SOME MORTAR“! CONCEPTS OF THE PROCSSS OF

EXPANDLNG AGRICULTURAL PRODUCTION CONSIDERED

IN LIGHT OF RECENT PAKISTAN EXPERIENCE

Thesis for the Dogma 9? M. S.
MICHKGAN STATE UNIVERSBTY'
Jchn R. Wilson
3965

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SOHE EPORTffiT CONCEPTS OF THE “EOCES”
OF EXPANDING AGRICULTURAL PRODUCTION
CONSIDERED IN LIGHT OF RECENT PAKISTAN EXPERIENCE
by John R. Wilson

Agriculture is often the lagging sector in the economic
development of a country, and increasing attention is being
given to methods for effectively increasing production of this
vital sector in developing nations. A study of the literature
reveals wide disagreement as to what action these countries
need to take in order to increase agricultural production.
There was agreement, however, that agricultural improvement
is necessary; will contribute to the development of other
sectors; and is needed to assist in maintaining foreign ex-
change balances.

It was noted that there were many similarities in the
relative importance given to various programs of agricultural
development by countries which have achieved a certain amount
of improvement. In order to determine if there is a pattern
that can be usefully followed by deveIOping nations, five
countries were studied: Japan, {exico, Taiwan, Greece, and the
United States. It was found that these five countries followed
very similar paths during the years of development. The pat-
tern has been compared with the agricultural improvement
programs of Pakistan to see if the experience of the five

countries offered any suggestion as to what further steps

needed to be taken to advance Pakistan's agriculture.

John E. Wilson
First, this study revealed that there were four general

conditions or situations in each of the five countries which
may have contributed to their agricultural development al-
though they do not relate specifically to the field of
agriculture. These four conditions were: (1) the traditional
society had been changed by a political, economic, or social
revolution, (2) the revolution was followed by a period of
stable government, (3) there was a fair supply of manufac-
tured consumer items on the market, and (4) a staff of
competent administrators was available to carry on projects.
Second, it was found that there were twelve categories
of activities that the leaders of the five countries had
apparently considered important to agricultural development
and each country had carried on programs to strengthen the
farmers' position in respect to each of them. These activities
affecting agricultural policy and production focused on: (1)
land and tenure reform, (2) technical improvement, (3) farmer
involvement in his own development, (4) general education
(especially at the adult level), (5) transportation and commu-
nication, (6) agricultural research, (7) farmer training in
agriculture, (3) agricultural education, (9) investment in
agriculture, (10) supplies for agricultural production, (11)
improvement of markets and prices, and (12) agricultural credit.
Each of the twelve development categories was then weighted
based on the effort involved and the extent of the programs

carried on to increase agricultural production in the five

countries. Pakistan was then studied in terms of these factors

John 3. Wilson
and given a similar "development score" based on the extent
and effectiveness of its agricultural programs. Pakistan's
score was considerably below that of the five developed
countries for the period 1952-1962. Further, on dividing the
1952-1962 period into two parts, 1952-56 and 1952-62, it was
found that Pakistan's developnent score was higher for the
latter part of the period than for the first part. When a
score was calculated for the 1962—67 period it was found to
be still higher, indicating that, based on the five country
experience, its agricultural program was improving.

Production records indicate that Pakistan's agriculture
improved at a slower rate during the ten-year period than did
that of the five countries, one percent versus four percent
or more, and production increased at a slower rate in the
first five years of the period than in the latter part, zero
versus almost two percent. The estimate of Pakistan's develop—
ment score as of 1962 for the years ahead, based on the weights
assigned to the prograns in the five more developed countries,
indicates that its agriculture should improve at a rate some-
what higher than heretofore, perhaps approaching the rates
achieved by some of the developed countries.

Recommendations were also made as to the categories of
development programs that should be given Special attention
in Pakistan to raise its development score (i.e. its agricul-
tural production increase rate) to a level comparable to or

above that of the five countries.

SOME IMPORTANT CONCEPTS OF THE PROCESS
OF EXPANDING AGRICUDTURAL PRODUCTION
CONSIDERED IN LIGHT OF RECENT
PAKISTAN EXPERIENCE
By
John R. Wilson

A THESIS

Submitted to
Michigan State university
in partial fulfillment of the requirements
for the degree of

MASTER OF SCIHCE

Department of Agricultural Economics

1965

ACKNOWLEDGEMENTS

During almost ten years of service in Pakistan as an
employee of the U.S. Agency for International Development and
its predecessor agencies, I had an excellent oppbrtunity to
observe and to take part in the agricultural development of the
country. It was brought forcefully to my attention on several
occasions that many projects had been tried on a large scale
and had then been abandoned which had been successful and full
of promise when conducted on a pilot basis a year or so earlier.

Further observation brought out the fact that conditions
were "different" in the pilot project areas. They were carefully
selected, the farmers owned their farms, the people were coop-
erative, the planning and execution of the projects were carried
on Jointly between farmers and officials, the project leaders
were enthusiastic about the possibilities of success, the
necessary production inputs were readily available, and the
farmers and officials studied, worked, and learned together.
However, as the projects spread to new areas, one of more of
these conditions no longer existed and they failed.

This study is a continuation of the above observations start-
ed in Pakistan. By studying five agriculturally developed coun-
tries in relation to Pakistan, it was hoped that a procedure
would emerge which could be followed by developing countries.

The concept of the'hevelopment score" is the result of this work.

Unfortunately, there is not time for me to further test the

11

ACKNOWLEDGEMENTS - Continued

concepts presented here, but if the ideas put forth have merit,
they should be given further testing by others more capable of
doing the necessary research.

I wish to gratefully acknowledge the assistance given me
by the Agency for International Development. Without its support,
this work would not have been possible. I especially appreciate
the advice and assistance of Dr. Frank W. Parker, Dr. Ervin Long,
and Dr. Monroe McCown, all of whom assisted in planning my pro-
gram.

I am also very grateful to Dr. Lawrence Witt, my faculty
advisor, for the long hours that he spent in checking the con-
cepts and ideas presented in this paper and for the many sugges-
tions that he made, to my faculty committee, Dr. James B. Hendry,
Dr. Robert Stevens, and Dr. David Boyne for their assistance,
criticisms, and suggestions. I would also like to thank all
of those who have been so helpful during my tours in Pakistan
for the contribution they have made to my understanding of the
problems of agricultural development.

Finally, there are four ladies to whom I am deeply indebted
and to whom special thanks are due; to Mrs. Pat Fuehring and
Mrs. Joseph Fuleihan for the typing of the last two drafts of
the paper, and to Betty and Christine, my wife and daughter for
their forebearance and understanding during the past year and

for the tremendous amount of encouragement and assistance they

iii

ACKNOWLEDGEMENTS - Continued

have given me. Without their help, I am afraid that I would not
have been able to carry on as I have.

In spite of all of the assistance received, however, any
mistakes appearing herein are mine and I hereby take the full

responsibility for them.

iv

TABLE OF CONTENTS

LIST OF TABLES O C O O O O O O O O O O O O O O O O O 0

LIST OF FIGURES . . . . . . . . . . . . . . . . . . .

APPmDIX TABLES O O O O O O O O O 0 O O O O O O O O 0

Chapter

I.

II.
III.
IV.

VII.

VIII.

INTRODUCTION 0 O O O O O O O O O O O O O O O O
The Problem 0 C O C O O O O O O O O 0 O O O O

REVIEWOFTHELITERATURE...........

AGRICUDTURAL DEVELOPMENT IN SELECTED COUNTRIES.

JAPAN'S AGRICUDTURAL DEVELOPMENT ‘. . . . . . .

‘ The Meiji Restoration to World War I . . . .
World War I to the Close of World War II . .
Modern Development . . . . . . . . . . . . .

AGRICUDTURAL GROWTH OF THE UNITED STATES . . 0
Independence to 1850 . . . . . .
The 1850 to 1920 Period . .

A Period of Stress, 1920 to 1935.
After19350000poooooo

TAIWAN'S AGRICUDTURE . . . . . . . . . . . . .

The Japanese Period, 1895 to 1945 . . . . . .
After 19H5: The Joint Commission for Rural
Reconstruction; . . . . . . . . . . . . . .

THEEXPERIENCEOFMEXICO .. . . ..-. ....

Mexican Agriculture, 1920 to 1935 . . . . . .
Mexican Agriculture after 1935 . . . . . . .

THE GREEK EXPERIENCE . . . . . . . . . . . . .

The 1920 to 1945 Period . . . . . . . . . . .
Postwar to the Present . . . . . . . . . . .

Page
vii

ix

100
103

TABLE OF CONTENTS - Continued

Chapter Page

IX. FACTORS INFLUENCING AGRICUDTURAL DEVELOPMENT
IN THE FIVE COUNTRIES . . . . . . . . . . . . . 113

Factors Common to the Development of Five
Countries . . . . . . . . . . . . . . . . 117

X. THE AGRICUDTURAL DEVELOPMENT OF PAKISTAN . . . 130

East Pakistan . . . . . . . . . . .1. . . . . 132
weSt PakiStan O O O O O O O O O O O O O O O O 140

XI. ANALYSIS OF THE AGRICUDTURAL DEVELOPMENT OF
PAKISTAN O O O O O O O O O O O O O O O 0 O O 150

XII. IMPLICATIONS FOR DEVELOPING COUNTRIES . . . . . 164
APPENDIX I . . . . . . . . . . . . . . . . . . . . . . 176
APPENDIX II (TABLES) . . . . . . . . . . . . . . . . . 179
LITERATURECITED...................185

vi

9.

10.

11.

12.

13.

1M.

15.

LIST OF TABLES
Page

An Evaluation of the Relative Contribution of
Agricultural Improvement Programs of Japan . . 45

Changes in Farm Inputs, United States . . . . . 59

U.S. Agriculture's Production Expenses and Gross
Capital EXpenditures . . . . . . . . . . . . . 60

Industrial Research InveStment Related to Agri-
culture 0 0 O O O O O O O O O 0 O O O O 0 O O 62

An Evaluation of United States' Agricultural
Development Programs . . . . . . . . . . . . . 65

An Evaluation of the Agricultural Development
Programs of Taiwan . . . . . . . . . . . . . . 82

Land Distribution and Persbns Receiving Land . . 90

An Evaluation of Mexican Agricultural Develop-
ment Programs . . . . . . . . . . . . . . . . 97

Deterioration in Agricultural Production during
World War II, Greece . . . . . . . . . . . . . 103

An ENaluation of Greek Agricultural Development
Efforts O O O O O O O O O O O O O 0 O O O O O 112

Agricultural Development Program - Date of
Adoption - Five Countries . . . . . . . . . . 120

Relative Contribution to the Development of Agri-
culture by each Category of Development Pro—
gram in the Five Countries . . . . . . . . . . 123

Development Score for the Period 1952-62 for the
Five countries 0 0 O C O O O O 0 O O C C C O O 125

Pakistan Program Evaluation for the Period
1952—62 o o o o o o o o o o o o o o o o o o o 152

An Evaluation of the Effectiveness of the Va-
rious Program Categories for the Period 1952-56 15M

vii

LIST OF TABLES - Continued

Table Page

16. An Evaluation of the Contribution of Pakistan's
Develppment Programs to its Agricultural
Improvement: 1957-62 o o o o o o o o o o a o o 155

17. An Estimate of Pakistan's Potential Agricultural
Improvement Based on the Program of 1962 . . . 156

18. Pakistan's Agricultural Production Index . . . . 158
19. A Comparison of the Development Scores for

Pakistan for 1952-62 and 1962-67 Periods with
the Five Countries, 1952-62 . . . . . . . . . 161

viii

LIST OF FIGURES

Agricultural
Farm Output,
Agricultural
Farm Output,
Farm Output,
Agricultural

Output and Labor Force, Japan
United States . . . . . . . .
Productivity, United States .
Taiwan . . . . . . . . . . .
Mexico . . . . . . . . . . .

Output, Greece . . . . . . .

ix

Page

. 21+
. 46
. 51
. 67
. 86
. 99

 

APPENDIX TABLES

Page
Calorie and Protein Content of National Food
Supplies in Selected Countries . . . . . . . 179
Fertilizer Consumption in Relation to Arable
Land and Total Population . . . . . . . . . 180
Indices of Total Agricultural Production of
Selected Countries and Regions . . . . . . . 181
Indices of Per Caput Agricultural Production
of Selected Countries and Regions . . . . . 182
Indices of Total Food Production of Selected
Countries and Regions . . . . . . . . . . . 183

Indices of Per Caput Food Production of
Selected Countries and Regions . . . . . . . 184

CHAPTER I
INTRODUCTION
The Problem

Since the early eighteen hundreds, there has been an
interest in economic growth and a few writers developed eco-
nomic theories as to of how countries progress. Among these
are Ricardo, Marx, J.S. H111 , and others whose economic
theories explaining why some countries developed faster than
others have been of interest for years.

However, economic development as a separate area of
economics did not receive much attention until after World
War II. That over half or the world's population suffered
from extreme poverty was brought forcefully to the world's
attention by statements such as that of Mr. B.R. Sen, airector
general of the Food and Agriculture Organization of the United
nations,

"The first half of the twentieth century has
witnessed three major revolutions. The political
revolution has given self-government to nearly a third
of the world's population and has brought their aspi-
rations for a better life to the forefront of world
attention. The revolution in communications has broken
down the barriers of distance and language, and the
dynamism of ideas can no longer be contained within the
limits dictated by social privilege or political con-

siderations. The demographic revolution has imparted 1
to the challenge of poverty and want a new dimension."

 

1U.N., FAQ, A ects of Economic Develo ment, (Freedom
from Hunger CampaIgn, BasicBStuQirflo;r3, Rbme, 1962), p. vii.

 

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For such reasons as indicated above economic development
is receiving much more attention than formerly.

Starting with the marshall Plan in Europe and similar
efforts in Japan, a great deal of success was achieved in
early development efforts. However, as improvement programs
were spread around the world to the less advanced countries,
success did not come easily and progress was slow.

Since 1945 many economists, anthropologists, sociolo-
gists, natural scientists, and politicians have considered
the problem of economic development of the underdeveloped
nations and a body of theory has been evolving to explain
develOpment or, rather, the lack of development in these areas.
The amount of literature has grown tremendously and ranges
from fictional accounts of economic improvement work such as

Thexfigly American and Burma Days through the well recognized

 

 

and authoritative works of Hagen, Heady, Schultz, Leibenstein,
Hirschman, Kuznets, and others. Professional Journals are full
of articles giving arguments and counter arguments for suggested
procedures to improve the condition of the agricultural people
of the world.

In the course of these arguments, two main themes have
emerged. The first is the idea of the "leading sector" in
which one industry or group of industries is developed with
the hOpe that it will either push or drag all of the other
sectors along with it on the road to development. The second
argument has come to be called the theory or the "big PUBh"
or "balanced growth” with all sectors traveling the path to

3
prosperity together. The idea being that there is enough
complementarity between industries and between sectors that
any neglected sector will become a drag on the rest of the
economy and delay development. Both of these schools of thought
argue for a rather massive capital investment program, although
some consideration is being given to the possibility of develop-
ment through a more gradual change in the economy. unfortunately,
agriculture is usually neglected in these theories. Only
recently, say during the last four or five years, has come the
realization that in all economies, agriculture has a big part
to play through furnishing labor, food, raw materials, and
capital for industry, and, in providing a market for industrial
products.

Other’aspects of agriculture are also important to the
developing countries. It may be the principle earner of foreign
exchange; it may save foreign exchange by supplying food; it
may employ up to seventy or eighty percent of the people; and
it is the center of the traditional way of life which has a
profound effect on the way all people in the nation react to
the development process.

Agriculture in many countries has become a drag on the
economy because of neglect. It does not fulfill its normal
function. Its people are poverty stricken, uneducated, half
starved, underemployed at times, and, as such, may be a source
of unrest and national instability.

Regardless of whether a country follows the ideas of

those who favor the leading sector theory or of those who favor

ii
the big push, agriculture dare not be neglected. It is
important, then, to study the procedures that have been used
in successful agricultural development programs to see if they
can serve as a guide to the lagging countries and if they will
provide ideas that will help these nations progress more rapidly.

There have been many studies of certain phases of rural
development, such as the Community Development program of
India, or the Agricultural Extension programs of the United
States and Japan, or the Land Reforms of hexico with marvelous
results reperted as having been achieved. Each is proposed
as the answer to all development problems everywhere by each
program's proponents. Others suggest that community develop-
ment is not enough; land reform is not enough; and that agri-
cultural extension by itself is a sterile discipline that can
contribute little unless united with a program that involves
the farmers, the administrators, industrialists, researchers,
and consumers in a combined effort to improve the rural
community.

In spite of the suggestions that have been made and the
develOpment programs that have been tried, the fact remains
that development has been slow and expensive in terms of
capital and people. The author of this paper spent over nine
years in Pakistan working on development programs, and, in
conjunction with many others, attempted to help Pakistan grow
into a prosperous country. As will be shown later, some progress
has been made, but not enough to maintain Pakistan's relative

position in comparison with more developed nations, to say

nothing of forging ahead.

The mere fact that some countries, once similarly situa-
ted, have advanced shows that it is not absolutely necessary
for a country to remain underdeveloped. The question then is,
what did the successful countries do that was not done in
Pakistan? What happened in Taiwan, Greece, Mexico, Japan, and
the United States that made their agriculture increasingly
more productive? What can be done now to help Pakistan, and
other underdeveloped countries, achieve a position as pros-
perous members of the family of nations?

In this study we will be interested primarily in the
agricultural phases of development with some reference to other
sectors of the economy as they become relevant. Five countries
that have increased agricultural production since World War II
will be studied in some detail to establish, if possible, the
methods and procedures used which led to progress in agri-
cultural development and to determine if there is a pattern
that can be used as a guide to developing countries. The
united States and Japan are to be studied as being representa-
tive of countries that have been long periods of development;
Mexico and Taiwan will be considered as examples of countries
achieving rapid advancement of agriculture during the last
fifty years; while Greece will be examined as a country that
has developed since World War II.

The processes and experiences of these countries will
then be compared with the programs that have been undertaken

in Pakistan in its efforts to develop the agricultural sector.

6
It is hoped that the ideas and concepts that emerge will
prove useful as a means of identifying important elements in
the agricultural development process, and, at the same time,
may serve as a rough guide in indicating the areas of ongoing

programs which need strengthening in the developing countries.

CHAPTER II
A REVIEW OF THE LITERATURE

During the last twenty years, with the emergence of
dozens of new nations from the colonial empires of the past,
differences in living standards have become wider between the
underdeveloped and the more fully developed nations; indepen-i
dence has not been an automatically opened door to affluence
for the great masses of people in the newer nations, no more
than it had been for the people of nations achieving indepen-
dence many years ago. It became apparent to national leaders
all over the world that if the gaps were not to become in-
tolerably wide between the rich and the poor countries, steps
would have to be taken to help the poor countries develop
into economically advanced members of the world community.

Economic development has been defined in many ways but
the most popular definitions seem to emphasize growth in a
country's economy and an increasing gross national product,
accompanied by an improvement in the economic welfare of the
individuals in the country, plus an expansion in production
capacity. It seems clear that economic development has come
to be regarded as a dynamic process which is influenced by
the resources available, the people, their attitudes, values
and beliefs, and the country's position in time. Development
then is likely to be an individual process for each country.

Some can move fast, others slowly, some will be able to Jump

8

barriers of time while others will not. Each country will
follow a different path while developing, yet the body of
theory that has accrued does not always reflect these differ-
ences. Let us now briefly look at some of the ideas that
have grown up in regard to economic advancement.

The early mercantilists considered the industrial and
trading sectors to be the most important aspects of the economy
and that the main functions of agriculture were to serve as
a source of raw materials and as a market for industrial pro-
ducts.

The mercantilists were followed by the physiocrats who
found the agricultural sector to be most strategic to develop-
ment. They believed that the non-agricultural sectors of an
agrarian economy "would grow at an optimal rate and in sympa-
thy with, and in response to, the growth of the agricultural
sector, so long as there was an absence of governmental
intervention, of special privilege and monopoly, and of other
interferences with the competitive processes."1

Later, Adam Smith, developed ideas on division of labor,
improvement in technology, and specialization as means of
satisfying the increasing wants and desires of the entire
population. He believed that the creation of an agricultural

surplus would produce a demand for other goods and services

 

1
Joseph J Spen 1er
” prin ed in

Growth The ' '
(edIEed.5y §.P. Hoselitz, Tfie Free‘Press, New'YonE, I960),
P. 55.

 

 

 

9
which could be paid for with the excess supply of agricultural

products. He also believed that manufacturing industries
would automatically develop to supply this demand so that agri-
culture would make demands On and supply industry, and industry
would make demands on and supply agriculture.

Ricardo, on the other hand, believed that production
increases from both land and industry would eventually be
eaten up by an increasing population and that inevitably a
point would be reached where the population would have increased
"to the point where total wages equal total product minus rent,
there will be no more profits, even with wages at the 'sub-
sistence level.‘ Accumulation will cease, and the stationary
state will have been reached."2

In the intervening years to 1945, there was relatively
little interest in, or attention paid to development, though
some of the writings of Marx, marshall, Schumpeter and others
can be read as applying to development.3

In fairly recent times, new theories of development have
been established, each with its cohort of supporters. The
first that should be mentioned is the theory of "Stages of

Economic Growth" developed, or redeveloped, by ROstow. He

 

2J.M. Letiche, "Adam Smith and David Ricardo on Economic

Growth," B. Hoselitz, editor, Theories of Economic Growth
(The Free Press, New York, 1960), p. 75.

3For further discussion of the evolution of Economic
Development Theory, see Theories of Economic Growth (edited
by Bert F. Hoselitz, The Free Press, New York, 19605

10

envisages all countries passing through five stages of develop-
ment which he classifies as (1) the traditional society, (2)
the pre-conditions for take Off stage when the economy begins
to expand and a transition begins to take place, (3) the take
off stage when investment and savings rates increase to ten
percent or more of the national income and some manufacturing
sectors expand rapidly, (4) the drive to maturity, when ten
to twenty percent of the national income is invested, per-
mitting output to outstrip the increase in pepulation, and
lastly (5) the age of high mass-consumption.4

This much quoted theory is often criticized as a doctrine
of development because of the difficulty in identifying the
stage in which a country finds itself. Professor Kuznets
also questions the validity of Rostow's interpretation and

asks, ... why manufacturing--rather than agriculture, trans-

port, or any other rapidly growing industry--shou1d be the
leading sector."5
GerschenkrOn also argues against Rostow's thesis saying
that there is no reason why a late developing nation should
follow the same path as the advanced nations and that it should

be expected that the latecomers will skip some of the "stages

 

4 ‘
‘W.W. Rostow, The Stages of Economic Development (Cam-

bridge Uhiversity Press, Cambridge, 1961). PP.

5Simon Kuznets, "Netes on the Take off," paper prepared
for September 1960 meeting of International Economic Associa-

tion reprinted in Morgan, et a1. Readin s in Economic Develo -
ment (Wadsworth Publishing Co., BeImonE, CaIIf. 1953): P. 255.

ll

of development."6

As opposed to Rostow's ideas, others have advanced theo-
ries to explain how economic development can take place. For
example, lurkse points out that development can be accelerated
by mobilizing surplus agricultural labor to build social over-
head capital at a very low cost.7 Arthur Lewis argues that
there are unlimited supplies of agricultural labor in most
underdeveloped countries that can be used at a wage Just
slightly higher than the subsistence level in agriculture to
develop industry, thereby forcing agriculture to contribute
to industrial development.8

Howeger, other authors, notably Schultz, Eicher, Anschel,
Rae and others, argues that while there may be times when.
'agricultural labor is not fully employed, it is very doubtful
if there are many, if any, countries where sizeable numbers
of laborers can be withdrawn from the agricultural working

force without decreasing agricultural production.9’10

 

6Alexander Gershenkron, Economic Backwardness in Histo-
rical Perspective, (Harvard university Press, Cambridge, 1962).

7Ragnar Hurkse Problems of Capital Formation in Under-
developed nations, (OxIOFd fihiverSity Press, New YorE, I953).

8W. Arthur Lewis, ”Economic Development with unlimited
Supplies of Labour," The Manchester School (May 1954) Reprinted
in Agarwala and Singh, The Economics of Underdevelo ment,
(Oxford University Press, Flow York 1963), pmw

9T.W. Schultz, Transformin Traditional Agriculture, (Yale
university Press, New Riven, I9EE), pp. 63A70.

103.0. Kao, K.R. Anschel, Carl Eicher, "Disguised Unemploy-
ment in Agriculture: A Survey," printed in Eicher and Witt,
A culture in Economic Development (McGraw-Hill Book Co. N;Y.

J. pp. 1729. _

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12

Other authors, such as Hirschman argue that development
efforts cannot be successful unless they are such as to induce
decisions on the part of other entrepreneurs which will lead
them, in turn, to increase production. He demonstrates that,
if properly chosen, new industries have forward and backward
linkage affects which induce the formation of other companies,
both to supply the requisites for, and to consume the products
of the new industry, thus contributing to economic develop-
ment.11

The idea outlined above is countered by other writers
such as flunkse who believe that massive amounts of capital
must be expended in an across the board advance of all parts
of the economy in order for development efforts to be success-
ful. These proponents of the big push discount the linkage
effects expounded by Hirschman and believe that direct action
is required to achieve development in any sector.12

The position of agriculture in the modern theories of
develOpment has varied from one of being regarded as of pri-
mary importance to being looked upon as having a value of
zero or below as a contributing factor to development. How-
ever, it has recently come to be realized that a stagnant

agriculture has a depressing effect on the economy as a whole,

 

11A.O. Hirschman, The Strategyiof Economic Development,
(Yale University Press,Iflethven, 961).

12 '
Bert F. Hoselitz and others, Theories of Economic Growth
pp. 155’2980 . '

'\

13
and that a live, vital, improving agriculture can help
stimulate and contribute to the development process.
Dr. Nicholls writes that in a closed economy,

"Rising agricultural productivity supports and sus-
tains industrial development in several important
ways. First, it permits agriculture to release part
of its labor force for industrial employment while
meeting the increasing food needs of the non-agricul-
tural sector. Second, it raises agricultural incomes,
thereby creating the rural purchasing power needed to
buy the new industrial goods and rural savings which
may then be mobilized, by direct or indirect means,
to finance industrial development. Finally, it
enables agriculture to supply the major wage-good
(food) of industrial workers at prices favorable

to the profitability of new industry."

He continues that in an open economy some Of these aspects
may not be so important but that,

"Eran here, however, rising productivity in the

food sector is desirable, both because it may save
scarce foreign exchange needed for financing imports
of industrial capital and because it contributes

to the integration of the dualistic (plantation-
peasant) agricultural economy...... iFinally if
agricultural productivity in the food sector is or
becomes sufficiently high, the nation may enjoy a
food surplus of such magnitude as to permit I38
export on favorable terms of food itself..."

Even Rostow made a bow in the direction of agriculture
in a speech given at the 17th annual conference of the Middle
East Institute in 1963 at Georgetown University when he said,

 

1
3William H. Nicholls, "The Place of Agriculture in Eco-
nomic Development," a paper presented at a Round Table on
Economic Development with Particular Reference to East Asia,
Camagori, Japan, April 1960, reprinted in Agriculture in

Economic Develo ment, (edited by Carl E. Richer and Lawrence
W. WIFE, HcGraw-HIII, Hew‘York, 1964), pp. 12-13.

14

”Rural development is proving, however, not merely

a social duty to the less advantaged portions of the

population, but a fundamental condition for the main-

tenance of a high rate of development for the society

as a whale including especially its industrial develop-

ment. 1
He goes on to say that "...the lesson of experience...
is that sustained industrialization requires the modernization
of the countryside."15

Other writers have stated these same ideas and expanded
on them since 1960, so that now the consensus seems to be that
agriculture, by one means or another, must develop either
ahead of or concurrently with industrialization. However,
there does not seem to be the same general consensus as to
what needs to be done to cause agriculture to modernize and
improve. Dorreen Warriner, for example, said in a lecture in
1955 that "Land Reform is the most important social change
now taking place in the world. ... Ho contemporary social
change in the industrial countries is comparable in scope.
The great new advances in social life are now happening in
agricultural countries, above all in Asia, and they affect

the people on the land."16

 

1AW.W. Rostow, "The Rationalization of the Takeoff,"

repginted in State Department Bulletin (so. 48, May 27, 1963),
pa 25.

15Ibid. P. 825.

6

Doreen Warriner, "Land Reform and Economic Development,"
National Bank of Egypt Fiftieth Anniversary Commemoration
Lectures, Cairo, 1955, reprinted in Eicher and Witt, editors

A iculture in Economic Development, (McCraw-Hill Book Company,
New YorE, 19611, p. E7 .

 

15
Other writers point out that distribution of land in
itself is not particularly important nor will it have much
effect unless accompanied by broad reforms or changes in the
institutions serving agriculture. Pei-Hang Chung, for example,
says that,

"...it may be concluded that industrial development is

a necessary, but not necessarily a sufficient condition
for agricultural reform and improvement. ... Other
conditions have to be provided simultaneously or even

in advance if agricultural reform and improvement are

to be effectively carried out. Among the other conditions
the most important are improvements in transport, conso-
lidation of farms and legal regulations relating to
redistribution of land.

Some writers have emphasized that incentives must be
provided to increase production and cite high-fixed prices,
subsidies on agricultural inputs and credit, and improved
markets as means of accomplishing this goal. Others are Just
as vehement in their denials, or rather in their statements
that price does not serve as a sufficient incentive.
Hirschman, in his book Strategy for Economic Development,
writes,

"Rising agricultural prices will not often be very

effective by themselves in calling forth additional

output, because incentives to increased cultivation
are weakened by existing land tenure systems, and
other institutional rigidities, and because knowledge

or improved meth s or the extension of such knowledge
is inadequate."

 

 

 

17Pei-Kang Chang,A culture and Industrialization,
Harvard university Press r1smbridge, l9 9, p.
18

6 A.O. Hirschman, The Strategy of Economic Development,
D. 1 O. .

16

Raul Prebisch, on the other hand, advocates a system of
maintaining high prices for farmers as an incentive and even
suggests that tarrffs should be placed on imports, the income
from which would be distributed to farmers to compensate them
for losses incurred when producing low-priced exports. As an
alternative, he suggests international retransfer of income
from exports which would divide the income from the farmers'
produce between the processor in the importing country and
the producer in the exporting country.19

Prebisch also is an advocate of the idea that development
must be preceded by radical social changes and reforms to,

"...bring about structural changes such as would enable

the savings potential to be used to the full and promote

social mobility, ...to satisfy the demand of a rapidly

increasing population that needs to improve its diet,

and...to raise the level of living of the rural popu-

lation."20

Other writers, such as Scrimshaw and Shumpeter, indicate
that new technology is the best source of increased agricul-
tural production. Scrimshaw believes that,

"The problem of the underdeveloped countries, then,

is to increase the productivity of their farms and

farmers. This would allow them to industrialize and

to feed their people more adequately... The entire

population needs to be indoctrinated in the possi-
bilities of scientific agriculture, including public

 

19

 

 

Raul Prebisch, Towards a. amic Devel ment.Polic
for.Latin.America, (UniEed NaEions, flew Yorfi, I963), pp. 3-

85.

O
2 Ibid. p. 39.

 

 

 

17

officials who must provide the necessary funds,
planning, training, and research programs.“21

Security on the land, however, is the aspect of rural
development that seems most important to Robert Hudgins.

"True agrarian reform lies not in the revolutionary
redistribution of land, but in the evolutionary
process by which people find security on the land.

It involves not merely the cravings of land hungry
people, but the whole complex problem of rural in-
security. We are concerned, therefore, with agrarian
reform as a process of advancing rural security."22

T.W. Schultz is a firm believer in the value of training
and education and thinks that much of the improvement achieved

in American agriculture is derived from investment in human

capital.23

Schultz's ideas are confirmed by a United nations study

which says,

"It has been recognized in recent years that the
process of economic growth requires both formal
training in new skills and the development of new
values. The training in new skills is required to
allow the country to operate in the modern techno-
logical world; the development of new values is
necessary to provide acceptance of, and efficient
operation within a changed society."2

 

1
2 Nevin S. Scrimshaw, "Food," in Technolo and Economic

Develo ment, (published by ”Scientific.lmerican, ‘Random
House, Hew'York, 1963), p. 40.

22Robert W. Hudgins, "Essentials of Land Reform"
Internatiogal Development Review, Oct. 1961 reprinted in
amics of Develo ment, Eadited by Cove Hambridge, Frederick

. Praegcr, er ork, 96 ), p. 277.

23'1‘.W’. Schultz, Transforming Traditional Agriculture.
Yale University Press. 1953. PP. 175-206.
2”United nations, National Development Efforts (Basic
study no. 13, Freedom from Hfinger Campaign, 1963). P. 17.

 

18

The above comments indicate that there is little agree-
ment on the proper methods to be used to achieve increased
agricultural production, although no one doubts that production
can be increased. As mentioned in a recent U.N., FAO, publi-
cation,

"To sum up, it is clear that the earth's physical

resources and man's present technical knowledge are

sufficient to multiply the world's production of

food many times. ... To be effective, knowledge

must be applied in developing resources and in-

creasing productivity. The magnitude 0f the

obstacles that must be overcome in bringing present

knowledge into full play throughout the world can-

not be over emphasized.'25

very little research has been done in the field of agri-
cultural development to provide empirical evidence of the
efficacy of any of the suggestions offered. The U.S. Agency
for International Development, with the cooperation of many
developing countries, the U.S. Department of Agriculture,
and several land grant colleges, is now conducting research
on the problem to determine the most efficient ways for in-
creasing the output of agriculture. As a preliminary to this
study, the lbonomic Research Service of the U.S. Department
of Agriculture prepared several papers, among the most important
of which, for our purposes, have been "How the united States

Improved its Agriculture" and "Agriculture and Economic

 

2
5United nations, Population_and Food Su 1 (Basic
study no. 7, Freedom from Hunger Campaign, 19 2, p. 41.

19
Growth . " 26
Dr. Frank Parker and Dr. William Hendrix, of the 0.3.
Agency for International Development and the Economic Research
Service respectively, prepared a paper, Foundations for

Agrarian Development,27

which analyzed and compared the develop-
ment of five countries achieving a good rate of agricultural
growth during the years 1952-62 with six countries that did

not achieve satisfactory growth rates during the same period.
They used four conditioning factors: (1) Land tenure, (2)

Farm Prices, (3) Markets, and (4) Consumer Goods; and four
production factors: (1) Knowledge, (2) Requisites, (3) Credit,
and (4) Investment in developing land resources, in making
comparisons based on a three-stage rating system.

The three papers mentioned above have been drawn on very
heavily in preparing this discussion. In addition, an excellent
review has been prepared, under the auspices of the Japan FAQ
Association, (edited by Takekazu Ogura) on the agricultural

development of Japan.28 I V

 

26U.S. Department of Agriculture, Economic Research Ser-
vice, How the United States In roved its Agriculture, (ERS-
Foreign 76, Washingtonj:fiarch, ).
U.S. Department of Agriculture, Economic Research Ser-
vice, A iculture and Economic Growth SAgricultural Economic
Report 0. 53: Washington, rc , 3 .

 

27Frank W. Parker and William Hendrix, "Foundations for
A rerian Development”presented at the CENTO Symposium on §55a1
evelopment, September, 1963 and included in the reportcdf-the
symposium by 0M0, Ankara, Turkey.

28Takekazu Ogura, (editor) A icultural Development in
Modern Ja an, Japan FAO Associat on, o o, 1963). An interesting
Thature c this report is the section dealing with the impli-
cations of the Japanese experience for other developing countries.

 

 

20

The united Nations and the Food and Agricultural Organi-
zation of the U.N. have prepared numerous articles and reports
which, except for two, will not be mentioned here but refer-
enceswill be found to them in the text. The two that have
been most instructive and useful are Economic Survey of Asia
and the Far East, 1963 and a series of reports. The State
of Food and Agriculture, issued annually.

Other sources of information on the development of agri-
culture are listed in the "Literature Cited" for those desiring
to inquire further in to this inspiring and useful field of

development.

CHAPTER III
AGRICUMURAL DEVELOPMENT IN SELECTED COUNTRIES

Since the beginning of history, the nations of the world
have been affected by periods of famine and periods of glut
of agricultural products. The first reported effort to es-
tablish an agricultural policy was that of Joseph in Egypt
when he correctly interpreted the king's dreams and encour-
aged excess production during the fat years to be stored for
use during the lean.

However, during only the last hundred years or so, has
there been a systematic effort to develop agriculture in any
part of the world; and only during the last twenty-five years
has agricultural improvement become a factor of great impor-
tance to nearly all nations because of their desire to
industrialize, because of the press of population,and because
of increasing shortages of food.

A few nations stand out in the progress that they have
made in improving agricultural production. For some, such
as Japan, the united States, and a few European countries,
it has been a long process, starting a hundred or more years
ago. For others, such as beico and Taiwan, the process has
been shorter, covering only the last fifty years; and in some,
such as Greece, the development of agriculture is a very

recent phenomena, dating from World War II.

21

22

The techniques used by these five countries at differ-
ent stages in their agricultural growth have varied depending
upon special local conditions, but as will be seen, there
has been a remarkable uniformity in the priorities given in
the Agrarian sector.

We will now examine these countries briefly to see what
happened--what measures were taken to increase the supply of
agricultural commodities available for use by the people in
industry and to improve the level of living of farm families.
We will attempt to make an evaluation of the success of these
measures and determine their relevance for those countries

seeking to increase agricultural production.

CHAPTER IV
JAPAH'S AGRICUDTURAL DEVELOPMENT

Japan's experience is of interest to many developing
countries, particularly those with a traditional type of
agriculture, too little land, and a rapidly expanding popu-
lation. As noted in Agricultural Development in Modern

Japan,

"The level of productivity of Japanese agriculture
prior to the Meiji Restoration—~as measured by yields
per acre or per man--was probably not very different
from, or at best only moderately higher than, levels
of productivity which persist to this day in many
parts of the region."

"...What is of interest to other countries is not

so much the fact of this transformation in agricul-

tural productivity. It is rather that it took place
within a traditional framework of small scale farming.

"1
Other factors making the Japanese agricultural experience
worthy of study by developing nations are that: (1) production
was increased without cutting down on the agricultural work
force in the early stages or development, giving industries
a chance to develop without mass unemployment; (2) early
production increases were achieved without large capital out-
lays or the use of capital intensive production methods, thus

permitting surplus capital to be used for building up an

industrial base; and (3) agriculture was able to assume the

 

LTakekazu Ogura, editor, A icultural Develo ment in
Mbdern.Japan, (Japan FAO AssocIa§Ion, Tofiyo, Japan, I963),
pe "' e

23

24

Figure 1: Agricultural Output and Labor Force, Japan*

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

       

 

 

   

of 1878-82
00
’1
300 _ ’
Total Output /
\/
200 / “
b‘v
per Acre
100 i=.=-1h—
Force
01 _
82 '88 '98 '08 '18 '28 'ué '56
-92 -02 -12 -22 -32 -50 -6O

 

 

Note: It will be noted in the chart above
that Total Agricultural Production has in-
creased rather steadily over the whole period;
was even higher in 1946-50 than before the
war, about 1936. Output per Acre kept pace
with total production until 1900 when it began
to lag. In the early 1920's, it began to rise
again so that by 1945-50, it had again reached
the same level as the Total Agricultural Prod-
uction Index. It will also be noted that the
agricultural labor force has remained almost
constant for the full 80 year period.

 

* Parker and Hendrix, Foundations for Agrarian Development,
p. 31, Figure 2.

25
triple roles of a foreign exchange earner during the course
of the transformation, a provider of capital for industry,
and a supplier of food to the industrial population.
The agricultural development of Japan can be conveniently
divided into three periods for study:‘

"1. A period of rapid growth lasting from approxi-
mately the Meiji Restoration to World War I.

"2. A period of slower growth lasting from the end
of World War I through World War II.

"3. And finally, a renewal period of rapid growth,
starting almost immediately after the end of 2
World War II and continuing to the present time."

1. The Meiji Restoration to World War I : 1860-1914.

 

This was a period of rapid growth in agricultural pro-
duction as well as a time of rapid social and political change
and much industrial development. The annual growth rate of
agricultural net output averaged almost 2.3 percent per year,
well above the growth rate of the population. (see figure 1)
At the same time, the absolute number of people employed in
agriculture remained fairly constant and the non-agricultural
sectors of the economy developed rapidly in close harmony with
agriculture.3

Soon after the restoration, effective action was taken

to break up the large feudal estates, to permit peasants to

 

2Ibid. p. 622.

3Kazushi Ohkawa and Henry Rosovsky, "The Role of Agri-
culture in Modern Japanese Economic Development," reprinted

in Eicher and Witt (ed) A riculture in Economic Development,
(Redraw-Hill, New Yerk, 156E), pp. EE-EB.

 

.. V.I.. A \l l .. I -l I . I I!" Ill||lllll"

 

f (Ill-Ill‘ll l!!! I II ill."

26
buy land and to become preperty owners, and to give farmers
freedom to conduct their own business.

Taxes on land were increased and, along with the new
taxes on S553 and tobacco, were payable in cash so that the
farmers were forced to enter the monetized markets for the
first time in the history of Japan. Industries were built
up and the government later established a monopoly on sake
and tobacco so that money was required for new consumer goods
as well as for the luxury goods the farmer used. Here and
more of the farmer's business was in a market which necessi-
tated the use of money.

The reduction of rents, the creation of a new class of
farm owner-operators, and increases in production meant that
the farmers had more products to dispose of in the market.

A large part of these returns were siphoned off as taxes

and were used for industrial and national development. Silk
and tea exports during this period supplied much of the fo-
reign exchange used to purchase equipment and supplies for
industry which in turn created the equipment and supplies
needed in agriculture.

nest farms in Japan were very small (one hectare or less)
and a high prOportion of the farmers were tenants. Agricul-
tural production increased 121 percent on a gross basis or
108 percent not between 1878 and 1913. The productivity of
land increased 76 percent and the productivity of labor 117

27
percent during the same period.4

The unification of the country and the removal of restric-
tions on movement of produce, along with the growth of cities,
increased the demand for farm products and widened the mar-
kets. All in all, it was a time of generally rising prices
for farm products and in several ways, farmers were motivated
to produce more.

In 1877, three new varieties of rice were discovered by
farmers and, with government help, spread rapidly in the
three main rice-growing areas of the country. As late as
1926, they were still the main varieties grown. These varieties
were responsive to fertilizers which stimulated the use of
organic manures and composts and later the use of chemical
fertilizers.

Several organic fertilizer factories were started in the
1880's, yet in 1912, the country was forced to import about
518,000 tons of soybean cake for fertilizer. A sulphate of
ammonia factory was opened in 1910.

Between 1877 and 1900, the government established two
agricultural schools, a federal agricultural experiment station,
made provision for one experiment station in each prefecture,
and built a seed breeding station.

The discovery of methods for sorting rice seeds by the

use of salt water and the invention of pedal threshers made

 

uOgura, Agricultural Development, p. 8-9.

28
production more sure and allowed double cropping.

Western technology such as planging materials, livestock,
implements, cultural methods, tools, and agricultural liter-
ature were imported in fairly large quantities. Only a few
of the ideas were found to be practical as imported, except
in Hokkaido, and most had to be adapted to Japanese conditions.

In 1881, a national meeting was held with 110 leading
farmers invited to discuss agricultural improvement. Some of
these farm leaders were hired to teach at the agricultural
schools and others were employed to tour the country advising
groups of farmers on methods for increasing production. The
prefectural governments were ordered to hold agricultural
meetings to discuss agricultural advancement and better farmers
were urged to teach their neighbors how to produce more.

About the same time, books on agriculture began to appear on
the market.

In the 1890's, voluntary associations of farmers came
into existence to exchange ideas for improving farming tech-
niques. In 1899, the Agriculture Association Law was enacted
to provide a legal basis for these associations. There-
after, every village was required to set up such an association
and provision was made for a federated organization with
associations at the county and prefectural levels. In 1903,
the associations assisted the ministry of agriculture and
commerce in informing the farmers of fourteen improved practices

to be followed, and in enforcing compliance. In 1910, the

29
national association was reorganized as the Imperial Agricul-
tural Association and began to receive a government subsidy.

Institutional developments were equally as rapid as
those in economics and technology. While agricultural workers
had been given greater freedom of movement at the abolishment
of feudalism, the number of agricultural tenants increased and
the number of owner-operators decreased after 1900. The land
became concentrated in the hands of landlords and wages in-
creased so that it was more profitable to lease land to tenants
than to attempt to farm it with hired labor.

As the result of the shift to landlordism, the landlords
became the important sellers of rice. Several rice exchanges
were set up and in 1893, a Rice Exchange Law was enacted to
regulate their activities. Concurrently, an inspection sys-
tem covering quality, grading, packing, and amount sold was
inaugurated which was at first supported by the rice merchants
and later by the Department of Agriculture and the agricultural
associations.

Agricultural credit was not overlooked during this period.
In 1897, the Hypothec Bank of Japan was organized to provide
loans for up to fifty years for land improvement with real
property as collateral. The bank could also make five year
loans against property and unsecured loans to local bodies.

By 1900, forty-six prefectural and industrial banks had been
established which were subsidized by the prefectural govern-
ments and supported by the Hypothec Bank.

30

In 1900, a law establishing five types of cooperatives;
credit, marketing, purchasing, manufacturing, and utilization,
was enacted. By 1914, there were over eleven thousand coop-
eratives serving about 90 percent of the villages.

.While these developments were taking place in agricul-
ture, the increase in productivity was repaying the govern-
ment investment in the form of taxes. Collections from
farmers more than doubled between 1888 and 1914. At the same
time, the land tax became less important in terms of total
government revenue, falling from 85 percent to #3 percent of
the total intake during the period.5 As Ogura says: "...it
must be noted that the heavy land tax which constituted the
main (or major) source of government revenues during these
early years...he1ped the Government in the furtherance of its
policies of economic development.6

2. Horlg,WargI‘to the close of World War II : 1914-1945.

This period was characterized by a decline in the rate
of growth. A boom in prices between 1915 and 1919 was
followed by a sharp slump, a slight recovery, then the world-
wide depression of 1929-36, and World War II. Even with this
unfavorable price picture, total agricultural production in-

creased about #0 percent between 1908-12 and 1933-37 but fell
rapidly during World War II.

 

51b1d pp. 8-22.

6Ibid p. 23.

31

During World War I, the requirements of the belliger-
ents increased the demand for Japanese products, particularly
industrial items. Despite a fall in prices following the war,
production did not decline appreciably. With the subsequent
recovery of prices, production again increased rapidly with
fruits, silk cocoons, and livestock products recording the
largest gains. Imports of food were increased from Korea and
Fcr mosa .

The use of chemical fertilizers increased to over twice
what it had been in 1908-1912. The increased sales were
probably stimulated by the relative drop in the price of fer-
tilizer compared with the price of farm products; and, public
credit was readily available for fertilizer purchases. Even
though there was an increase in the use of fertilizer; in the
use of cold-resistant, high-yielding varieties of rice; and
the effective area planted had been increased by reclamation
works and double cropping; production did not increase
correspondingly. This was probably due to a less intensive
use of family labor caused by a drop in rice prices and large
rice imports from Korea and Formosa, and other government agri-
cultural policies unfavorable to farmer.

From 1939 to 1945, production declined because of the
increasing shortage of manpower, supplies and dquipment. The
amount of rice and other "major" crops produced did not fall
appreciably until after 1942 when the decline in production
became very rapid. By the end of the war, the yield per acre

32
of rice was only about 70 percent of pre-war, and other crop
yields had fallen even more.

Among the favorable measures for agricultural improvement
taken during the war years were those dealing with arbitration
of disputes concerning rental rates and payments; farmland
adjustment which helped delineate boundaries and consolidate
holdings; price controls, purchase and storage of rice, and
subsidies for agricultural improvements. One of the most
interesting measures adopted was a two-price system for rice
delivered to the government. Lower prices were paid for rice
owned by non-farming landowners than were paid to actual
producers. Since rents were largely paid in rice, this had
the effect of lowering rents and of reducing the importance
of the landlord class as a whole.

During the last 5 years of the period, other laws were
passed strengthening the cooperative structure, changing the
structure of the agricultural associations, establishing
cottage industries, establishing fertilizer distribution
channels, and an agricultural insurance system for crops and
livestock.

The planned effects of these measures were largely
negated by the last year or two of the depression, by the
Hanchurian War and World War II, by government policies on
food imports, price controls, and food purchase systems, by

shortages of labor, and by shortages of equipment and supplies.7

 

7Ibid. pp. 27-62.

33
3. Modern Development : 1945 to date.

 

Since World War II, Japan has again increased agricul-
tural production very rapidly, about 5.3 percent per year.
Again, this has been done without heavy, long term,1umpy
investment and without dislocating a large part of the popu-
lation. It is true that short term agricultural capital
investment has been heavy but it has largely been in operating
capital with relatively small amounts invested in long-term
capital projects. It is also true that since the war, there
has been some reduction in the labor force employed in agri-
culture, but this out-migration has been slow and has not
disrupted the economy.

As far as the government was concerned, Ogura notes that,

"The basic theme of agricultural policy has changed

from pro-war and war time authoritarianism to a

more liberal approach as the economy was freed from

the various controls dominant during and immediately

after the war.

"One important task of agricultural administration

in the immediate post war years was, besides securing

the nations' good supply, to democratize farming

communities."

As the first step in attaining the two objectives men-
tioned above, a series of land reform bills were passed which
drastically changed the structure of land holding in Japan
and completely broke the power of the large land owners in
the rural communities. However, it did not change the

pattern of small scale farming nor the labor intensive methods

 

81bid. pp. 115-116.

34
used.

In the early years of this period, several production
regulations were passed requiring delivery of crops to the
government, establishing quotas, and setting up a system
whereby the state took the initiative in providing technical
guidance. These measures were continued until 1955 when the
food situation eased and food production equaled or exceeded
pro-war levels.

Changes were made in almost every facet of agricultural
life as evidenced by the fact that, by 1959, almost every
important law affecting agriculture, adopted before or during
the war, was either repealed or changed.

Due to these changes, the farmers became landowners and
by 1950, only 10 percent of the land was tenant operated,
and by 1960, only 500,000 hectares remained under tenancy.
Most of this land was actually owned by farm households but
rented because of fragmentation, family illness, or distance
from the farmstead.

Farm technology changed rapidly and fertilizer use per
unit of land was an estimated 10 percent higher in 1952-54
than in the pre-war years. Between 1952 and 1960, the use
of nitrogen increased 1.7 times, phosphorous two times, potash
four times, and other farm chemicals about three times.

The use of farm implements also grew very rapidly and
in 1960, over 500,000 power cultivators were in use, and

over one million electric motors, 1,600,000 petroleum engines,

35
260,000 power sprayers, 2,476,000 power threshers, 840,000

power huskers, and 280,000 power pumps were being used by
farmers.9

The introduction of these new implements has affected
the cultural practices used by farmers. Early planting,
economizing on plowing and labor, more intensive application
of fertilizer, control of insects and diseases, more land
reclamation by the farmer himself, and more multiple cropping
have helped increase production.

The structure of agriculture itself has changed during
the post war years. First, there has been a further trend
toward commercialization of the industry. The level of agri-
cultural production in 1960 was 39 percent higher than in
1950-52, and 75 percent of the product moved into commercial
channels compared to 62 percent in the earlier period. At
the same time, the commodities produced by the farmer have
changed as the contents of the city housewife's market basket
have changed. Rice still is the main commodity produced but
there has been a shift toward producing more meat and other
livestock products, more wheat and wheat products, and more
fruits and vegetables than before the war. This, in turn,
has had an effect on the relative prices of farm products
and on processing and farm service industries.

While farm production has increased, the share of gross

 

91bid. p. 418.

36

national product from agriculture has decreased and the
share of the secondary and tertiary sectors has increased.
Increased use of mechanical equipment on farms, coupled with
small farm size and large families has resulted in many far-
mers seeking outside employment so that in 1960, non-agri-
cultural income of agricultural households increased to 46.7
percent of the total family income. For these families,
farming activities have tended to remain more or less tradi-
tional and they have not been an important factor in the
commercial sector. Other farmers, about 41 percent of the
total, have become even more commercial than before the war.
Livestock production is notable for its commercialization,
particularly milk, dairy products, poultry, and pig production
where, to quote Ogura, the "expansion of the scale of pro-
duction has been phenomenal in recent years."10 In order to
increase their incomes, farmers have organized 2500 (1961)
"joint management" farms where the whole production process
for a group of farmers is conducted jointly; more and larger
equipment can then be used to make production more efficient.
Many "joint organization" farms have also been formed where
only a part of the production processes are carried on
jointly.

Incentive for the farmer has been provided by maintain-

ing a high price for rice, even though production was high

 

1.:)Ibid. p. 99.

37

enough to assure plenty for all. Before the war, the govern-
ment food purchase plan had been conducted so as to protect
the consumer and to provide cheap food to industrial workers,
but after 1955-56, a system was adopted which provided a
floor for farm prices of rice, wheat, and barley.

Fertilizer production was encouraged through the allo-
cation of scarce raw materials immediately following the war
and prices to the farmer were subsidized at about the world
price level. During the years of shortage, the government
allocated fertilizer to farmers on a crop priority basis.

In 1950, fertilizer controls were lifted but prices to farmers
have continued to be subsidized as the fertilizer industry
has not been able to compete, pricewise, with the world mar-
ket.

Japan's agriculture developed early in a traditional
fashipn characterized by small irregular fields, fragmented
fields and wasteful methods of using and distributing water.
A law was passed after the war to correct this situation.

It was designed to "effect the improvement, development,
security, and consolidation of farmland and to contribute to
the maintenance and increase of the production of foods and
other farm produce..."11 Land improvement districts were set
up and projects were initiated by the people concerned, or

by the government, and a cost sharing procedure was established

 

11Ibid. p. 244.

38
whereby the government shared in the expenses and in the
allocation of newly formed land. After this law was passed,
great emphasis was placed on the development of rice land
which contributed to the abundant harvests of 1955 and after-
wards.

At the end of the war, the National Agricultural Asso-
ciation and its branch units represented the government in
practically all its dealings with farmers. In the fieid of
agricultural extension, for example, the association had a
staff of 38,000 technicians employed to assist the farmers
with problems of agriculture, stock raising, and sericulture.
It was decided that this organization was not democratic
enough so an Agricultural Cooperatives Law was passed in
1947 to replace the associations with cooperatives.

General purpose cooperatives (marketing, purchasing,
credit and utilization activities) were organized at the
village or town level, economic and credit federations at the
prefectural level and marketing and purchasing federations
at the national level. By 1950, about 17,000 cooperatives
had been formed, Later legislation helped reorganize many
of the nearly bankrupt organizations and a program for amal-
gamation of small units was started in 1961 to take advantage
of improved transportation, the joining of towns and villages,
and because of the necessity to raise wages of employees.

The business of the cooperatives has increased to the point

that they handle about 90 percent of the rice marketed and

\‘_/

39
about 80 percent of the fertilizer sales.

The cooperatives took over the credit responsibilities
of the agricultural associations at the prefectural and
local levels at the end of the war, loaning their own funds
as well as those of the Central Cooperative Bank for Agri-
culture and Forestry.

They had difficulty in securing additional money for
credit and in 1948 a system of Agricultural Bills was estab-
lished. These bills were granted to farmers for necessary
purchases and discounted by the Central Cooperative Bank and
the Bank of Japan. In 1958, the Bank of Japan stopped its
preferential treatment of these bills so that they are no
longer used except for dealings between cooperatives. In
1951 and 1953, changes were made in the agricultural credit
laws and the Agriculture, Forestry and Fisheries Finance
Corporation was set up. It is financed by the government and
loans money for land improvements and "common" facilities on

long term, low interest rates. In 1962 it loaned 71,000 million

yen.

In 1955, another law was enacted making provision for
intermediate loans in case of natural disaster of other mis-
haps, to prevent the degradation of farmers through the frag-
mentation of holdings or because of small farm size, and to
increase the scale of farm operations through the Finance
C30rporation. Loans for the same purpose are made by coop-

eratives and are subsidized by the government.

40

Finally, a law for subsidizing the Agricultural Modern-
ization Fund was passed in 1961, paralleling the Agriculture
Basic Law. This law provided 30,000 million yen in 1961 and
50,000 million yen in 1962 for loans to private facilities
at 6.5 percent interest and at 7.5 Percent to other facilities.
This legislation is significant in that it enables the coop-
eratives, through the use of rural funds, to perform the
function of financing agriculture.

Some functions of the old agricultural associations,
such as technical guidance of the farmers, were taken over by
the prefectural and national governments. Other duties (regu-
lation, enforcement, etc.) were taken over by agricultural
commissions established at each level of government for the
purpose.

An agricultural insurance program, (very informal in the
early years) has been a part of the Japanese agricultural
development program for many years. 3A livestock insurance
program was started in 1927 and one for crops in 1938, both
subsidized by the government. Since World War II, the insur-
ance program has been revised and in 1949, insurance of
cattle, horses, goats, sheep, cocoons, and breeding pigs be-
came compulsory while crop insurance for rice, barley and
other crops was made compulsory later. An insurance federation
has been established in each prefecture with an association
in each village or town. Property insured by these federations

and associations is reinsured by the state through a mutual

41
relief fund. The insurance system is subsidized to the
extent of about one-fourth the cost of the program.

In the pre World War II period, the agricultural extension
service had been a combination service sponsored jointly by
the agricultural associations and the government. It was
responsible for inspection, supervision, control, and incen-
tive subsidies besides activities. The Agricultural Improve-
ment Law of 1948 changed this system completely. The extension
service is now supported only by the state and prefectural
governments and has become purely an educational and technical
guidance service. By 1961, there were 13,495 full-time tech-
nicians (596 agricultural subject matter specialists working
through 10,911 extension specialists, and 138 home economics
subject matter specialists working through 1850 home advisers)
working with the farmers through voluntary local groups.

The research and extension efforts of Japan have always
been closely allied and in the early years, the research
stations were responsible for training the "veteran farmers"
who were serving as itinarant teachers. Later, the experiment
station personnel were expected to spend part of their time
working with farmers. In 1948, these functions were separated
and a consolidated research organization was set up under the
Ministry of Agriculture. Later, two other research organi-
zations were set up to study land improvement and the social
and economic aspects of agriculture. In 1956, a Science and

Techniques Agency was set up in the Prime Minister's office

42
to coordinate all research in agriculture and industry.

The Agriculture Basic Law, passed in 1961, again decen-
tralized research. Besides the National Institute of Agri-
cultural Sciences and the District Ekperiment Stations, new
national experiment stations for agriculture, horticulture,
livestock, tea, and agricultural engineering have been
established.

Along with the emphasis on farmer training and research,
great importance has been attached to agricultural education.
Agricultural colleges and universities had been established
before World War II and over a million students were enrolled
in agricultural continuation schools (night schools, 967,000
enrolled in 1933), agricultural schools (66,000) and agricul-
tural colleges and universities (6,000).

After the war, the educational system was revised. The
6-3-3-4 system (six years primary--three years Junior High
School--three years High School--four years College) was
adopted and the first nine years were made compulsory, co-
educational, and democratic, with local village school boards
in charge. The night agriculture schools for adults were
reborn; and by 1960, 830 agricultural high schools had been
established and had graduated over 59,000 students.

Agricultural education at the college level received
increased emphasis and there are now thirty universities having
departments of agriculture, graduating over 5,900 students

in 1960.

 

111' I I'll,“ l I) r JIlI. )wll ll ltllrl. ll ’1] 1’: [ll IIII.

43
In addition, the Department of Agriculture has started
agricultural retraining schools for its technicians. These
schools work closely with the agricultural research stations
so that the workers are kept in close touch with the latest

developments. The department has also a number of Management

 

Instruction Farms where short courses are held to train young
people and adults in farm management to further increase
farm production.
To quote Parker and Hendrix,
"The Japanese Government maintained conditioning
and production factors rather favorable for agricul-
tural production except during the interwar period.
It supported general education, agricultural research,
and extension, credit and marketing facilities and
industry provided production requisites and consumer
goods. ... In the post war period there has been an
effective land reform program and other conditioning
and production factors have been favorable."12
As a result, agriculture and industry have advanced
together for the improvement of the country.13
Agricultural production has increased, farmers incomes
have improved, the diets of the people have been bettered,
and the economy has flourished. Agriculture contributed
greatly in the early years through taxes and by supplying
food and labor to industry, and exports, which generated the
necessary foreign exchange for capital imports. Even today,

the agricultural industry still contributes its share to the

 

12Parker and Hendrix, Foundations for Agrarian Develop:
ment. p. 30.

13It will be noted that Agricultural Development in

Modern Japan edited by Takekazo Ogura has been drawn on
ex ens ve y in preparing this section.

ll. I‘IIII'I‘IIJIIIII-lllll‘

 

4 llfhl 1 ll ‘ r

44

economy of the country.

While writing of the agricultural development of Japan,
B.F. Johnston summarizes the last one hundred years as follows:

"These gains were predominantly the result of increased

use of fertilizers and advances in farm technology

introduced into the existing structure of Japanese

agriculture. Moreover, the requirements for capital

funds were small and consisted mainly of increased

requirements for working capital for the purchase of

fertilizers.

"Considerable reliance was placed on the initiative

of the individual farmer and on price incentives.

In addition government experiment stations performed

a key role in developing improved seed in experimenta-

tion, on the efficient use of fertilizers, and in

spreading knowledge of improved methods.

"Japan ... was able to borrow heavily from the hard-

won progress of Britain and other countries. The

government stimulated the introduction of "Western

learning" by hiring foreign experts in agriculture ...

and by seflding Japanese students to foreign univer-

sities."1

Table 1, below, presents an assessment of the relative
contribution to agricultural improvement of the various devel-
opment programs and other actions taken (in both the public
and private sector) in Japan during the period of its develop-
ment. These actions and programs have been grouped into
twelve categories which are listed in order of the first
effective action taken in each category. The scale used is
based on a ten point rating system and takes into account both
the length of time that a category has been a part of the

agricultural program and its apparent effectiveness in promoting

 

1"(Bruce F. Johnston, "Agricultural Productivity and Econo-
mic Develo ment in Japan," Journal of Political Economy, LIX
(Dec. 1951 , p. 512. .

45
increased agricultural production. (For a listing of items
included in each of the twelve categories, see Appendix I.)
Table 1. An Evaluation of the Relative Contribution of the

Agricultural Improvement Programs Carried on in
Japan, 1860-1962, to Increased Agricultural

 

 

Production.
Relative ‘RelatIve

Date Category, Contribution
l. Technological Improvement 10

2. Land and Tenure Reform 10

3. Farmer Involvement lO

4. Agricultural Research 10

5. Agricultural Education 8

6. Farmer Training 8

7. General Education 6

8. Transportation-Communications 6

9. Agricultural Investment 6
10. Markets and Prices 4
11. Agricultural Supplies 4
12. Agricultural Credit 2

 

[lull‘ l . I .
lllllllil‘lllI'I'llIlllll'lIl4 l .l 1" l 'II‘f‘vl'Il ll.’ '1‘) l."nf (‘1‘ ‘)

llllllllllll

CHAPTER V
AGRICUDTURAL GROWTH OF THE UNPTED STATES

The agricultural growth of the United States has been one
of the wonders of the modern world and is pointed to in the
developing countries as a model for emulation. In the view of
the leaders of these countries, the present food and fiber sur-
pluses in the face of a rising population in the United States

is much to be desired and the question is often asked as to

how is was accomplished. Some people argue that an abundant
Figure 2: Farm Output, The United States1

 

% of 1947-48

 

 

140 7

120 x
Crop Output Per Acre I

A

\
n

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

80 J ’ ,w—n-z:__ . \
60 " J ......
40. Z I‘ota Output
20
O l l J I
18 o 1900 9 19 O 196

 

 

 

supply of fertile land is responsible, but most realize that

more than a bountiful nature was required.

First, let us look at what was done. Figure 2 shows the

 

1Frank Parker and W.E. Hendrix, Foundations for Agrarian
Development, Figure 1, p. 29.

 

46

.llv I ‘ [llr
Illiilllll’lllll

47

increase in output that has been achieved from 1870 to 1963.
There was little change in crop output per acre during the
period 1870-1930, while there was an almost continuous in-
crease in total production, indicating that the increase was
achieved through the addition of land. After 1935, there
has been a decided increase in rate of production per acre,
outstripping total production and indicating that land has
become less important to increase production. In fact, the
total amount of land in crops has decreased materially during
the last thirty years.

As noted by the united States Department of Agriculture:

"Improvements in Agricultural output and productivity

have contributed greatly to national economic growth

of the United States. Total farm output has increased

more than fivefold in the last one hundred years.

One farm worker now supplies food and other farm

products for twenty-nine people at home and abroad

as compared with less than five a century ago. This

is about the same as in many of the less developed

countries today. Although consumption levels have

gone up greatly, American consumers now spend less

than a fourth of their incomes for food as compared

with over half by people in the less developed

countries."2

The history of United States agriculture can conveniently
be divided into four periods: (1) Independence to 1850, (2)
1850 to 1920, (3) 1920 to 1935, and (4) 1935 to the present.

1. Indopendence to 1850

Agricultural production increased steadily from Indepen-

dence to 1850 with the value of agricultural products rising

 

2Economic Research Service, How the United States Im-
proved its Agriculture, p. 2.

 

illlllllillllll'llllll'

48
from $333,000,000 to $1,442,ooo,ooo (in 1910-14 dollars).
This amounted to a fourfold increase, keeping up with popu-
lation growth, which was increased at about the same rate
(5.3 million to 23.2 million). In addition, agricultural
exports supplied the needs of other countries for cotton and
tobacco.

In 1785 and 1787, ordinances were passed which started
the process of opening up the West, and making it easier for
farmers to acquire land. The availability of new land and
the rapid expansion of the industrial Northeast forced a rapid
expansion of the communications network. In 1825, traffic
started on the Erie Canal, opening up the whole of the former
Nerthwest territory with cheap transportation. The Cumberland
Traiu and other East-West roads were opened up or improved.
By 1850, railroads were making themselves felt as a factor in
communications. All of these contributed to the development
of East-West flows of traffic carrying agricultural products
to the East and manufactured products to the West.3

The increase in agricultural production during the pe-
riod was largely due to the expansion of land area under
cultivation, although events were occuring which later were
to affect productivity.

As early as 1796, President George Washington urged the
creation of a National Board of Agriculture. In 1836-37, the

 

3Economic Research Service, Agriculture and Economic
Growth, p. 11.

.I.‘ l [I I.
III I [I'll III. II." {-1 Ill 1 l

 

49
patent office was established and began importing foreign
seeds and distributing them to farmers (at the expense of the
commissioner). Privately sponsored fairs and agricultural
contests were begun very early in the period and the first
agricultural periodicals were published in 1810 and 1819.

In 1839, funds ($1,000) were granted to the patent office
for the collection of statistics on agriculture and represen-
tatives of the united States in foreign countries had been
collecting "seeds, plants, and agricultural inventions" since
1819.4

America, during the period, contained very few elements
of "traditional agriculture" as defined today except in Florida
and the Indian villages. The early settlers-~migrants from
Europe--were rebels against the traditional society of Europe
and the mere fact that they left their homelands for a new
world demonstrated their willingness to break with the past.
This attitude facilitated the movement westward and the
adoption of new ideas from Europe and from the Indians.

The early settlers brought with them an interest in edu-
cation which was maintained during their western migration so
that almost every new settlement had a school and the Ordi-
nance of 1787 made provision for compulsory primary education
in the Nbrthwest Territory. Private colleges were started at

many places in the East and by 1850, there were several in

 

“The U.S. De artment of Agriculture, Centurlfof Service,
(Washington, 1963 pp. 1-10, 520.

I‘. lllfbllu (I I! 1|

50
the new states west of the Alleghany Mbuntains.

Several labor-saving innovations were made but, because
of a lack of demand for grain, they were not generally adop-
ted until later. An exception was the iron plow with inter-
changeable parts (invented in 1819). Other inventions, available
but not widely adopted by 1890, were the steel plow for prai-
rie soils, the reaper, harrows and seed drills, corn planters,
corn cultivators, the threshing machine, and other horse-
drawn machinery.

Considering the whole situation, the period was one of
unstable prices, slowly developing markets, increasing interest
in education, some new technology, improved transportation
and increasing industrialization. At the same time, it was
a period of low investment in agriculture and of low, almost
constant productivity of agricultural labor. Mbst of the gain
in agricultural production was derived from the opening of
new lands to the west and the cultivation of more acres by
the owner-fa'rmers .

2. The 1850 to l920_period

During this period, total farm output grew at a rate of
about 2.2 percent a year. Most of the expansion resulted from
the use of more production inputs; land, labor, and capital.

Only a fourth came from increased overall productivity or in-

creased output per unit of input.5 (Figure 3)

 

5ERS, How the United States Improved its Agriculture,
pp. 2'3r

51
Inputs of land, labor, and capital increased steadily
during the 1850-1920 period and although the percentage in-
creases in capital were large, most of the increase in agri-

cultural output resulted from the use of more land and labor.
Figure 3: Agricultural Productivity, United StatesS

 

% of 1870

 

500

 

400

Out jA/F
300
VI input+

200 ;;,_..==e—""—_“~”3 ,1:_____
/"-u ... c~o'--b"“’
100 “‘ "" 1

Output per unit pf input*

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

18.0 1900 1920 1940 1960

+ Total committed to agriculture by farmers
* Average, not Marginal, Productivity.

 

 

 

In 1862, four laws were passed that were to have consi-
derable effect on agriculture in the decades to follow. The
Homestead Act encouraged settlement of the West on the basis
of l60-acre farms; the Morrill Act established the pattern

for land grant colleges, encouraging agricultural education;

 

6Ibid., Figure 2, p. 3.

52
the act establishing the Department of Agriculture recognized
the importance of assisting farmers to adopt better methods;
and the act chartering the first cross-country railroad (the
Union Pacific) assisted in opening the western land.

Chemical fertilizers entered the farm investment picture
significantly for the first time in 1850, when about $2 million
worth of fertilizer and lime were used. By 1900, this figure
had increased to 90 million and to more than $150 million by
1920.

Machinery and tools were purchased in large quantities
during the period, rising from eleven million dollars worth
in 1850 to over 200 million in 1900, and to over 300 million
in 1920. The interest in education continued and in 1855,
Michigan provided for a State Agricultural College (now Michigan
State University) to be followed later the same year by
Pennsylvania legislation establishing the Pennsylvania Far-
mer's High School (now Pennsylvania State University). After
the passage of the Merrill Act, other states established
colleges of Agriculture in rapid succession and many private
colleges included agricultural sections as part of the regu-
lar curriculum.

In 1887, the Hatch Experiment Station Act was passed
providing federal grants to the states for agricultural ex-
perimentation. However, a great deal of experimental work
had already been done by private parties and the first agri-

cultural experiment station had been established at Wesleyan

53
University at Middletown, Connecticut in 1877. Interest was
concentrated on the import of new varieties of crops and ani-
mals, foreign markets, crop and animal science, and such
other activities as are associated with production and mar-
keting.

In 1889, because of its increasing importance, the De-
partment of Agriculture was raised to Cabinet status. Laws
rapidly followed, regulating and promoting certain aspects of
crop marketing, livestock marketing, conservation, the use of
insecticides, plant and animal quarantine, research, medicines
and vaccines for livestock, road building, futupes markets,

a rural free mail and parcel post system, and extension and
vocational education.

In 1914, the Smith-Lever Act was passed providing for
cooperative administration of extension work by the U.S.
Department of Agriculture and the state agricultural colleges.
As originally conceived, extension was to:

"...Consist of the giving of instruction and prac-

tical demonstrations in agriculture and home econo-

mics to persons not attending or resident in said

colleges in the several communities, and imparting

to such persons information on said subjects through

field demonstrations, publications, and otherwise..."7

This law provided that the agricultural colleges should
set up divisions of extension and the agents were joint em-

ployees of the U.S. Department of Agriculture and the College

concerned.

 

7U.S.D.A., A Century of Service, p. 81.

54

In the early years, the extension workers assisted in
the development of cooperatives, and in 1920 assisted with
the formation of the Farm Bureau and fostered other farm
organizations at the state and local levels. In many states,
the extension service was partially supported by the Farm
Bureau financially. In 1922, this relationship was brought
to an end in some states by the U.S. Department of Agriculture
and by 1958 the extension service had reverted to state and
national control and financing in all states.

The Smith-Hughes Vocational Eflucation Act was approved
in 1917 authorizing vocational education in the high schools
of the nation. Under this act, vocational agriculture depart-
ments were set up in high schools throughout rural America
for training farm boys in scientific agriculture. As a part
of the program, most states have also conducted courses for
"out of school" youth and adult farmers to train them in the
latest developments of agricultural science and management.

Agricultural credit did not receive much official
attention until after 1910, when research was conducted on
interest rates and use of rural credit. As a result of this
activity, the Federal Farm Loan Act was passed setting up
the Federal Farm Loan Board and twelve district Federal Land
Banks in 1916.

Many other activities were carried on during the 1914-
1918 period to support the war effort, most of which were
discontinued in 1919 and 1920.

55

This period saw a rapid rise in the industrialization
of the nation so that agriculture became relatively less
important in the economy than it had been previously. For
example, agricultural exports fell from over eighty percent
of total exports in 1865 to a little over forty-one percent
in 1921, but the absolute value of agricultural exports in-
creased from 279 million dollars to 2,606 million dollars.8
The farm share of total gross national product fell from
about 39 percent(1870)to about 12 percent in 1920, but output
per farm worker increased more than 50 percent during the
period.

The gross investment in agriculture (not including land)
reached 631 million dollars annually by 1900 and was expanding
rapidly. Most of this investment was in the form of improve-
ments to land and buildings, and purchase of machinery and
equipment. In addition, the amount of intermediate products
annually consumed on farms (repairs, fertilizers, etc.) had
increased from about 47 million in 1850 to over 360 million
dollars (1910-14 dollars) by 1900. While the relative im-
portance of agriculture as an industry declined between 1850
and 1920, it was growing in an absolute sense and contributed
substantially to development by supplying food, labor, markets,

and investment funds for the rapidly rising industrial sector.

 

ERS, Agriculture and Economic Development. P. 25.

56
3. A period of Stress: 1920-1935

 

As shown in Figure 3, agricultural production continued
to rise for part of the period and then decreased with a
compound rate of increase of about 0.2 percent for the period
compared with 2.2 percent for the preceding periods. It was
marked by severe depressions, unstable prices, declining ex-
port markets, and unfavorable weather, all contributing to
a poorer climate, both economic andnmaeorological, for in-
creased agricultural production.

During this period, labor input began to decline and the
input in land leveled off as most of the suitable land was
brought into use before 1920.

Changing technology began to make itself felt with wider
use being made of tractors and machinery and less dependence
placed on horses and manpower. More emphasis was placed on
education, training, and research and on the regulation of
markets by the government.

During the fifteen years, legislation was passed making
provision for or regulating almost every sector of the agri-
cultural economy--markets, cooperatives, research, market
stabilization, unemployment relief, soil conservation, mort-
gage relief, production and marketing controls and agreements,
farm credit, surplus commodity disposal, crop production loans,
rural rehabilitation, crop controls, school lunch programs,
and rural electrification.

The principle problems of the period were the surpluses

57

of agricultural commodities on hand and the poor economic
condition of the farmers. In efforts to allay these condi-
tions, cooperatives were fostered, export corporations were
formed to promote export of farm products, improvements in
marketing were started and land was withdrawn from use in

soil conservation programs and acreage and production controls.
Emergency work programs were instituted and loans made to
farmers for seed, feed, and relief in flood or drought-affected
areas.

Acreage controls were imposed on the major crops in 1933
and 1934 and controls were placed on the production of most
types of livestock products. Loan programs were stepped up
and emergency purchases of crops were made in attempts to
bolster the farm markets. Marketing agreements were used for
many commodities in an effort to reduce production, and sur-
plus disposal and relief programs were used to dispose of
some of the surpluses in areas of low production and in areas
where city people, as well as farmers, were in distress be-
cause of natural causes or unemployment.

One of the factors that has intrigued foreign economists
for years has been the ability of American agriculture to
respond to emergencies of all types and this was borne out
during the great depression. Even though agricultural incomes
were very low and many farmers were in distressed circumstances,
agricultural production remained at a level sufficiently high
to feed the population of the country so that even during the

58

depths of the depression, there was food enough for everyone.

4. After 1935

The period was marked by a continued increase in produc-
tion, as noted before, caused by increased yields per unit of
input. New land was limited, labor was high priced and scarce
during most of the period. As a result, beginning in the late
1930's, the farmers of America stepped up their rate of in-
vestment in production and labor saving capital. Based on
1935-39 prices, the composition of farm inputs in 1935 were
distributed so that 65 percent of the expense went to labor,
18 percent to land, and 17 percent to capital. By 1940, these
percentages had changed to 41 percent for labor, 18 percent
for land and 41 percent for capital. Using 1947-49 prices,
the figures of the same inputs for 1940 are 56, 14, and 30
percent respectively and by 1960, the figures were 27 percent
for labor, 15 percent for real estate, and 58 percent for
capital. (See Table 2)

Crop yields averaged nearly twice as large in 1960-62
as in 1930-32 and the annual compound rate of increase of
crop production was 1.7 percent in spite of a reduction of
over fifty million acres in crops, forty million of which
have been taken out of production since 1950.

In order to achieve this record of increasing produc-
tivity, the farmers have changed their way of farming radi-
cally during the last twenty-five to thirty years.

The shift to tractors from horses has accounted for a

59
Table 2. Changes in Farm Inputs, United Statea9

 

 

 

Tear» Distribution of Inputs Based on 1935-39 Prices
Labor Real Estate Capital Total
Percent Percent Percent Percent
1870 65 18 17 100
1920 50 18 32 100
1930 46 18 36 100

1940 41 18 41 100

 

Distribution BTTInputs Based on 1947-49 Prices

1940 56 14 30 100
1957 31 15 54 100
1960 27 15 58 100

 

large part of the increase, particularly that occurring before
1940-45. Increased yields from crop acres and livestock units
have accounted for most of the increase since that time.

Fertilizers are probably the most important single fac-
tor in this increase, the amount used being more than nine
times as much in 1960 as in 1910. Table 3 shows that in
addition to fertilizer, the farmers of America spent ofer
seven times as much in 1960 as in 1910 for production items
and eight times as much on capital expenditures.

The value of production assets increased during the

period 1940-1960 by 82 percent per farm and by 100 percent

 

6 9ERS; How the U.S. Improved its Agriculture, Table 2,
P. . .

60

Table 3. U. S. Agriculture's Production Expenses and Gross
Capital Expenditures.10

 

 

 

Year
Item (Million Dollars)
Total Production Expenses [3,115 22,039
Current Farm Operating Expense
Fertilizers & Lime > 152 1,462
Repairs & Operation of Farm Capital Items
Buildings ‘ . 199 578
Motor Vehicles & Machinery ' 52 3,283
Miscellaneous 558 2,839
Gross Capital Expenditures
Buildings 236 1.497
Motor Vehicles 36 1,315
Other Machinery & Equipment 259 1,269
Total 531 4,081

 

per farm worker, and in 1960, stood at over 108 billion

dollars for the United States, an average of almost $24,000

per farm and $14,700 per farm worker.11
Another source of high yields has been the use of im-

proved seeds. For example, it has been estimated that between

 

10ERS, Agriculture and Economic Growth, Table 7, p. 23.

 

11Ibid. p. 24.

61
1940-41 and 1955, 12 percent of the increase in crop pro-
duction per acre was due to hybrid corn and that 19 percent
of the increase between 1919-21 and 1938-40 was due to this
same input.

Other inputs entered into the production picture such as
the use of chemicals for weed control, improved pest control
chemicals, new crops and varieties, improved breeding and
"hybridization" of livestock, improved feeding practices,
disease and insect control and many others, too numerous to
mention here.

Improved practices - made possible by the new equipment
available, new seeds, new machinery, new knowledge, new manage-
ment practices, and new technology all combined to make higher
yields possible and production more efficient.

On the economic side, .other factors combined to encourage
the farmer in his production progress. Minimum price programs
started in the 1930's were continued in a modified form. War
time demands and post-war requirements for food created con-
ditions that caused farmers to make the investments and to
take the steps required to increase production.

In order to supply the information needed by the farmers,
public and private research expenditures increased several
times. For example, research expenditures of the United States
Department of Agriculture increased from $29 million to $331
million between 1940 and 1960. Private research also represents

a considerable sum. Some of the industries allied to agriculture

62
and their expenditures for research in 1960 are listed in
Table 4, below.

Table 4. Industrial Research Investment Related to Agriculture12

 

‘Research Expenditure

 

Industry in Millions; 1960
Processed Foods & Concentrated Products $ 97
Paper & Allied Products I 65
Stone, Clay, & Glass 78
Primary Metal 146
Industrial Chemicals & Machinery 1,000

 

In addition, millions of dollars were spent by the land
grant colleges, State experiment stations, feed companies,
and others on agricultural research, but the total expendi-
ture is still only about one percent of total agricultural
production.

While early research concentrated on production, later
work has dealt increasingly with marketing and utilization,
as well as with finding ways for increasing efficiency.

Emphasis has also been placed on extension and education
with increased effort being placed on training young people
in the high schools and colleges through such groups as 4-H
Clubs and the Future Farmers of America. Training programs

are offered by the extension services, the universities,

 

12ERS, Agricultural and Economic Growth, p. 19.

63
experiment stations, vocational agriculture departments,
manufacturers, and cooperatives to teach the farmer how to
increase his efficiency in production and marketing.

I As the price of labor rose and the need for machinery and
other inputs necessary to increase the efficiency of labor
became more apparent, a greater amount of credit was required.
The activities of the Farm Credit Administration were greatly
expanded to provide production credit and credit for capital
increases. A large number of the farm credit associations
set up under this program have become wholly farmer owned.

In order to relieve the uncertainties of production in
some high risk areas, crop insurance programs are conducted
which assure the farmer a fair return._

As a result of programs which have assured him of at
least minimum prices, stable institutional credit, and a mar-
ket for his products, the farmer has made good use of the
other inputs available. Because of the large supply and low
prices of inputs needed for production, an adequate supply
of power, good transportation and communications, a constant
stream of new technology to be used, and a continual flow of
information, the farmers of America have continued to lead
the world in producing the things people everywhere need for
a better life.

In summary, to quote the Economic Research Service, U.S.
Department of Agriculture,

"Expansion of land under cultivation was a major

64

means of increasing production until about 1920.
Over all productivity of agriculture went up gradu-
ally...and resulted from increased use of capital
inputs and labor as well as land. Foundations of
later increases...were built up with establishment
of family operated farms, free public schools,
agricultural research and extension services,
credit facilities, farmer cooperatives, and im-
proved roads and other transportation and commu-
nication facilities.

"Agricultural output increased slowly in the 1920-35
period. Strong incentives...were lacking, as prices
of farm products declined relative to those of the
production inputs.

"Total labor force began to decline...

"Agricultural production went up rapidly beginning

in the late 1930's and continuing to the present. In
fact, total agricultural output has increased as much
or more in the last 25 years as it did in the preceding
75 years. Higher prices and larger markets for farm
products made it profitable for farmers to apply im-
proved agricultural technology, developed through years
of research. Additional capital inputs were used to
improve production methods, but the labor force in
agriculture declined with corresponding industrial
growth. Increasing productivity was the source of
seventy five percent of the agricultural output
expansion.

"Numerous interrelated factors have contributed to

the large output and high productivity of American agri-
culture. They include: (1) a large supply of land and
water resources; (2) large investments for education
that improve human skills and managerial abilities; (3)
development and diffusion of new knowledge about agri-
cultural technology; (4) complementary industrial
development that supplies capital inputs for agricul-
ture and non-farm employment opportunities for people
not needed in agriculture; (5) a structural organiza-
tion of farmers and marketing firms to increase output
and productivity; and (6) public and private institu-
tional services that a)help conserve and improve
natural resources, (b increase the fund of knowledge
about improved agricultural technology, (c) encourage
ca ital formation and investments in agriculture and
(d) assure farm people that they will share in the eco-
nomic benefits of increased production."13

 

p.

13ERS, How the United States Improved its Agriculture,

1-2.

55

Table 5, below presents an evaluation of the results

of the various categories of development programs carried

on in the United States during the period 1860-1962.

 

 

Table 5. An Evaluation of the Relative Contribution of
Agricultural Improvement Programs Carried on in
the United States to Increased Agricultural
Production, 1862-1962.

Relative * Relative

Date Category Contribution
1. Land and Tenure Reform 10
2. General Education 10
3. Technological Improvement 10
4. Transportation-Communication 8
5. Farmer Involvement 8
6. Agricultural Investment 4
7. Agricultural Education 6
8. Agricultural Research 8
9. Agricultural Supplies 4

10. Markets and Prices 4
11. Farmer Training 8
12. Agricultural Credit 2

 

* See Appendix I for items included in each category.

CHAPTER VI
TAIWAN'S AGRICUDTURE

The experience of Taiwan is perhaps of more interest
to the developing countries than that of Japan or of the
United States because of its sub-tropical monsoon climate
(which more nearly parallels that of most developing countries).
Taiwan started the development process more recently, still
has an agrarian economy, and was under colonial rule until
the end of World War II. Agriculture accounts for about half
of its national income, provides 70 percent 6f its exports,
employs more than half its people.1

”Figure 4 below shows the increase that has been made in
agricultural production, mostly since 1920. The war years,
of course, had an adverse affect on the province but, as
seen, recovery was rapid and almost continuous since 1945.

Except for the war years, the island has increased pro-
duction at an annual compound rate of about five percent per
annum since 1910.

Taiwan was ceded to Japan in 1895 and from 1920 to the
end of World War II, it contributed agricultural products,
particularly food, to Japan's economy. At the end of the war

it was returned to China, and with the takeover of the mainland

 

1Tsui Young-Chi "Land Use Improvement: A Key to the
Economic Development of Taiwan," Journal of Farm Economics,
Vol. 44, (May 1962). -

66

67
by the communists in 1948-49, the Chinese government moved to

Taiwan accompanied by an army and over a million civilians.

Figure 4: Farm Output, Taiwan2

 

% 9f 1935-37

 

160

 

 

140

 

 

 

120

 

 

 

100

80

 

 

6O

 

 

 

40

 

 

 

 

 

 

 

l
1910 1920 1930 1940 1950 1960

 

 

 

 

 

From 1900-09 to 1960, the number of farm families increased
from 359,000 to 786,000, the amount of cultivated land increased
from 554,000 hectares to 869,000 hectares, and the average size
of farm decreased from 1.5 hectares to 1.11 hectares.

The agricultural development of Taiwan can be conveniently
divided into two periods: 1895-1945, the period of Japanese

occupation; and 1945 to the present.

 

2F.W. Parker and W.E. Hendrix, "Foundations for Agrarian
Development," Figure 3, p. 23.

 

 

68

l. The Japanese Period: 1895-1945

While details of many aspects of the early progress of
Taiwan's agriculture are not available to the author, evi-
dence available indicates that the advancement made during
the Japanese occupation closely paralleled Japan's own develop-
ment, but with a fifteen to twenty year time lag which was
reduced somewhat in the latter part of the period.

The first achievement of the Japanese was a complete
cadastral survey of the island which has been useful in es-
tablishing land rights, settling disputes, levying taxes, and
in implementing land reforms after World War II.

The "Farmers“ Associations," familiar in Japanese develop—
ment, were started in the province in 1900 and by 1945 there
were over two hundred functioning associations. They were, 8
as in Japan, largely government controlled and acted as agents
of the government in its contacts with farmers. Early in the
1900's, the Japanese government began to encourage Japanese
migration to Taiwan. The new settlers took over most of the
government posts and the farmers' associations and used them
as a means of control and instruction.

Two research stations, four seed farms, and a small
experiment-cum-demonstration-cum-extension project was begun
in 1916 to encourage the Chinese farmers in rice production.
Japanese seeds and techniques were introduced and, although
some adaptation was required (Just as in Japan), they were

generally found to be successful.

69

The extension program was strengthened in the 1930's,
because of the requirements for rice in Japan, by strength-
ening the Farmers' Associations in every part of the province.
In most cases, the extension work was carried on by locally-
trained men or better farmers under the supervision of
Japanese agricultural graduates working through the farmers'
associations.

Hence, an efficient and quick-acting organization for
introducing new technology was available which did not depend
on local research exclusively for its ideas, but freely
adopted ideas from other sources (mainly Japan).

Agricultural education got a later start and was limited
in its scope. In 1919, a Senior School of Agriculture and
Forestry was started for primary school graduates and a few
Japanese graduates of this school were sent to Japan for
further training since, as a general rule, Chinese could not
attend college except to study medicine.

In 1928, a faculty of Science and Agriculture was
established in Taisoku Imperial University (now National Taiwan
University) and trained primarily Japanese students.

Fertilizers were first introduced about 1900 and by
1931-40 their use had increased to the point that 14.9 percent
of the total imports of the province were chemical fertilizers.
After 1930, fertilizer factories were inaugurated on the
island along with petroleum, aluminum, steel, machinery, and

electrical generating industries.

70

As noted earlier, seed and technical and managerial
know-how were imported from Japan which helped in the develop-
ment of the country during this period. Prices were relatively
favorable during the period and a large export market existed
for sugar and rice. Warehouses were constructed to improve
marketing.

A fairly good transportation system, electrical generat-
ing system, and banking system were started which were later
to serve as the foundation of Taiwan's industrial and agri-
cultural structure.

Some agricultural credit was supplied by the farmers'
associations, based on the savings of their members. However,
this supply was unreliable before the war and never accounted
for a very large part of the total amount of credit used by
farmers. Most agricultural credit was supplied by relatives
and merchants or money lenders and was provided at high rates
of interest.

Another development during this period was the expansion
of the irrigated areas. About 28 percent of the cultivated
area was irrigated in 1903 and by 1940, 61 percent was irri-
gated. Counting the increase in cultivated area, the irri-
gated area increased 252 percent during the period 1903 to
1940. The government financed all irrigation projects: the
large projects being undertaken by the state while the small
ones were administered by local farmer operated irrigation

associations. .

71

This period, 1895-1945, is notable for the rapid in-
creases in agricultural productivity that were made, essen-
tially following the Japanese pattern of development. The
traditional structure of agriculture was not materially
disturbed, and the agricultural working force continued to
increase, though relatively it became a smaller proportion of
the total population. Except for the investment in irrigation
and agricultural supporting industries, the capital invest-
ment was small and involved only operating expenses for good
seed, fertilizers and small tools. The last factor that seems
to have had an effect, but not the least important, was the
adoption of new technology, transplanted, with some modifi-
cation, directly from Japan and extended throughout the province
quickly and expertly by the farmers' associations and their
employees.

2. After 1945 - The Joint Commission for Rural
'Heconstruction.

 

Taiwan also presents a remarkable example of agricultural
development since 1945. As noted in Figure 4, agricultural
production decreased to about 50 percent of the 1935-37 level
in 1945 but recovery was rapid and by 1950, agriculture had
regained its prewar level.

Brown rice production increased from 639,000 metric tons
in 1954 to 2,100,000 tons in 1962, yield per acre doubled and
agricultural exports increased to $80,600,000,3 (in 1962)

 

3JCRR - General Report XIII, (Taipei, 1962).

72
from practically nothing in 1945 so that agriculture has
contributed materially to the country's progress.

As the first approach of the Chinese government in
promoting agricultural development, a program of land reform
was initiated that was to have far reaching consequences.

As Mr. Chen Cheng, a former governor of Taiwan says,

"...the implementation of land reform is not only

basic to the betterment of the people's livelihood

and the promotion of political and social stability,

but also a motive force for furtherance of economic

development and industrialization. The progress we
have made in economic reconfitruction is largely due

to changes in agriculture.

To start the land reform program, the government leased
land taken over from the Japanese to farmers. This program
was started in 1947 and largely completed by 1949.

The second stage was the Rent Limitation program of 1949
whereby the rent of land was limited to 37.5 percent of the
annual main crop yield. This encouraged double cropping,
forced down land prices, and increased farmers' incomes.
Leases were extended to six years, renewable at the will of
the tenants, so that they could afford to make improvements
on the land. This program eventually covered about 260,000
hectares and benefited about 300,000 tenants.

In 1951, the Land-to-the-Tiller program was initiated,

first on government land and then on privately held land.

The government sold 80,000 hectares of its land to the occupying

 

4Chen Cheng, Land Reform in Taiwan, (China Publishing
Company, Taiwan, 1961), preface, p. xii.

73

tenants at 2.5 times the value of the annual main crop yield.
Payments were made in rice for paddy land and in sweet
potatoes for high land and extended over a ten-year period.
The size of holding was limited to three hectares of paddy
land and six hectares of upland.

In 1951, a survey was carried on to determine the extent
of tenancy on the island and in 1955 a bill was passed pro-
viding for the purchase of landlords' holdings (above what
they actually farmed themselves) for resale to farmers on the
same terms as mentioned above. This program transferred the
ownership of 140,000 hectares ofland to 200,000 former tenant
operators; An interesting feature of this program was the
manner of payment to the landlords. They were paid 70 percent
of the sale value in land bonds and 30 percent in stocks of
four publicly owned corporations allied to agriculture. As
a result, thousands of former landlords became interested in,
and supporters of, the industrial sector through compulsory
investment in these companies.

The actual administration and supervision of the trans-
fer of land was put in the hands of 341 local land commissions
made up of eleven members: five tenants, two landlords, two
owner-farmers, and two members appointed by the local govern-

ment.5

 

5"I'.H. Shen, Agricultural Development on Taiwan Since

World War II, (Constock Publishing Associates, Ithaca,ANTY.
1954). p. 44.

74

In 1957, the government initiated a long term "land
loan" program to assist farm operators in completing the job
of buying excess land from landlords, for enlarging their
farms, and increasing the size of their farm business.

Equally as important as the land reform program in the
development of rural Taiwan has been the constructive work
conducted by the Joint Commission on Rural Reconstruction.
This organization was started on mainland China, moved to
Taiwan in 1949 and continued its work there.

Its objectives are as follows:

1. To increase crop and livestock production.

2. To improve rural living conditions.

3. To develop the potentiality of rural people
for rehabilitation of their own communities.

4. To cooperate with government agencies in

rendering services to agriculture.

5. To encourage and develop rural leadership.

The Joint Commission on Rural Reconstruction (herein-
after referred to as JCRR) has chosen to work through existing
agencies or by setting up agencies for special jobs and has
operated through a very small staff. It has functioned pri-
marily as a planning, supervising, and supporting agency.

It has taken the lead in promoting rural development since
World War II, but only a few of its major efforts will be
reported here. i

The first major step was to reorganize the Farmers'
Associations. With the end of the World War II and the de-
parture of the Japanese, these organizations fell into disuse

and were largely disorganized. After reorganization, they

became a viable and forward thrusting part of the rural economy.

75

Dr. T. H. Shen describes them thusly:

"The Farmers' Association system in Taiwan...makes

it possible to increase agricultural production and

promote the well-being of rural families. It is a

federated system of multiservice cooperative organ-

izations operating on three levels: an association

on the rovincial level, 22 associations on the

county hsein) and municipal level, and 317 associa»

tions on the township level. One member represents

a family. The members of each village in the

township area organize themselves into a small

agricultural unit (SAU). There are 4,803 such units

and the members total 702,254. These units are the
basic structure for the organization of the farmers'
associations."6

Membership is divided into two categories, active and
associate, on the basis of proportion of income derived from
agriculture. Active members (with voting privileges) must
make 50 percent or more of their income from agriculture or
be an agricultural graduate working in a field allied to agri-
culture. All others in the rural villages are associate mem-
bers.

The management is vested in an unpaid board of directors
with policy making duties, and a hired manager. An elected
board of supervisors oversees the many activities of the or-
ganization.

The JCRR.has provided much of the guidance for the far-
mers' associations and subsidized many of their activities,
especially in the early stages of their operation. The pro-
vincial department of agriculture and forestry also has a

special section to assist the associations in their regulatory

 

6
T.H. Shen, Agricultural Development on Taiwan, p. 48.

76
and legal activities and sponsors some of their activities.
Dr. Shen describes the activities of the associations
as follows:

"The farmer's associations in Taiwan perform such
services and offer such facilitses as rural credit
and savings deposits, extension services, sale and
marketing of agricultural products, provision for
rural health and transportation, promotion of rural
industry, settlement of disputes relative to farming
problems, and sale of farm tools, food, cloth and
clothing, rubbers, boots, bicycle tires, soft drinks,
and canned fruits. In addition, they also render
services for the government, provide facilities for
rice milling and for warehousing of rice and ferti-
lizers, and aid in crop and livestock improvement.
They collect and process 700,000 metric tons of rice
and distribute 600,000 metric tons of fertilizer and
100,000 metric tons of feed-per year.

"The services rendered by the associations and the
nature of agriculture on Taiwan have necessitated the
development of physical facilities, including large
office space, warehouses, processing machines, trucks,
seed and animal breeding farms, fishponds, jute-
retting ponds, and jute packing machines. The assets
of farmers' associations in Taiwan are estimated to
be NT$900,000,000, and include 276 hectares of farm
land, 103 livestock breeding stations, 330 hectares
in nursery fields, 1,118 rice warehouses, 579 ferti-
lizer warehouses, 3 tea processing plants, and 409
rice mills. There are 295 farmers' associations with
credit departments, having deposits of NT$900,000,000.
Nearly all these facilities are established in the
township farmers' association, and most of the ser-
vices are rendered by the latter.

"...Every one of its members can reach it (the far-
mers' association) and come back in a day's time...
The associations are sensitive and responsible to the
needs of farmers and they constantly seek to increase
their effectiveness and services. In addition, they
are grass-roots agencies for promoting government
policy, agricultural development, and the improvement
of rural communities."7

 

7T.H. Shen. Ibid. p. 51-52.

77

In 1955, the farm extension prOgram was revised and
many of the activities of the extension advisors were split
off and given to specific interested organizations. For
example, the Sugar Manufacturers' Association undertook the
responsibility for conducting the necessary training and
supervision of the cane producers, and other commercial organ-
izations took over the responsibility for promoting their own
industry among farmers. The provincial agriculture extension
system now includes farm extension, 4-H Clubs, and home
demonstration.

Farm extension work is carried on by 1500 township advi-
sors under the guidance of 100 hggin supervisors. All work
through township and village advisory committees. Over 3,000
farm discussion groups have been organized, averaging 30 members
each, and during 1962 they distributed over 500,000 copies of
educational materials and conducted over 6,400 result demon-
strations. About 150,000 farmers participated in 2,390 farm
tours.

The 4-H Clubs have expanded to more than 60,000 members
in almost 5,000 clubs with 4,800 volunteer leaders. They
have been active in production projects and community build-
ing (planting trees, flower beds, etc.) programs and inter-
national activities (IFYE, Young Farmers to Liberia, and
others.)

Home economics work has been started in over half the

townships with about 13,000 women taking part.

78

To support the extension effort, JCRR started a rural
information program in 1949. The activities included agri-
cultural bulletins, magazines, posters, movies, mobile pub-
licity vans, and a radio program. All of these activities
except for one magazine and the movie making activities have
been taken over by the Provincial Department of Agriculture
or private industry and expanded. Over 2,000 radio programs
were prepared in 1961, over 2,000,000 pieces of literature
distributed, and 500 mobile van programs presented.

The JCRR has instituted most of the rural studies that
have been carried out in the province and at the present time
is conducting or supporting studies on land use, mechaniza-
tion, food consumption, dairy farming, food processing, farm
record keeping, and agricultural census. In addition, JOIR
publishes two rural economics periodicals for guidance of
farmers and industry and for reporting the results of its
research activities.

The farm tenancy committees set up to expedite land re-
forms have been continued to handle local tenancy and other
land disputes and JCRR has appropriated money to improve the
land registration system based on the cadastral survey men-
tioned earlier.

It has also supported agronomicn research programs on the
island, concentrating on rice, tea, jute seeds, and other
phases of crops' work. As a result, Taiwan produced over

2,000,000 tons of brown rice in 1961 with an average yield

79
of 2,577 kg. per hectare.

Taiwan has eagerly accepted new varieties from all over
the world for trial, searching for varieties that can in-
crease yield or quality of the presently grownh crops. JCRR
brought in 209 new rice varieties in 1961-62 and provided
other breeding materials and crops to the plant breeding sta-
tions of the province for test and experiment.

Under JCRR's leadership, and through the use of imported
techniques and materials, Taiwan has been able to change from
the traditional varieties to hybrids or F1 generation seed of
many crops in only five or ten years whereas the originating
countries had to spend twenty to forty years in the same
process.

Similar activities and accomplishments could be recounted
in pest control, reclamation of land, irrigation, implements
and machinery, livestock production (particularly in regard
to artificial insemination of hogs and cattle with semen from
the United States and Europe), poultry, fisheries, forestry,
soil conservation, mountain resource development, planning,
and administration.8

The farm credit program was retarded for several years
because of the traditional Chinese attitude towards borrowing

of any kind. Through an intensive educational program, the

 

8JCRR,_A Decade of Rural Progress, 1948-1958, Taipei,
Taiwan, 1958.

JCRR, Annual Report XIIILfl1962, Taipei. Both sources
were drawn on in completing this section.

 

8O

farmers were gradually taught that borrowing for productive
purposes was not "shameful" and a larger number of farmers
began to borrow and use the credit sections of their farmers'
associations. By 1959, the total deposits of all township
farmers associations had reached NT$927,000,000, more than
seven times the deposits in 1953. (The loans issued had reached
NT$664,000,000, more than six times the loans made in 1953.9

It is estimated that in 1961, of the NT$2,900,000,000
in agricultural loans made by institutional or government
agencies, about NT$1,800,000,000 were made by the Land Bank,
Cooperative Bank, and the Farmers' Associations. It is further
estimated that these official or institutional agencies supply
about 60 percent of the production credit and land mortgage
credit used by farmers.10

All loans are supervised, the lending institutions are
frequently audited (every two weeks), and the record of loan
use and repayment are exceptionally good; delinquencies amount
to only 1.5 percent of the value and 3 percent of the number
of loans.11

An agricultural education program has been carried on

since 1945 and the general educationalflevel has been raised.

Enrollment in the primary schools has increased to include

 

9T.H. Shen Agricultural Development on Taiwan, p. 372.

 

10JCRR, General Report XIII. P. 138.

ll
T.H. Shen - Agricultural Development on Taiwan, p. 319.

81

almost 95 percent of the eligible children. Forty-three
vocational agriculture schools are in operation and the two
agriculture colleges have increased their enrollment and
faculties. The student body of the Agriculture College of
National Taiwan University increased from five in 1945 to 879
in 1958 and the faculty increased from 47 to 248. At the
Provincial Agriculture College, enrollment increased from 207
in 1945 to 1230 in 1958 and the faculty increased from 77 to
311. At the same time, all institutions of higher learning
increased from 4 to 21 with 27,900 students--about eight times
as many as in 1946.12

Agricultural investment has been heavy in Taiwan, but
with the organizing and pump priming role of the JCRR, a great
part of the cost has been recovered from the farmers. They,
the farmers, have been involved in the planning and execution
of the projects so that they have been in favor of those carried
on and willing to pay for the benefits received. As a result
of their new-found prosperity, farmers have invested heavily
in their own enterprises and farms. Mr. Tsui Young Chi reports
that by 1960, farm owners had built 100,000 new houses, and
had bought 90,000 bicycles and 140,000 water buffaloes. He
further reports that 13 percent of the farmers had made per-
manent improvements to the land's productive ability, 40 percent

had bought equipment such as threshers, cleaners, and improved

 

12
Ibid., pp. 90-91.

82

plows, and 58 percent had constructed drying grounds and
compost houses, bought excarts, etc., and in 1960, over
600,000 tons of fertilizer were sold.

During this same period, production has tended to shift
to export crops and crops other than rice, although produc-
tion of rice has continued to increase. There is now avail-
able more fruit, vegetables, and animal products as well as
rice than in 1945 so that the general dietary level has been
raised and net family income has increased from $285 in 1953
to $848 in 1960,13 (in terms of 1960 dollars).

Table 6. An Evaluation of the Relative Contribution of the

Agricultural Programs Carried on in Taiwan to
Increase Production Since 1895.

 

 

Relative * Relative

Date Category Contribution

1. Land and Tenure Reform 10

2. Farmer Involvement 10

3. Agricultural Research 8

4. Farmer Training 8

5. Agricultural Education 6

6. Technological Improvement 6

7. Transportation-Communication 6

8. Agricultural Investment 4

9. Agricultural Supplies 6
10. markets and Prices 4
11. General Education 2
12. Agricultural Credit 2

 

* See Appendix I for items included in each category.

Table 6, above, gives an evaluation of the effectiveness

 

13Tsui Young Chi, Land Use Improvement, p. 366-67.

 

OOOOOOOOOOOO

83
of the various development programs conducted in Taiwan by
both the Japanese and Chinese governments, based ontthe
length of time they have been operating and their apparent

effect on the farmers in inducing increased production.

CHAPTER‘VII

THE EXPERIENCE OF.MEXICO

Mexico is one of the few Latin American countries to
achieve a satisfactory rate of increase in agricultural pro-
duction, having achieved a rate close to five percent per year
as compared to a population growth of 2.8 percent during the
last twenty-five years. This means that Mexico has been able
to increase per capita consumption of agricultural products
and is increasingly able to export to earn foreign exchange.

The increases in production have not been spread evenly
over the whole agricultural sector, nor have they necessarily
increased the per capita supply of the staple foods, wheat
and corn, but there has been an increase in livestock products,
fruits, and vegetables. The increases in production have
taken place, for the most part, in the northern states where
the agriculture is quite similar to that practiced in the
irrigated portions of the southwestern United States.1

The agricultural history of modern Mexico begins about
1910 with the start of the Revolution. What might be called
a preconddtioning period followed, lasting until 1930-35, when
agriculture seemed to begin the "take-off."

This makes it convenient to divide Mexico's agricultural

development into two sections, the preconditioning period from

 

1Pafiker and Hendrix, Foundations of Agrarian Development,
pp 0 33-3 0

84

85
1910 to 1935 and the take-off from 1935 to the present.
Mexican Agriculture: 1920-1935
The period was marked by almost continuous fighting and
unrest, and very little development took place. Agricultural
production fluctuated around a level of about 60 to 70 percent
of the average 1947-49 production as shown in Figure 5.

Even though there was no evidence of increased agricultural

Figure 5: Farm Output, Mexico2

 

% of 1947-49

190 f

/’

130

 

 

 

 

 

 

100

70

 

 

/

1900 1910 1920 1930 1940 1950 1960

 

 

 

 

 

 

 

4O

 

 

 

 

 

production during this period, a groundwork was laid that later

was to help Mexico on the road to modernization.

 

2Ibid., Figure 4, p. 34.

86
The Revolution was principally a peasant revolution With
interest centering on the ownership of land which had tradi-
tionally been held in latifundia owned by the Church and large
landlords. In the course of the revolution, the army, the
Church, and the landlords lost their former power to the
revolutionary leaders, supported by the laborers and peasants.
The old constitution was replaced by the constitution
of 1917 which provided that:

1. Land would be redistributed, mainly to foster the
ejido; to provide the peasant with land which he
could farm and/or own depending on his own desires.

2. Ownership of the subsoil and mineral rights of the
land were vested in the government.

3. Laborers were singled out as a special class of
citizens with new rights and benefits.

4. The government was given the responsibility for
primary education on a free, secular and compul-
sory basis.3

However, not much was done to implement these reforms

until 1920 when a program was started to improve roads and
the irrigation system, and to provide agricultural credit.

When the road building program began, there were less

than 700 Km. of paved roads in the country. Paved roads

 

3James G. Maddox, "Economic Growth and Revolution in
Mexigg," Land Economics Vol. 36, (No. 3, August 1960),
p. 2 .

 

87

amounted to less than 10,000 Km. in 1939 and by the end of
1960, over 39,000 Kms. of paved roads had been constructed,
connecting the main cities}l

Considering all kinds of roads, Flores reports that during
the period 1930-59, over 46,000 miles of roads of all kinds
were added to the already existing 27,000 miles and that over
nine billion pesos had been spent on the program which con-
tributed toward connecting farmers to their markets.5

In 1926, the government began rebuilding and adding to
the irrigation system so that by 1935, about 1,800,000 acres
of land were supplied water by government irrigation systems,
and by 1959, there was an additional increase of 4.2 million
acres at a cost of over seven billion pesos.6 Actual irri-
gation of land generally lags behind the construction of large
systems but this lag has been taken up by small projects con-
structed by local communities and farmers so that as Cline
reports, in 1926-47, 816,000 hectares were irrigated, between
1947 and 1952, 665,000 hectares were added and another 1,128,000
were added between 1952 and 1958. A total of 2,609,000 hectares

(about 6,390 thousand acres) were under irrigation7 by 1959 at

 

uHoward F. Cline, Mexico: Revolution to Evolution 1940-
1960. Oxford University Press, New York, 1962, p. 65.

5Edmundo Flores, "The Significance of Land Use Changes
in the Economic Development of Mexico." Land Economics,
Vol. 35. (No. 2 May 1959), pp. 118-120.

6

 

Flores. Ibid., p. 119.

7Cline, Mexico: 1940-1960, P. 69.

 

88
a total cost of 10.4 billion pesos.8
A third major action taken during 1925-26 was the start-
ing of an agricultural credit system. The Banco Nacional de
Credito Agricola y Ganadera, S.A. (Agrarian Credit Bank) was
established in 1926 to supply credit to agriculture.
In 1935, it was realized that some kind of credit system

was needed to support the glidatarios in his efforts to im-

 

prove himself. The Banco Nacional de Credito Bjidal, S.A.
(IUido Bank) was established to carry on this work.

In the same year, the Almacenes Nacionales de Deposito
(National Food Warehouses) was established to provide support
to agricultural commodity-prices and to provide middleman
services. The warehouse receipts issued on stored commodities
by this concern are negotiable and are used by the trades, en-
gaged in food supply, to finance their businesses.

The Banco Nacional de Pomento Cooperative, S.A. (Bank of
Cooperative Development) was established to support the coop—
erative credit programs in 1941.

The enlargement of agricultural credit has been relatively
slow during the whole period of Mexico's development program,
largely because of a lack of funds.9

In 1939, the total amount of public credit extended to

agriculturists amounted to about fifty-eight million pesos.

 

8ERS, Agricultural Policies, p. 18.

9William P. Glade, C.W. Anderson, The Political Economy
of Mexico, (University of Wisconsin Press, Nadison, 1963),
Appendix

 

liwl‘l’l‘l‘l‘ llli llt l‘l'llll'lll ‘lllln‘liflll‘l

89
This grew to 338 million pesos in 1950--about 5 percent of
product value.10 In 1960, the amount loaned amounted to
2,163 million pesos and fell to 1,887 million pesos in 1961.11

The agricultural credit act of 1955 relaxed some of the
terms for credit in regard to collateral required. These loans
are frequently contingent upon the use of improved agricultural
techniques and supervision of the farm management practices
of the borrower.

It has been mentioned that land reform was one of the
major goals of all the governments since the revolution. The
land reform program started slowly but increased rapidly from
1935-1940 and then dropped back in 1956 to resurge once again
in the 1960's. The table below shows land distribution to
1956 and it is reported that the distribution during the year
1961-62 amounted to 3,400,000 hectares, slightly less than
in 1960-61. Altogether over 100 million acres of land have
been distributed.13 3

The Constitution of 1917 limits the amount of land that

can be held by a farmer, limits the amount of land that can

 

1the combined working party, the International Bank for
Reconstruction and Development (The World Bank), The Economic
Development of beico, (Johns Hopkins Press, Baltimore,

1953), p. 20.
'11

 

ERS, Agricultural Policies, P. 19.

 

12Glade and Anderson, Political Economy, p. 73.

13ERS, U.S. Department of Agriculture, A ricultural
Policies of Foreign Governments, (Agr. Handbook, No.132,
washington, 1964), p.'19.

 

 

 

 

l‘ll'll,l||[nl‘l {II-1..“I'I’lllll

90

 

Table 7. Land Distribution and Persons Receiving Landlu
Hectares Distributed Number‘Sf Persons
Period Total Average Per Year Receiving Land

 

Average Per
(000) Ha. (0001 Ha. Total (000) Year, (000)

1916-34 7.777 409 783 41
1935-40 17,981 2,982 815 136
1941-56 11,146 743 267 18

 

be held by a corporation, prohibits a Church from holding
land and in article 123, establishes minimum wages and other
rights for agricultural labor.

Between 1922 and 1926, several laws were passed providing
more secure tenure. A Homestead Law provided that unsettled
land could be homesteaded, contingent on two years of occu-
pancy and tillage. A Colonization Law provided land for
ejidos in new areas and a Credit Act provided loans to pay
for the amenities needed for community life. An Idle Lands
Law provided that idle land revert to the government, and be-
tween 1922 and 1926, most of the states passed laws regulating
the amount of rent that could be charged and providing relief
from usurious debts.15

Another factor of development provided for in the con-

stitution is the requirement that free education be provided

 

4
1 James G. Maddox, Mexican Land Reform (American Univer-
7

sities Field Staff, Mexico U.F. July 3, 195 , p. 15-17.

15Frank Tannenbaum, The Mexican Agrarian Revolution,
(MacMillan Co., New York, 1929), pp. 260-287.

 

 

 

1||I~lll|n|l|l I’ll! ‘ll‘lul'llllll' {I

91

in each ejido. This program has been slow in getting started.
As mentioned by the Working Party of the World Bank, "con-
struction of schools has taken a minor share of total public
investment, accounting for a little less than 1 percent of
the total between 1930 and 1950."16

Additional efforttwas put into education following 1950
so that by 1963, Edwin M. Martin could write that in thirty
years, the "literacy rate has been doubled."17

Mexican Agriculture After 1935

 

It will be noted that many of the activities started in
the 20's and 30's have been expanded and carried over to the
present. Irrigation, roads, land distribution, land tenure,
education and agricultural credit are of continuing interest.

Besides the providions mentioned earlier, there are other
developments worthy of mention. In 1949 a Land Law was passed
providing that a minimum ejido grant should be ten hectares
of irrigated land or twenty hectares of seasonal land.18

Investment in agriculture increased considerably during
these years with private investment tending to increase faster

than public investment. Agricultural investment made up about

12 percent of the total national investment in 1939-47 and 20

 

l6

17Edwin M. Martin, "The Economic Revolution in Mexico"
Department of State Bulletin, V61. 49, (No. 1278 Dec. 23)

j953: PP. 959-60.

World Bank, Economic Development, Pp. 99-100.

 

 

 

l8
Cline, Mexico: 1940-1960, p. 72.

 

92

percent in 1948-50. The share of private investors during
the period increased from 45 to 56 percdnt.19

The actual amounts invested have increased from thirty-
nine million pesos in 1939 to 595 million pesos in 1950,20
to a planned investment of over four billion pesos each year
for 1962-64.21

To further agricultural development, Regional Development
Commissions started functioning in 1947 as planning and
supervisory agencies. In 1946, the National Colonization
Commission was formed, followed by the National Maize Commission
in 1947, and the National Coffee Commissidn in 1949. These
commissions are to stimulate production, improve quality, in-
crease exports, and help stabilize prices.

Price stabilization or guaranteed prices have been a
part of the government agricultural program since 1938. This
objective has been accomplished through a system of warehouses
and retail outlets so that a floor is effectively maintained
under agricultural prices by buying and storing or exporting
farm commodities. Through the 400 retain outlets and 54
"motorized stores" serving the lower income areas of the major

cities, the government maintains a ceiling price on major food

items at the retail level.

 

19World Bank, Economic Development of Mexico, pp. 10-18.

 

O
2 World Bank, Ibid. Table 19, p. 194.

21ERS, Agricultural Policies, p. 19.

93

An agricultural extension service was started about
1950 but its growth has been slow. It is cooperating in a
demonstration program with the National Institute for Agri-
cultural Research set up by the Ministry of Agriculture in
cooperation with the Rockefeller Foundation in 1943. Starting‘
about ten years ago, demonstrations, conducted on individual
farms and at the experiment stations located in the several
states, have been used as centers of training for farmers.

As far as agricultural education is concerned, the main
emphasis has been placed on the agricultural schools in each
agricultural region. In addition, the rural high schools
teach agriculture as a major subject. Tannenbaum describes
the schools in these terms: I

"...looked at from the point of view of the changes

that are taking place in the rural community, the

type of school being established is perhaps of even

greater importance than the number of schools. It

is essentially an "action school." The rural school

is socialized and as far as possible made the center

of life of the community. The school almost always

has a piece of land and there is instruction in

agriculture, in the raising and care of animals, in

the keeping of bees, and in raising vegetables.’22

The development of cooperatives in Mexico has not pro-
gressed satisfactorily, even though one of the principal aims
of land reform was to support the ejido (a form of coopera-
tive, owning and farming land). Reports indicate that since
the disruption of the rural economy by land reform, the

Bjido Bank working through local credit societies, and in

 

22Tannenbaum, The Mexican Agrarian Revolution, p. 424.

94
close cooperation with the elected Bjido leaders, has taken
23

over some of the functions of the former landlords. How-
ever, the bank has not been entirely successful in this res-
pect because of its reluctance to loan money when land is not
offered as collateral.

Most of the Eflidos were set up in the older agricultural
areas of the country where the latifundia and haciendas were
located and there has been a tendency for these farmers to
continue their traditional type of agriculture. In the newly
developed lands to the north, most of the land was purchased
by individual farmers. The World Bank report indicates that
these farmers have made greater investments, have used better
technology, have been more efficient on larger farms, and
have achieved greater development.24

Glade considers that the EUidos, by remaining in the
subsistence economy, have been an effective means of absorb-
ing excess labor while private farms supply the market and
use the surplus capital available. He goes on to say that
the breaking up of the large holdings increased the efficiency
of the remnants left to the latifundia and added to the amount
of capital used on private holdings, resulting in a change

from ascription to achievement in the assignment of economic

 

23Maddox: Mexican Land Reform, pp. 11-12.

1:,
2 World Bank, Economic Development, p. 20.

95

rewards, and the development of commercial agriculture.25
Fertilizers have played a part in the development of
the northern areas but have not been an effective development
tool in the older parts of the country. Fertilizer was in- ‘
troduced early in the history of Mexico and several factories
for bone meal, oil cake, and mixed chemical fertilizers were
producing in the 1930's. In 1944, Guano y Fertilizante was
set up. In 1945, 13,000 metric tons of fertilizer were being
used and by 1958, this had increased to 265,000 metric tons
annually.26 According to the FAO, the use of N, P205, and
K20 combined amounted to only .43 of a metric ton per 1000
hectares in 1949-50 compared to a Latin American average, at
that time, of 2.74 metric tons per 1,000 hectares. By 1960-
61, fertilizer use had increased, on the same basis, to 9.36
metric tons per 1,000 hectares compared to a Latin American
average of 9.03 metric tons. While this is a fair increase,
it is still only about a fourth of that used in the United
States or Greece, 5 percent of that used in Taiwan, and 3 per-

cent of the fertilizer used per 1,000 hectares in Japan.27

 

25Glade and Anderson: Political Economy of Mexico,
pp. 57-59.

26
p. 66.

27
FAQ, The State of Food and Agriculture, 1963, (Rome
1963), Tables 18, 19, 20, and 22, PP. 218-227.

 

Glade and Anderson: Political Economy of Mexico,

96

To summarize, agricultural production has increased rapid-
ly during the last twenty-five years in Mexico. The land has
been distributed, many essential services have been supplied,
though in small quantities to date, and gradually increasing
amounts of money are being spent on irrigation, roads, market-
ing, education, research, electricity, equipment, and indus-
trial products used in agriculture. The increase in production,
which seems to originate largely in the new farm lands of the
north, is about 25 percent accounted for by the addition of
new land and 75 percent accounted for by improvements in yield.

Flores sums up the situation in Mexico quite well by
saying that Land Reform and development was paid for in the
early stage by the landed gentry through land expropriation
and inflation. Later, the labor force and agriculture paid for
it through low wages and prices; and still later, agriculture
has paid a large part of the bill through low food prices and
heavy export taxes. He goes on to say:

"The agricultural sector was able to withstand this

drain without sinking into subsistence levels...

because on the one hand, total agricultural income

increased due to expanded and more intensive land

utilization (the direct and induced effects of pub-

lic works, agricultural credit, and urban expansion)

and to high prices for agricultural exports, and on

the other, the percentage of working population

engaged in primary production dropped from 90 percent

before land reform to around 52 percent today."28

Martin also says:

"The statistics on Mexico suggest that Mexico began

 

28Flores, The Significance of Land Use, p. 123.

97

its economic development in earnest in 1930...in the
thirty years since that time the statistics show that
a country can do that really sets its mind to raising

the standards of living of its people.

Gross national

product has increased almost five times, per capita
income has more than doubled, over 100 million acres
of land have been distributed, agricultural production
has increased over four times, the literacy rate has
been dggbled and the mortality rate has been cut in
half.

Below, table 8, is an evaluation of the part the various

development programs carried on by the people and government

of Mexico have had in contributing to the increased production

of its agriculture.

 

 

Table 8. An Evaluation of the Relative Effectiveness of
the Agricultural Programs of Mexico in Increasing
Agricultural Production, 1910-1062.

Relative * Relative

Date Category Contribution
1. Agricultural Supplies 6
2. Land and Tenure Reform 10
3. Farmer Involvement 8
4. General Education 6
5. Agricultural Education 6
6. Agricultural Investment 10
7. Transportation-Communications 8
8. Markets and Prices 6
9. Agricultural Credit 8

10. Agricultural Research 4
11. Technological Improvement 6
12. Farmer Training 6

 

* For identification of items included in each
Appendix 1.

category, see

 

29
Martin, The Economic Revolution, pp. 59-60.

 

CHAPTER'VIII
THE GREEK EXPERIENCE

For over 4,000 years, Greece has been famous for its
leadership in the arts, philosophy, government, and other
disciplines affecting the lives of people. The experience of
Greece during the last fifteen years may exhibit different
aspects of leadership by showing that agricultural development
can be a reality in the face of high population pressures,
traditional outlook among the farmers, and a lack of resources.

For hundreds of years, Greece was a captive state under
foreign domination. After achieving independence, many years
were spent in wars with neighbors in aleffort to establish
territorial rights. During World War II, it was again overrun
and, after the war, was plagued by internal strife and re-
bellion until 1950. With subsequent peace and relative stabil-
ity, it was found that many resources had been destroyed.
Livestock had been slaughtered, the irrigation works, the
drainage systems, and the transport systems were either destroyed
or had become useless through neglect and lack of maintenance.
The forests had been stripped and many thousands of farmers
had migrated in front of intruding military forces or because
of starvation.

In the face of these difficulties, Greece not only has
made a remarkable recovery, but during the last twelve years,

has increased agricultural production at an average compound

98

99
rate of four percent per year. With population growing at a
rate of only 0.9 percent per year, this represents a gain on
a per capita basis of nearly 3.1 percent per year.
(See Figure 6)

Figure 6: Agricultural Output, Greece2
(1952/53-1953/54 = 100)

 

140

ifio r’,.....-==:::
120 _ .a””‘!”‘--=r””

110

 

 

 

 

 

100

 

9O
80

 

 

7O

 

 

 

 

 

 

 

1952/53 54/55 56/57 58/59 60/61 62/63

3 year moving average.

 

 

 

To facilitate the discussion of Greek agriculture, it is
convenient to divide the development period into two sections:
1920 to 1945 when many of the actions originated that have

begun to pay off in the second period, 1945 to the present.

 

1Parker and Hendrix, Foundations for Agrarian Development,
pp. 35-36.

2Prepared from data in The State of Food and Agriculture,
(U.N., FAO Rome, 1964), Annex Tables 1A and 1B, pp. 195-198.

 

 

\‘lll II III.

100
The 1920 to 1945 Period

Land reform in Greece was started in 1923 by breaking up
the large holdings and distributing the land, mainly to the
3

mountain people. In 1952, expropriation of farm land in
excess of 25 arable hectares per farm owner was authorized
and the job was practically finished by 1955. About 350,000
hectares were appropriated and distributed to over 136,500
families with the average family receiving 2 hectares of ara-
ble land or 22.5 hectares of grazing land each. This reform
increased the number of small holdings (less than 5 hectares)
by 5 percent and decreased the holdings of over 25 hectares
(including non-arable land) by 20 percent. Considering the
low yields generally received, (the Food and Agriculture Or-
7ganization estimates that at least 6 hectares of non-irrigated
or 2.5 hectares of irrigated land are necessary to support a
family at a subsistence level) the farm size in Greece was too
small even before reform to support a really prosperous
agricultural population.4

Another factor contributing to the farmer's difficulties
is the extreme fragmentation of the land. Land Consolidation
was introduced in 1953 and, by 1961, 55,000 hectares had been
consolidated with the holdings averaging 10 plots of about

0.25 hectares each before reform.

 

3OEEC, Fodder Development in Mediterranean Countries,
(Paris 1951).

“FAQ, Pro ress in Land Reform, Third report, United
Nations, ( ew ork 1962), p. 172

101

The farms in the grazing areas tend to be communal and
only a few private landowners are found in these areas.5
The government has not yet done anything about establishing
ownership of this land so that the farmers are reluctant either
to make land improvement investments or to take care of improve-
ments made by the government.

In the field of agricultural education, some efforts have
been made to educate the farmers and youth for over sixty years.
In 1902, the American Farm School was started to give four
years of agricultural training to rural boys destined to go
back to their home villages to farm and to train their neigh-
bors.6

Other schools were started between 1920 and 1935 but
there was not much interest on the part of rural young people.
In 1952, these schools were converted to the training and
reorientation of the farm extension staff.

An extension program was started before World War II,
with various government organizations doing their own farmer
contact and training. Among the organizations engaged in this
activity were the Mechanical Cultivation Section, the Agri—
culture Credit Bank, and the various irrigation organizations.
Because of the lack of coordination between these activities,

not much was accomplished before the war. During the sub-

sequent periods of unrest in the country, the extension system

 

5Ibid., p. 17.

Munkman, American Aid to Greece, p. 88.

102

completely disintegrated.7

Two colleges were in operation before the war giving
degrees in agriculture, and a considerable number of people
had been trained in these institutions. However, opportu-
nities for employment were scarce and interest in advanced
agricultural education had dropped to the point that very few
new students were seeking admission.

The Agricultural Bank was started before the war and
made some medium and short term loans for production purposes.
When the farmer cooperative program began, the bank was given
the responsibility for overseeing the operations of the coop-
eratives and, until after the war, the majority of the coop-
eratives were credit operations. During the period, the
volume of loans handled was very small because of a lack of
financing and government support.

Greek farmers have practiced irrigation for years, using
small diversion dams. In 1929 the government started building
large irrigation and drainage projects but very few were
finished. Financing was inadequate and too many projects
were started to be serviced by the available staff. During
the war years, most of these projects were destroyed or de-
teriorated from lack of maintenance.

A Mechanical Cultivation Service commenced operations

 

7Ibid., p. 90.

8Munkman, American Aid to Greece, pp. 112-116.

 

103
about 1925, doing reclamation and irrigation work and intro—
ducing mechanical cultivation to the farmers. The service was
well organized and, until a large part of the equipment was
destroyed by guerilla action in the early 1940's, continued
to render assistance to the farmers.

A number of research stations were set up during the pe-
riod, dealing mainly with the major export crops--tobacco,
cotton, and wine. A Plant Improvement Station at Thessaloniki
began testing varieties of grain brought in from outside in
1925.

Postwar to the Present

 

During World War II, agricultural production decreased
about 30 percent. Shown below for comparison are a few pro-
duction figures for 1938 and 1947.

Table 9. Deterioration in Agricultural Production During
World War I19

 

 

1938 1947

Product_fi 1000 Tons 1000 Tons
Wheat Production 768 578
Currant Production 158 76
Meat Production 111 88
Milk Production 705 441
Industrial Production Index (1939 . 100) 100 67

 

As noted before, considering the condition of Greek

 

90.A. Munkman, American Aid to Greece, (Frederick A.
Praeger, New York, 19587] p. 46.

 

104
agriculture at the end of hostilities, remarkable progress
has been made in the twenty-year period.

Several developments in the country help account for this
improvement. Mention has already been made of the land reform
program and the changes it has made since 1952.

In 1948, a program for the improvement of agriculture was
authorized with emphasis placed on two phases: (1) technical
development, and (2) land improvement.

The technical improvement and development program includ-
ed not only agriculture itself, but the whole rural infra-
structure--transportation, health, administration, education,
vocational education, forestry and fisheries. As a first
step, the agricultural extension service was reorganized in
1951, using the remnants of the extension programs carried on
before the war. An active recruitment program was conducted
and about 400 Agricultural College graduates were formed into
a staff and given intensive training and reorientation. The
new extension service had two goals besides the normal goal
of improving agricultural production: (1) to inculcate in
the farmers a "let's try it" philosophy, and (2) to remove
the element of distrust between the government workers and
the farmers.10

The new extension organization embraces agricultural

 

10Paul P. Vouras, The Changing Economy of Modern Greece,
Since World War II, (Institute or Balkan Studies, 1962),

P. 78.

105
extension, home economics, education of farm youth, information
and advisory aids, and small land improvement projects. In
the ministry of agriculture, there are fifteen subject matter
extension: specialists besides the directorate officials. In
the rural areas,there are ten inspectorates or regions with
an extension supervisor, a home economics inspector, and two
subject matter specialists in each. There are fifty-two nomos
(county) offices with an agent in charge. At the local level,
there are 420 agricultural advisory officers plus about 110
home demonstration agents.

The advisory officers work through local groups in con-
ducting demonstrations and training farmers. In addition,
each advisor is responsible for conducting short course train-
ing and traveling schools for the about 2,500 farm families
with whom he works.11

The agricultural cooperative program was reorganized in
1952 with cooperatives at the village level federated at the
nomos and national levels. They are under the general super-
vision of the agricultural bank on behalf of the government.
The bank makes reclamation (medium term), production, and crop
(short term) loans directly to the local cooperatives, who,

- l2 2
in turn, allocate the money and make collections. The

 

ll
OEEC, EPA, Agricultural Advisory Services in OBBC
Countries in the Mediterranean Area. ‘(No. 8 of a series en-
titledeocumentatlon in Food and Agriculture. Paris, 1959),
pp 0 17-200

 

l
2Munkman - American Aid to Greece, pp. 263—265.

 

 

\--#

106
lending program seems to be well organized but suffers from
a lack of loanable funds, encompassing (1962) only about one—
fourth of the agricultural loans outstanding, the rest coming

13

from private, high-cost sources. Most government loans for
production are given in kind; the cooperatives supervising
them to insure proper use and repayment.

The cooperatives are also set up to handle crop purchases
and sales of agricultural supplies on behalf of the government.
The government makes bulk purchases of grain (from the far-
mers) and of supplies from overseas or local sources. It is
the responsibility of the cooperatives and the Agricultural
Bank to warehouse, distribute, sell and buy, and collect pay-
ments on all commodities. A few specialized cooperatives han-
dle olives and dairy products or engage in processing and
canning food.

The second part of the development program of 1948 em-
phasized land improvement. The Mechanical Cultivation Service
changed its orientation in 1948 and for a few years, most of
its work consisted of plowing and minor reclamation of land
that had been farmed before the war. Later it was given respon-
sibility for "small" irrigation and reclamation works. Its
work grew in size and scope so that eventually it became a
major factor in earth work. As private contractors (often

supported and trained by the Mechanical Cultivation Service)

 

13ERS - Agricultural Policies, p. 75.

107

became familiar with and able to do the work, the Service
withdrew and allowed the private parties to continue with
mechanical development.14 As a result of encouraging these
entrepreneurs, in 1961 over 85 percent of the wheat grown in
the plains was threshed or cOmbined by privately owned power
units, and in 1959, over 10,000 hectares of rice were grown
in the riverine mudflats where none had been grown in 1948.15

The land reclamation, irrigation, and resettlement pro-
jects have been pushed by the government through special semi-
autonomous organizations. A Border Area Resettlement program
began in 1953 and was supplemented by the Mechanical Cultivation
Section which built the necessary hillside terraces and small
irrigation projects.

Irrigation has been fostered by two corporations besides
the Mechanical Cultivation Section. About 100,000 acres of
land came under irrigation in 1962 making a total of 1.1
million acres irrigated. Loans are available for farmers and
communities for small scale reclamation projects; however,

16 Since 1950, soil conservation

the supply of money is limited.
programs have also been a part of the mountain development pro-
gram.

The higher educational facilities of the country have

 

11(Munkman, American Aid in Greece, pp. 112-116.

15
Vouras, The Changing Economy, pp. 40-46.

16ERS, Agricultural Policies, p. 75.

108

been improved and expanded, although there is still not enough
capacity to accomodate all students desiring to attend. In
1959, the colleges of Greece accepted about 16,000 new stu-
dents but over 5,000 went to other countries for training.
Of the entire 21,000, only about 150 students were registered
in five-year agricultural colleges.17

A new veterinary college was started at the University of
Thessaloniki and the first class graduated in 1956. Since
then, animal health clinics have been set up in provincial
centers, and vaccination campaigns have been carried on with
a fair degree of success. A cattle breeding project was ini-
tiated in 1948 and stations were stocked with good native and
imported animals. As a part of the livestock improvement
program, feed demonstrations have been carried on at several
places in the provinces since 1955.18

The information programs have been vastly expanded since
1952 with the extension service, the colleges, and various
government and private organizations contributing to the fund
of information being given to the farmers.

Research seems to have improved more slowly than some

sectors because of a lack of organization and trained personnel.

However, some progress has been made in improving wheat

 

l7OEEC, Higher Education in Agriculture, (1960 series
Paris 1960), p. 59.

18Munkman, American Aid in Greece, PP. 92-95.

109
varieties. In conjunction with the research organization,
a seed production and certification program was set up in
1957 that now oversees the production of breeders, basic, and
certified seeds of all commercially grown crops. All seeds
are grown under the control of this organization and only
approved varieties are permitted.19

The government has had a price support program for many
years, and in 1950, price supports were extendéd to cover most
farm crops. Since that time, the amount and nature of the
support given has varied from year to year.20 The bulk of
the price support purchasing has been done through the coop-
eratives. Subsidies have been granted on products in short
supply, and on commodities such as improved seed and fertilizer
to stimulate use.

The use of farm chemicals has expanded, although the
supply has been limited by shortages of foreign exchange.

Weed and insect control chemicals have been sold through the
cooperatives or private business outlets.

Fertilizer use has been subsidized since 1958. The
consumption of nitrogen (N) increased from an estimated 25,000
metric tons in 1949-50 to 83,000 tons in 1961—62. During the
same time, the consumption of phosphate (P205) increased an

estimated 25,000 tons to 65,000 tons and potash (K20) from

 

190EE0, EPA, National Systems of Seed Certification,
(1959 Series Paris,71959), p. 22.

 

2OERS, Agricultural Policies, p. 74.

 

110

5,000 tons to 9,800 tons. The application of elemental fer-
tilizers per 1,000 hectares jumped from about seventeen tons
per year to over thirty-eight tons between 1949-50 and 1960-
61.21

In the marketing sector, several developments have taken
place to induce increased production of fruits and vegetables,
to reduce production of tobacco and wheat (there is a surplus
in the world economy and Greece does not have a specializa-
tion advantage in either), and to expand the production of
rice. The expansion of the irrigation system has helped in—
crease the production of fruits and vegetables, which are
marketed in Europe since the acceptance of Greece as an asso-
ciate member of the European Economic Community. The success
of the marketing program has depended, to a great extent on
the construction of about 6,000 miles of roads during the
1949-58 period, which have helped expedite market shipments.
An arboriculture experiment station was established in 1956
to test imported fruit varieties under Greek conditions. In
the same year, the government started inspecting marketed
fruit, set up marketing standards for exported fruits and
vegetables, and built the first of a series of cold storage
warehouses, all of which contributed to better marketing.
Trade associations (cotton, tobacco, fruit) have been established

to promote quality, improve production practices, and increase

 

21FAQ, The State of Food and Agriculture - 1963, (Rome,

lll
exports, primarily to other members of the European Economic
Community.

The system of price supports, subsidies, marketing con-
trols, inspections, and research have been used extensively
to manipulate production patterns, to balance production for
internal consumption, and to promote exports.

In summary, Greece has increased production quite rapidly
during the years since World War II to the point that their
food supply averages about 2,600 calories (including about
140 calories imported) per day and the agricultural production
index (1952-53 to 1954-55 = 100) stands at 151 for 1963-64
and is estimated to be 160 for 1964-65. Per capita production
has also gone up to an index of 140 (1952-53 to 1954-55 : 100)
in 1963-64 and 147 in 1964-65.22 In both categories, this is‘
a much larger increase than achieved in any other country in
Europe.

The increase has been achieved through improvements in
markets, security of land and tenure, increased use of inputs,
irrigation, organization, training, reclamation, and a differ-
ent attitude on the part of the farmers.

The effectiveness of the projects carried on in Greece's
agricultural program are difficult to evaluate since most of

the activities in each of the several categories are new,

 

22Economic Research Service. U.S. Department of Agricul-
ture, Forei n Agriculture Service, The 1965 World Agricultural
Situation, Foreign Agriculture Economic Report No. 22,
Washlngt6n, January 1965), p. 29.

 

112
having started since 1946. However, the rapidity with which
Greece has taken up the agricultural development of the country,
some of the time effect noticed is missing here so that the
evaluations made probably reflect more accurately the effective-
ness of the projects themselves. Following is an evaluation
of the Greek development efforts. (Table 10)
Table 10. An Evaluation of the Relative Contribution of

the Agriculture Programs carried on since World
War II in Greece to Increased Production.

 

Relative Relative

 

Date Category? Contribution
1. Land and Tenure Reform 10
2. General Education 8
2. Agricultural Research 8

. Farmer Training 6
5. Transportation-Communication 4
6. Agricultural Education 4
7. Technological Improvement 6
8. Agricultural Investment 6
9. Markets and Prices 4

10. Agricultural Supplies 4

11. Agricultural Credit 2

12. Farmer Involvement 6

 

* For items included in each category, see Appendix I.

CHAPTER IX

FACTORS INFLUENCING AGRICUDTURAL
DEVELOPMENT IN THE FIVE COUNTRIES

When reviewing the agrarian development of these five
countries, one soon becomes aware that, in spite of the
differences in culture, in background and resources, and in
place and time, there are, nevertheless, many similarities in
the methods used and in the order of implementation as well
as in the fact that impressive results have been achieved.

Before attempting to analyze the agricultural history
of the individual countries, there are four historical factors
that should be noted as being consistent in each of the five
countries. These are not, in themselves, a part of agriculture,
but seem to have had a significant influence on country develop-
ment.

The first point to be noted is that agricultural develop-
ment in all five countries followed periods of political un-
rest and more or less violent social upheavals.

Japan's development was preceded by the restoration of
the Meiji, the breaking up of the peasant's traditional
communal agriculture, and the opening up of Japan to Western
ideas and technology. Again, between 1937 and 1945, Japan
was almost continually at war and the character of the govern-
ment changed. A great deal of social and economic readjust-
ment was required of the population at large as well as poli-

tical adjustment.

113

114

The United States development started after the Civil
War and continuing migrations to the West. As in Japan, each
of the World Wars was followed by a mass movement of the popu-
lation in search of work and better living conditions, and
then by a rapid upsurge in agricultural production.

In Mexico, development was preceded by several years of
bloody revolution and sweeping changes in the political,
economic, and social structure.

In Taiwan, development followed a period of dislocation
for many people on the island by the new Japanese immigrants
and rulers. The second World War, independence, and mass
migrations of armies, rulers, and people to and from the island
in 1945 and 1948 were followed by increased agricultural pro-
duction.

Greece is another case where intense warfare and guerilla
activity accompanied by rather large migrations, realignment
of social structures, and political and economic turmoil
preceded a period of increased agricultural activity and eco—
nomic progress.

While it is not advocated in this paper that war, accom—
panied by radical shifts in social, political, and economic
structure is a necessary condition for development, the
combination may contribute more than is commonly supposed.

In each of these countries, millions of people were affected
and were at least partially jolted out of their traditional

"rut." A social revolution, the acquisition of new knowledge,

115

the development of a new invention or technique, or a chance
for unusually high profits may serve to stimulate new activity
among those affected. As pointed out by Rostow when writing
about the preconditions for economic development,

"The more general case in modern history, however,

saw the stage of preconditions arise not endogenously

but from some external intrusion by more advanced

societies. These invasions--literal or figurative--

shocked the traditional society and began or hastened

its undoing; but they also set in motion ideas and

sentiments which initiated the process by which a

modern alternative to the traditional society was

constructed out of the old culture."1

The second similarity in all five countries is that the
revolutions mentioned above were followed by periods of rela-
tively stable government. In Japan and the United States,
this has certainly been true. In Taiwan, each of the two
periods of turmoil were followed by a new set of rulers but,
in each case, there was a stable government. In Mexico, while
there were several changes in government during the early years
of the revolution, all have been more or less stable and were
revolutionary in character. The development program has been
continuous in that all governments had land reform as a goal,
though differing in degree of implementation, and all supported
peasant and laborer improvement. The difference in government
was largely a matter of degree. In Greece, for the first few

years after the return of the monarchy, there were changes in

governments, but all of them, as in Mexico, had practically

 

1W.W. Rostow, The Stages of Economic Growth, (Cambridge
University Press, Cambridge, 1961), p. 6.

116
the same goals as the preceding governments. In each of these
cases, essentially one agricultural program was carried on
for the entire period, from the start of development to the
present.

The third factor that should be noted is that all of the
countries experienced varying degrees of industrial develop-
ment along with their agricultural development. There were
both good markets for agricultural products and a fair amount
of consumer goods and agricultural supplies for farmers to
purchase during most of the development period. True, Japan
and the United States had a far better supply situation than
the other countries covered in this report, but industrial
production in all five countries has increased, and there is
a much greater supply of consumer and agricultural production
goods available than is found in most underdeveloped countries.

A fourth factor common to the five countries' development
has been the presence of a staff of able and trained adminis-
trators. The importance of this factor in a country's develop-
ment may be more fully appreciated by studying examples of
failure or lack of progress in a country's development program.
In many, many cases, failure to progress as expected can be
traced to too few administrators or their lack of ability,
inadequate training, limited knowledge, lack of energy, lack
of interest, or lack of experience. This then, becomes an area
of supreme importance in the considerations of a developing

country. It must take measures to select, train, and adequately

117
supervise its beauracracy before projects are implemented in

order to insure their success.
FACTORS COMMON TOITHE DEVELOPMENT OF FIVE COUNTRIES

The first step in attempting to determine the reasons
for success of the agricultural sector in these five countries
is to determine what measures were used in common, either
accidentally or on purpose, that have contributed to agricul-
tural development.

A close perusal discloses that there are many similari-
ties in the programs which have been conducted in these coun-
tries, both in the public and in the private sectors. Some
countries have made agricultural development a public respon-
sibility, while in others, it has been primarily left to private
interests except for a few areas such as education and agri-
cultural research. This was especially true in the United
States and in Japan where the governments did not take a lead-
ing role except in times of emergency until fairly late in the
development period.

In the five countries, many different things were tried
that had a definite effect on the development effort. How-
ever, for ease of handling, these many activities have been
grouped into twelve factor categories. The listing of activities
included in each category are included as Appendix I.

Other authors might quarrel with this division into
categories but in light of the developments that have taken

118
place in these countries, this seems to be the most logical
arrangement of agricultural development factors for our present
purpose.
The twelve categories of agricultural improvement activi-
ties considered in this paper are listed below.

Land and Tenure Reform.

0

Technological Improvement.

Farmer Involvement in His Own Development.

General Education.

Transportation and Communications.

Agricultural Research.

Farmer Training (Extension).

Agricultural Education.

\OCD‘QONUl-D'UOIUH

Investment in Agriculture.

1...:
O
0

Agricultural Supplies.

I-’
{.1
0

Markets and Prices.
12. Agricultural Credit.

While not every country has engaged in all of the sub-
topics listed in the appendix, each of the five did carry on
some activity involving all of the major categories and most
of the sub-topics. Each country exhibited some individuality,
depending on the needs of the country and the ability of the
people, as to what it supported and to what extent support
was given. It is important to note that each of the factors
listed contributes to increased production or income from

existing farm land except in the case of irrigation projects

119
which bring new lands into production. As a general rule,
none of the countries except Mexico have added much new land,
relative to that already cultivated, to their available supply
since the early 1920's. In the case of the United States,
the cultivated acreage has been considerably reduced.

Using the limited amount of information available, and
attempt was made to determine the relative effect of each of
the twelve agricultural production factors in increasing out-
put. As the first step in this process, it was necessary to
determine when each activity became important to the improve-
ment of agriculture in each country. Table 11 below shows
the relative rank of each category of activity based upon the
time it became an effective part of the agricultural program
and began to contribute to production increases. In case
two or more major actions were adopted at about the same time,
they were given the same rank.

An assumption that can be made is that the programs
adopted first in the five countries were regarded as most
important to encourage increased agricultural production by
the administrators and politicians who were responsible for
planning the country development effort under the conditions
existing at that time.

It becomes apparent, when examining table 11, that land
and land tenure reform was the first agricultural development
activity undertaken in most of the countries and ranked near

the first in all the countries, indicating the importance

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121

national leaders gave to this activity as a means of increasing
agricultural production.

The involvement of farmers in their own development and
a rising level of general education seem to be second in or-
der of adoption by these countries, while the inputs that
improve the technology a farmer uses ranked third. Transpor-
tation and communications, investment in agriculture, extension
programs, and the supply of agricultural inputs shared the
fourth priority, while programs to support prices, to regulate
markets, and to supply institutional credit were generally
adopted last or near the last.

Many development specialists have pointed out that per—
haps a poor country could study the past performance of a
developed country and benefit by following the same path to
increased production. Others, such as Gershenkron and Kuznets,
have pointed out that there is no reason why the developing
countries should follow the same pattern. Actually, they say,
the mere fact that the new countries are starting development
late means that they can avoid mistakes made by the developed
countries and they may be able to telescope some of the activi-
ties in time, accomplishing in five or ten years what it took
the United States, Japan, or Mexico twenty-five to fifty years
to achieve. By the same token, the new countries may be able
to skip altogether some kinds of activity that are too costly,
too time consuming, give too low a return for the inputs

committed, or those kinds for which good substitutes have been

122
found. For example, a great deal of basic research that has
been conducted in the developed countries does not need to be
repeated in each of the new nations. They can take advantage
of the work that has been done in other countries.

However, the patterns of development of these five countries
are historically important in that they have been successful
and they present an opportunity for farm leaders to study differ-
ent techniques so that they can adapt and adopt those that seem
to best fit their own circumstances. The actual sequence of
some of the activities may or may not be particularly important
and, in any event, a country development sequence will be in-
fluenced by its own political, social, and economic circum-
stances.

In this paper, we have, after determining the sequence of
development activities in the agriculturally developed countries,
made an attempt to evaluate the contribution of each activity
category to agricultural progress. The evaluations for each
country have been presented previously and are summarized in
table 12, below.

These evaluations of the contribution to development of
the various factors are based on personal observations, the
observations of others, who also have worked in the various
countries, articles, books, reports, surveys, official documents
and other available sources. They represent the author's best
judgement as to the importance of each category to the success

of the agricultural development effort of each country.

123

Table 12. Relative Contribution to the Development of Agri-
culture by Each Category of Development Program in
the Five Countries and the Establishment of Weights

 

 

 

for Each.
No. Category Japan 623. Taiwan Mexico lGreece Total ‘Weight
1. Land and 10 10 10 10 10 ' 50 5
Tenure Reform
2. Farmer 10 8 10 8 6 42 5
Involvement
3. Agricultural 10 8 8 4 8 38 4
Research
4. Technological 10 10 6 6 6 38 4
Improvement
5. Farmer
Training 8 8 8 6 6 36 4
6. General
Education 6 10 2 6 8 32 3
7. Transportation- .
Communications 6 8 6 8 4 32 3
8. Agricultural
Education 8 6 6 6 4 3O 3
9. Agricultural
Investment 6 4 4 10 6 3O 3
10. Agricultural
Supplies 4 4 6 4 4 24 2
11. Markets and
Prices 4 4 4 6 4 22 2
12. Agricultural
Credit 2 2 2 8 2 l6 1
Total 84 82 72 84 68

Average - Five Countries 78

124

On the basis of this evaluation, the categories that
apparently had the greatest effect in all of the studied coun-
tries were given a weight of five, the second most important
group were given a weight of four and so on, with the least
important receiving a weight of one. These weights were then
multiplied by the contribution of the category to agricultural
improvement for each country to derive a development score.
For example, referring to Table 12, item number three, "Agri-
cultural Research" received an evaluation of ten for Japan,
eight for the United States, eight for Taiwan, four for Mexico,
and eight for Greece, thus making a total of thirty-eight for
the five countries. This category was then given a weight of
four which, in turn, was multiplied by the "contribution to
development" number of each country to secure a development
score for the category. (Table 13) This process was repeated
for each activity for all five countries.

The scores were then totaled on a country basis and com-
pared with actual production performance (Table 13). Japan
achieved an annual compound rate of increase in agricultural
production of 5.3 percent and received a development score of
308. The Uhited States achieved a 1.7 percent rate of in-
crease, in spite of having had over fifty million acres taken
out of production since 1930, and received a score of 296.
Taiwan increased production four percent per year and received
a score of 264. Mexico's score was 276 with a 5.0 percent

rate of increase, and Greece's rate of increase came to 4.0

125

Table 13. Development Score for the Period 1952-62 for the
Five Countries.

 

 

 

 

No. Category Japan U.S. Talwan Maxico Greece Ave. Welgfit
1. Land and
Tenure Reform 50 5O 50 5O 50 50.0 5
2. Farmer Involve-
ment 5O 40 5O 40 30 42.0 5
3. Agricultural
Research 40 32 32 16 32 30.4 4
4. Technological
Improvement 40 40 24 24 24 30.4 4
5. Farmer
Training 32 32 32 24 24 28.8 4
6. General
Education 18 3O 6 18 24 19.2 3
7. Transportation-
Communications 18 24 18 24 12 19.2 3
8. Agricultural
Education 24 18 18 18 12 18.0 3
9. Agricultural
Investment 18 12 12 30 18 18.0 3
10. Agricultural
Supplies 8 8 l2 l2 8 9.6 2
ll. Markets and
Prices 8 8 8 12 8 8.8 2
12. Agricultural
Credit 2 2 2 8 2 3.2 1
Total 308 296 264 276 244
Avera e Score 277.6

 

Annua Increase
in Agricultural

Production 5.3% 1.7%a 4.0% 5.Q% 4.0%

* Parker and Hendrix: Foundations for Agrarian Development,
Table 2, p. 28.

a.Production has been limited and/6r controlled because of a
lack of markets.

126
percent compared with a development score of 244. The average
development score for the five countries is 277.6.

It is interesting to note the differences in relative rank
of the various categories determined by the two methods of
arrangement. As compared to the sequential arrangement (table
11), the "Contribution to Agricultural Development" arrange-
‘ment (table 13) moved Agricultural Research up one position,
Technological Improvement two positions, and Farmer Training
as much as four positions in the table, while General Education,
Agricultural Education and Agricultural Investment moved down,
indicating that a lesser degree of importance is attached to
these factors in the latter arrangement.

It is also interesting to note that the two highest ranking
categories (those receiving a weight of five) are the two in-
volving the farmer and his relationship to the land. The next
group of factors (those with a weight of four) relate to the
improvement of the farmer and the techniques he uses to farm
his land. The third group (those receiving a "three" weight)
are generally long range activities to improve the farmer, his
land and his farming conditions. The fourth and fifth groups
include items relating to marketing, supply, and credit which
are generally more important to a fairly well developed economy
than they are to a subsistence type of agriculture.

The pattern of development which seems to emerge from
this Study may have several ramifications for the consideration

of developing countries. First, it indicates that there are

127
some activities that should have a high priority in a country
development program for agriculture. The suggestions which
follow should be considered in light of the political, social,
and economic conditions of a country contemplating an agri-
cultural development program, and adjustments made accordingly.

In general, this survey shows that a program is probably
necessary which will insure that the farmers have rights to
the land, either by ownership or by some other arrangement
whereby the farmers' tenure on the land is secure at a fair
rental rate.

Next in importance seems to be the involvement of the
farmer in his own development. He should be encouraged and
trained, and then made responsible for planning, executing,
and maintaining projects and demonstrations for his own benefit.
At the same time, research and technological improvement seem
to have a place in helping the farmer improve the techniques
and inputs he uses in production so as to increase the output
from the agricultural sector.

As agricultural conditions improve, and the farmer begins
to move out of the traditional subsistence form of agriculture,
the technology needed to further increase production becomes
more complex and general education standards need to be raised.
Transportation and communications systems need to be improved
to facilitate the movement of agricultural inputs and sur-
pluses and to help in the farmer information program.

Agricultural education should be provided to train farm

128
leaders, trainers, researchers, teachers, administrators,
technicians, and, eventually, farmers, to keep the development
program moving. By the time the country has started to progress,
additional investment is required to improve the land, to
supply water, fertilizers, drainage, machinery, equipment, to
build factories to supply the necessary inputs, processing
plants, warehouses, cold storage plants, and other installations
necessary to fill the farmers' requirements and to insure
orderly and efficient marketing.

As the use of inputs besides land and labor increases,
and as farmers enter the commercial, monetized sector of the
economy, credit, at reasonable rates and well administered,
will be essential to their support. This, in turn, requires,
a greatly expanded administrative structure, security of
tenure, and farmer involvement if it is to be successful.

This brief summary demonstrates that none of the develop-
ment activities outlined can be successful by themselves.

Each activity has a high degree of complementarity with the
other activities so that, except in the very early stages of
development, when agriculture is just emerging from its tra-
ditional rut, it is likely that all activities will have to be
supported at increasingly higher costs in men, money, and
material as production levels creep higher and higher. This
has been the experience of the five countries.

Now let us compare the concepts presented here with the

agricultural development efforts of a new nation, Pakistan.

129
Do these ideas shed any light on the reasons for the successes
and failures Pakistan has experienced? On the basis of thus
study, can constructive conclusions be drawn as to the kind
of program needed to strengthen Pakistan's agricultural

sector? To speed her on the path to prosperity?

CHAPTER X
THE AGRICULTURAL DEVELOPMENT OF PAKISTAN

Pakistan's agriculture is apparently fairly typical of
the underdeveloped world. The farmers are, for the most part,
tradition directed and poverty stricken; they have very small
farms; their standards of education are generally low and
there is a very high rate of illiteracy.

Data of the Food and Agriculture Organization of the
United Nations indicates that, between 1952-53 and 1962-63,
the production index of total agricultural production in
Pakistan increased from 100 to 111 (1952-53 to 1956-57 : 100).
At the same time population increased from less than 76 million
in 1951 to about 100 million in 1961, and per caput agricul-
tural production fell from 105 to 94. During the same period,
per caput food production foal from 102 to 94.1 The popula-
tion of Pakistan (100 million in 1961) is about 86 percent
rural and increasing at a rate of about 2.6 percent per annum.

Pakistan achieved its independence, after years of agi-
tation, in 1947 and nationhood was followed by about a year
of turmoil and mass migrations to and from India.

The period 1947 to 1958 was marked by frequent changes

 

1FAO, The State of Food and Agriculture; 1964. Annex
Tables 1A and 1B, 2A and 2B, pp. 195-202.

U.S. Agency For International Development, Long Range
Assistance Stratogy, (Supporting Documentation, Kéradhi),

p. 1313/11/2.

 

 

130

131
in government and constantly changing government policies.
Due to the lack of progress, a planning organization was set
up and the first five-year plant(l955-56 to 1960-61) was
drafted but was not accepted until 1958. Very few of its pro-
visions were implemented before 1959.

In 1958, a revolution, led by the Chief of the Armed
Services (now President-Field Marshal) Mohamed Ayub Khan, was
successful, and has been followed by seven years of stable
government and increasing democratization of the country through
the "Basic Democracies."

Pakistan's industrial development has been relatively
greater since 1947 than has the development of the agricultural
sector. However, most consumer items except cloth are scarce
in the market and/or very high priced. Practically all agri-
cultural production inputs, except nitrogen fertilizer, are
wholly or at least partially imported, because of the scarcity
of agriculture supporting industries in the country.

At independence, Pakistan had an excellent administrative
set up for "ruling, revenue collecting, and regulating" but
it was not well adapted for development. The top administrators
were capable and well trained but the junior officials were un-
tried, inexperienced, and reluctant to assume responsibility.
Over the intervening years, a corps of young men has risen
in government ranks who now seem to be taking more responsibility

for development (and with considerable success in some sectors).

Because of the differences in climate, terrain, agriculture

132
and institutions of the two provinces, it will be more inform-
ative to consider them separately in terms of the development

factors listed earlier.
East Pakistan

East Pakistan is a low-lying, deltaic region subject to
the monsoons which bring from 80 to over 200 inches of rain
per year. About half of the province is subject to flooding
and the principle crops are rice and jute. It covers about
54,000 square miles of which about 23,000,000 acres are cul-
tivable. About half of the land is double cropped and the
yields of all crops are low, less than a fourth of those of
some of the developed countries. There are over six million
farm families in the province with the average farm being
about 3.5 acres in size and consisting of 6.6 fragments.

Land Reform and Land Tenure Reform

 

The institution of zamindari was broken up in 1950 and

 

the land was sold or otherwise assigned to the farmers working
it. The government holds title to all land but the farmers'
rights amount to ownership in the ordinary sense. Rents
(taxes) are paid to the government but the existing low rate
was set in 1935 and has not been changed since that time.
About 61 percent of the farms are owner operated, 37 percent

are owner-cum-tenant operated and only 2 percent tenant operated.2

 

2Agricultural Census Organization, Ministry of Agriculture
Government of Pakistan, 1 60 Census of A riculture, Vol. III
All Pakistan (Report 1, Kgracfil, I964), Table 2, p. 32.

 

133

Under the land reform law, the maximum size of holding
was 33 acres until 1958 when the maximum was raised to about
110 acres. Holdings under three acres cannot be further
subdivided.3

A cadastral survey has not been completed but work was
begun on a "certification of holdings" program in 1951 which
was reportedly about 30 percent completed in 1962.

Farmer Involvement in Agricultural Development

While some cooperatives have been set up in the province
since the early 1900's, they have not been effective and,
during the period 1947-1954, most of them collapsed from lack
of farmer interest and because of unpaid debts. The farmers
were left to their own devices until the early 1960's when
the Comilla Project began to use farmer members of coopera-
tives as agents of change in the rural community and when the
officers of the Agriculture Department in the Mymensingh area
developed a joint committee approach to solving farmer pro-
blems and inducing the adoption of new techniques in 1962.

Both of these efforts have come too late to have more
than a very minor effect on the total production of the pro-
vince during the period under review, but they offer a great
deal of hope for the future. Since 1962-63, rural leaders
have been used successfully in the rural works program as

directors of projects to benefit the farmers, using both paid

 

3State Bank of Pakistan, Agricultural Credit in Pakistan,
(Karachi 1962), p. 3.

134
and volunteer rural labor.

General Education Level

 

While the education level in East Pakistan is higher than
in many developing countries, the percentage of literacy is
higher in the 25-45 age bracket than in the lower age groups.
Historically, primary education had been a function carried
on by private philanthropists and industrialists prior to
1947. It was not taken over as a public function throughout
the province until the late 1950's. The government has under-
taken a large school building program since 1959 but the
teacher supply is not sufficient to fill the classrooms.

At partition there were two colleges and one university
in the province. Since then the number of colleges has been
increased to eleven and an Agricultural University has been
opened.

Agricultural Research

 

One research station and several small substations had
been established before 1947, but with the coming of independence,
much of the research under way was wrecked and the new research
programs tended to be designed to impress foreigners rather
than to solve the problems of farmers. As one officer comment-
ed, "More status and more promotions are attached to having an
article published in the American 'Agronomy Journal' than in

helping the farmer."4

 

“A comment made to the author by a plant breeder at the
Tejgaon Station in 1961, during an inspection of the research
work being done at the station.

135

In 1959, the Pakistan Academy of Rural Development was
formed at Comilla to conduct research on rural development and
to teach rural administration. The results of its work are
evident in the rural works program and the Thana development
programs now under way.

_Agricu1tural Education

No work had been done in a formal way to give an agricul-
tural education to farmers or prospective farmers until 1961-
62 when a program was started for training agriculture teachers
for high schools. An agricultural college was attached to the
University of Dacca prior to independence but because of the
lack of employment opportunities, only three to ten people
graduated per year until the early 1960's. In 1961-62 the
facilities were expanded to accomodate an additional forty ad-
missions per year. At the same time an Agricultural University
was opened at Mymnsingh which will graduate its first class
in 1966. The whole agricultural program up to 1961 was being
carried on by a staff of less than 230 agricultural college
graduates.5

Technological Improvement

 

The farmers of East Pakistan have been very slow to adopt
new developments in agriculture. In fact, the government and

other agencies have been slow to introduce new developments.

 

5Letter from Paul Booz, Harvard Advisory Group, East
Pakistan to the author stressing need for additional Agri-
cultural Education facilities.

136
Fertilizer was not introduced until 1954 for any crops except
tea and sugar cane and, as late as 1963, less than five pounds
of chemical fertilizer per cultivated acre were being used. 9
No new seed varieties have been introduced since the "shail"
varieties were first introduced in 1945. Plant protection,
on a province-wide basis, was not introduced until 1960 and
in 1963, only five percent of the province was covered. The
Japanese method of rice culture was introduced about 1955 and
has had mixed success. The main reason being that the prin-
ciple feature borrowed, planting in rows, has not been accom-
panied by other necessary features such as heavy fertilization,
use of good seed, adequate plowing, and control of weeds.

Transportation and Communications

 

The transport system is based on the railroad and water-
ways. The railroad is fairly efficient, though overloaded,
but waterway freight traffic is dependent for the most part
on wind and man power. Farm to market roads were practically
non-existent until 1962-63 when a few roads were built under
the "Rural Public Works Program." The main method used to
move agricultural commodities to market is still the head
basket, at least for the first part of the journey.

Communications are inferior. There is one province-wide
agricultural publication with a circulation of about 15,000
but no newspapers carry articles dealing with agricultural
improvement consistently. About one hour per week of agricul-

tural programming is broadcast by 10081 radio stations, but

137
only about a third of the 65,000 villages have radios.

_Agricultural Investment

 

Agricultural investment was practically nil in the pro-
vince until 1955, when the first of a series of irrigation
projects was begun. However, by 1962-63, these projects were
not yet functioning properly and only about 7,000 acres were
benefited. In 1960, the government started a program of low
lift pump installation for small irrigation projects and by
1964, 150,000 acres were irrigated.6

In 1961, the first fertilizer factory (117,000 tons of
urea per annum) started production and in 1962, a pump factory
began assembly operations. In 1958, a project for flood con-
trol in the lower delta area was started to eventually protect
2.4 million acres of which it is estimated that about 200,000
acres had benefited in 1962.7

Farmer Training

 

An extension service was established about 1940 but was
not staffed at the local level until 1959 when 2,500 untrained
lower employees of the Jute Regulation staff were transferred
to the agriculture department. Since then, these employees
have been given about three months training in agriculture and

assigned areas of work. In 1961, a program to organize the

 

6Falcon & Gosch, An Analysis of East Pakistan Agriculture,
(Harvard Advisory Group to the Planning Commission, Karachi,
1965): P. 14.

 

7
U.S. AID,_Agricultural Growth in Pakistan, pp. 3-8.

 

138
farmers into working and planning committees was started in
one district with great success and the technique is rapidly
spreading.8 A major part of this program has been the mutual
training program whereby farmers are taught by leading farmers
of the village, assisted by local agricultural workers. An
agricultural information service was started in 1960 and by
1963 was turning out an average of two bulletins and three
posters per month.

_Agricultural Supplies

 

As noted earlier, fertilizers were not introduced to the
general agriculture of East Pakistan until 1954 and the first
fertilizer factory started production in 1961. Good quality
seed did not become available in quantities large enough to
plant more than one percent of the area until 1961. Pumps
for irrigation, spray equipment, and chemicals are not freely
available on the market being under government control and
virtual government monopoly. Other modern implements such as
Japanese weeders, pedal threshers, and hoes are not available
except in a few areas near three or four large towns. In 1961
an Agricultural Development Corporation was formed to handle
agricultural supplies, irrigation pumps, and seeds, and to
promote agricultural development. A program for construction
of storage and sales buildings (4,000) for fertilizers and

seeds in every union was completed in 1964 so that these supplies

 

8Ben R. Ferguson, Rural Life in Mymensingh (U.S. Agency
for International Development, Pakistan, Dacca, 1962).

 

139
are now available within one day's travel by bullock cart, by
boat, or on foot to every farmer in the province.

Markets and Price Stabilization

A department of Agricultural Marketing was established
in 1956 and by 1964 had a staff of forty field reporters and
market supervisors whose job was to report supplies and prices
in the forty principle markets. The government buys rice in
the border areas every year and from all over the province in
years of surplus, both to prevent smuggling out of the country,
and to support prices. However, the purchase price for govern-
ment procured rice is usually lower than the market price at
the time of purchase. 0n the other hand, ceilings have been
established at which the government releases stocks of wheat
and rice during times of rising prices. Rationing is insti-
tuted in times of actual shortage and prices are closely
controlled.

The marketing system in the rural areas is of the tradi-
tional type with daily or weekly sales or "fairs" held in the
rural areas from whence the surpluses move to the forty main
markets. Free movement of commodities is limited by a system
of "octroi" taxes and regulations against movement. No effort
has been made to establish grades or standards for any agri-
cultural commodity except tea and jute, both of which enter
foreign markets.

Agricultural Credit

 

Agricultural credit has been a matter of concern to the

 

i 1: i‘- ll I... II I} . I . I ll‘ l-I‘ l Ir I!

140

government of East Pakistan since before independence but
institutional rural credit has not had a successful history
in the province. Credit cooperatives, the Department of Agri-
culture, and Agricultural banks have all made loans to the
farmers but by 1960, a survey made by the Central Statistical
Office, Government of Pakistan, revealed that these sources
accounted for only about three percent of the loans made.
In 1962, the government of East Pakistan moved deeper into the
field of agricultural credit with forty million rupees to be
issued in kind (seeds, fertilizers, rent on pumps, etc.).9

East Pakistan's situation can be summarized by saying
that the farmers' land and tenure situation has improved but
that the necessary inputs have been slow in coming onto the
market. There is a shortage of trained people and effective
institutions to serve the agrarian sector. The situation in
the fields of transportation, education, Markets, and prices

has been such as to reduce any incentive the farmer might

have had to farm better and produce more.
West Pakistan

Contrasted to East Pakistan, West Pakistan is a dry,
desert type country, except in the mountains of the north, and
most agriculture is dependent on irrigation. Rainfall averages

ten to twenty inches per year with some of the mountainous areas

 

9U.S. Agency for International Development, Long Range
Assistance Strategy, SD/ll/Dp. 27-30.

 

141
receiving 60 to 100 inches annually. The climate is severe
with temperatures ranging from over 125' F. in the deserts in
the summer to considerably below freezing in the north during
the winter.

In the rainfed areas, farms are generally large while in
the irrigated areas, they are small and fragmented, similar
to East Pakistan. According to the census of agriculture,
there are 5.7 million farms of all types in West Pakistan with
the average farm consisting of 10.1 acres of which 7.7 acres
is cultivated. Forty-nine percent of the farms are less than
five acres in size (10 percent of the total farm area) and
eight percent are over twenty-five acres in size (42 percent
of the area).10 Forty-one percent of the farms are owner
operated, seventeen percent are owner-cum-tenant operations,
and forty-two percent are tenant farms.ll

West Pakistan has 56 million acres of arable land of
which 22 million are irrigated and the balance is arid or semi-
arid.12

The principle crops are wheat, sugar cane, and cotton,
the yields of which are much lower than in the more highly

developed areas of the world.

West Pakistan's industry has developed more rapidly than

 

O
1 Agricultural Census Organization, 1960 Census of Agri-
culture, p. 64.

11

 

Ibid., p. 64.

12U.S. AID, Agricultural Development, p. SD/ll/Di-Z.

 

142
that of East Pakistan and its agricultural expansion efforts
have been expedited by a higher state of development at the
time of partition from India. West Pakistan also has a com-
pletely different social and economic structure than East
Pakistan as will be shown by the following discussion.

Land Reform and Land Tenure Reform

 

As noted earlier, a high percentage of the farms in West
Pakistan are tenant operated and, in most areas, the bulk of
the land was held by large landlords who in turn let out their
land to petty farmers at rents exceeding fifty percent of the
value of the crops. In 1959, a regulation was passed confis-
cating holdings in excess of five hundred acres of irrigated
or 1,000 acres of rainfed or barani land. Land holdings cannot
be subdivided if less than twelve acres in the northern part
of the province or sixteen acres in the southern part. Nothing
has yet been done to improve the security of tenure for tenants.

Farmer Involvement in Development

 

Farmers in West Pakistan have been involved less in their
own development than those in East Pakistan. While the number
of credit cooperatives has increased from 9,000 in 1948 to
11,800 in 1959-60, the officers of the cooperatives have been
government officials, who directed the operations. The rural
works program was started in the province in l963-64but here
again, the planning and most of the supervision came from
official sources rather than from the farmers themselves, al-

though the labor was supplied by local communities. Very

143
little responsibility has been given to the farmers for fur-
thering their own development except in the new development
areas in the Salinity Control and Reclamation Project (SCARP‘s)
areas started in 1963.

General Education Level

 

The rate of literacy is slightly lower in West Pakistan
than in East Pakistan although the province is catching up
with the East wing very rapidly. Schools have been publicly
supported since before independence and there is a larger supply
of trained teachers available to fill the new school houses.
At the college level, general colleges are located in all of
the principle towns with Universities in each of the principle
cities.

Agricultural Research

 

Excellent research facilities at Lyallpur, Lahore, and
Peshawar were started in the early 1900's and were well staffed
at partition. At that time, many projects were destroyed, but
by 1954 all research institutions were staffed and in operation
again. The staffs have increased in size during the years
and the amount of work done has increased; but because of in-
adequate supervision and management, not much was accomplished
until after 1955. The Food and Agriculture Council, Pakistan,
was formed in 1953 to coordinate, supervise, and finance the
more important aspects of agricultural research. In 1952, the
Social Science Research Center at Lahore was opened to conduct

research into village life and a center similar to the one at

144
Comilla was opened at Peshawar in 1959. The new agricultural
universities are conducting a limited amount of research, but
most of the research conducted in the province suffers from
inadequate reporting of results to the farmers and subsequent
lack of farmer support.

Agricultural Education

 

The remarks about farmer education in East Pakistan will
generally hold true for West Pakistan. However, five schools
were set up to train Village Agricultural and Industrial
Development Workers (V.AID) which have been taken over for
training extension workers and a few farm boys.

Three Agricultural Universities have been set up in the
province which have absorbed the Agricultural College at
Lyallpur (established about 1900) and the agricultural section
of Islamia College at Peshawar (established in 1940). Two of
these institutions came into being in 1953 and the third in
1959. Each had graduated two or more classes by 1964 and
seemed to be progressing satisfactorily.

Technological Improvement

 

The spread of technological innovations has been spotty
throughout the province. In some areas, farming is carried on
much as it was a thousand years ago while in other areas, it
has modernized to the place that tractors and equipment are
used quite widely by the larger farmers and the government has
no difficulty in renting its equipment for land leveling and

plowing.

145

However, there is a great deal of difficulty in introduc-
ing new practices and techniques to farmers. Fertilizer has
been slow to catch on until a sudden spurt in use occurred in
1964. New irrigation projects are eagerly accepted by the
farmers but production practices have not been changed with
the addition of the new water supply so that often very little
more is produced on newly irrigated lands than was produced
before in good years. However, the aariability of yields has
been reduced.

The author was involved in a hybrid corn production pro-
ject in the province for over six years and found that the
farmers were willing to adopt the new seed but that they did
not receive the full benefit of the innovation because of
their reluctance to properly space plants, use fertilizer,
remove weeds, or to water properly.13

New crops such as Virginia tobacco and sugar beets have
been introduced during the last few years with excellent suc-
cess. The same is true of some other innovations which have
been tried. A hand corn sheller succeeded, but a steel plow
that reduced the labor required in preparing land did not.
Power threshing machines for wheat have not been accepted, but
power winnowing machines and fodder choppers have been. These

examples could be supplemented by other comparisons tending

 

13See also Russell Olson, Economicsof Hybrid Maize Pro-

duction in Pun ab, (U.S. Tehhnical cooperation Mission to
India, 1958).

 

146
to show that the introduction of new technology has met with
mixed success.

Transportation and Communications

 

The transport system was fairly good in West Pakistan on
independence with a good railroad and road system in most of
the province except in parts of the desert and in the mountains.
The government has improved the trunk roads, local authorities
have built a network of village to town market roads and during
the last two years, additional local roads have been built
under the rural works program. However, most farm products
still move to the local markets cross cOuntry on bullock carts
or in head baskets. Radio stations have been set up so that
radio programs can be heard in all parts of the province and
in 1962, about four hours of agricultural programming was
carried per week.

(Agricultural Investment

 

Large agricultural investments in irrigation schemes were
made in West Pakistan long before independence, and several
irrigation barrages and one major dam added about 800,000 acres
to an already extensive system between 1950 and 1965. Tube
wells for drainage were installed by the government beginning
in 1955. These have since become useful for augmenting the
water supply for irrigation. As a consequence of the success
of this demonstration, thousands of wells have been installed
by farmers in the private sector (32,000 are expected to be

installed by midsummer, 1965).]1‘L

 

1“U.S. AID, Agricultural Growth, p. 23.

147
Three fertilizer factories have been built, the first
coming into production in 1956, and several private factories
are turning out agricultural equipment, particularly pumps and
well equipment.

Farmer Training

 

An agricultural extension service was set up about 1940
with agricultural graduates at the district level. In 1954,
graduates were stationed at the Tehsil (county) level and two
matriculates with a year of agricultural training were placed
in each tehsil to work with farmers in 1956. Until 1962,
these men were salesmen of agricultural supplies and equipment
as well as being extension men.

The extension service, until 1958, was not oriented to
going out to work with farmers on their own land but to serve
those who came into their offices. In 1958, the emphasis was
placed on service and training and increased effort was put
into preparing literature and training materials.

Agricultural Supplies

 

Fertilizer and a limited amount of seed has been available
at subsidized prices from the agriculture department since
about 1948. Plant protection service has also been provided
free of charge, except to sugar cane producers, and a sub-
sidized mechanical cultivation service has been operational
since 1954. Other agricultural supplies are generally avail-
able in tehsil headquarters' towns and mechanical equipment is

available in the major cities. In 1961, an agricultural

148
development corporation was formed to handle supplies and
agrarian development. The corporation is concentrating on
colonization of the new canal-fed areas and has turned the
supply functions over to the private sector and to cooperatives
with excellent results to date.

Markets and Price Stabilization

 

The comments regarding marketing and price stabilization
made concerning East Pakistan apply to West Pakistan except
that a larger staff is employed in the West. At one time,
grades and standards were established for fruit in the province,
but they were abandoned about 1945 under pressure of competing
fruit from parts of what are now India. Other than this one
experience, no effort has been made to establish grades and
standards in the province.

Agricultural Credit

 

The agricultural credit experience of West Pakistan is
very similar to that of East Pakistan except that the cooper-
atives have been slightly more successful in their credit
operations. The number of societies has grown from 9,000 in
1948 to over 11,800 in 1959-60 and the membership rose from
246,000 to 434 thousand in the same period.

However, the proportion of agricultural credit from
institutional sources in 1960 was less than two percent of the
total credit used by farmers.

To summarize, in West Pakistan, land reform has not been

as effective as in East Pakistan but, at the same time, many

149
of the other factors listed as being important to agrarian
development have been much more favorable and agricultural

development started from a more advanced position than in the

eastern wing.

Iv I'll [III l l III I 11!.“ lllllll. I I: I'll. I

CHAPTER XI

ANALYSIS OF THE
AGRICULTURAL DEVELOPMENT OF PAKISTAN

Reports indicate that Pakistan's progress in the agricul-
tural sector was slow during the first ten to twelve years
of independence but that the last five or six years have seen
some improvement. As noted in the preceding section of this
paper, many activities have been undertaken by the government
and the people to increase production. Let us now examine these
programs in relation to the results achieved to see if there is
any correlation between them that can be explained by the con-
cepts presented herein. 1

First let us look at Pakistan from the standpoint of the
four historical factors listed earlier.

1) Pakistan has undergone a severe political and social
upheaval. At the time of partition from India and independence,
millions of people migrated into and out of the country. In-
stitutions changed, the administration changed, Pakistan became
a nation and the people became the masters of the country in-
stead of the servants of a foreign power.

2) While the government as a whole was relatively stable
during the first eleven years of independence, the administration
of the agricultural sector was not. Ministers of Agriculture
were changed frequently, and with each change of ministers,

agricultural policy changed. It was not until late in 1958 or

150

151
early 1959 that a definite policy was established for agricul-
ture which has been followed to the present with only minor
modifications.

3) During the last seventeen years, seldom has there been
an adequate supply of any consumer item, except textiles, on
the market for farmer consumption at prices they could afford
to pay. Even bicycles, the favorite method of rural transpor-
tation in most areas, have been high priced since either their
component parts have been imported, or if manufactured locally,
the quality has been regarded as being poor and the prices
have been as high or higher than the imported items. Conse-
quently, the farmers have not been encouraged either to pro-
duce more or to save in order to buy new things to use.

4) While there were many able administrators in responsible
positions, there were not enough of them to fill all of the
important positions in the government. It took twelve to fif—
teen years to train a capable officer cadre to take care of
the main development jobs so that it was not until 1959-6O
that these younger administrators were prepared to fill many
of the senior positions.

Now, let us look at the development scores of Pakistan
to see how the programs carried onhhave contributed to agri-
cultural development. Table 14 lists the dates by which
effective action had been taken in the various categories in
each province, the relative contribution to agricultural develop-

ment of each category and the development scores for each

Table 14.

152

and Score for Projects Carried On.

Pakistan Program EValuation for the Period 1952-
1962; Date of Adoption, Relative Contribution,

 

 

 

 

East Pakistan West Pakistan Pakistan
* Contri- Contri- Average
No. Category Date bution Score Date bution Score Score
1. Land and
Tenure Reform 1950 8 40 1960 O 0 2O
2. Farmer
Involvement 1961 0 0 1962 0 0 O
3. Agricultural
Research 1920 6 24 1950. 6 24 24
4. Technological
Improvement 1955 6 24 1950 5 2O 22
5. Farmer
Training 1959 l 4 1954 3 l2 8
6. General
Education 1940 5 15 1948 4 12 13
7. Transportation—
Communications 1943 3 9 1940 8 24 17
8. Agricultural
Education 1954 3 9 1952 5 15 12
9. Agricultural
Investment 1957 3 9 1920 8 24 17
10. Agricultural
Supplies 1958 2 4 1954 4 8 6
11. Markets and ‘
Prices 1956 4 8 1955 4 8 8
12. Agricultural
Credit 1952 4 4 1945 5 5 4
Total Score 150 152 151

 

* For items included in each category, see Appendix I.

153
province and for the country as a whole. It will be noted
that essentially nothing was done in some development areas
until very late; 1960 or after. No score has been given in
these categories since it was thought that a constructive con-
tribution to development would be impossible in the short time
remaining until mid-1962. East Pakistan's development score
is 150 for the period 1952-1962, and West Pakistan's is 152,
making a simple average for the country of 151, compared to
an average of 277.6 for the five countries.

The 1952-62 period was then broken down into periods,
1952-1956 and 1957-1962 and development scores were prepared
for each period. Referring to Table 15, it will be noted that
between 1952 and 1956, many activities that were important to
the development of the five countries were either not carried
on at all or were conducted ineffectively in Pakistan so that
the development score was very low. In East Pakistan, the
score was 68 for the period, 112 for West Pakistan, and 90 for
the country as a whole.

However, improvements were being made so that for the
period 1957-1962, East Pakistan's score more than doubled to
163, West Pakistan's score went up to 172 and the all Pakistan
score reached 167, an increase of 55 points (Table 16) during
the intervening five years from 1952.

Then, as a matter of interest, a score was determined as
of 1962 to be used to make a prediction of agricultural perform-
ance for the years 1962-1963 to 1966-1967 (Table 17). For this

 

‘III 0...}! II. III III
‘lllo 4'1

154

Table 15. An Evaluation of the Effectiveness of the various
Program Categories in Contributing to Pakistan's
Agricultural Development, 1952-1956.

 

East Pakistan West Pakistan

 

 

 

* Contri- Contri- Pakistan
No. Category bution Score bution Score Score
1. Land and Tenure
Reform 3 15 O O 8
2. Farmer
Involvement 0 O O O 0
3. Agricultural
Research 3 12 5 2O 16
4. Technological
Improvement 3 12 3 12 12
5. Farmer
Training 0 0 1 4 2
6. General
Education 4 12 3 9 10
7. Transportation-
Communications 3 9 6 18 13
8. Agricultural
Education 2 6 4 12 9
9. Agricultural
Investment 0 O 7 21 11
10. Agricultural
Supplies 0 O 2 4 2
11. Markets and
Prices 0. O 4 8 4
12. Agricultural
Credit 2 2 4 4 3
Total Score 68 112 90

 

* For items included in each category see Appendix I.

 

.I'll‘ «Ill. ..Ill‘tlal III! I}

155

Table 16. An Evaluation of the Contribution of Pakistan's
Development Programs to its Agricultural Improve-
ment and its Agricultural Development Scores,

 

 

 

 

1957-1962.
‘_East Pakistan West Pakistan
* Contri- Contri- Pakistan
No. Category bution Score bution Score Score
1. Land and Tenure
Reform 8 40 O 0 2O
2. Farmer
Involvement 1 5 O O 2
3. Agricultural
Research 7 28 7 28 28
4. Technological
Improvement 6 24 6 24 24
5. Farmer .
Training 1 34 4 16 10
6. General
Education 5 15 5 15 15
7. Transportation-
Communications 4 l2 8 24 18
8. Agricultural
Education 3 9 6 18 14
9. Agricultural
Investment 3 9 8 24 16
10. Agricultural
Supplies 2 4 5 10 7
11. Markets and
Prices 4 8 4 8 8
12. Agricultural
Credit 5 5 5 5 5
Total Score 163 172 167

 

* For items included in each category see Appendix I.

156

Table 17. An Estimate of Pakistan's Potential Agricultural
Improvement based on the Apparent Effectiveness
of the Programs Underway in 1962 for the Period

 

 

 

 

‘East‘PakIStan wast PakIétan
* Cbntri- Contri- Pakistan
No. Category bution Score bution Score Score
1. Land and Tenure
Reform 9 45 6 30 38
2. Farmer
Involvement 5 25 3 15 2O
3. Agricultural
Research 7 28 8 32 3O
4. Technological
Improvement 6 24 7 28 26
5. Farmer
Training 4 16 5 2O 18
6. General
Education 6 l8 5 15 18
7. Transportation-
Communications 7 21 8 24 22
8. Agricultural
Education 5 15 7 21 18
9. Agricultural
Investment 6 18 9 27 23
10. Agricultural
Supplies 5 10 8 16 13
11. Markets and
Prices 5 10 4 8 9
12. Agricultural
Credit 6 6 5 5 5
Total Score 236 244 240

 

* For items included in each category see Appendix I.

157
period, East Pakistan has a development score of 236, West
Pakistan 244, and the country as a whole has a score of 240.

If our proposed scoring system has any validity, we should
be able to make predictions as to the performance of Pak’stan
during the years under review using the development score. 0n
the basis of a score of 151 for the 1952-1962 period versus
277.6 for the developed countries, we should be able to conclude
that Pakistan did not increase agricultural production as much
as did the five countries. In fact, we would anticipate that
its production increase would be considerably lower than that
of the five countries. Second, we would conclude that Pakistan
increased production less per annum in the 1952-1956 period than
in the 1957-1962 period. Third, we should be able to pinpoint
areas where improvement is needed to increase production to a
satisfactory level. And fourth, we should be able to predict
that production would increase in Pakistan at a rate more nearly
approaching that of the five countries in the years 1962-1967
if corrective actions started before 1962 are continued and
strengthened. In fact, if Pakistan can raise its score to a
level of 280 or better, production should increase at a rate high
enough to adequately feed the population, taking into account in-
creased food needs to compensate for present low dietary levels,
an expanding population, and a rising per capita income.

To check the validity of the first two conclusions let us
study the production records. Parker and Hendrix give the fol-
lowing figures as the annual compound rates of change in total

agricultural production during the years from 1952 to 1962

158
for the five countries: Japan, 5.3 percent; United States,
1.7 percent; Taiwan, 4.0 percent; Greece 4.0 percent; and
Mexico, 5.0 percent.
Pakistan's production as recorded by the FAQ is shown in
Table 18 below.

Table 18. Pakistan' 3 2A riculture Production Index, 1952- 56
to 1961- 622 1952- 53 to 1956 57 . 100).

 

1952-53 - 100 1957-58 - 102
1953-54 - 98 1958-59 - 102
1954—55 - 102 1959-60 - 108
1955-56 - 97 1960-61 - 111
1956-57 - 103 1961462 - 114

 

Thus it can be seen that while the five countries in-
creased production at from four to five percent or more per
year (except the United States which was attempting to limit
production during most of the period), Pakistan increased pro-
duction only fourteen percent in ten years or, just slightly
over one percent per year. Thus the first conclusion drawn,
that PakiStan did not increaSe production as fast as the five
countries between 1952 and 1962 is borne out.

The data of table 18 shows that the second conclusion,that

 

1

8 Parker and Hendrix, Foundations for Agrarian Development,
p. 2 .

 

2FAQ, The State of Food and Agriculture, 1964, Annex
Table 1A, pp. 1954196.

 

159
production increased more in the last half of the 1952-62
period than during the first half, is also verified. Production
remained almost constant during the years 1952-53 to 1956-57,
varying only two or three points on either side of the index
of 100 during the five years. However, production increased
during the last half of the 1952 to 1962 period (1957-58 to
1961-62) to an index of 114 in 1961—62.

In support of the third conclusion mentioned above, that
we should be able to pinpoint areas needing improvement in
Pakistan's development program and make suggestions for im-
provement, turn to table 19 below. This table presents the
average development scores of the five countries in comparison
with the development scores of Pakistan for the 1952-1962
period and for the period 1962-1967.

This comparison indicates that Pakistan was especially
weak, in comparison with the other countries, in the following

categories for the 1952-1967 period:

 

Category Difference*
1. Land and Tenure Reform 30 5
2. Farmer Involvement 42
3. Agricultural Research 6.4
4. Technological Improvement 8.4
5. Farmer Training 20.8
6. General Education ' 6.2
7. Agricultural Education 6.0

 

* Five Country Score - Pakistan score a Difference (number
of points Pakistan is below Five Country Average) in the
category. .

160

On the basis of this study, it is the opinion of the
author that Pak'stan night have improved the agricultural
situation materially in the 1952-62 period by concentrating
action on programs designed to improve the tenure situation
of the farmers, by getting the farmers involved in the develop-
ment process, and by improving the extension service. Smaller
short term gains could have been made by improving research,
the general and agricultural education levels, and by intro-
ducing more technological improvements.

Still smaller short term gains in agricultural production
are indicated as the reward for development activities in
other categories during the period.

However, it must be remembered that agricultural develop-
ment is not necessarily a short term process and that the re-
search, education, and investments of today are the technological
improvements, extension programs, and irrigation systems or
factories manufacturing agricultural inputs for tomorrow.
Therefore, while planning an agricultural development program
for the immediate future, plans must be made, and programs
started, for development of agriculture in the more distant
future, for the long run. Let us now look at what Pakistan has
done in planning and preparing for further development.

Referring again to table 19, it will be noted that Pakistan's

development score in 1962 for the five years ahead is 240, about

the same as that of Greece for the 1952-1962 period. Therefore

we would expect that Pakistan during the next few years should

161

Table 19. A Comparison of the Development Scores for
Pakistan for 1952-1962 and 1962-1967 Periods
with the Five Countries, 1952-1962.

 

Maximum Average Score
Possible Five Countries Pakistan's Score

 

No. Category Score 1952-1962 1952—62 1962-67
1. Land and Tenure
Reform 50 50 20 38

2. Farmer
Involvement 50 42 0 2O

3. Agricultural
Research 40 30.4 24 3O

4. Technological
Improvement 40 30.4 22 26

5. Farmer
Training 40 28.8 8 l8

6. General
Education 30 19.2 13 18

7. Transportation-
Communications 30 19.2 17 22

8. Agricultural
Education 30 18.0 12 18

9. Agricultural
Investment 30 18.0 17 23

10. Agricultural
Supplies 20 9.6 6 13

11. Markets and
Prices 20 8.8 8 9

12. Agricultural
Credit 10 3.2 4 5

 

Total 390 277.6 151 240

 

162
be able to increase production at a higher rate than before
and very possibly could reach a rate closely approaching or
surpassing that achieved by Greece during the 1952-1962 period.

Fortunately, data is available for the first part of the
prediction period and some indications are becoming apparent
as to the course of Pakistan's agricultural development.

During the last few years, there have been definite signs of
improvement in Pakistan's agriculture.

Falcon and Gosch, in papers prepared for the Economic
Affairs Dividion, Planning Department, Government of Pakistan,
state that East Pakistan increased agricultural production at
a rate of about 3.5 percent per annum, while West Pakistan in-
creased its total production over four percent per annum during
the second plan period (1960-61 to 1964-65).3’u

Of the 3.4 percent increase in rice production achieved
in East Pakistan during the second plan period (1960-61 to
1964-65), about one fourth was the result of increased acreage
through irrigation, farming of marginal land, and new Land
developed by the coastal embankments. The balance came from
increased inputs such as fertilizer, better seed,and better

cultural practices. (This last item involves a better use of

 

3Walter Falcon and Carl Gosch, An Analysis of East Pakistan
Agriculture During the Second and ThirdTPlan Peridds—(Draft),
(Harvard Advisory Group to the Planning Commission, Karachi,

1965). p. 1.

 

 

4
U.S. AID, Agricultural Growth in Pakistan, (Karachi,
1965)) p0 1.

 

163
labor and accounts for about one of the 3.4 percent increase).5

It is estimated that about half of the incremental in-
crease in crop output in West Pakistan during the second plan
period has been due to the increased supply of water for irri-
gation. The balance of the increase has come from other inputs,
mainly fertilizer.

As time goes on and the effectiveness of its development
program improves, the author believes that Pakistan should be
able to raise its level of agricultural production economically
and efficiently, particularly, if it puts special effort into
strengthening those factors shown by their development score to

be weak.

 

5

FAlcon and Gosch, East Pakistan Agriculture, p. 16

OU.S. AID, Agricultural Growth, p. 24

 

CHAPTER XII
IMPLICATIONS FOR DEVELOPING COUNTRIES

It is believed that the agricultural development of the
five countries, Japan, United States, Mexico, Taiwan, and
Greece, has some relevance for underdeveloped countries wishing
to increase their supply of food and fiber and to generally
increase agricultural production as a part of the development
process.

Each of the five countries accomplished its early agra-
rian development without capital intensive projects but they
did have increased investment in agricultural labor and work-
ing capital. The programs followed were labor intensive until
late in the development process so that the farm population
was not forced to migrate to the cities to earn a livelihood
until the industrial sector had grown enough to absorb much
of the surplus. In addition, the increased rate of production,
being higher than the rate of population increase, provided
a more adequate (although not necessarily a better) diet and
reduced the necessity for foreign exchange expenditures for
food. In each of the countries, agriculture served as a major
source of capital for other sectors until the late years of
development, when agriculture itself became a less important
sector than industry in the economy. As a result, agrarian
development has been achieved at low capital cost and the

results have been generally favorable to the economy.

164

165

If the experience of Japan, the United States, Taiwan,
Mexico, and Greece are to serve as a guide to the further
development of the agriculture of Pakistan and other under-
developed countries, and if these countries are really desirous
of maxing progress and are willing to make the necessary sacri-
fices, then the proposed road is clearly marked, needing only
an interpretation of the signs in the light of conditions
existing in the country and the ability to move forward.

The experience of the five countries indicates that land
and tenure reform should be considered very seriously as one
of the potentially most fruitful ways of stimulating agricul-
tural production. A recent United Nations report states that
"...a direct relationship exists between land reform and
agricultural productivity and output, mainly because land
reform results in a greater incentive to operators and in more
efficient farm organization."1

Elsewhere, the same report states, "When linked with an
agricultural revolution in the technical sense, and with sup-
porting governmental policies as regards agricultural prices,
public investment and tax incentives, needed land reforms can
yield impressive agricultural development."2

Pakistan's score in this category is still low (table 19)

in this report, 38 compared to 50 for the developed countries.

 

1"nited Nations, Food and Agriculture Organization

Progress in Land Reform Third Report, New York, 1962, p.2.
2

 

Ibid., 0 Vi.

.5

166
This indicates hat Pakistan can strengthen its program
materially by improving the conditions of tenure, especially
in West Pakistan. The experience of Taiwan and Japan could
be very helpful in this respect. The first steps in land re-
form have been taken, now it is necessary to make conditions
such that the farmer will be willing to invest the necessary
labor and capital in the land he tills to make it produce more.
EXperience has shown that the farmer will invest more in his
land if his tenure is secure and if he is sure that he will be
able to reap the benefit of his investment. This is not true
for the tenant farmer of West Pakistan today and the author
believes that this situation needs to be remedied to promote
development.

The second important issue is to encourage the farmer to
become involved in his own development. He should take part
in the planning, financing and execution of projects affecting
him. It has often been noted that very little rice or wheat
is grown by a minister of agriculture or the Governor of a
province; rice and wheat are grown by the farmers and until
the farmers are involved in their own development through
committees, cooperatives, clubs, or associations, they will not
take much interest in development.

The new farmer involvement programs in East Pakistan,
developed at Comilla and Hymensingh, should be spread over the
country as rapidly as possible. The Mymensingh program is
primarily one to improve farm technology and depends on com-

mittee of farmers to plan and execute demonstrations, small

167
irrigation, drainage, seed production, food processing, and
other projects of benefit to the farmers. The Comilla program
attempts to build a system of cooperatives and other local
institutions to reorganize and modernize the rural village.
The Mymensingh project can be spread rapidly throughout the
country with the present staff of the provincial agriculture
departments coordinating and assisting the local and district
committees. The Comilla approach will necessarily take longer
because of the need for training a large number of cooperative
organizers, leaders and credit officials to make the program
successful.

The next four issues are closely allied to the first two.
The improvement of the farmer and his methods of farming by (1)
providing him with better information through research, (2)
improving the technology he uses by introducing new, suitable
materials and methods from all over the world, (3) training
him through extension and information programs, and (4) rais-
ing his general education level. These all combine into what
Schultz calls investment in human capital. He emphasizes that
education, acquisition of knowledge, acquiring new skills, and
the preparation to use this new knowledge and skill are im-
portant to the development and growth of a country. He went
so far as to say in his presidential address before the American
Economic Association, "Truly, the most distinctive feature of
our economic system has been the growth in human capital.

Without it there would have been only hard, manual work and

168
poverty except for those who had income from property."3
The experience of the five countries shows that this is es-
pecially true in agriculture.

The underdeveloped countries, including Pakistan, should
concentrate their research efforts during the early stages of
development on the problems of the farmer and in testing and
developing techniques that can be used in a traditional agri-
culture without requiring investment in extensive equipment.
The development of simple methods of applying fertilizers to
growing crops, controlling weeds in rain fed rice, controlling
insects in deep water paddy, better methods of irrigation for
increased production, and improved water logging and salinity
control, better crop sarieties, and thousands of such problems
in agronomy, soil science, animal husbandry and agricultural
engineering, face the scientists of Pakistan. Until these
problems are solved the agricultural technology and production
of the country will be hampered. Research is closely tied to
technological improvement which in turn depends on educated
farmers and a means of getting information to them.

Pakistan can well afford to try many ideas and materials
from other parts of_the world which have been successful in
increasing agricultural production. Among the ideas that might

pay off handsomely are such things as using waste molasses as

 

3T.W. Schultz, "Investment in Human Capital" reprinted
in the American Economic Review (March, 1961) and in Morgan,
Betz, and Choudhury, (editorS), Readings in Economic Develop:
ment, (Wadsworth Publishing 00., Belmont, California, 1963),

P. 199.

 

 

169
a supplement for straw as cow feed; the use of fish flour,
tank fish culture, fish feeding, poultry feeding and dairy
production on a commercial scale, production of fruits for ex-
port, etc.

As new technology is developed and becomes more important
to the further development of agriculture, it generally becomes
more complex. It becomes more difficult to teach the new tech-
nology through simple demonstrations and other methods suitable
for a traditional society. Pakistan has reached a stage where
an active and progressive extension service is required to take
the results of research to the farmer, to carry his problems
back to the researchers, and to organize,teach, and assist them
in their efforts to increase production.

The introduction of new technology also requires an edu-
cated farmer to be able to take full advantage of its potential
for development. Pakistan should support the voluntary adult
night schools which seem to be springing up over much of the
country and a great deal of emphasis should be placed on the
publication of agricultural books in the local languages.
Teachers, facilities, and books are required in the rural areas
to help the farmers learn the necessary mathematics, economics,

engineering, sociology, civics, natural sciences, and agricul-

ture so that they can become more useful and productive citizens.

These first six factors are relatively cheap and effec-
tive in increasing production and were obviously given a high

priority by the leaders of the five countries in the early

170
stages of their development, and apparently contributed greatly
to their agricultural advancement.

The remaining six factors are more capital intensive but
none the less important. The experience of the five countries
indicates that the development of transportation and communica-
tion systems should be among the first projects undertaken which
have large capital requirements. This will facilitate farmer
mobility, (it will allow him to see what others are doing) and
later help in the development of market and price stabilization
programs. The growth of communications systems permits the
experts to tell many farmers directly about new crops, market
conditions, and new technolog‘, so that they can learn and
benefit more rapidly. Through radio particularly, the expert
can reach a wider audience than would be possible by direct
contact. Improved communications in Pakistan would also permit
a direct feedback of rural problems to the experts so that there
would be a greater tendency for research to be oriented to the
solving of real problems in the rural community.

As the population of Pakistan and other underdeveloped
nations increase and as the already cultivated areas near their
limits of production, it will become incresingly necessary for
long term capital investments to be made in agriculture and
the agriculture supporting industries. Fertilizer factories,

*ower plants, irrigation systems, land reclamation projects,

l>

land colonization schemes, and industries, all must be acti-

vated to increase production.

171

Along with the investment in physical assets must go
investment in agricultural training. The Pakistani farmer and
his leaders must be taught, through the use of an extension
service, short courses, college courses, displays, and demon-
strations, how to take advantage of the investments mentioned
above for improving production. The youth can and should be
taught in the schools and in outside activities, such as 4-H
Clubs, or Chandtara (a youth club started in Pakistan as an
adjunct of Village AID) Clubs, to take their rightful place
in the rural community as farmers and leaders.

As Pakistan's agriculture develops to the point that fur-
ther increases through the use of labor intensive, improved,
cultural practices becomes difficult and more expensive, other
inputs must be made available. Fertilizers, seeds, tools,
implements, insecticides, and equipment must be used in greater
and greater quantities to keep production increasing. It may
be satisfactory, in the early stages of development, to allow
the knowledge of these inputs to drift down to the farmer and
to let their use expand gradually. Later in the development
program, they must be available at suitable locations and in
sufficient quantities so that every farmer has access to and
can use them.

The last two steps taken by the five countries in their
agricultural development have been the improvement of the mar-
ket and price stabilization, and the provision of institution-

alized agricultural credit. In a purely subsistence economy,

172
prices and the availability of markets do not seem to be par-

ticularly important to the farmer since he produces very little

in excess of his own needs, and that is traded for salt, mashing
powder, cloth or ornaments. However, as taxes payable in money

are imposed, and as more goods become available, the monetary

spects of the market become more important and provision must

ED

be made for handling increasingly large agricultural surpluses

in the rural areas, moving the surpluses to the growing cities,
and selling them to the increasingly large group of industrial
workers. Price incentives must be given so that the surpluses
will continue to expand and the workers and urban population

will continue to be fed. This requires storage facilities,
transport and sales facilities, the establishment of grades and
standards, and a freely and fast-moving market information sys-
tem. In most economies, some kind of minimum price assurance
seems to be required. Even though there is a short fall in total
annual supply, and average annual prices are high, but because of
seasonal market gluts, there are low prices at harvest and sale
tine. These programs have a very high cost, both in capital and
in trained manpower.

Among the last of the production factors to be adopted in
the five countries and one which appears to have contributed rela-
tively little to overall productivity has been agricultural
credit. Traditionally, the sources of the credit needed by

(A , ... .
warmers in the underdeveloped countries have been the money
lenders, the merchants, or relatives of the borrower. This

173

credit has usually been very expensive in the form of high
interest rates, contracts to purchase produce at low prices
or other valuable considerations. In order to make it possible
for farmers to buy the necessary supplies and to make necessary
investments in long term capital, the five countries supported
institutionalized rural credit by subsidies, by assisting coop-
eratives, and by relief loans at low rates. There are probably
two or three main reasons for the late development of credit
programs for farmers; 1) the very large administrative staff
required to service small loans(an average of about $20 in
Pakistan); 2) the attitude of many farmers toward borrowing
(regarding loans as shameful on the one hand or asrelief on
the other); or 3) because farmers either had enough money or
could get local credit for the small amounts needed in agricul-
ture during the earlier stages of development. In fact, Falcon
and Gosch, when writing about West Pakistan, state that,
"...farmers have far more resources at their disposal for invest-
ment in profitable inputs than was previously thought. Estimates
for West Pakistan for the year 1962-63 range as high as Rs. 40
crore 5¢u00,000,ooo), which is substantial for what has always
been considered a subsistence economy."u

New countries, Just getting started on an agricultural

development program should study the records of these five

countries when preparing their agrarian development plans. If

 

“Falcon and Gosch, An Analysis of East Pakistan Agricul—
ture, p. 39.

 

171+
they carry on pr-graas designed to strengthen the low spots in

their development score, (which in turn is Jasad on the success—
ful perfornance of the five countries), it is eXpected that
their agriculture would improve rather rapidly, especially if
the program is conducted with good will by an efficient and

well trained set of administratbrs and technicians; if there

is a supply of desirable consumer commodities for farmers to
buy; if the administration is reasonably stable; and, lastly,

he farmers have been enticed out of their traditional rut.

Ho
....)
Ct-

For the countries that have started developing their
agriculture, the material presented here can serve as a guide
for testing their agrarian programs to see where they may be
lacking and where improvements might be made without requiring
the use of excessive amounts of scarce capital and foreign
exchange.

After nine years in Paiistan the author concluded that,

"In order to beat the problem of food shortages in many countries,
the changes that are needed are not large. While it may seem

to be a big problem, when placed on an acreage basis the food
problem becomes a problem of only a few pounds per acre. For
example, to make an extra million tons of rice available for con-
sumption in East Pakistan, we need to increase production only
about 100 pounds per acre. This can be accomplished by pre-
paring the land a little better, pulling a few weeds, better

rain water control, by using a little fertilizer, or by any one

of a number of other practices. Our problem is to teach the

farmer how to make use of what is already known about rice pro—

175
duction and to encourage him to change so that he can profit

by it."5

 

. 5John R. Wilson, Research and the Farmer in a Develo
ing Country, a paper l—ca r a go

Representatives Conference, hexico City, 1964), p. 13.

   

 

APPENDIX I

Categories of Development Activities

Below is a listing of the twelve development categories

considered in this paper and the major activities included in

each category. This should be thought of as only a partial

listing since there were literally hundreds of activities

carried on in each of the countries described herein which

contributed to their development.

1. Land and Tenure Reform:

Land Reform in the traditional sense.
Security of tenure of tenants.

The right to own, buy, and sell land.
The right of personal movement.

The right to engage in any occupation.
The right to mortgage land.
Consolidation of holdings.

2. Technological Improvement:

8..
b.
0.
do
9.

f.

g.

Import of new technology.

Imports of new varieties and strains of plants.
Import of better animals.

Import of new equipment.

Adaptation of items in a, b, c, and d to local
conditions.

Development of new technology adapted to local
conditions.

Development of innovations.

3. Farmer Involvement in Development:

a.

Farmer organizations (associations, committees,
commissions, cooperatives).

Farmer support for development projects (taxes,
dues, commissions on sales, etc.). _
Farmer-conducted demonstrations.

Mutual teaching of local groups.

Discussion groups.

Assisting in planning and execution of projects.

176

177

General Education:

a.
be
0.
d.
e.
f.

Education at the adult level to increase literacy.
Primary education.

Night schools.

Short courses.

Community schools.

Voluntary schools.

Transportation and Communications:

a.
b.
C.
d.

Roads, waterways, and railroads-—cross country.
Farm to market roads.

Farm Periodicals. ,

Radio, television and other mass media.

Agricultural Research:

Farmers' problems solved on his own land.
Experiment stations as center of training.
Basic research centers.

Adaptation of foreign technology.

Development of new technology.

Supply of information to extension service and
farmers.

Markets and economics.

Farmer Training:

Agricultural extension programs.
Demonstration programs.
Agricultural literature.

Short course programs.

Radio and television programs.
Commercial efforts (all of above).
Training schools.

Youth organizations.

Agricultural Education:

Agricultural Colleges.

Agricultural schools and high schools.
Vocational agriculture.

Agricultural clubs for youth.

Short courses in agriculture.
Agricultural retraining programs.

Investment in Agriculture:

a.
b.
c.

Irrigation.
Land reclamation.
Factories to supply agricultural requisites.

10.

11.

12.

178

Processing plants.

Farm equipment factories.

Farm supply factories.
Transportation--farm to market.
Rural public works programs.

Agricultural Supplies:

Fertilizers.
Equipment.
Chemicals.

Seeds.

Irrigation supplies.
Tools.

Markets and Prices:

Roads and railroads.

Warehouses.

Commercial market services.

Food processing plants.

Price supports.

Market regulation.

Subsidies.

Freedom of movement of commodities.
Grades and standards.

Training programs.

Market information dissemination.

Agricultural Credit:

Production credit.
Medium term credit.
Long term credit.
Institutional credit.
Private credit.
Market credit.
Interest rates.
Collateral required.
Supervised credit.
Training in credit.

179

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LITERATURE CITED

Books

Chen Cheng, Land Reform in Taiwan, China Publishing 00..
Taiwan,‘1961.

 

Chung, Pei-Kang, Agriculture and Industrialization, Harvard
University Press, Cambridge, 1949.

 

Cline, Howard F., Mexico: Revolution to Evolution 1940-1960,
Oxford University Press, New‘York,1962.

 

Combined Working Party, The Economic Development of Mexico,
International Bank TEr ReconStruCtion and Development,
Johns Hopkins Press, Baltimore, 1953.

 

Gershenkron, Alexander, Economic Backwardness in Historical
Perspective, Harvard University Press, Cambridge, 1962.

 

Glade, William P. and Anderson, C.W., The Political Economy
of Mexico, University of Wisconsin Press, Madison,‘l9b3.

 

 

Hirschman, Albert 0., The Strategy of Economic Development,
Yale University Press, NEw Haven, 1961.

 

Hoselitz, B. F. (Editor), Theories of Economic Growth, The
Free Press, New York, 1960.

 

Hudgins, Robert W. "Essentials of Land Reform" International
Development Review, Oct. 1961. Reprinted in Dave Ham-
bridge (editor), Dynamics of Development, Frederick A.
Praegcr, New York, 1964.

 

 

Kuznets, Simon, "Notes on the Take Off", paper presented at
September, 1960 meeting of International Economic
Association, reprinted in Morgan, Betz and Choudhury,
Readings in Economic Development, Wadsworth Publishing
66., Belmont, California, 1963.

 

Letiche, J. M. "Adam Smith and David Ricardo on Economic Growth,"
printed in B. F. Hoselitz, (editor) Theories of Economic
Growth The Free Press, New York, 1960.

 

Lewis, W. Arthur, "Economic Development with Unlimited Supplies
of Labor," The Manchester School, May 1954. Reprinted
in Agrawala andESingh, (editors), The Economics of Under-
development, Oxford University Press, New York, 1963.

 

185

186

Munkman, C.A., American Aid to Greece, Frederick A. Praeger,
New York, 1958.

 

Nicholls, William H., "The Place of Agriculture in Economic
Development," paper presented at a Round Table on Economic
Development with Particular Reference to East Asia,
Bamagori, Japan. Reprinted in Eicher and Witt, (editors)
Agriculture in Economic Development, McGraw-Hill Book 00.,
NEW YOrk, 1984. .

 

Nurkse, Ragnar, Problems of Capital Formation in Underdeveloped
Countries, Oxford University Press, New York, 1958.,

 

Ogura, Takekazu, editor, Agricultural Development in Modern
Japan, Japan FAQ Association, Tokyo, Japan, 1963.

Prebisch, Raul, Towards a Dynamic Development Policy for Latin
America, United Nations, New York, 1963.

Rostow, Walter W. The Stages of Economic Development, a Non
Communist Manifesto, Cambridge University Press,
Cambridge, 1961.

 

Scrimshaw, Nevin 8., "Food," printed in Technology and Economic
Development published by Scientific American,“Random
HOuse, NEW York, 1963.

 

 

 

Shen, T.H., A ricultural Development in Taiwan Since World
War II, omStock Publishing Assodiates, Ithaca, NLY., 1964.

 

Schultz,T.W., Transforminngraditional Agriculture, Yale
University Press, New Haven, 1984.

 

Spengler, Joseph J., "Mercantilist and Physiocratic Growth
Theory," printed in B.F. Hoselitz, (editor) Theories of
Economic Growth, The Free Press, New York, 1960.

 

Tannenbaum, Frank, The Mexican Agrarian Revolution, MacMillan
Co., New York, 1929.

 

 

Youras, Paul P., The Chan ing Economy of Northern Greece
Since World War II, Tnstitute‘forBalkan Studies, 1962.

 

Warriner, Doreen, "Land Reform and Economic Development,"
National Bank of Egypt Fiftieth Anniversary Commemoration
Lectures Cairo, 1955. Reprinted in Eicher and Witt
(editors; Agriculture in Economic Development, McGraw-Hill
Book Co., New‘York,'1964.

 

187
Articles

Falcon, Walter and Gosch, Carl, An Analysis of East Pakistan
Agriculture During the Second_and Third Plan Periods
(draft) Harvard Advisory Group to—the Planning Commission,
Karachi, 1965.

 

 

Ferguson, Ben R., U.S. Agency for International Development,
Rural Life and Times in Mymensingh, Dacca, 1962.

 

Flores, Edmundo, "The Significance of Land Use Changes in the
Economic Development of Mexico," Land Economics, Vol. 35,
N0. 2, May, 1959.

 

Johnston, B.F., "Agricultural Productivity and Economic Develop—
ment in Japan," Journal of Political Economy, LIX,
December, 1951.

 

Kao, Anschel, and Eicher, "Disguised Unemployment in Agriculture:
a Survey," printed in Eicher and Witt, (editors) A ricul-
ture in Economic Development, McGraw-Hill, New YorE, I953.

 

Maddox, James G. "Economic Growth and Revolution in beico,"
Land Economics Vol. 36, No. 3, Aug. 1960.

-------- , Mexican Land Reform, American Universities Field Staff,
Mexico D. F., July 3, 1957. ‘

Martin, Edwin M., "The Economic Revolution in Mexico,"
Department of State Bulletin Vol. #9, No. 1278, Dec. 23,

1953.

Ohkawa, Kazushi and Rosovsky, Henry, "The Role of Agriculture
in Economic Development," Economic Development and Cul-
tural Chan e, Vol. 9, part 2 october 1960, pp. 43-68.
‘Reprintedgicher and Witt (editors), Agriculture in Economic
Development, McGraw-Hill Book Company, New York, 196H

 

Olson, Russell, Economics of brid Maize Production in the
Punjab, U.S. TechnicaIfi ooperation Mission to India, 1958.

Parker, F.W. and Hendrix, William, Foundations for Agrarian
Develo ment, presented in CENTU“SympoSium on Rural Develop-
ment, Tefieran, Sept. 1963 and included in the report of
the symposium, CENTO, Ankara, Turkey 1963.

 

Rostow, W.W., "The Nationalization of the Takeoff," presented
at 17th Annual Conference Middle East Institute, George-
town Univ., Washington D.C., M3X82’ 1963. Reprinted in
State Department Bulletin, NO. , May 27, 1963.

188

Schultz, T .W., "Investment in Human Capital, American Economic
Review (March, 1961) Reprinted, Morgan, Betz and Choudhury
ors) Readin s in Economic Development Wadsworth
Publishing C0,, elmont, CalifT7'l963.

 

Tsui Young-Chi, "Land Use Improvement, a Key to the Development
of Taiwan," Journal of Farm Economics, Vol. 44, May, 1962.

 

Wilson, John R. Research and the Farmer in a DevelopingJCountry,
Paper prepared’for the Fora Foundation's Representatives
Conference, Mexico City, 1964.

Official Documents

JCRR, A Decade of Rural Progress, 1948-1958, Taipei, Taiwan,
1958 0

Joint Commission for Rural Rehabilitation, General Report XIII
Taipei, 1962.

 

 

Organization for European Economic Cooperation, Agricultural
Advisory Services in OEEC Countries in the Mediterranean
Area No. ‘8 in a series entitled Documentation in Food

and Agriculture, Paris, 1959.

 

 

-------- , Fodder Development in Mediterranean Countries, Paris,

 

1951.

-------- , Higher Education in Agriculture, 1900 series, Paris,
1960.

-------- , National Systems for Seed Certification, 1959 Series,

 

Paris,‘19§g.

State Bank of Pakistan, Agricultural Credit in Pakistan,
Karachi, 1962.

 

Pakistan Ministry of Agriculture, Agriculture Census Organization,
1960 Census of Agriculture Vol. III All Pakistan Report
Réport Nb. 1, -Rarachi 1982.

United Nations, Food and Agriculture Organization, Aspects of
Economic Development, Freedom from Hunger Campaign,
Basic Study NumberEB, Rome 1962.

 

United Nations, Economic Survey of Asia and the Far Easty 1963,
Bankok, 1964.

-------- , National Development Efforts, Basic Study No. 13,
Freedom from Hunger Campaign, New York, 1963.

 

U.S.

U.S.

189

---, Population and Food Supply, Basic Study No. 7,
Freedom from Hunger Campaign, New York, 1963.

 

---, Progress in Land Reform,_Third Report, New York, 1962.

---, The State of Food and Agriculture, issued annually,
New York, 1957 to 1964.

Agency for International Development, Agricultural Growth
in Pakistan, Karachi 1965.

 

---, Lonngange Assistance Strategy supporting docu-
mentation, KaraCEi, 196A.

Department of Agriculture, Economic Research Service,
Agricultural Policies of Foreign Governments, Agricul-
tural HandboOk No. 132, Wéshington,‘1964.

---, Agriculture and Economic Growth, Agricultural
Economic ReportflNo. 28, waShingtbn, March, 1963.

 

---, A Century of Service, Washington, 1963.

 

-------- , How the United States Improved its Agriculture, ERS-

Foreign - 76‘WaShington, March, 1964.

-------- , Foreign Agricultural Service, The 1965 World Agri-

cultural Situation, Foreign Agriculture Economic Report
‘No. 22, waSHington, 1965.

 

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