform and Economic Development, 1972.

*There is an extensive literature on most of the topics discussed in this paper.
The "List of References" is just that. It does not constitute a selected,
much less an exhaustive, bibliography. An effort has been made, however,
to refer to (1)recent research and (2) publications of particular interest
to AID as well as to (3)summary material.


14. Ford Foundatuon. "Employment in Developing Countries: (July 1974).

15. Crlff I K.e th. 'lhe Political Pconomy of Agrarian Change: An Essay
on the (;reen Revolution (1974)

16. Harberger, Arnold C. "Fiscal Policy and Income Redistribution"
(unpublished draft for AID Princetor-Brookings Contract, 1974).

17. Heady, Earl 0. and Steven T. Sonka. "Farm Size, Rural Community Income,
and Consumer Welfare", American Journal of Agricultural Economics,
August, 1974.

18. Herz, Barbara. Demographic Pressure and Economic Change: The Case of
Kenyan Land Reforms. (unpublished Ph.D. dissertation, Yale University,

19. House of Representatives, Foreign Affairs Committee, Report on Foreign
Assistance Act of 1974. House Report No. 93-1471, October 25, 1974.

20. House of Representatives Bill H.R. 9005 (August, 1975) and Committee on
International Relations Report, "International Development and Food
Assistance Act of 1975" (Report No. 94-442).

21. IBRD. Rural Development: Sector Policy Paper (February 1975)

22. International Labor Office. Mechanization.and Employment in Agriculture,

23. IRRI Research Highlights for 1974, 1975.

24. Kocher, James E. "Rural Development, Income Distribution and Fertility
Decline," published by the Population Council, 1973.

25. Krishna, Raj. "Agricultural Price Policy and Economic Development in
Southworth and Johnston, editors Agricultural Development and Economic
Growth, 1967.

26. Lau, L.J. and P. A. Yotopoulos, "A Test for Relative Efficiency and
Application to India Agriculture", American Economic Review (March

27. Mellor, John and Uma J. Lele. "Growth Linkages of the New Foodgrain
Technologies." AID Employment and Income Distribution Project -
Occasional Paper No. 50.

28. Miller, James C. "Regional Devel opment: A Review of the State-of-
the-Art" TAB/UD, Agency for International Development (August 1974)

29. Mosher, Arthur. Creating a Progressive Rural Structure, 1969, and
To Create a Modern Agriculture, 1971.

4 -

30.' Owens, Edgar, and Robert Shaw. Development Reconsidered: Bridging
the Gap Between Government and People (1972).

31. Sen, Amartya. Employment Technology and Development, 1975.

32. Sidim,, 'urjit S. "Relative Efficiency in Wheat Production in the Indian
Punjab", American Economic Review (September, 1974).

33. Soligo, Ronald. "Factor Intensity of Consumption Patterns, Income
Distribution and Employment Growth in Pakistan", Rice University
Program of Development Studies, Discussion Paper No. 44 (1973).

34. Statement of Edgar Owens, House Foreign Affairs Committee Sub-Committees
on International Organizations and Foreign Economic Policy (September

35. Summan, Tucay M. "Short-run Effects of Income Distribution on Some
Macro-Economic Variables: The Case of Turkey" Rice University Program
of Development Studies, Discussion Paper No. 46 (1973).

36. USDA, Economic Research Service, Foreign Agricultural Economic Report
No. 98, The World Food Situation and Prospects to 1985 (1974).

37. World Food Conference (November 1974). Draft Resolutions.



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