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Are part-time and full-time small farms detrimental to agriculture : evidence from Taiwan, 1972-1980 Wardenier, Rita 1985-12-31

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ARE PART-TIME AND F U L L - T I M E SMALL FARMS DETRIMENTAL TO AGRICULTURE EVIDENCE FROM TAIWAN,  1972 - 1980  by RITA WARDENIER Lie.  Doctorandus, Katholieke U n i v e r s i t e i t ,  Leuven,  1974  A THESIS SUBMITTED IN P A R T I A L FULFILMENT OF THE REQUIREMENTS  FOR THE DEGREE OF  DOCTOR OF PHILOSOPHY in THE FACULTY OF GRADUATE STUDIES Department  Of  Economics  We a c c e p t t h i s t h e s i s a s c o n f o r m i n g to  the required standard  THE UNIVERSITY OF B R I T I S H August  ©  COLUMBIA  1985  R i t a W a r d e n i e r , 1985  -r^l*  In p r e s e n t i n g  t h i s t h e s i s i n p a r t i a l f u l f i l m e n t of  requirements f o r an advanced degree a t the  the  University  o f B r i t i s h Columbia, I agree t h a t the L i b r a r y s h a l l make it  f r e e l y a v a i l a b l e f o r reference  and  study.  I further  agree t h a t p e r m i s s i o n f o r e x t e n s i v e copying o f t h i s t h e s i s f o r s c h o l a r l y purposes may department o r by h i s o r her  be granted by the head o f representatives.  my  It i s  understood t h a t copying or p u b l i c a t i o n o f t h i s t h e s i s f o r f i n a n c i a l gain  s h a l l not be  allowed without my  permission.  Department of  E C O N O M C I S  The U n i v e r s i t y of B r i t i s h Columbia 1956 Main Mall Vancouver, Canada V6T  D  DE-6  rvftn  a  1Y3  t  e  s ^ ,  \°m  written  i i  ABSTRACT  Slow a g r i c u l t u r a l  growth i n the s e v e n t i e s i n  Taiwan has induced a second l a n d from t h e assumption t h a t part-time  the  the  little  e m p i r i c a l evidence  data  i s drawn f r o m t h e 1972-1980 s u r v e y s  t h e N o r t h , M i d - , S o u t h r i c e and Sugar r e g i o n s i n ( d a i l y ) 'Farm R e c o r d K e e p i n g F a m i l i e s ' in production  pattern  multi-characteristic  family-supplied  has  rural  been a d e c l i n e  superior  days and farm  i n large  assets.  s t r u c t u r e t o the l o s s  f u l l - t i m e farming. n o t be c o u n t e r e d  i s no e v i d e n c e t h a t  to small  functions  1968 ( a n d more r e c e n t l y o f l a n d  t h i s process should  because there  Total  with value-added  response of the a g r a r i a n  workers since  shows t h a t  on t h e b a s i s o f  i n p u t s : paddy and d r y c u l t i v a t e d  l a n d , m a l e and f e m a l e l a b o u r The  The  land  dummy v a r i a b l e r e g r e s s i o n s .  f a c t o r p r o d u c t i v i t y was e s t i m a t e d five  surveys.'  and s i m p l e  p r o d u c t i v i t y m e a s u r e s were a n a l y s e d  of  i s presented.  assumption.  differences  of  than l a r g e f u l l - t i m e  s t u d y a t t e m p t s t o i n v e s t i g a t e t h e v a l i d i t y of  The on  f a r m s , and e s p e c i a l l y s m a l l  farms, a r e l e s s p r o d u c t i v e  farms. But very This  small  reform debate which s t a r t s  Our s t u d y artificially  large f u l l - t i m e farming i s  f u l l - t i m e f a r m i n g and o n l y  l a n d t y p e farms i n t h e r e g i o n s  too),  are small  on d o m i n a n t  f u l l - t i m e farms  more e f f i c i e n t  than  f a r m s have n o t  responded f a s t e r  f o o d demand, n o r inputs.  lower  higher  investment,  than  on  f a r m s and  because the  machinery d i v i s i b l e . show some t o t a l s m a l l farms, methods a r e  recommended.  small part-time  The  Research  farms i s  f a r m s and  farms.  the  continue  production farmers  of  l a b o u r movements  only  Farm hectare  are  returns to scale  part-time  loss against recommended  for part-time  small  made farms  full-time farming  farms.  t o improve the working  of  agrarian restructuring i s  s u p e r v i s i o n - s e n s i t i v e crops  and  l i m i t a t i o n s would produce l i t t l e nightmare of  non-staple  ' c u s t o m s e r v i c e s ' s y s t e m has  no a r t i f i c i a l  needs s m a l l f u l l - t i m e  full-time  intermediate  machine stock per  additionally,  appropriate  l a n d m a r k e t but  towards  small full-time  because the  should  new  Large  large full-time  I n some c a s e s ,  probably not  and  factor efficiency  Policies the  on  f a r m a s s e t s and  similar across are constant  than  farms.  to s h i f t s  to mechanization  L a n d p r o d u c t i v i t y on  substantially slightly  small part-time  part-time efficiency  farming gain against  restrictions.  Supervisor: Dr.  Robert  Allen  the  iv  TABLE OF CONTENTS Page L I S T OF TABLES  v i i  L I S T OF FIGURES  x i i  ACKNOWLEDGEMENTS  xii i  Chapter I  INTRODUCTION  1  II  AGRICULTURE IN TAIWAN  4  A. INTRODUCTION  4  B. GOVERNMENT POLICY AND AGRICULTURAL DEVELOPMENT  .  4  C. FACTOR MARKETS AND FARM ORGANIZATION  10  C.1 Farm s i z e a n d t h e l a n d m a r k e t s C. 2 P a r t - t i m e f a r m i n g , h o u s e h o l d l a b o u r • s u p p l y and t h e r u r a l l a b o u r market  12 .  19  D. STATEMENT OF THE PROBLEM  27  E. NOTES  31  I I I DATA  35 A. INTRODUCTION B. THE ANNUAL REPORT OF THE FARM RECORD KEEPING F A M I L I E S C. DATA FROM THE FARM RECORD KEEPING FAMILIES D. DATA BASE AND CHARACTERISTICS OF THE FARMS D. 1 S i z e o f t h e f a r m ( s ) D.2 P a r t i c i p a t i o n ( p ) : t h e d e g r e e o f importance of f a r m i n g t o t h e farm household D.3 A g r i c u l t u r a l r e g i o n s ( r ) D.4 Time ( t ) D.5 The d i s t r i b u t i o n o f f a r m h o u s e h o l d s ..  35  36 37 41 41  43 45 47 48  V  •E. NOTES IV  51  PRODUCTION PATTERNS  55  A. INTRODUCTION  .. .  55  B. LITERATURE  59  C. EMPIRICAL METHOD: THE DUMMY VARIABLE MODEL  62  D. FAMILY ENDOWMENT, LABOUR AND MACHINE USE PATTERN  67  E.  OUTPUT PATTERN PER HECTARE  74  F.  INTERMEDIATE INPUTS PER HECTARE  80  G. SIMPLE PRODUCTIVITY MEASURES  AND  INVESTMENT PER HECTARE  V  83  H. CONCLUSION  88  I . NOTES  93  TOTAL FACTOR PRODUCTIVITY  ,  A. INTRODUCTION  99 99  B. LITERATURE  101  C. SOURCES OF I N E F F I C I E N C Y  105  D. TREATMENT OF THE VARIABLE INPUT-OUTPUT MIX E.  F.  112  FUNCTIONS  122  E.1 L i n e a r dummy model E.2 L i n e a r m o d e l  123 124  E.3  125  The g e n e r a l i z e d  l i n e a r model  DATA  G. THE S T A T I S T I C A L PROPERTIES OF THE MODELS  127 ' 130  vi  H. ESTIMATION RESULTS H.1 H.2 H.3 H.4  133  Introduction Returns t o scale Allocative efficiency Technical efficiency  133 138 139 158  I . SUMMARY AND CONCLUSIONS  160  J . NOTES  166  VI CONCLUSION  172  BIBLIOGRAPHY  .  182  APPENDIX A: PRICES AND LAND PRODUCTIVITY MEASURES ..  191  A. INTRODUCTION  191  B. PRICES, PRICE DEFLATORS  191  B.1 B.2 B.3 B. 4  I n d i v i d u a l commodity g r o u p p r i c e s The i n d e x o f n e t p r o f i t The i n d e x o f a s s e t p r i c e s Miscaleneous p r i c e s  . C. LAND PRODUCTIVITY MEASURES C. 1 C.2 C.3 C.4 C.5 C.6  The m u l t i p l e c o r p i n d e x Rice y i e l d s Non-rice value y i e l d s The o u t p u t p e r h e c t a r e P r o f i t per hectare Farm i n v e s t m e n t a n d s a v i n g s p e r hectare  ....  .  191 192 193 193 196 196 197 197 198 198 199  APPENDIX B: INFORMATION FOR CHAPTER I I  200  APPENDIX C: INFORMATION FOR CHAPTER I I I  208  APPENDIX D: INFORMATION FOR CHAPTER I V  212  APPENDIX E: INFORMATION FOR CHAPTER V  248  vi i  L I S T OF  TABLES Page  T a b l e 2.1 T a b l e 2.2  The number o f h o u s e h o l d s c l a s s i f i e d by t y p e o f work a n d by s i z e o f f a r m .. Farm h o u s e h o l d s size  11  by t y p e o f work and  ...  11  T a b l e 2.3  Ownership of the farm l a n d  Table  Changes i n l a n d h o l d i n g s by s i z e o f f a r m and by r e a s o n D i s t r i b u t i o n of workers i n a g r i c u l t u r e and i n t h e economy by age  25  D i s t r i b u t i o n of workers i n a g r i c u l t u r e and i n t h e economy l e v e l of e d u c a t i o n a t t a i n e d  by 25  D i s t r i b u t i o n of farm household  labour  2.4  T a b l e 2.5 Table  2.6  T a b l e 2.7  by employment  s t a t u s and by age  T a b l e 3.1  Farm t y p e d i s t r i b u t i o n  T a b l e 4.1  L a b o u r , m a c h i n e u s e and endowments  14  17  26 49  family  per h e c t a r e  68  T a b l e 4.2  S e l e c t e d o u t p u t a m o u n t s p e r h e c t a r e ..  76  T a b l e 4.3  S e l e c t e d i n t e r m e d i a t e inputs per hectare S i m p l e p r o d u c t i v i t y measures and  81  investment per h e c t a r e  85  T a b l e 4.4  T a b l e 5.1  Shadow p r i c e  f o r labour 1  140  T a b l e 5.2  ' Shadow p r i c e  f o r labour2  142  Table  5.3  Shadow p r i c e  f o r farm a s s e t s  143  Table  5.4  Shadow p r i c e  f o r paddy l a n d  144  T a b l e 5.5  Shadow p r i c e  f o r dry land  145  vi i i  T a b l e 5.6  T a b l e 5.7  T a b l e 5.8  Shadow p r i c e s i n t h e g e n e r a l i z e d l i n e a r model f o r f o u r r e g i o n s i n t h e s m a l l f u l l - t i m e , l a r g e f u l l - t i m e and s m a l l p a r t - t i m e farms .  148  Shadow p r i c e s i n t h e l i n e a r s i z e - p a r t i c i p a t i o n dummy m o d e l f o r four regions i n the small f u l l - t i m e , l a r g e f u l l - t i m e and s m a l l p a r t - t i m e farms  149  Shadow p r i c e s f o r t h e S u g a r a l l - d r y farms i n t h e g e n e r a l i z e d l i n e a r and l i n e a r dummy m o d e l  150  T a b l e A.1  S e l e c t e d p r i c e s used i n t h i s  T a b l e B.1  Growth  study  ...  195  r a t e s of p r o d u c t i o n i n  specific agricultural  crops  201  T a b l e B.2  Agricultural  exports  202  T a b l e B.3  Labour market  T a b l e B.4  Farm m a c h i n e  stock  204  T a b l e B.'5  Farm m a c h i n e  s t o c k by s i z e  204  T a b l e B.6  Patterns of emigration - immigration  situation  203  into agriculture  206  T a b l e C.1  Distribution  210  T a b l e D.1  NR: per MR: per SR: per  T a b l e D.2 T a b l e D.3 T a b l e D.4 T a b l e D.2  T a b l e D.6  o f sample o b s e r v a t i o n s ..  Labour use and f a m i l y hectare Labour use and f a m i l y hectare Labour use and f a m i l y hectare  SUG: L a b o u r u s e a n d f a m i l y per h e c t a r e  endowments 215 endowments 217* endowments 219 endowments 221  NR: S e l e c t e d o u t p u t amounts p e r hectare  223  MR: S e l e c t e d o u t p u t amounts p e r hectare  225  ix  T a b l e D.7  T a b l e D.8 T a b l e D.9 T a b l e D.10 T a b l e D.11 T a b l e D.12  SR: S e l e c t e d o u t p u t amounts p e r hectare  227  SUG: S e l e c t e d o u t p u t amounts p e r hectare  .  229  NR: S e l e c t e d i n t e r m e d i a t e i n p u t s p e r hectare  231  MR: S e l e c t e d i n t e r m e d i a t e i n p u t s p e r hectare  233  SR: S e l e c t e d i n t e r m e d i a t e i n p u t s p e r hectare  235  SUG:  S e l e c t e d i n t e r m e d i a t e i n p u t s per  hectare  237  T a b l e D.13  NR:  simple productivity  measures  ....  239  T a b l e D.14  MR:  simple productivity  measures  ....  241  T a b l e D.15  SR: s i m p l e p r o d u c t i v i t y  measures  ....  243  measures  ....  245  T a b l e D.16  SUG:  T a b l e E.1  F - s t a t i s t i c s f o r the test returns to scale F - s t a t i s t i c s f o r the test linearity  T a b l e E.2 T a b l e E.3 T a b l e E.4 T a b l e E.5 T a b l e E.6 T a b l e E.7  T a b l e E.8  simple productivity  F - s t a t i s t i c s f o r the test male m a r g i n a l p r o d u c t s F-test for linearity l i n e a r model  of c o n s t a n t 247 of 249 of c o n s t a n t  i n the  249 size 250  F-test for participation effects in t h e s i z e - p a r t i c i p a t i o n l i n e a r m o d e l ..  250  F-test f o r size e f f e c t s i n the s i z e - p a r t i c i p a t i o n l i n e a r model  251  I n f o r m a t i o n about the f i t of the estimated functions  252  Generalized Linear function coefficients  253  X  T a b l e E.9  T a b l e E.10 T a b l e E.11  T a b l e E.12  T a b l e E.13  T a b l e E.14  T a b l e E.15 T a b l e E.16 T a b l e E.17 T a b l e E.18 T a b l e E.19 T a b l e E.20 T a b l e E.21 T a b l e E.22  T a b l e E.23  Sign p a t t e r n of t h e g e n e r a l i z e d l i n e a r f u n c t i o n : c o e f f i c i e n t s and d i a g o n a l of t h e second order d e r i v a t i v e (average)  254  S t r u c t u r e of the estimated e r r o r of t h e l i n e a r m o d e l : t e s t s t a t i s t i c s ....  257  S t r u c t u r e of the estimated e r r o r of the g e n e r a l i z e d l i n e a r model: t e s t statistics .  257  Structure of the estimated e r r o r of t h e g e n e r a l i z e d l i n e a r model ( s i z e , p a r t i c i p a t i o n , y e a r dummy m o d e l )  258  S t r u c t u r e of the estimated e r r o r of t h e g e n e r a l i z e d l i n e a r model ( s i z e , p a r t i c i p a t i o n dummy m o d e l )  260  S t r u c t u r e of the estimated e r r o r of t h e l i n e a r model ( s i z e , p a r t i c i p a t i o n dummy m o d e l )  261  NR: l i n e a r . m o d e l w i t h dummy v a r i a b l e s : shadow p r i c e s h i f t s  262.  MR: l i n e a r m o d e l w i t h dummy v a r i a b l e s : shadow p r i c e s h i f t s  263  SR: l i n e a r m o d e l w i t h dummy v a r i a b l e s : shadow p r i c e s h i f t s  264  SUG: l i n e a r m o d e l w i t h dummy v a r i a b l e s shadow p r i c e s h i f t s  265  NR: G e n e r a l i z e d l i n e a r model w i t h dummy v a r i a b l e s : shadow p r i c e s h i f t s  .  266  MR: G e n e r a l i z e d l i n e a r m o d e l w i t h dummy v a r i a b l e s : shadow p r i c e s h i f t s  .  267  SR: G e n e r a l i z e d l i n e a r m o d e l w i t h dummy v a r i a b l e s : shadow p r i c e s h i f t s  .  268  SUG: G e n e r a l i z e d l i n e a r m o d e l w i t h dummy v a r i a b l e s : shadow p r i c e s h i f t s  .  269  NR: e s t i m a t e d shadow p r i c e s f o r small f u l l - t i m e , large f u l l - t i m e , s m a l l p a r t - t i m e farms  270  xi  Table  Table  Table  E.23  E.25  E.26  MR: e s t i m a t e d shadow p r i c e s f o r small f u l l - t i m e , large f u l l - t i m e , s m a l l p a r t - t i m e farms  271  SR: e s t i m a t e d shadow p r i c e s f o r small f u l l - t i m e , large f u l l - t i m e , s m a l l p a r t - t i m e farms  272  SUG: e s t i m a t e d shadow p r i c e s f o r small f u l l - t i m e , large f u l l - t i m e , s m a l l p a r t - t i m e farms  273  xii  L I S T OF  FIGURES  Page F i g u r e 5.1  1 55  F i g u r e 5.2  155  ACKNOWLEDGEMENTS I would  like  t o e x p r e s s my a p p r e c i a t i o n t o  D r . R o b e r t A l l e n , D r . Samuel Ho, a n d D r . Ashok K o t h w a l f o r t h e i r comments a n d s u g g e s t i o n s o v e r t h e c o u r s e o f t h i s study.  Without  h a v e been  t h e i r a s s i s t a n c e t h i s d i s s e r t a t i o n would not  completed.  I would a l s o l i k e Council the  for Agricultural  P l a n n i n g and Development  S i n o - A m e r i c a n J o i n t Commission  and D e v e l o p m e n t , the  t o t h a n k D r . Wang, C h a i r m a n  Council  of the  (formerly  for Rural Reconstruction  T a i p e i , R.O.C.) f o r a l l o w i n g me t o work a t  f o r 11 months i n 1980. I want t o t h a n k ,  e s p e c i a l l y D r . Mao Y.K., D i r e c t o r o f t h e D e p a r t m e n t o f Economics  and P l a n n i n g a t t h e C o u n c i l ,  f o r t h e generous  s u p p o r t a n d e n c o u r a g e m e n t I r e c e i v e d when I was p a r t o f h i s department.  I a l s o t h a n k M r . L i n S.T., C h i e f  International  C o o p e r a t i o n a n d I n f o r m a t i o n D i v i s i o n , who gave g e n e r o u s l y o f his  t i m e t o h e l p me w i t h I m m i g r a t i o n a n d w i t h h o u s i n g .  I  want t o t h a n k e s p e c i a l l y D r . Chen W.H., who was a l w a y s willing  t o a n s w e r my q u e s t i o n s a b o u t  and t h e s o m e t i m e s p u z z l i n g farmers o f t h e sample. knowledge path.  sector  b e h a v i o u r and r e p o r t i n g o f t h e  M i s s Chen Y.E. s h a r e d h e r w i d e  of t h e s t r u c t u r e of a g r i c u l t u r a l p r i c e s and growth  I t h a n k D r . Chuang F.T. who s u p p l i e d me w i t h t h e  computerized records. at  the a g r i c u l t u r a l  I a l s o want t o t h a n k M r . T s a i G.C-.,  t h a t time C h i e f of t h e A g r i c u l t u r a l Economics  Division at  xiv  the Taiwan  P r o v i n c i a l Department  o f A g r i c u l t u r e and F o r e s t r y  ( P D A F ) , where t h e Farm R e c o r d K e e p i n g S u r v e y Especially  I t h a n k Mr. L e e , C h i e f o f t h e FRKS d i v i s i o n ,  t o g e t h e r w i t h h i s p e o p l e p r o v i d e d s o much s e r v i c e s c o n n e c t e d t o t h e FRKS. Director  i s collected.  of the A g r i c u l t u r a l  who  additional  I a l s o t h a n k Mr. Wu  W.J.,  S c i e n c e i n f o r m a t i o n Center, as  a l o t o f t h e hand c o p y i n g o f t h e m a t e r i a l was f i n a n c e d a n d o r g a n i z e d by t h i s  organization.  B u t most o f a l l , CAPD).  I t h a n k Mr. Chen C h i n - C h u n ( o f  Without h i s generous  have been a b l e t o f i n i s h additional  liaison  activity,  this dissertation,  I would not  s i n c e a l o t of  i n f o r m a t i o n h a d t o be c o l l e c t e d a f t e r my  t o Canada.  return  I a l s o thank him and h i s w i f e L i - F e n  for their  f r i e n d s h i p a n d f o r a l l o w i n g me t o s h a r e i n t h e i r  lifestyle  a t home i n T a i p e i a n d on t h e a n c e s t r a l f a r m s t e a d . I t h a n k my C a n a d i a n M i s s Leduc  f r i e n d s Dr. Crean  P.,  J . , a n d t h e Roggeman f a m i l y , who e n c o u r a g e d me t o  c o n t i n u e t o t h e e n d , a n d Mr. M c G i l l i v r a y who a t g r e a t t y p e d up t h i s  dissertation.  Finally, encouragement dissertation  I t h a n k by p a r e n t s f o r t h e c o n t i n u o u s  t h e y gave d u r i n g t h e s e y e a r s .  I dedicate  this  t o my f a t h e r who a l w a y s s u p p o r t e d me i n my  c h o i c e o f s t u d y , a n d who u n h a p p i l y d i d n o t l i v e joy of t h i s  speed  t o share the  moment. RITA WARDENIER V a n c o u v e r , A u g u s t 1985-  1  CHAPTER I  INTRODUCTION  D u r i n g the War  c o l o n i a l p e r i o d and  I I decades, the  small  of T a i w a n ' s economy.  e a r l y post  s c a l e f a r m s e c t o r was  However, b e g i n n i n g  the pace of a g r i c u l t u r a l A l a r m e d by  the  growth d e c l i n e d  the  i n the  mainstay  late  1960s,  significantly.  t h i s d e v e l o p m e n t , T a i w a n ' s p o l i c y m a k e r s began a  search  f o r t h e c a u s e s of a g r i c u l t u r e ' s s l u g g i s h  Of  many f a c t o r s i d e n t i f i e d as p o s s i b l e r e a s o n s ,  the  World  a s s o c i a t e d w i t h the a g r a r i a n  performance. two  s t r u c t u r e of a g r i c u l t u r e have  r e c e i v e d a t t e n t i o n r e c e n t l y from Taiwanese p l a n n e r s : declining farmers,  f a r m s i z e and particularly  part-time  farming  small  t o o p e r a t e f a r m s on  f a r m s i z e and  a d v a n t a g e of the  not,  use  their  scale  response t o the  that part-time  land optimally.  gains  increasing scarcity  farmers  Mechanization 1970s i n  of a g r i c u l t u r a l  i t i s c u r r e n t l y b e l i e v e d t h a t e c o n o m i e s of  are  l o s t on  non-agricultural  small  farms.  s e c t o r s has  The  small  economies  b e e n underway i n T a i w a n s i n c e t h e e a r l y  so t h a t  a  the  w i t h alarm because they b e l i e v e that  w i t h m e c h a n i z a t i o n and  c a n n o t , o r do has  farmers,  r e a c t t o the  farms cannot take associated  small  Taiwanese  basis.  Planners part-time  (2) a g r o w i n g t e n d e n c y o f  (1)  e x p a n s i o n of  e n t i c e d more and  labour, scale  the  more f a r m  2  h o u s e h o l d s i n t o t a k i n g o f f - f a r m e m p l o y m e n t , so t h a t now  believed that  land  farms because farming land  o p t i m a l l y u s e d on  is a residual activity  i s h e l d as a s t o r e of v a l u e  reasons. by  i s not  the  Imperfections  restrictions  i n the  and  for  i t is  part-time  and  because  speculative  land market, caused p r i m a r i l y  i n t h e L a n d R e f o r m Laws of  1949-53,  may  have hampered m a r k e t t r a n s a c t i o n s t h a t w o u l d h a v e  helped  consolidate  farms  part-time  land holdings.  farming  g r o w t h has  The  belief  are d e t r i m e n t a l  l e d planners  to c a l l  that small  to sustained  I n t e r e s t i n g l y and  agricultural  f o r a second land  w h i c h w o u l d p r o m o t e more l a r g e f u l l - t i m e  reform,  farming.  s u r p r i s i n g l y , the  discussion  the  need f o r c h a n g e i n t h e a g r a r i a n  structure just  has  taken place  s u p p o r t of  l a r g e l y without  evidence.  And  ones.  p u r p o s e of t h i s  The  y e t , the  the  is.sues i n q u e s t i o n study  w i t h the  i t currently lacks.  study  tries  to provide  q u e s t i o n s . ' (1) A r e  answers t o the  small  than l a r g e  farms?  productive  than f u l l - t i m e  The  study  And  (2)  i n the  t h e p o s t W o r l d War  provide farming  In b r i e f ,  following  farmers i n Taiwan l e s s farming  the  two productive less  farming?  i s organized  examines major changes i n the p o l i c y and  part-time  i s part-time  described  empirical  i s to attempt to  f a r m s i z e and  about  empirical  are  t h e p o l i c y d i s c u s s i o n on empirical basis  and  as  follows.  government's  Chapter  two  agricultural  o r g a n i z a t i o n a l s t r u c t u r e of a g r i c u l t u r e i n II period.  In the c o n t e x t  of t h i s  brief  3  overview  of t h e h i s t o r i c a l  s e t of s p e c i f i c  and  institutional  e m p i r i c a l q u e s t i o n s are proposed  answered i n the c h a p t e r s t h a t f o l l o w . d e s c r i b e s and  assesses  the main d a t a  study: the Annual  Report  Chapters  five,  f o u r and  empirical evidence  full-time  i n chapter  f u n c t i o n s of t h e used t o t e s t  are  three  used i n t h i s  Keeping  Families.  productivity small part-time  and  investment-savings  four.  In chapter  behaviour  five,  value-added  f a m i l y s u p p l i e d f a c t o r s are estimated  f o r s c a l e economies, t e c h n i c a l e f f i c i e n c y  p a r t - t i m e . f a r m i n g , ' and summarizes the  the  -Differences in production patterns,  l a n d p r o d u c t i o n m e a s u r e s and are presented  source  which  the c o r e of the s t u d y , p r o v i d e  on p r o d u c t i o n and  farms.  Chapter  of F a r m R e c o r d  d i f f e r e n c e s between s m a l l f u l l - t i m e , large  background, a  allocative  f i n d i n g s and  offers  efficiency.  Chapter  some c o n c l u s i o n s .  and in six  4  CHAPTER I I AGRICULTURE I N TAIWAN  A.  INTRODUCTION The p u r p o s e o f t h i s c h a p t e r  i s t o provide the  historical  and i n s t i t u t i o n a l b a c k g r o u n d t o t h e c u r r e n t  discussion  i n T a i w a n a b o u t t h e need f o r a s e c o n d l a n d  r e f o r m , one t h a t w o u l d r e d u c e t h e number o f s m a l l f a r m s a n d i n c r e a s e t h e number o f l a r g e f u l l - t i m e  part-time 1  farms .  The c h a p t e r b e g i n s w i t h a d i s c u s s i o n o f t h e m a j o r c h a n g e s i n the  government's a g r i c u l t u r a l  development p o l i c y .  The  g r o w t h i n t h e number o f s m a l l f a r m s a n d o f p a r t - t i m e are  next examined  farms  i n t h e c o n t e x t of Taiwan's l a n d and l a b o u r  markets.  The c h a p t e r c o n c l u d e s w i t h a s t a t e m e n t o f t h e s i z e  part-time  issue that  i s c u r r e n t l y under d i s c u s s i o n  a n d an o v e r v i e w o f t h e q u e s t i o n s t h a t w i l l this  i n Taiwan  be a n s w e r e d i n  study.  B. GOVERNMENT POLICY AND AGRICULTURAL DEVELOPMENT In  t h e p o s t W o r l d War I I p e r i o d ,  d e v e l o p m e n t h a s come a b o u t p r i m a r i l y individual  agricultural  through the e f f o r t s of  f a r m e r s r e s p o n d i n g t o c h a n g i n g economic  opportunities.  H o w e v e r , t h e g o v e r n m e n t , by s u p p l y i n g  5  agriculture with  t h e needed i n f r a s t r u c t u r e and  manipulating  the  economic e n v i r o n m e n t w i t h i n w h i c h  operate,  been a b l e  has  of a g r i c u l t u r a l d e v e l o p m e n t .  g o v e r n m e n t has junctures  and  again  be  intervened introduced  agriculture.  directly dramatic  There i s a f e e l i n g  1949,  on  s t r u c t u r a l changes i n Taiwan t h a t the  only  The  hope was  that  m a j o r r u r a l a s s e t , - but  land reform  and  productivity.  Reduction Act  was  tenants  promulgated  .  3  stages .  introduced,  and  enabled tenants  i n 1953  t o buy The  the  the  In  land reform 1949  a very  i n 1951  owner-cultivators  L a n d To  Tiller  not  land,  the  to agricultural was  strict  Act,  Rent  were s o l d which  l a n d t h e y c u l t i v a t e d , was  r e s u l t was  in total  policies  public lands  a vast  increase  of o w n e r - c u l t i v a t o r s , which r a i s e d the  t o 64%  of  g i v i n g ownership  The  to  would  i t w o u l d m o t i v a t e them t o i n c r e a s e  implemented i n three  t o the  t h a t by  may  the  standing  r e s u l t i n a more e q u i t a b l e d i s t r i b u t i o n  production  time  intervene.  d e c i s i o n to implement i t s l o n g  cultivators  to  when i t r e t r e a t e d f r o m t h e m a i n l a n d  land reform.  the  important  T a i w a n , t h e C h i n e s e N a t i o n a l i s t Government made political  the  In a d d i t i o n ,  at s e v e r a l  r i p e f o r the government t o In  farmers  t o i n f l u e n c e b o t h t h e p a c e and 2  direction  by  share  i n the  number  of  f a r m h o u s e h o l d s f r o m 32%  in  1947  i n 1960". Besides  r e p a i r e d and  introducing land  reform,  extended the a g r i c u l t u r a l  the  government a l s o  infrastructure (first  6  built  during  t h e c o l o n i a l p e r i o d ) , and i n t r o d u c e d  i n p u t s a n d new p r o d u c t i o n  techniques  industrial  t h a t were d i v i s i b l e a n d  s c a l e n e u t r a l and t h u s s u i t a b l e f o r wide a d o p t i o n Taiwan's s m a l l farmers.  by  However, g o v e r n m e n t p o l i c y  in this  e a r l y p e r i o d was n o t o n l y d e v e l o p m e n t a l b u t a l s o e x t r a c t i v e . Through i t s c o m p u l s o r y r i c e p u r c h a s e and  fertilizer-rice  b a r t e r program, t h e government m a n i p u l a t e d trade against  f a r m e r s and e x t r a c t e d a c o n s i d e r a b l e  the a g r i c u l t u r a l during  surplus.  In s p i t e of t h i s ,  t h e 1960s a n d t h e f i r s t  balance,  favourable By  t h e terms of  the late  t h e economic  h a l f o f t h e 1970s was, on  to agricultural  growth.  1960s, h o w e v e r , t h e c o n d i t i o n s f a c i n g  Taiwan's farm h o u s e h o l d s had changed c o n s i d e r a b l y . 1960s was t h e d e c a d e d u r i n g  i n d u s t r i e s t o be more  The c h a n g e s i n t r a d e a n d  p o l i c i e s produced spectacular  results:  industrial  production  expansion occured  industries,  industrial  r e a l GNP  d u r i n g t h e decade approached double d i g i t growth i n manufacturing  The  which Taiwan implemented major  economic r e f o r m s t h a t encouraged outward-oriented.  share of  growth  f i g u r e s and t h e  r e a c h e d 20%.  Because t h e  primarily i n labour-intensive  t h e demand f o r u n s k i l l e d  and s e m i - s k i l l e d  workers increased  rapidly.  industrialization  on a g r i c u l t u r e was m o d e s t , b u t by t h e l a t e  1960s t h e r u r a l agricultural  At f i r s t ,  labour  t h e impact of r a p i d  l a b o u r m a r k e t became v e r y  t i g h t and  wages began t o i n c r e a s e r a p i d l y a s many f a r m e r s  f o u n d i t more p r o f i t a b l e  t o take  employment i n t h e  7  industrial Because  s e c t o r than t o remain  industrial  growth  full-time  i n Taiwan  in agriculture.  was n o t o n l y  r a p i d but  a l s o g e o g r a p h i c a l l y d i s p e r s e d , many f a r m e r s were a b l e t o participate cities. for  in industrial  The r i s e  employment w i t h o u t m i g r a t i n g t o  i n wages a n d c o n t i n u e d d e p r e s s e d  a g r i c u l t u r a l p r o d u c t s made i t i n c r e a s i n g l y  profitable  f o r farm h o u s e h o l d s t o remain  Consequently  i n the l a t e  agriculture,  either  reallocation  of l a b o u r time from t h e i r  agricultural  employment, so t h a t  less  in agriculture.  1960s w o r k e r s began t o s h i f t  f a r m work t o n o n -  i n 1972 t h e number o f f a r m 5  husbandry  a c t i v i t i e s and double c r o p p i n g .  declined  6  and t h e a r e a p l a n t e d 7  1972 t o 9 4 % o f t h e 1968 l e v e l .  fell was  from  Animal  i n r i c e had f a l l e n  The m u l t i p l e c r o p i n d e x 8  190 i n 1968 t o 175 i n 1 9 7 2 .  Agricultural  growth  stalled. Finally,  need  In t h i s  f a r m e r s a d j u s t e d by r e d u c i n g l a b o u r i n t e n s i v e  agricultural  in  out of  through migration or through the  w o r k e r s h a d d e c l i n e d t o 9 4 % o f t h e 1967 l e v e l . period,  prices  i n 1969, t h e g o v e r n m e n t a c k n o w l e d g e d t h e  f o r some f u n d a m e n t a l c h a n g e s  abandoned t h e f o u r t h a g r i c u l t u r a l  9  in i t spolicies . plan  (1969-72)  It  since  s u r p l u s e x t r a c t i o n a n d l a b o u r - i n t e n s i v e g r o w t h were no longer a p p r o p r i a t e  1 0  .  The p r i c e s of r i c e a n d f e r t i l i z e r  were a d j u s t e d t o t u r n t h e t e r m s o f t r a d e  i n favour of  f a r m e r s , and c o n s e q u e n t l y t h e r a t i o of o f f i c i a l market  price 1 1  p r i c e c l i m b e d f r o m 75 i n 1968 t o 108 i n 1 9 7 3 .  to the To  8  deal w i t h t h e problem of r u r a l  labour  shortages  r e s e a r c h was r e d i r e c t e d t o w a r d s d e v e l o p i n g techniques.  A major e f f o r t  mechanize r i c e c u l t i v a t i o n .  agricultural  labour-saving  was made t o f i n d ways t o Joint projects  involving  experiment s t a t i o n s , machine p r o d u c e r s ,  importers,  A s s o c i a t i o n s and farmers  to develop the  a p p r o p r i a t e machines. specialization By  were i n i t i a t e d  Research t o develop  i n production  was a l s o  initiated.  L o c a l l y made a p p r o p r i a t e  m a c h i n e s were i n t r o d u c e d a n d t h e i r extension  maintain  regional  1972-73 t h e r e s u l t s o f p u b l i c a n d p r i v a t e  r e s e a r c h became a v a i l a b l e .  The  Farmers'  s e r v i c e s t r a i n e d farmers  a g r i c u l t u r a l machines.  1 2  adoption  was p r o m o t e d .  t o operate  and t o  Farmers A s s o c i a t i o n s as  w e l l a s p r i v a t e c o m p a n i e s were i n v o l v e d i n t h e d e v e l o p m e n t of a s u p p l y agricultural  network f o r machines and s p a r e - p a r t s . organizations, previously limited  s h o r t t e r m l o a n s , were now a l l o w e d medium t e r m  t o provide  (7 y e a r ) l o a n s n e e d e d f o r b u y i n g  The  to providing t o farmers the  machines.  J o i n t o w n e r s h i p o f m a c h i n e s was p r o m o t e d b u t p r o v e d n o t v e r y popular.  However, s p e c i a l i z a t i o n d e v e l o p e d  m a c h i n e s began t o g i v e machines  'custom s e r v i c e s '  1 3  as farmers f o r those  with without  (a d e v e l o p m e n t t h a t was u n e x p e c t e d b u t n e v e r t h e l e s s  welcomed by p l a n n e r s ) .  A g r i c u l t u r a l m a c h i n e s were u s e d  p r i m a r i l y as a s u b s t i t u t e f o r l a b o u r d u r i n g peak seasons of the r i c e p r o d u c t i o n .  Rice t r a n s p l a n t e r s , r i c e  combines,  d r y e r s a n d t h r e s h e r s became a v a i l a b l e i n 1970 a n d by 1980 a  9  total  o f 110538 r i c e - r e l a t e d m a c h i n e s were i n u s e  1 4  .  At the  same t i m e ,  r i c e v a r i e t i e s w h i c h were a p p r o p r i a t e f o r  mechanical  h a n d l i n g were e x t e n d e d a n d n u r s e r i e s were s t a r t e d  to supply  boxed r i c e  seedlings.  The u s e o f h e r b i c i d e s was  p r o m o t e d t o r e d u c e t h e n e e d f o r w e e d i n g , an l a b o u r - i n t e n s i v e and p h y s i c a l l y demanding Developing crops  activity.  labour-saving technology  p r o v e d more d i f f i c u l t ;  extremely  f o r the non-rice  e f f o r t s were i n s t e a d d i r e c t e d  t o a r e d u c t i o n of l o s s e s from n a t u r a l d i s a s t e r , d i s e a s e and price  instability.  Improved c u l t i v a t i o n  promoted and h e r b i c i d e r e s i s t a n t  techniques  s t r a i n s were  were  developed.  Where p o s s i b l e , t y p h o o n p r o t e c t i o n m e t h o d s a n d more v i l l a g e - w i d e p e s t a n d d i s e a s e c o n t r o l were p r o m o t e d . provide  greater price s t a b i l i t y ,  farmers,  p r o c e s s o r s and  e x p o r t e r s were e n c o u r a g e d t o s i g n s e a s o n a l improve t h e r e g i o n a l d i s t r i b u t i o n  To  contracts.  To  o f i n c o m e , an e f f o r t was  made t o make s l o p e l a n d p r o d u c t i o n more p r o d u c t i v e a n d prof i t a b l e  1 5  .  I n t h e 1970s, f a r m e r s i n consumer demand. demand f o r n o n - s t a p l e farmers  As p e r c a p i t a income i n c r e a s e d , t h e food a l s o i n c r e a s e d , and Taiwan's  responded t o these  was 2 2 % a n d v e g e t a b l e production  a l s o had t o a d j u s t t o changes  changes.  production  Thus, f r u i t  48% l o w e r  4% a n d sweet p o t a t o p r o d u c t i o n 1 6  1972  than  i n 1980 .  also  i n response t o s h i f t s  production  i n 1972, b u t r i c e 177% h i g h e r i n  The a d j u s t m e n t s i n p r o d u c t i o n i n the export  pattern.  were Fresh  10  fruit  e x p o r t q u a n t i t y was  175%)  and  were 45%  sugar lower  increased. by  1980,  27% h i g h e r i n 1972  I n 1972,  (banana 125%,  i n 1972,  than  canned  but v e g e t a b l e  i n 1980.  Rice exports also  1 7  exported;  exported .  The  i n r i c e exports occurred d e s p i t e the  fact  r i c e p r o d u c t i o n i n 1980  was  C l e a r l y , domestic  dramatically.  slightly  lower  and  compared u n f a v o u r a b l y  1979,  a t 3.5%  t o t h e 4.5%  e s t a b l i s h e d d u r i n g 1951 - 1 9 7 0 Dissatisfied  than  1 8  that  that in  c o n s u m p t i o n p a t t e r n s had  Despite these adjustments,  g r o w t h b e t w e e n 1972  pinapple  exports  1% of t h e r i c e p r o d u c t i o n was  17% of i t s p r o d u c t i o n was  expansion  1972.  157%  changed  agricultural  per y e a r ,  still  per year growth r a t e  .  w i t h the lower  r a t e of g r o w t h ,  Taiwan's  a g r i c u l t u r a l p l a n n e r s , s e a r c h i n g f o r o t h e r ways t o accelerate agricultural that the  began t o v o i c e t h e i r  i n c r e a s i n g number of s m a l l and  the c h i e f  FACTOR MARKETS AND The  near  structural  growth.  70%  1972  of l a r g e f a r m s and  large  and  1980,  the  Table  farms  In t h i s  rise 2.1  s m a l l farms (those w i t h  1 h e c t a r e of l a n d ) c o n s i s t e n t l y a c c o u n t e d  of Taiwan's farms.  now  characteristics.  of p a r t - t i m e f a r m i n g c a n be e a s i l y d o c u m e n t e d .  l e s s than  We  FARM ORGANIZATION  disappearance  shows t h a t , between  belief  p a r t - t i m e farms, were  constraints to faster a g r i c u l t u r a l  t u r n t o examine these C.  growth,  for  same p e r i o d t h e s h a r e  ( t h o s e w i t h 2 o r more h e c t a r e s ) d e c l i n e d  over  of from  Table  2.1:  1960, 1970, 1975, 1980 T h e NUMBER o f HOUSEHOLDS C L A S S I F I E D b y TYPE o f WORK a n d by S I Z E  %  1960 F u l l t i me (FT) W i t h s i d e 1 i ne: (PT) - m a i n l y farm (PT.A) - ma 1n1y s i d e l i ne (PT.NA) Total l e s s t h a n 1 ha 1 h a a n d l e s s t h a n 2 ha 2 h a a n d more Total cultivating n o n - c u 1 1 1 v a t i ng Source:  Census  (S) (M) (L)  276959 639007 371434 267573 915966  30 22 100  515817 183751 76434 776002 31598  66 24 10 100  629063 176216 741 1 19 879398 36568  1975  1980  157043 729012 422 131 306881 886055  30 70 41 29 100 72 20 8 100  18 82  91209 800054 306335 493719 891263  48 34 100  618119 181464 66817 866400 19655  71 21 8 100  1980 a n d  1975  633708 174020 64539 872267 18996  10 90 35 55 100 73 20 7 100 -  data  T a b l e 2 .2:  FARM HOUSEHOLDS by  Number o f H o u s e h o l d s Year  48 52  384501 423099 241060 182039 807600  %  1970  OF FARM  Size  Total  FT  TYPE o f WORK a n d S I Z E  p e r Type  %  PT . A  5 3 2  170159 94556 39067  %  % PT.NA  in  Households  per Size  %  Total  FT  PT.A  48 6 1  100 100 100  7 16 25  27 54 61  100  10  100 100 100 100  PT.NA  'o H o u s e h o l d s  p e r Work  Type  Total  FT  PT.A  PT.NA  66 30 14  73 20 7  50 31 19  56 31 13  87 1 1 2  35  55  100  100  100  100  13 28 36  43 62 59  44 10 5  71 21 8  52 33 15  64 27 9  93 6 1  18  48  34  100 •  100  100  100  1980 -1 h a 1-2 h a 2+ h a  633708 174020 64539  45054 28046 16302  1980 C u l t i v a t o r s  872267  89402  -1 h a 1-2 h a 2+ h a  618119 181464 66817  80436 50650 23981  1975 C u l t i v a t o r s  866400  155067  20  1 1 4  303782  418445 51418 9220 479083  1975 9 6 3  267599 112937 39331 419867  31 13 5  270084 17877 3505 291466  31 2 .04  S o u r c e : A g r i c u l t u r a l C e n s u s , 1980, 1975 N o t e : FT f u l l - t i m e f a r m e r ( a l l f a m i l y income comes f r o m t h e f a r m i n g a c t i v i t y ) PT.A : p a r t - t i m e , m a i n l y f a r m e r (more t h a n h a l f o f t h e f a m i l y income comes f r o m t h e f a r m i n g a c t i v i t y ) PT.NA: p a r t - t i m e , m a i n l y s i d e l i n e ( l e s s t h a n h a l f o f t h e f a m i l y income comes f r o m t h e f a r m i n g a c t i v i t y )  12  10%  t o 7%.  H o w e v e r , t h e most d r a m a t i c  e x p a n s i o n of p a r t - t i m e the p r o p o r t i o n  of  1 9  farming .  f r o m 71%  Between  farms c l a s s i f i e d  as p r o v i d i n g more t h a n h a l f of t o 45%.  T a b l e s 2.1  c h a n g e was  as  the  and  1970  the  and  'full-time'  rapid 1980,  (defined  f a m i l y income) d e c l i n e d  2.2  a l s o document a n o t h e r  widely  o b s e r v e d phenomenon i n T a i w a n e s e a g r i c u l t u r e , t h e  strong  inverse  farming.  As  increases.  r e l a t i o n s h i p b e t w e e n f a r m s i z e and  the For  farm s i z e d e c l i n e s , p a r t - t i m e e x a m p l e , i n 1980  66%  of  small  farming f a r m e r s were  also part-time  farmers while  only  14%  were p a r t - t i m e  farmers.  data  also suggests  part-time  farming  has  The  increased  of t h e  part-time  large  farmers  that  f o r f a r m s of a l l s i z e s o v e r  time. The  government i s p a r t i c u l a r l y  g r o w i n g number of distribution factors.  of  small part-time  Because developments i n the a particularly  d i s c u s s i o n below s h a l l Farm s i z e and How  land  forces outside some o f  farmers.  the  c u s t o m s and commercial  the  focus land  farming  labour  t h e s e two  many land  role,  m a r k e t s of  the Taiwan.  2 0  i s determined  households.  t h e demand f o r l a n d  the  the  and  influencial  markets  i s organized  the  on  e x t e r n a l f a c t o r s : the  use.  But  f a r m h o u s e h o l d s i s i n f l u e n c e d by  markets have p l a y e d  C.1  c o n c e r n e d about  in part  B e l o w we  land laws,  the  for residential  by  consider inheritance and  13  The are  the  l a n d laws t h a t a f f e c t the d i s t r i b u t i o n  1949  Rent-Reduction Act  L a n d - t o - T i l l e r Act but  (LTT).  a l s o gave t e n a n t s  cultivate. law  The  strong  Rent i s s e t a t  (RRA) RRA  not  r i g h t s on  37.5%  the  only the  of the  the c o n t r a c t  s o u r c e of  income and  cultivate  the  i f farming  i f the  land h i m s e l f  2 2  2 3  ,  and 2  w o r k e d a p i e c e of  apply its  to the  local  statutory The  distribute  land  2 5  cultivated retain  for c u l t i v a t i o n leased,  family. ha)  or l e a s e  t h e LTT  t o buy  the  Landlords  2 6  .  who  to  land  act allows  were  land  at  the  t o buy  tenants the  f a m i l i e s who  bought l a n d u n d e r t h e  to  6  land  .  the  they to  c h i a of d r y retained  t o ask 2 7  to  Under  were a l l o w e d  However, i f t h e  t o own  the  land  land Land  Cultivators  more t h a n 3 c h i a of paddy l a n d , but a l l  l a n d to the the  be  right  from r e o c c u r i n g .  were a l l o w e d  they r e n t out  to  c u l t i v a t o r s and  of paddy l a n d o r  Commission f o r p e r m i s s i o n  lose their  the  to  only  intent  the L a n d - t o - T i l l e r Act  were a l l o w e d  (=2.91  right  Furthermore a tenant  land ownership to the  with their  3 chia  the  The  .  purposes of  farmer-tenants  .  contract  f o r 8 y e a r s has  prevent ownership concentration Act,  2 1  l a n d commission to purchase the  value  the  ,  tenant's  t h a t the  rent  they  yield  l a n d l o r d does not  r e g i s t e r e d w i t h the government ". has  1953  land  1948  i s the  land  reduced the  a l s o s t i p u l a t e s a minimum s i x y e a r l e a s e  renew t h e  is  and  of  land  L a n d - t o - T i l l e r Act  government w i t h o u t 2 8  .  could  compensation i f  14 T a b l e 2 .3: OWNERSHIP OF THE FARM LAND Year  full part Owner owner  1 947 1 960 1 972 1 976 1 979 1980 •  full ten  Household  Populat ion  Area  Area per HH (6)  (1)  (2)  (3)  (4)  (%)  (%)  (%)  (#)  (#)  (Ha)  (Ha)  32 64 78 82 85 83 (1)  28 21 12 9 7 10 (2)  553308 785592 879526 867547 898341 872267 (4)  3578175 5373375 5947325 5563354 5638810 5287596  834000 869223 898603 919680 915393 907353  1.51 1.11 1 .02 1 .06 1 .02 1 .04 (5)  41 14 10 9 8 7 (3)  (5)  S o u r c e : PDAF A g r i c u l t u r a l Y e a r b o o k Note:  (1) (2) (3) (4) (5) (6)  p e r c e n t a g e f u l l l a n d owners of t h e households p e r c e n t a g e p a r t owners percentage f u l l tenants number o f f a r m i n g h o u s e h o l d s p o p u l a t i o n on t h e f a r m s area per farming household  The l a n d r e f o r m was v e r y s u c c e s f u l . where t h e l a n d l o r d eliminated.  32%  i s the s t a t e ) has v i r t u a l l y  T a b l e 2.3 shows t h a t  owner-cultivators  in total  I n 1980 t h e a v e r a g e  farm  size  f a r m s i z e was 1.02  h e c t a r e , a n d o n l y 7% o f f a r m h o u s e h o l d s  operated  farms  than 2 ha. Since the e a r l y  remained of  from  B e c a u s e l a n d was  o v e r s o many h o u s e h o l d s , t h e a v e r a g e  also declined.  larger  increased  w h i l e t h e share of tenants  f r o m 4 1 % i n 1947° t o 7% i n 1980.  distributed  been  the share of  farm h o u s e h o l d s  i n 1947 t o 7 8 % i n 1972.  declined  Tenancy ( e x c e p t  stable  1970s t h e o w n e r s h i p p a t t e r n h a s  ( t a b l e 2.3) a n d s o h a s t h e s i z e  management u n i t s .  I t would appear  that  distribution  the land  reform  15  laws not  only  have p r e v e n t e d r e c o n c e n t r a t i o n  t h e y may  a l s o have p r e v e n t e d t h e  i t s proper a l l o c a t i v e land reform  role.  Under the p r e s e n t perceived  t o be  main p r o b l e m s w h i c h  are  laws,  highly r i s k y  2 9  .  for longer  a t most f o r one that  t h a n one  y e a r and  f a r m e r s who  basis rather  than r e n t out  the  Since  laws.  One  another This  l a n d under a f o r m a l  year.  Thus l a n d  to farm t h e i r  speaking,  1978,  the  l a n d and  risk  arrangement a l l o w s  around the  land  a  contract  'farming  h a v e had  an  shows t h a t d u r i n g  the  arrangements.  reform  effect.  rental  This  out means  1  but  a small  the  part-time the  l o s s of  i s not  the  been on  land  'contract  a rental  first  the  farmer'.  contract  But  the  new  3 2  .  may  share  table  2.4  contracting farm  r e n t a l market i s s t i l l  i n t r o d u c t i o n of t h e  for  strictly  time,  r.ise.  new  reform  arrangements  f r a c t i o n of t o t a l  t h a t the  enter  several  laws because,  For  may  l a n d owner t o a r r a n g e  1977-80, n e w l y r e n t i n g o r  households, suggesting t h i n even w i t h  .  introduced  s u g g e s t s t h a t t h e s e new  of p a r t - o w n e r f a r m e r s has  households are  3 0  t o e n c o u r a g e more l a n d t o  arrangements to circumvent the  T a b l e 2.3 already  may  i s rented  l a n d on a  f a r m e r t o o p e r a t e h i s l a n d as a  gets  is  Farmers f e a r t h a t they  r e n t a l m a r k e t , t h e g o v e r n m e n t has  institutional  land  have f o u n d n o n - a g r i c u l t u r a l employment  continue  3 1  l e a s i n g of  usually u n o f f i c i a l l y  nevertheless  ownership .  the  the f o l l o w i n g .  the  l o o s e o w n e r s h i p i f t h e y r e n t out contract  ownership,  l a n d market from p l a y i n g  The  l a w s have c r e a t e d  of  contracting  very  For a piece  many r e a s o n s , l a n d s a l e s a r e a l s o r a r e .  o f l a n d c a n be s o l d , p e r m i s s i o n  obtained  from the l a n d commission.  must f i r s t  land  sales  Beside the imperfections are  other  pressures  that  be  The u n d e r d e v e l o p e d  m o r t g a g e m a r k e t and t h e s t r i n g e n t c o n d i t i o n s mortgages a l s o discourage  Before  3 3  i m p o s e d on  .  i n the land markets,  keep f a r m s s m a l l  there  i n Taiwan.  C h i n e s e i n h e r i t a n c e c u s t o m s d i v i d e l a n d e q u a l l y among male 3  heirs ".  Furthermore, r a p i d i n d u s t r i a l  growth has s t e a d i l y  taken b i t s of l a n d from farms l o c a t e d near urban a r e a s .  The  demand f o r r e s i d e n t i a l c o n s t r u c t i o n h a s a l s o p u t p r e s s u r e farm l a n d  3 5  .  With the cost  land development very The of  of l a n d r e c l a m a t i o n  high, very  little  land  on  and s l o p e  i s being  added.  f a r m s i z e d e p e n d s on .the r a t e o f l o s s o f f a r m l a n d and farming  households.  From 1972 t o 1976, f a r m l a n d a n d  farm households i n c r e a s e d 2.3).  But between  more o r l e s s p r o p o r t i o n a l l y ( t a b l e  1976 a n d 1980, f a r m l a n d h a s d e c l i n e d  more r a p i d l y t h a n h a s t h e number o f f a r m h o u s e h o l d s , so f a r m s i z e has d e c l i n e d . I n summary, t h r e e m a j o r f a c t o r s h a v e i n f l u e n c e d size and  i n Taiwan: the land reform the increased  uses. on  increase  t h e i n h e r i t a n c e custom  demand f o r f a r m l a n d f o r n o n - a g r i c u l t u r a l  The l a n d r e f o r m  the operation  laws,  farm  laws have imposed s e v e r e c o n s t r a i n t s  of t h e l a n d m a r k e t , making i t d i f f i c u l t t o  farm s i z e  f o r management p u r p o s e s .  The i n h e r i t a n c e  Table 2.4: CHANGES IN LAND HOLDINGS BY SIZE OF FARM AND BY REASON in 1975  Size  Purchase HH  -1 ha 1-2 ha 2+ ha  2882 1838 1023  Total %  5743 . 77  Sold  Rent In HA  HH  HA  HH  HA  339 707 801  866 683 362  325 377 335  5488 1559 823  1826 799 387  2247 . 30  1811 .24  1037 .14  7870 1 .06  3022 .41  in the 1977-80 Period  Size  Purchase HH  (3 years  HA  HH  542 322 99  303 ' 160 76  558264 197324 110812  963 . 13  539 .07  866400 100  HH  % 65 23 13  Sold  Rent Out  Contract  HH  HH  ' HH  HH  HH  HH  4845 831 404  633708 4845 64539  72 20 8  6080 . 70  872267  100  2907 683 317  2909 646 257  8269 1767 1161  781 225 134  Total  32553 3 . 73  3297 .45  382 1 .44  10996 1 . 26  1 140 • 13  A g r i c u l t u r a l Census, 1975, 1980 households area percent of the t o t a l number of households (or area)  Total  Number  Contract  Rent i ng  25516 5061 1976  Source: b HH: c HA: d % :  Number  together)  -1 ha 1-2 ha 2+ ha  %  Total  Rent Out  %  18  custom encourages land and  1980, b e c a u s e o f i n c r e a s e d  residential r a t e than  land,  these:  will  Finally,  b e t w e e n 1976  demand f o r i n d u s t r i a l a n d  l a n d was l e a v i n g a g r i c u l t u r e a t a f a s t e r  farm h o u s e h o l d s .  The be  fragmentation.  consequences f o r t h e farm s e c t o r a r e thought t o (1) o t h e r  mean s l o w e r  things equal,  agricultural  a net decrease  i n land  growth i n the f u t u r e , i s likely  (2) t h e  more u n i f o r m  distribution  of l a n d  a more e q u a l  distribution  o f income i n r u r a l T a i w a n , and  (3) t h e i n c r e a s i n g number o f s m a l l production  inefficiency  agriculture. the  third  f a r m s may r e s u l t i n  a r e s c a l e ecomomies i n  One p u r p o s e o f t h i s  study  i s t o s h e d l i g h t on  consequence.  To a l l e v i a t e 1949  i f there  to contribute to  some o f t h e p r o b l e m s c r e a t e d  a n d 1953 l a n d r e f o r m  proposed.  laws,  The e x p e r i m e n t a t i o n  by t h e  s e v e r a l c h a n g e s h a v e been w i t h new r e n t a l a r r a n g e m e n t s ,  such as c o n t r a c t  farming,  has a l r e a d y  been m e n t i o n e d .  Another proposal  i s t o r a i s e t h e amount o f l a n d t h a t  h o u s e h o l d s may own, w h i l e p l a c i n g a l o w e r l i m i t .size.  farm  on f a r m  A law t o p r o h i b i t l a n d s p e c u l a t i o n , a c a p i t a l  gains  t a x on l a n d , a n d a h e a v y p u n i t i v e t a x on u n c u l t i v a t e d 3 6  l a n d h a v e a l s o been s u g g e s t e d . facilitate accessible.  Another proposal  l a n d s a l e s by m a k i n g l o n g  farm  i s to  t e r m c r e d i t more  The i n t e n t o f a l l t h e s e s u g g e s t i o n s  increase  t h e number o f l a r g e f u l l - t i m e  chapters  s h a l l analyze  farms.  the p a t t e r n of p r o d u c t i o n  i s to Later by t h e s i z e  19  of f a r m  and t h e degree of farm  farming. likely  households'  Hopefully, the a n a l y s i s w i l l  impacts  suggest  some o f t h e  of l a n d ownership c o n s o l i d a t i o n .  C.2 P a r t - t i m e f a r m i n g , h o u s e h o l d r u r a l l a b o u r market Of  participation in  labour  s u p p l y and t h e  t h e many f a c t o r s t h a t h a v e i n f l u e n c e d t h e  development and t h e o r g a n i z a t i o n of p a r t - t i m e f a r m i n g i n Taiwan, four deserve  special  attention:  the nature of  Taiwan's l a b o u r market, t h e extended f a m i l y system, the increased s p e c i a l i z a t i o n agricultural and  of l a b o u r i n  p r o d u c t i o n made p o s s i b l e by new t e c h n o l o g i e s ,  the growing  non-agricultural  demand f o r r u r a l sectors  p a r t - t i m e farm household least  and d i v i s i o n  3 7  .  labour  from the  Note t h a t i n t h i s . s t u d y a  i s d e f i n e d a s one t h a t e a r n s a t  5 0 % o f i t s income f r o m o f f - f a r m s o u r c e s  at l e a s t  (or a l l o c a t e s  25% of i t s l a b o u r t o o f f - f a r m a c t i v i t i e s ) ,  off-farm sources  (activities)  non-agricultural  sources  o f f - f a r m employment may  and  a r e not n e c e s s a r i l y  (activities). i n v o l v e working  In other  words,  on someone e l s e ' s  farm. Taiwan's l a b o u r market works r e a s o n a b l y  well,  with  no s i g n o f t h e d i s t o r t i o n s o r i m p e r f e c t i o n s t h a t c a n s o m e t i m e s be o b s e r v e d The i s l a n d  i n other  i s s e r v e d by a w e l l  (made up o f r a i l r o a d s ,  l e s s developed  countries.  o r g a n i z e d t r a n s p o r t system  h i g h w a y s a n d an e x t e n s i v e f e e d e r  s y s t e m , a n d h a v i n g a l a r g e bus s y s t e m ) ,  road  perhaps the best i n  20  A s i a a f t e r Japan. system.  I t a l s o has  an  N e w s p a p e r s , r a d i o s and  available  i n a l l p a r t s of t h e  efficient  t e l e v i s i o n s are a l l widely  island.  r e s t r i c t i o n s on movements w i t h i n t h e laws e x i s t areas not  but  a r e not  (e.g. export  exist  mobile,  strictly  processing  There are island.  enforced  zones),  f o r most of t h e economy.  Minimum wage  except  in a  so e f f e c t i v e l y  In b r i e f ,  responsive  t o new  labour  f o r the e l d e r l y ,  'Taiwan t o d a y  is still 3 8  generations .  typical  household.  a  four  one  This household s t r u c t u r e provides  expanded r a p i d l y  Traditionally, education possible  in rural  f o r more p a r e n t s  and  Taiwan.  t o send c h i l d r e n t o  a l s o remained longer  i n the  those  In  secondary  on  income i m p r o v e d and  i n c r e a s e d r a p i d l y and  for  plans.  Taiwanese have p l a c e d a h i g h v a l u e  so t h a t , when r u r a l  enrollment  marriage,  son r e m a i n s i n t h e  f o u r d e c a d e s , t h e number of p r i m a r y  s c h o o l s has  and  traditional  t h e c a r e o f t h e e l d e r l y a s t h e r e a r e no p e n s i o n the past  do  is  fast  Young a d u l t s r e m a i n a t home u n t i l at l e a s t  they  r u r a l household in  composed o f t h r e e o r  even a f t e r m a r r i a g e ,  parent's  the  few  economic o p p o r t u n i t i e s .  B e c a u s e of s t r o n g f a m i l y t i e s and  and  no  news of employment o p p o r t u n i t i e s t r a v e l s  r u r a l workers are  respect  communication  school,  attending  s c h o o l system.  made i t  schools  Thus, i n a  t y p i c a l e x t e n d e d f a m i l y , t h e y o u n g e r members a r e much b e t t e r educated than  members of an  older generation.  members, t h e r e f o r e , have b e t t e r a c c e s s  The  t o economic  younger  21  opportunities outside the family  farm.  H o w e v e r , many o f  t h o s e who h a v e f o u n d employment o u t s i d e t h e f a m i l y c o n t i n u e d t o be p a r t o f t h e f a r m h o u s e h o l d . f a s h i o n , t h e extended  family  In t h i s  system has c o n t r i b u t e d  increase  i n the share of farm households w i t h  off-farm  activities. Another  i n f l u e n c e on t h e d e v e l o p m e n t  f a r m i n g h a s been t h e g r o w t h f a r m e r s who s p e c i a l i z e production existed  3 9  .  i n 'custom  of f a r m e r s u s e d t o t r a v e l  F o r example,  p r o v i d e d by  seedlings.  t h e i m p o r t a n c e of 'custom  services'  a s many f a r m e r s i n v e s t e d  has always  (from South t o  H o w e v e r , i n t h e 1970s increased  significantly  i n s p e c i a l i z e d machines and  a n d began t o o f f e r  their  s e r v i c e s t o t h o s e who  T h u s , i t became p o s s i b l e t o h i r e one  farmer t o prepare the f i e l d  with a t i l l e r ,  a second t o  s e e d l i n g w i t h a t r a n s p l a n t e r and a t h i r d  to harvest- t h e r i c e w i t h a h a r v e s t e r or combine. has s t a r t e d increasing example,  t o go i n t o o t h e r a c t i v i t i e s sophistication  of s p e c i a l i z e d w o r k e r s "  0  The s y s t e m  i n response t o the  of the p r o d u c t i o n technology.  i n s e c t i c i d e use i s expanding and w i t h  activities  groups  season h e l p i n g w i t h t h e  t r a n s p l a n t i n g of the r i c e  the rice  from  of p a r t - t i m e  i n t h e 1960s,  up t h e i s l a n d  North) d u r i n g the t r a n s p l a n t i n g  transplant  income  services'  T h i s type of s p e c i a l i z a t i o n  d i d n ' t h a v e them.  to the  i n one o r s e v e r a l a s p e c t s o f c r o p  i n r u r a l Taiwan.  equipment  f a r m have  and t h e i r equipment,  such as p r u n i n g a l s o i n c r e a s i n g l y  For  i t the supply and o t h e r  need  22  specialized services' activity  knowledge.  This expansion  of the  s y s t e m i n t r o d u c e s an e l e m e n t o f and  may  members o f t h e agricultural  become i n c r e a s i n g l y f a r m i n g c o m m u n i t y , by  activity,  specialization  distribute  i n c r e a s e the d i v i s i b i l i t y  specialization  important.  in their  from  f a r m s and  of l a r g e p i e c e s of  also  farm  equipment.  Thus t h e d e v e l o p m e n t of a m a r k e t f o r ' c u s t o m s e r v i c e s ' increased part-time farming agricultural another  work f o r one  g r o u p of f a r m e r s  has  by p r o v i d i n g o f f - f a r m  group of f a r m e r s to continue  w h i l e engaged i n f u l l - t i m e  of  These  specializing  the g a i n s  (human c a p i t a l ) a c r o s s  'custom  while allowing  to operate  their  farms  employment o u t s i d e o f  agr i c u l t u r e . P e r h a p s t h e most i m p o r t a n t development of p a r t - t i m e f a r m i n g in  t h e demand f o r r u r a l 1  sector" .  S i n c e the e a r l y  d e v e l o p m e n t has year-round  greatly  The  expansion  concentrated  has  the  been t h e r a p i d  increase  from the n o n - a g r i c u l t u r a l  1970s, r a p i d  industrial  expanded the o p p o r t u n i t i e s f o r  employment f o r r u r a l  workers. not  labour  i n f l u e n c e on  workers,  particularly  young  of n o n - a g r i c u l t u r a l a c t i v i t i e s  only i n the  large c i t i e s  b u t has  was  occurred  i n a d e c e n t r a l i z e d p a t t e r n , so t h a t many r u r a l w o r k e r s c o u l d switch occupation also  important  provides  without  t o note  i t s w o r k e r s on  employment  changing  their  residence.  It is  t h a t the n o n - a g r i c u l t u r a l s e c t o r t h e a v e r a g e w i t h more d a y s of 4 2  (27 d a y s p e r m o n t h ) t h a n  the  agricultural  23  sector  (16 d a y s p e r m o n t h ) .  sector  t e n d s t o h i r e t h e young and  indeed,  with  However, the n o n - a g r i c u l t u r a l  industrialization,  increasingly  the o c c u p a t i o n  the b e t t e r educated,  farming  of t h e  i n T a i w a n has  o l d and  the  less  compare t h e age  and  the  and  become  educated. Tables  2.5  and  2.6  education  d i s t r i b u t i o n s of w o r k e r s i n a g r i c u l t u r e w i t h those economy as a w h o l e .  educated workers.  In  i n a g r i c u l t u r e had  education  proportion  1980  only  this  49%.  Among women w o r k e r s , o n l y  proportion 1980,  60%  force.  10%  o f age  of those  Among f e m a l e w o r k e r s t h e age  a g r i c u l t u r e was total  1980,  force.  between the ages of  20 and  c o m f i r m e d by  56%  o v e r 40 y e a r s  labour  school, force  f o r c e was  44%.  of the o f age  That 44,  who  i n the  total  d i f f e r e n c e was female labour  In over  labour even force in  as c o m p a r e d t o o n l y  i t i s the young, a r e most m o b i l e ,  1970s, when t h e o i l s h o c k  d e p r e s s e d i n d u s t r i a l , a c t i v i t i e s , t h e r e was g r o u p 20-44 f r o m  25%  those  3  f l o w o f w o r k e r s i n t h e age  was  the  the a n n u a l flow between o c c u p a t i o n s " .  example, i n the mid  force  f o r c e i n a g r i c u l t u r e was  a s c o m p a r e d t o 42%  In  less  in agriculture  school, while  female labour  of t h e m a l e l a b o u r  more p r o n o u n c e d .  i n the  total  the  of t h e m a l e l a b o u r  i n the t o t a l male l a b o u r  beyond the p r i m a r y  i n the  f o r t y years  26%  beyond the p r i m a r y  while  education  the  They show t h a t T a i w a n ' s a g r i c u l t u r e  a b s o r b s a d i s p r o p o r t i o n a t e s h a r e of t h e o l d e r and  had  in  is For  severely  a s u b s t a n t i a l net non-agriculture  24  to  agriculture.  employer  I t appears that a g r i c u l t u r e  i s the r e s i d u a l  a n d t h a t w o r k e r s move between i t a n d t h e  non-agricultural  s e c t o r s a c c o r d i n g t o economic  conditions.  However, l a b o u r m o b i l i t y d e c l i n e s s i g n i f i c a n t l y  once  rural  w o r k e r s r e a c h t h e age o f 4 5 . T h a t t h e young h a v e a b e t t e r c h a n c e  of o b t a i n i n g  o f f - f a r m employment i s a l s o c o n f i r m e d by t h e d a t a i n t a b l e 2.7.  I n 1975 t h e s h a r e o f w o r k e r s a b o v e t h e age o f 45  was 3 0 % f o r a l l w o r k e r s s u p p l i e d by f a r m i n g h o u s e h o l d s , 4 2 % for  full-time  farm workers and 25% f o r p a r t - t i m e farm  w o r k e r s , a n d o n l y 5% f o r w o r k e r s e n g a g e d i n o t h e r occupations words,  (i.e.  full-time  of those workers  work on t h e f a m i l y activities,  i n off-farm work).  i n f a r m i n g h o u s e h o l d s who d i d no  farm b u t were f u l l y  9 5 % were under  f a m i l y members who worked  development  o f 20 a n d 40.  of p a r t - t i m e f a r m i n g : a l a b o u r market  of a market  decentralized  The  industrial  f o r 'custom growth.  family  t y p e i s an e x t e n d e d  that  services'  and r a p i d and  They h a v e c o m b i n e d  to  i n Taiwan.  f a m i l y where some members  ( u s u a l l y t h o s e o v e r 45 y e a r s o f a g e ) work f u l l - t i m e family  works  system, t h e  two t y p e s o f p a r t - t i m e f a r m h o u s e h o l d s  first  farm  p a r t on t h e f a r m a n d p a r t o f f t h e  t h e p e r s i s t e n c e of t h e extended  produce  And o f t h o s e  summary, f o u r f a c t o r s have i n f l u e n c e d t h e  development well,  engaged i n o t h e r  t h e age o f 4 5 .  f a r m , 64% were between t h e a g e s In  In other  f a r m a n d some ( t h e y o u n g e r  ones) have  on t h e  off-farm  25  Table + 15  2.5: DISTRIBUTION OF WORKERS I N AGRICULTURE AND IN THE ECONOMY BY AGE  +20  MALE 1 975 AG 1 1 EC 12 1980 AG 5 EC 8 FEMALE 1975 AG 12 EC 24 1980 AG 4 EC 17  +25  + 30  + 35  +40  +45  +50  + 55  +60  +65 TOT NUM  % 7 10  8 13  1 1 13  13 13  15 12  12 11  9 8  6 9  10 19  7 12  1 1 1 1  13 10  14 10  13 10  8 5  5 3  1 1  949 3473  10 7  7 3  3 2  828 4262 NUM  % 11 22  9 10  13 10  15 10  15 10  13 7  8 4  4 2  1 1  0 0  544 1705  7 23  10 16  10 10  13 9  15 8  17 8  13 5  8 3  3 1  0 0  439 2266  T a b l e 2.6: DISTRIBUTION OF WORKERS I N ACRICULTURE . AND I N THE ECONOMY BY LEVEL OF EDUCATION ATTAINED ILLIT MALE 1 975 AG EC 1980 AG EC  SELF  PRIMAR  JUNIOR  SENIOR  VOCAT  UNIV  TOT NUM  % 17 8  6 4  61 51  12 16  . 1 5  3 9  0 6  949 3473  1 1 4  7 3  63 45  12 19  2 8  4 1 1  1 1 1  828 4262  FEMALE 1975 44 AG 22 EC 1980 32 AG 12 EC  %  NUM  6 3  43 46  5 13  1 4  1 9  0 4  544 949  9 3  54 40  4 16  .02 5  .05 15  8  439 2265  S o u r c e : DGBAS, L a b o u r s u r v e y d a t a N o t e : E C : economy AG: f a r m , f o r r e s t r y , l i v e s t o c k , f i s h e r y , h u n t i n g ( d o e s not i n c l u d e a g r i c u l t u r a l experiment station, Farmers' A s s o c i a t i o n and other s e r v i c e s workers) I L L I T : i l l i t e r a t e (no e d u c a t i o n ) SELF : S e l f e d u c a t e d (no e d u c a t i o n b u t l i t e r a t e ) PRIMAR: w i t h p r i m a r y e d u c a t i o n JUNIOR: w i t h j u n i o r h i g h SENIOR: w i t h s e n i o r h i g h VOCAT : w i t h s e n i o r v o c a t i o n a l UNIV: w i t h u n i v e r s i t y  26  T a b l e 2.7: DISTRIBUTION OF FARM HOUSEHOLDS LABOUR BY EMPLOYMENT STATUS AND BY AGE ( 1 9 7 5 )  NUMBER OF WORKERS(a ) AGE  FULL FARM (1 )  PART FARM (2)  -14 1520456065TOT  52462 155085 654305 400813 99542 1 18124  7056 95496 571440 194239 1 7924 9393  FARM TOTAL (3)  OTHER OCCUP (4)  EMPLOY TOTAL (5)  LABOUR SUPPLY (6)  59518 250581 1225745 595052 117466 127517  33595 198990 303192 16176 3279 4888  931 13 449571 1528937 611228 120745 132405  98108 467156 1647289 674594 144354 156451  AGE PERCENTAGES I N A WORKER CATEGORY ( b ) -15 1520456065TOT  4 10 44 27 7 8 1 00  1 1 1 64 22 2 1 100  3 1 1 52 25 5 5 100  6 36 54 3 1 1 100  3 15 52 31 4 5 100  3 15 52 21 5 5 1 00  S o u r c e : C e n s u s d a t a 1975 Notes: a: Number o f f a r m h o u s e h o l d members i n t h e w o r k e r c a t e g o r y a n d i n t h e age b r a c k e t b: p e r c e n t a g e o f t h e w o r k e r c a t e g o r y i n t h e a g e b r a c k e t (1) F u l l (2) (3) (4) (5) (6)  f a r m : number o f f a r m h o u s e h o l d members who work f u l l - t i m e on t h e i r f a r m P a r t f a r m : number o f f a r m h o u s e h o l d members who work b o t h on t h e i r f a r m a n d somewhere e l s e Farm t o t a l : t o t a l number o f f a r m h o u s e h o l d members who work on t h e i r f a r m O t h e r o c c u p : f a r m h o u s e h o l d members who do n o t work on t h e i r f a r m E m p l o y t o t a l : T o t a l number o f f a r m h o u s e h o l d members who h a v e employment labour supply: i n c l u d e s houseworkers  27  employment b u t a l l i n c o m e s a r e p o o l e d and a l l l i v e u n d e r same r o o f .  The  have f u l l - t i m e after  the  s e c o n d t y p e i s a h o u s e h o l d whose members o f f - f a r m employment b u t work on t h e i r  work o r on w e e k e n d s .  likely  t o depend  These  h e a v i l y on  farm work, e s p e c i a l l y  activities  w h i c h need  Indeed i t i s l i k e l y  'custom  services'  net  farming  skills.  are i t s consequences.  result  The  STATEMENT OF THE The  development agricultural  o f income  because of t h e  to  in rural farms  may  residuality  consequence.  PROBLEM  p r e c e d i n g e x a m i n a t i o n of the h i s t o r i c a l of the a g r i c u l t u r a l  s e c t o r and o f t h e  p o l i c i e s and t h e d e t a i l e d  i n the l a n d market for  is likely  second purpose of t h i s s t u d y  i s t o s h e d l i g h t on t h e t h i r d D.  income  number o f p a r t - t i m e  inefficiency  the farming a c t i v i t y .  f o r the farm  mean s l o w e r a g r i c u l t u r a l  distribution  (3) t h e i n c r e a s i n g  in production  Less  (1) o t h e r t h i n g s b e i n g e q u a l , a  c o n t r i b u t e t o a more.equal  of  The c o n s e q u e n c e s  (2) t h e a d d i t i o n o f o f f - f a r m  T a i w a n , and  phenomenon.  t o become e v e n more p o p u l a r .  d e c r e a s e i n farm workers w i l l  growth,  t o do much o f  d u r i n g peak s e a s o n s and f o r  special  s e c t o r a r e t h o u g h t t o be:  farm  part-time households are  P a r t - t i m e farming i s not a temporary  certain  the  the p o l i c y  study of the  and t h e l a b o u r m a r k e t p r o v i d e t h e  forces setting  question which i s addressed i n t h i s study.  28  The  a g r i c u l t u r a l development s t r a t e g y adopted by  Taiwan in the e a r l y 1950s was  built  (1) c u l t i v a t o r s are more p r o d u c t i v e land, and  (2) there e x i s t s surplus  Accordingly,  basic premises:  when they own labour  their  in a g r i c u l t u r e .  through land reform, the government c r e a t e d  l a r g e c l a s s of o w n e r - c u l t i v a t o r s . owner-cultivators  To p r o t e c t the  from l o s i n g c o n t r o l of t h e i r  r e g u l a t i o n s were i n c l u d e d i t extremely d i f f i c u l t operational  upon two  small  land,  i n the land reform laws that made  to buy  land or to increase  s i z e of one's farm.  of r u r a l  the  Other a g r i c u l t u r a l  development p o l i c i e s adopted i n t h i s p e r i o d promoted the a b s o r p t i o n  a  generally  labour.  As c o n d i t i o n s changed in Taiwan, the basic  premises  behind the a g r i c u l t u r a l development s t r a t e g y became l e s s valid.  By  the  late  in r u r a l Taiwan. extremely t i g h t  1960s, labour  was  no longer  in  surplus  In f a c t , the r u r a l labour market in the  1970s as a g r i c u l t u r e and  was  the  n o n - a g r i c u l t u r a l sector both competed for r u r a l workers. With labour labour  costs r i s i n g  saving  technology.  farmers were induced to adopt Growth in o f f - f a r m employment  o p p o r t u n i t i e s a l s o converted a l a r g e number of farm households i n t o part-time  farmers.  These developments, in t u r n , have encouraged p o l i c y makers to reconsider  Taiwan's land p o l i c y .  The  land laws  were designed to prevent the reemergence of l a r g e But  such r e s t r i c t i o n s may  no longer  be u s e f u l .  holdings.  29  Now  t h e p e r c e p t i o n of t h e economic p l a n n e r s  t h e r e may be t o o many s m a l l p a r t - t i m e  farmers.  arguments a g a i n s t s m a l l and s m a l l p a r t - t i m e favour  of l a r g e f u l l - t i m e  (1) S m a l l  farmers  Various  farmers  f a r m s a r e b e l i e v e d t o be i n e f f i c i e n t  and i n 1  have been p u t  economies i n the mechanized p r o d u c t i o n  i s that  1  forward " . since scale  technology  c a n n o t be  5  achieved" . (2) P a r t - t i m e  farmers  a r e b e l i e v e d t o be l e s s  because of the r e s i d u a l aspect part-time activity"  farmers 6  (caused,  farming.  Thus  may be l e s s a t t e n t i v e t o t h e i r  farm  ( s i n c e i t i s now a s e c o n d a r y o c c u p a t i o n  a s m a l l f r a c t i o n of t h e i r farming),  of t h e i r  productive  household  and o n l y  income comes f r o m  l e s s a b l e t o a d j u s t t o sudden n e e d s f o r l a b o u r f o r e x a m p l e by s t o r m s ,  more l i k e l y  to divert  d i s e a s e s a n d p e s t s ) , and  t h e more a b l e a n d p r o d u c t i v e  family  7  members i n t o o f f - f a r m e m p l o y m e n t " . (3) L a r g e f u l l - t i m e responsive the  farmers  a r e b e l i e v e d t o be more  t o changes i n t h e economic environment.  1970s, i t i s t h o u g h t t h a t t h e l a r g e f a r m e r s  first  Thus f o r  were t h e  t o responded t o t h e changes i n a g r i c u l t u r a l  demand  b r o u g h t a b o u t by t h e r a p i d g r o w t h o f income p e r c a p i t a i n Taiwan and t h a t they adopted l a b o u r - s a v i n g t e c h n o l o g y  more  rapidly  of the  ( u n l i k e l e s s developed  Taiwanese a g r i c u l t u r a l p l a n n e r s adoption took  c o u n t r i e s , the concern  i s not d i r e c t e d towards the  speed of t h e green r e v o l u t i o n ; t h e green r e v o l u t i o n  place  i n Taiwan i n t h e  1930s).  30  These arguments i n f a v o u r of a system of l a r g e full-time  f a r m s and i n f a v o u r o f t h e d i f f e r e n t  land reform  p r o p o s a l s a r e u s u a l l y d i s c u s s e d and p r e s e n t e d w i t h relatively  little  8  empirical e v i d e n c e " , yet the underlying  questions are largely especially  earlier  farmers?  agriculture?  Do e c o n o m i e s o f s c a l e e x i s t i n  Did large  full-time  farmers respond  t o t h e new t r e n d s i n demand f o r a g r i c u l t u r a l  products than s m a l l farms? machines e a r l i e r ,  D i d they adopt t h e l a b o u r  or t h e newly a v a i l a b l e h e r b i c i d e ?  w o u l d be t h e i m m e d i a t e c o n s e q u e n c e s markets of amalgamating large  A r e s m a l l , and  s m a l l p a r t - t i m e farmers l e s s p r o d u c t i v e than  large full-time Taiwanese  e m p i r i c a l ones.  saving What  f o r the a g r i c u l t u r a l  s m a l l and s m a l l p a r t - t i m e  farms  into  f a r m s , e a c h managed by one h o u s e h o l d who a g r e e d t o  farm f u l l - t i m e ?  The f o l l o w i n g c h a p t e r s a t t e m p t t o p r o v i d e  e m p i r i c a l l y - b a s e d a n s w e r s t o t h e s e q u e s t i o n s by e s t i m a t i n g and c o m p a r i n g t h e p r o d u c t i v i t y a n d p e r f o r m a n c e o f f a r m s by s i z e a n d by t h e d e g r e e t h a t off-farm  activities.  farm households p a r t i c i p a t e i n  31  E. NOTES  1  I n t h i s c h a p t e r n a t i o n a l d a t a i s used and the d e f i n i t i o n s of f a r m s a r e t h o s e t h a t a r e u s e d i n t h e n a t i o n a l s t a t i s t i c s . ( i n c h a p t e r I I I , we w i l l f o r m o u r own definitions). L a r g e farms a r e farms over 2 h e c t a r e s , s m a l l farms a r e t h o s e w i t h l e s s than 1 h e c t a r e of c u l t i v a t a b l e l a n d (not c o r r e c t e d f o r l a n d q u a l i t y ) . F u l l - t i m e f a r m s a r e f a r m h o u s e h o l d s where a l l t h e income i s g e n e r a t e d on t h e f a r m . A g r i c u l t u r a l p a r t - t i m e f a r m s a r e f a r m s where t h e f a r m i n g a c t i v i t y p r o v i d e s more t h a n h a l f t h e f a m i l y income. The r e s t o f t h e f a r m s a r e n o n - a g r i c u l t u r a l p a r t - t i m e f a r m e r s . The d e f i n i t i o n o f p a r t - t i m e f a r m i n g i s b a s e d on income s h a r e s . ( T h i s s t u d y w i l l use a f e r t i l i t y c o r r e c t e d measure o f s i z e and a labour supply d e f i n i t i o n f o r part-time farming.)  2  A comprehensive s t u d y of t h e development of Taiwan 1972, w h i c h was u s e d e x t e n s i v e l y c a n be f o u n d i n HO S. ( 1 9 7 8 ) .  3  F o r r e f e r e n c e s see t h e b i b l i o g r a p h y  4  V a r i o u s i s s u e s o f PDAF, A g r i c u l t u r a l s e c t i o n C.1 on t h e l a n d m a r k e t .  5  Chen, Wang (1980) .  6  A n n u a l R e p o r t on Farm R e c o r d K e e p i n g  7  PDAF, A g r i c u l t u r a l  8  Chen, Wang ( 1 9 8 0 ) .  9  Shen T.H. ( 1 9 7 4 ) .  until  s e c t i o n on l a n d . yearbooks; see  Families.  y e a r b o o k s a n d t a b l e B.1 i n a p p e n d i x B.  10 The r e s t o f t h i s p a r a g r a p h a n d t h e n e x t a r e b a s e d on s t a t e m e n t s f r o m v a r i o u s a n n u a l r e p o r t s o f t h e JCRR ( J o i n t Commission f o r R u r a l R e c o n s t r u c t i o n , t h e major a g r i c u l t u r a l a u t h o r i t y d u r i n g t h e 1950-1978 p e r i o d ) , P D A F - a g r i c u l t u r a l y e a r b o o k s ; Peng (1980) f o r m e c h a n i z a t i o n q u e s t i o n s ; Shen (1974) a n d JCRR (1978) f o r policy questions. 11 R i c e R e v i e w M a g a z i n e  (1980).  12 Peng (1980) f o r t h e w h o l e  s e c t i o n on m e c h a n i z a t i o n .  32  13 Custom c o n t r a c t : r e n t a l c o n t r a c t f o r an a g r i c u l t u r a l s e r v i c e u s u a l l y h i r e d on t h e b a s i s of a r e a s e r v i c e d ( m a c h i n e + o p e r a t o r s ) o r p e r day ( a n i m a l + o p e r a t o r ; s k i l l e d labour s e r v i c e ) . 14 T a b l e B.4  i n appendix  15 JCRR, a n n u a l r e p o r t s  B. (1968-1976).  16 PDAF, a g r i c u l t u r a l y e a r b o o k , and  t a b l e B.1  i n appendix  B.  17 PDAF, a g r i c u l t u r a l y e a r b o o k , and t a b l e B.2. Note the d i f f e r e n c e i n t h e d o m e s t i c r i c e p r i c e ( s u p p o r t e d as p a r t of t h e f a r m income p o l i c y ) and t h e e x p o r t p r i c e ( c o n c e s s i o n a r y as p a r t of t h e i n t e r n a t i o n a l a i d p o l i c y ) . 18 Chen, Wang  (1980).  19  See  a l s o Ho  S.  20  For  references  21  R e n t - R e d u c t i o n - A c t a r t . 2 , a r t . 4 . D r . Mao s a i d t h a t t h e s e r e n t s a p p l y t o c o n t r a c t s r e g i s t e r e d i n 1949-53. Since t h e n no m o r e t e n a n c y c o n t r a c t s h a v e been r e g i s t e r e d ( s e e n o t e 30) .  22  RRA,  art.6.  23  RRA,  art.5.  24  RRA,  art.19,  25 L a n d A c t  1930,  (1983) . see  LTT,  art.12.  28  LTT,  art.30.  29 Mao  bibliography  s e c t i o n on  land  art.20. 1936,  26 L a n d - t o - T i l l e r A c t , 27  the  art.33. art.10.  ( 1 9 7 8 ) , p i 35-6.  30  p e r s o n a l t a l k s w i t h D r . Mao ( C h i e f o f t h e L a n d R e f o r m I n s t i t u t e and C h i e f o f t h e E c o n o m i c P l a n n i n g d i v i s i o n a t the C o u n c i l f o r A g r i c u l t u r a l P l a n n i n g (JCRR).  31  T h e r e i s a c o n s t r a i n t on t h e l e n g t h o f t i m e t h a t l a n d can l a y f a l l o w , a t most one s e a s o n (3 m o n t h s ) i s a l l o w e d , o t h e r w i s e a p e n a l t y t a x i s i m p o s e d (and t h e r e i s r i s k o f forced s e l l i n g ) . ( T a x a t i o n and T a r i f f C o m m i s s i o n ( 1 9 7 4 ) ; R e g i o n a l P l a n n i n g Act 1974).  33  32  I t i s h a r d t o t e l l what t h e l e g a l s t a t u s i s of t h e c o n t r a c t f a r m i n g a g r e e m e n t s but t h e y a r e m e n t i o n e d i n ( 1 9 7 8 ) , p i 41 and Wu, Yu ( 1 9 8 0 ) , p l 5 .  Mao  33 A l l s a l e s h a v e t o be g o v e r n m e n t a p p r o v e d and owner c u l t i v a t o r s can not morgage t h e i r p r e v i o u s l y owned l a n d b e y o n d a l i m i t (Mao ( 1 9 7 8 ) , p 1 3 6 ) . The m o r t g a g e t e r m s a r e t h e L a n d - t o - T i l l e r A c t t e r m s u n t i l 1981 (10 y e a r s maximum) b u t have been r a i s e d s i n c e (15 y e a r s ) . 34  Yu, Wu ( 1 9 8 0 ) , p3; Chen ( 1 9 8 0 ) , p2. Large farms e s p e c i a l l y a r e d i s a p p e a r i n g when t h e p a t r i a r c h o f t h e f a m i l y d i e s and t h e f a r m i n g s o n s e a c h c l a i m t h e i r s h a r e and become s e p a r a t e h o u s e h o l d s . On s m a l l e r f a r m s , u s u a l l y o n l y one son c o n t i n u e s t o f a r m and t h e o t h e r n o n - f a r m i n g b r o t h e r s do n o t s e l l t h e i r l a n d s h a r e b u t rent i t i n f o r m a l l y to the f a r m i n g b r o t h e r .  35  Some p r o v i s i o n s of t h e R e g i o n a l P l a n n i n g A c t (1978) a l s o d e a l w i t h t h e i s s u e of c o n v e r s i o n of f a r m l a n d i n t o n o n - f a r m l a n d and w i t h i s s u e of l a n d s p e c u l a t i o n . The a c t p r e v e n t s s a l e of a g r i c u l t u r a l l a n d s of c e r t a i n g r a d e s t o n o n - f a r m e r s ( i n h e r i t a n c e i s not c o v e r e d however). The a c t i s p r i m a r i l y d e s i g n e d t o c o n t r o l t h e c o n v e r s i o n of l a n d t o n o n - a g r i c u l t u r a l u s e s and has not y e t been enforced.  36  See  previous  note.  37 An e x t e n s i v e s u r v e y of t h e e x t e n d of o f f - f a r m e m p l o y m e n t , t h e s o u r c e s o f t h i s o f f - f a r m employment and t h e e f f e c t s on f a r m i n g c a n be f o u n d i n Ho S. ( 1 9 8 3 ) . 38 G a l l i n , G a l l i n (1982) r e p o r t t h a t t h e number of n u c l e a r f a m i l i e s had d e c l i n e d by n e a r l y h a l f w h i l e t h e number of j o i n t f a m i l i e s had r i s e n 3 - f o l d b e t w e e n 1958-9 and 1978-9 i n the v i l l a g e which they s t u d i e d . They s t a t e t h a t t h e . j o i n t f a m i l y i s the i d e a l ( p 2 0 8 ) . They a l s o comment t h a t m o b i l i t y o f men t o w a r d s u r b a n a r e a s has d e c l i n e d ( p 2 1 2 ) . 39 T h i s s e c t i o n i s b a s e d on t h e o b s e r v a t i o n s o f Peng (1980) f o r t h e c u s t o m work m a r k e t o f m a c h i n e s s e r v i c e s and on i n f e r e n c e f r o m my p e r s o n a l i n v e s t i g a t i o n o f f a r m p r o d u c t i o n a c t i v i t y and t h e h i r i n g p r a c t i c e s o f 60 farmers i n South Taiwan f o r the year 1979. 40 W i t h t h e i n c r e a s i n g a w a r e n e s s by t h e f a r m e r s o f t h e h a r m f u l l e f f e c t s of some o f t h e i n s e c t i c i d e s on humans, t h e r e w i l l p r o b a b l y be a g r e a t e r d e v e l o p m e n t o f t h i s c u s t o m work m a r k e t a s p r o t e c t i v e e q u i p m e n t w i l l be c o n s i d e r e d n e c e s s a r y . - A d d i t i o n a l l y , new s e l f p o w e r e d s p r a y e r s h a v e been i n t r o d u c e d .  34  41 Ho S.  (1979).  42 DGBAS, L a b o u r s u r v e y d a t a and t a b l e  B.5.  43 See t a b l e B.6. where a more d e t a i l e d commentary on t h e i m m i g r a t i o n f l o w s .  i s given  44 The one argument t h a t h a s been p u t f o r w a r d i n f a v o u r o f s m a l l p a r t - t i m e f a r m i n g i s t h a t t h e i r e x i s t e n c e may have a f a v o u r a b l e i m p a c t on t h e r u r a l income d i s t r i b u t i o n . The o f f - f a r m income d i s t r i b u t i o n t e n d s t o i n v e r s e l y m i r r o r t h e f a r m income d i s t r i b u t i o n so t h a t t h e t o t a l h o u s e h o l d income d i s t r i b u t i o n i s more e q u a l . See a l s o Koo ( 1 9 8 2 ) . 45 Yu, Wu  ( 1 9 8 0 ) , p 8 , p l 5 , p26; Chen  46 Yu, Wu  ( 1 9 8 0 ) , p8.  47 Chen  ( 1 9 7 8 ) , p98; Chen  (1980), p23.  (1980), p5.  48 An e m p i r i c a l i n v e s t i g a t i o n f o u n d i n Yu ( 1 9 7 0 ) .  of p a r t - t i m e f a r m i n g c a n be  35  CHAPTER I I I DATA AND HOUSEHOLD CHARACTERISTICS  A. INTRODUCTION The e m p i r i c a l a n a l y s i s i n chapters four and f i v e i s based on data drawn from the 'Annual Keeping  Families'.  The purpose 1  d e s c r i b e t h i s data s e t . collected, form,  Report  of Farm Record  of t h i s chapter  i s to  The i n f o r m a t i o n as o r i g i n a l l y  and subsequently processed i n t o machine readable  i s d e s c r i b e d i n s e c t i o n s B-C. The data i s organized by s i z e , degree  activity, agricultural  region and time.  of o f f - f a r m .  The s i z e of the  farm i s measured i n paddy land e q u i v a l e n t h e c t a r e s . degree  of importance  of farming to the household  The  i s measured  as the share of the f a m i l y ' s labour supply that goes t o the farming a c t i v i t y and i s c a l l e d  'participation'.  To make the  study managable, only four of the eight agronomic r e g i o n s of the Farm Record Keeping F a m i l i e s survey w i l l be used (the North, Mid- and South Rice regions and the Sugar regions).. There are nine annual characteristics  samples (1972-1980).  The v a r i o u s  of the farmers are d i s c u s s e d i n s e c t i o n D.  36  B.  THE ANNUAL REPORT OF FARM RECORD KEEPING F A M I L I E S Taiwan has had a l o n g h i s t o r y of farm  keeping.  record  I t began i n 1953 when a s m a l l number o f f a r m  h o u s e h o l d s k e p t f a r m r e c o r d s a s a p a r t o f an e d u c a t i o n a l programme c o n d u c t e d by t e n a g r i c u l t u r a l the r e s p o n s i b i l i t y transferred  Since not a l l Farmers i n the project  important a g r i c u l t u r a l 1964  I n 1960  o f t h e r e c o r d k e e p i n g p r o j e c t was  from t h e s c h o o l s t o i n t e r e s t e d  Associations. participated  2  schools .  Farmers  Associations  f a r m h o u s e h o l d s f r o m some  districts  were n o t r e p r e s e n t e d .  t h e Taiwan P r o v i n c i a l Department of A g r i c u l t u r e and  Forestry  joined  t h e p r o j e c t and e n l a r g e d t h e sample of farm  r e c o r d keeping f a m i l i e s t o i n c l u d e households from agricultural districts. under t h e d i r e c t The  d a t a used  eight  S i n c e 1972, t h e p r o j e c t h a s been  s u p e r v i s i o n of t h e township  r e c o r d s kept between  in this  offices.  s t u d y i s drawn f r o m t h e  1972 a n d 1980.  During t h i s  period,  a b o u t 450 f a r m h o u s e h o l d s f r o m 60 s e l e c t e d t o w n s h i p s all  In  8 major a g r i c u l t u r a l  the farm r e c o r d  from  regions participated annually i n  keeping p r o j e c t .  Because farm  households  p a r t i c i p a t e d on a v o l u n t a r y b a s i s , t h e r e i s no r e a s o n t o suspect the v a l i d i t y all  transactions  accuracy data  of the information  3  recorded .  Since  ( c a s h a n d i n - k i n d ) were r e c o r d e d d a i l y , t h e  i s a l s o h i g h , c e r t a i n l y h i g h e r than t h e a c c u r a c y of  from p e r i o d i c  s u r v e y s where t h e r e s p o n s e s d e p e n d on  37  memory.  However, because the p a r t i c i p a t i n g  s e l f - s e l e c t e d , the sample i s l i k e l y likely  farmers are  to be b i a s e d .  It i s  that there are too many l a r g e farms and too few  part-time  farmers  i n the sample.  c o r r e c t e d , but not a l l ,  Some of the b i a s can be  as w i l l be d i s c u s s e d i n s e c t i o n D.5.  Despite t h i s problem, the j o u r n a l s kept by the farm r e c o r d keeping  f a m i l i e s are the most complete and r e l i a b l e  household records a v a i l a b l e i n Taiwan. Taiwan, few c o u n t r i e s can boast  farm  Indeed, o u t s i d e of  of data of t h i s  high  quality.  C.  DATA FROM THE FARM RECORD KEEPING FAMILIES Farm record keeping  and  flow  f a m i l i e s recorded d e t a i l e d  information on n e a r l y a l l aspects  activities. was l o s t  of t h e i r  U n f o r t u n a t e l y , some of the i n f o r m a t i o n  through aggregation  i n t o machine readable  form.  stock  recorded  when the data was processed Both the i n f o r m a t i o n that was  recorded  by the households and what i s a v a i l a b l e i n machine  readable  form i s d e s c r i b e d i n what f o l l o w s " . Stock  data  At the beginning  and end of each calendar year,  Farm Record Keeping Family all  their  each  reported a d e t a i l e d accounting of  r e a l and f i n a n c i a l a s s e t s and l i a b i l i t i e s .  This  account i n c l u d e s information on land h o l d i n g s , b u i l d i n g s , machines, t o o l s , f r u i t t r e e s , d r a f t animals, crops growing on the f i e l d ,  livestock,  s t o r e d produce, s t o r e d farm  38  supplies, f i n a n c i a l assets, l i a b i l i t i e s cash.  (short and long) and  The recorded i n f o r m a t i o n was aggregated  i n t o 15  c a t e g o r i e s when i t was processed and converted i n t o machine readable form. appendix C.)  (A l i s t  of c a t e g o r i e s i s p r o v i d e d i n  U n f o r t u n a t e l y , the processed data does not  d i s t i n g u i s h between a s s e t s f o r farm production use and f o r consumption included the  use. Consequently,  i n farm a s s e t s  6  farm b u i l d i n g s  5  c o u l d not be  and no attempt was made t o estimate  labour input from d r a f t a n i m a l s  7  used i n farming.  Flow data Each Farm Record Keeping Family kept d a i l y records of  each c a s h  8  9  and ' i n - k i n d ' t r a n s a c t i o n f o r the f a m i l y , f o r  the  farm and f o r the o f f - f a r m a c t i v i t i e s .  was  then processed i n t o  expenses,  17 consumption  16 farm r e c e i p t  The i n f o r m a t i o n  expenses,  (organized by c r o p s ) ,  17 farm 2 off-farm  cost and 4 o f f - f a r m r e c e i p t c a t e g o r i e s , most with a cash and 'in-kind' subdivision. categories.)  (See appendix C f o r a l i s t  of these  U n f o r t u n a t e l y , the processed data cannot be  used to a l l o c a t e c o s t s to each farm output, and o f f - f a r m labour a c t i v i t i e s have been r e t a i n e d with very  little  detail. Farm Record Keeping F a m i l i e s kept extremely d e t a i l e d information on the labour a l l o c a t i o n activity.  in t h e i r  farming  The amount of labour used on each c r o p was  recorded d a i l y f o r each member of the f a m i l y , f o r the h i r e d workers,  f o r the machines and f o r the animals (the l a t t e r  39  two  s e p a r a t e l y f o r self-owned and h i r e d ) , with a d e s c r i p t i o n  of the a c t i v i t y fertilizing  (hoeing,  etc...).  land p r e p a r a t i o n , weeding,  But most d e t a i l s were l o s t when the  i n f o r m a t i o n was processed form.  and converted  A l l information was converted  1 0  1 1  and h i r e d l a b o u r .  readable  i n t o 3 labour  c a t e g o r i e s : annual male f a m i l y labour, labour  to machine  female f a m i l y  It i s particularly  unfortunate  that the i n f o r m a t i o n on the use of the self-owned machines and animals was l o s t  1 2  (the h i r e d amounts can be r e t r i e v e d  from the r e l e v a n t cost c a t e g o r y ) . a l l o c a t e d to the d i f f e r e n t  farm r e c e i p t c a t e g o r i e s .  q u a l i t y of t h i s labour data there  A l s o , labour cannot be  i s no need to estimate  is still  But the  e x c e p t i o n a l because  the labour  flow from the f a m i l y  members. Each Farm Record Keeping Family  a l s o kept  i n f o r m a t i o n on the amount and q u a l i t y of land used i n i t s farm o p e r a t i o n , and the amount of land a l l o c a t e d to each crop.  Subsequently, when the data was processed,  the land  i n f o r m a t i o n was aggregated i n t o 3 c a t e g o r i e s of q u a l i t y (paddy, dry and other, without and  4 c a t e g o r i e s of crop a r e a  regard 1 4  1 3  f o r the q u a l i t y grade)  (first  r i c e , second  rice,  other crops and permanent c r o p s ) . Family  characteristics  Much information on the c h a r a c t e r i s t i c s of each f a m i l y was c o l l e c t e d .  Each Farm Record Keeping  r e p o r t e d the age, education,  occupation  Family  and h e a l t h  of,each  40  f a m i l y member.  But most of t h i s  the data was processed.  i n f o r m a t i o n was l o s t when  Family members were c l a s s i f i e d as  a d u l t male, female, o l d and young.  The lack of i n f o r m a t i o n  on the f a m i l y members' c h a r a c t e r i s t i c s , together with the f a c t that o f f - f a r m income flows were not r e t a i n e d i n much d e t a i l , makes i t impossible to conduct of the o f f - f a r m a c t i v i t y .  an in-depth a n a l y s i s  But a farm a c t i v i t y  does not concentrate on managerial  skill  effects  p o s s i b l e with a l l the other data a v a i l a b l e In summary, the data used  study which is s t i l l  in t h i s  survey.  i n t h i s study i s based on  the d a i l y records kept by Taiwanese farm f a m i l i e s .  A wealth  of i n f o r m a t i o n was gathered but much d e t a i l was l o s t when the data was aggregated  and converted i n t o machine readable  form. . Thus, n e i t h e r p r o d u c t i o n c o s t s nor labour input can be a l l o c a t e d to the output c a t e g o r i e s .  Secondly,  the amount  of labour input from self-owned d r a f t animals and machines i s not a v a i l a b l e .  T h i r d l y , a g r i c u l t u r a l b u i l d i n g s c o u l d not  be i n c l u d e d i n farm a s s e t s .  F o u r t h l y , the i n f o r m a t i o n on  o f f - f a r m a c t i v i t y which was r e t a i n e d , was i n s u f f i c i e n t an in-depth a n a l y s i s of the o f f - f a r m a c t i v i t y . t h i s study  t o do  But since,  i s focussed on the consequences of the s i z e and  the degree of o f f - f a r m a c t i v i t y on farming, the data that i s a v a i l a b l e i s more than s u f f i c i e n t and indeed of very h i g h quality.  41  D.  DATA BASE AND The  that  large  FARMS  main aim of t h i s s t u d y i s t o t e s t full-time  f a r m t y p e s , and each  CHARACTERISTICS OF THE  f a r m s a r e more e f f i c i e n t t h a t  To make t h e . s t u d y m a n a g a b l e t h e  made t o r e s t r i c t  the a n a l y s i s to four  Taiwan's e i g h t a g r i c u l t u r a l  regions,  base  o f t h e 450 Farm R e c o r d  is limited  F a m i l i e s and  t o o n l y 250  so t h a t t h e a n n u a l d a t a  of t h e h o u s e h o l d s ,  were c l a s s i f i e d a c c o r d i n g t o  production.  preference for  Keeping  The  the  four  c h a r a c t e r i s t i c s : , farm s i z e , p a r t i c i p a t i o n , of  of  t h e w h o l e s a m p l e c o n t a i n s 2274 o b s e r v a t i o n s .  To compare t h e f a r m p e r f o r m a n c e households  the other  t h i s s e c t i o n d e s c r i b e s t h e d e f i n i t i o n of  farmer c h a r a c t e r i s t i c .  d e c i s i o n was  the hypothesis  r e g i o n and  year  arguments which a r e used t o d e f e n d  f o r the l a r g e  the d e f i n i t i o n s  full-time  farm type a r e the  of t h e s e c h a r a c t e r i s t i c s  chosen  the  base in this  study. D.1  S i z e of the farm In  sizes The  (s)  t h e l i t e r a t u r e on t h e e f f i c i e n c y  of f a r m s , f a r m s i z e  of  different  i s measured i n a v a r i e t y  o f ways.  most f r e q u e n t l y u s e d m e a s u r e i s t h e amount o f  cultivatable  1 5  l a n d h e l d by t h e f a r m h o u s e h o l d .  This  measure a p p r o x i m a t e s the s c a l e of farm o p e r a t i o n i f l a n d i s of  uniform q u a l i t y  t y p e of f a r m i n g  and  i f a l l f a r m s a r e e n g a g e d i n t h e same  activities.  42  If  the land  i s not of uniform  quality  then a  c o m p a r i s o n o f f a r m p e r f o r m a n c e by s i z e , m e a s u r e d by t h e amount o f c u l t i v a t e d  l a n d , may be q u i t e m i s l e a d i n g .  l a r g e farms have poor l a n d , w h i l e  small  f a r m s have  If a l l fertile  l a n d , t h e n e f f i c i e n c y c o m p a r i s o n s do n o t r e f l e c t t h e e f f e c t of s i z e the  only,  but a l s o that of l a n d q u a l i t y .  land q u a l i t y  i n t h i s study,  an  To c o r r e c t f o r  equivalent-paddy-land  s i z e measure i s computed. Also,  i f the type of farming  activity  different  between f a r m e r s then l a n d s i z e  indicator  of t h e s c a l e of o p e r a t i o n .  a specialized reflected  livestock  i s very  isa  misleading  The o p e r a t i o n  ( o r f i s h pond) p r o d u c e r  by t h e l a n d s i z e .  Fortunately,  i s not  the farmers i n the  sample a r e c r o p f a r m e r s who have some l i v e s t o c k fishery  (forestry To  quality  1 6  ,  take  or processing)  measures farm s i z e  hectares.  paddy l a n d e q u i v a l e n t .87  as a minor  The d r y l a n d  hectares  ( t h e average of t h e c o n v e r s i o n  dry  using  .187 ( t h e c o n v e r s i o n  land against  activity.  grade  i n t e r m s o f paddy  1 7  was c o n v e r t e d  into  by m u l t i p l y i n g i t s a r e a by rates  graded paddy and d r y l a n d ) , and ' o t h e r ' by  o r a d d some  account of the d i f f e r e n c e s i n land  t h i s study  land equivalent  s c a l e of  between•equal land  1 8  was  r a t e of t h e lowest  10 paddy l a n d ) .  converted  q u a l i t y of  The c o n v e r s i o n  rates  were c a l c u l a t e d f r o m t h e l a n d t a x a s s e s s m e n t s c h e d u l e s u s e d i n Taiwan t o t a x l a n d of d i f f e r e n t  grade and  type  1 9  .  43  In summary, the land s i z e s = 1 x P  + .87  x D  (s) i s c a l c u l a t e d  as:  +.189x0  where P = Paddy land hectare D = Dry land hectare 0 = Other land hectare Our  sample farms are c l a s s i f i e d according to the amount of  equivalent  land they use  in t h e i r operation.  There are  three c a t e g o r i e s : small (S) medium (M) l a r g e (L) where s D.2  s < 1 ha 1 ha < s ^ 2 ha 2 ha < s 2 0  i s the e q u i v a l e n t c u l t i v a t a b l e land i n h e c t a r e s .  P a r t i c i p a t i o n ( p ) : the degree of importance of to the farm household The  degree to which the farming a c t i v i t y  farming  i s part of  the f a m i l y a c t i v i t i e s  ( c a l l e d p a r t i c i p a t i o n ) can be measured  in s e v e r a l ways.  the d e f i n i t i o n should r e l a t e  But  mechanism by which p a r t - t i m e farm p r o d u c t i o n e f f i c i e n c y  farming  i s assumed to i n f l u e n c e  ( s i m i l a r to ' s i z e ' being  to the economies of s c a l e assumption). d i s c u s s i o n s on the e f f e c t  But  of part-time farming  21  in Taiwan ,  efficiency  the arguments are u s u a l l y  v a r i a t i o n s around three main themes: ( l ) i n a t t e n t i v e because farm  income i s not  important  the labour q u a n t i t y f o r farming labour supply  related  In the p u b l i s h e d  there i s no agreement on the main reason why l o s s e s are i n c u r r e d .  to.the  farming  for f a m i l y income,  (2)  i s r e s i d u a l when the main  i s for o f f - f a r m work, and  (3) the  labour  44  quality is  for farming  i s r e s i d u a l when t h e b e s t  labour  f o r o f f - f a r m work. We  labour  define 'participation'  as t h e s h a r e  s u p p l y g o i n g t o the farm a c t i v i t y  s u p p l y of t h e f a m i l y .  With  of t h e f a m i l y  i n the t o t a l  this definition  we  f o r the farm a c t i v i t y  of the  of t h e  f a m i l y farm  labour.  less  reason  for this  the a l t e r n a t i v e sensitive  A second  labour d e f i n i t i o n farm  of t h e farm  i n f l u e n c e d by n a t u r a l c o n d i t i o n s .  reason  seems t o be c l o s e r  farming  t h e o f f - f a r m and t o y e a r and  2 2  .  the  closer  The  for farming'  To  share' calculations  from  go  to year  of p a r t i c i p a t i o n the  captures  'attention  argument. Keeping  incomes from  (2)  of  a r e more s t a b l e from  a r g u m e n t s and  F a m i l i e s kept d e t a i l e d on  r e p o r t the o f f - f a r m labour time. the  income  t o the i n h e r e n t f a m i l y c h a r a c t e r i s t i c .  o f t h e amount of l a b o u r s p e n t  and  'attention  in practical  farm a c t i v i t y  labour supply d e f i n i t i o n  Farm R e c o r d  report  the farm  l a b o u r s u p p l y amounts which  both the labour r e s i d u a l i t y share  i s that  i s too  n o t c a p t u r e t h e more s t a b l e c h a r a c t e r i s t i c  part-time  So o u r  important  income as i t i s  Although  t o the  against part-time farming,  will  residuality  of p a r t i c i p a t i o n  income s h a r e d e f i n i t i o n  t o the v a r i a b i l i t y  definition  and  labour  t r y to  capture the e f f e c t  it  supply  full-time  (1)  records  f a r m work b u t d i d n o t However, t h e  temporary  farmers  did  or o c c a s i o n a l l a b o u r  labour or other b u s i n e s s  e s t i m a t e t h e amount of o f f - f a r m l a b o u r we  activity.  assume t h a t  the  45  first  t y p e o f o f f - f a r m l a b o u r commands a wage w h i c h i s  comparable  t o t h e a g r i c u l t u r a l d a i l y wage a n d t h a t t h e  s e c o n d o f f - f a r m work c a t e g o r y comparable supply  2 3  t o the manufacturing wage .  i s t h e sum o f t h e t e m p o r a r y  the temporary agricultural (calculated  income by d i v i d i n g  from t h e f u l l - t i m e  off-farm  this  2 4  income by t h e time  supply i s  family labour  used i n  work.  participation  low p a r t i c i p a t i o n part-time 1 part-time 2 full-time  (LP) (PT1) (PT2) (FT)  according  t o the  i n t o four c a t e g o r i e s : .25 > p .50 > p > .25 .75 > p > .50 p > .75  i s t h e share of f a m i l y labour a l l o c a t e d t o farm  (p = f a m i l y farm l a b o u r / t o t a l f a m i l y l a b o u r ) .  D.3 A g r i c u l t u r a l The major  by t h e  u s e d on t h e f a r m ( m e a s u r e d i n  ) and t h e e s t i m a t e d  degree of on-farm  work  labour  income by d i v i d i n g  Farm h o u s e h o l d s a r e c l a s s i f i e d  where p  labour  ( c a l c u l a t e d from  T o t a l family labour  sum o f t h e f a m i l y l a b o u r  male e q u i v a l e n t  The o f f - f a r m  labour  d a i l y wage) a n d t h e f u l l  m a n u f a c t u r i n g d a i l y wage). the  i s s u p p l i e d a t wages w h i c h a r e  regions (r)  250 f a r m s i n o u r a n n u a l s a m p l e s a r e f r o m  agricultural  r e g i o n s of Taiwan: N o r t h R i c e , M i d R i c e ,  South R i c e and Sugar. climate,  These r e g i o n s d i f f e r  i n t h e i r agronomic  opportunities  four  environment  in their  and i n t h e i r  fornon-agricultural activity.  46  The  North Rice region  (NR)  i s i n the north of Taiwan  where r i c e can be grown in the v a l l e y s , and  in the North Eastern p l a i n .  on the slope land.  The  region  r e c e i v e s most of i t s r a i n i n d u s t r i a l i z e d and  C i t r u s f r u i t s can be grown i s c o o l i n the winter  in the f a l l .  urbanized  The  opportunity  and  T h i s i s the most  region in Taiwan.  the c a p i t a l , and Keelung, the northern this region.  i n the T a i p e i p l a i n  Both T a i p e i ,  port c i t y , are i n  f o r o f f - f a r m employment in  i n d u s t r i a l and commercial a c t i v i t i e s appears to be good throughout the r u r a l area of t h i s  region.  Below the North Rice region (MR).  i s the Mid-Rice region  I t i s l e s s mountainous and more r u r a l .  industrial activity from the North.  The  i s r a p i d l y spreading climate  However  into this  i s s u b t r o p i c a l and  s u b s t a n t i a l l y warmer than that of the North-Rice The area  South Rice  i n Taiwan.  island.  The  (SR)  the land in t h i s region was region has  region  i s the major a g r i c u l t u r a l  fertile  and  c o n s o l i d a t e d i n 1 978  Some of 25  .  The  beans.  primarily rural.  some of the best land in Taiwan f o r growing Since the c l i m a t e  i s t r o p i c a l , the area i s  a l s o s u i t a b l e for t r o p i c a l crops and  crops mature r a p i d l y .  should be noted that some of the farms i n our  located  the  one major i n d u s t r i a l c e n t r e , the port c i t y of  T h i s region has  It  t i p of  irrigated.  Kaohsiung, but most of the region i s s t i l l  r i c e and  region.  I t i s l o c a t e d near the southern  land i s f l a t ,  region  in the h i l l s bordering  have a higher  share  of dry land  t h i s region and area.  sample are consequently  47  The  Sugar r e g i o n  (SUG) l i e s on t h e s o u t h - w e s t e r n  s i d e of t h e mountain range t h a t runs from the n o r t h south  of Taiwan.  the c l i m a t e without  The l a n d  i s tropical.  much o p p o r t u n i t y  agricultural It  is hilly This  and l e s s  region  t o the  i r r i g a t e d , and  i s largely  rural  f o r employment o u t s i d e t h e  sector.  should  be n o t e d t h a t t h e c l a s s i f i c a t i o n  of farm  h o u s e h o l d s by r e g i o n w h i c h i s u s e d i n t h i s  study, i s  slightly  i n the published  different  from t h e c l a s s i f i c a t i o n  r e p o r t on f a r m r e c o r d investigation bordering study  keeping  A f t e r an  o f t h e c r o p p a t t e r n s , some v i l l a g e s i n  a r e a s were moved i n t o a n o t h e r c r o p  so a s t o e n s u r e t h a t  similar  families.  output mix.  T h i s was done so t h a t o u r d a t a  within a region.  f o r our  farms i n each r e g i o n have a  b e t t e r c o m p l y w i t h t h e a s s u m p t i o n o f a common technology  region  This  would  production  r e c l a s s i f i c a t i o n of  v i l l a g e s d i d not change t h e c h a r a c t e r i s t i c  economic  c o n d i t i o n s of t h e sample r e g i o n s as t h e r e c l a s s i f i e d v i l l a g e s were g e o g r a p h i c a l l y c l o s e t o e a c h D.4  other.  Time To t e s t  responsive  the hypothesis  t h a t s m a l l farms a r e l e s s  t o changing c o n d i t i o n s  (e.g. shift  i n demand  p a t t e r n and changes i n t h e l a b o u r market) than l a r g e response p a t t e r n s and time t r e n d s  a r e needed.  farms,  In t h i s  48  study,  the  hypothesis  will  samples  (1972-1980) of  D.5  distribution  The  The into three  of  farm  categories  (NR,  (1972-1980).  MR,  We  SR,  can  households s a m p l e h a v e been  T a b l e 3.1  (LP, SUG)  now  PT1, and  PT2,  nine  discuss  presents  the  hectares)  ( i n s t e a d of  labour  hectares and  s u g g e s t s t h a t our somewhat t o o  few  of  part-time  of o u r  s i z e and the  sample by  two  because the  national land  income  share  d i s t r i b u t i o n s i n Table  farms.  in this  too  few  small  study  we  are  in  are  truly  r e q u i r e m e n t we  and  be  representative  Rather  various  importance unbiased  i s that  i f the  for that c e l l .  assume f u l l f i l l e d i n t h i s  are  not  sample a v e r a g e s .  f a r m s , t h u s what i s of They w i l l  farms  3.1  T o t a l sample a v e r a g e s  i n the d i f f e r e n c e s between the  unbiased.  last  two  sample c o n t a i n s  averages are each c e l l  periods  ( i n s t e a d of paddy  interested in total  interest.is  regional  i s s u e of s e l e c t i o n  p a r t i c i p a t i o n by  the  t h e r e f o r e d i s t o r t e d , but particularly  four  share).  A c o m p a r i s o n of  categories  time  However, c o m p a r i s o n s of  m e a s u r e s s i z e by  equivalent  our  FT),  the d i s t r i b u t i o n  d i s t r i b u t i o n s must be done w i t h c a r e data  classified  ( s m a l l , medium, l a r g e ) , f o u r  t h a t of a l l T a i w a n e s e f a r m s by  participation.  annual  Farm R e c o r d K e e p i n g F a m i l i e s .  farm s i z e c a t e g o r i e s  categories  f a r m s and  250  tested with nine  2274 f a r m s of o u r  participation  bias.  be  study  cell  farmers This because  49  T a b l e 3.1  FARM TYPE DISTRIBUTION (PERCENTAGES)  SAMPLE(a)  S M L "  PT  FT  18  33 13 3  21 12  TOT ; 51  49  NATIONAL(b)  TOT 51 34 15 100  PT  FT  TOT  S M L  32 16 7  40 4 1  72 20  TOT  55  45  100  8  S o u r c e a: a v e r a g e s h a r e o f e a c h f a r m c a t e g o r y , c a l c u l a t e d f r o m t h e t o t a l number o f s a m p l e h o u s e h o l d s (2274) b: a v e r a g e s h a r e o f e a c h f a r m c a t e g o r y , c a l c u l a t e d by a d d i n g t h e numbers o f 1975 and 1980 f a r m h o u s e h o l d s t o g e t h e r (1975,.1980 a g r i c u l t u r a l census) n o t e : FT: s a m p l e : h o u s e h o l d w i t h o v e r 50% f a r m s h a r e i n family labour supply c e n s u s : H o u s e h o l d w i t h o v e r 50% f a r m s h a r e i n f a m i l y income L : s a m p l e : h o u s e h o l d w i t h more t h a n 2 h e c t a r e paddy equivalent land c e n s u s : h o u s e h o l d w i t h more t h a n 2 h e c t a r e l a n d M :• s a m p l e : w i t h between 1 and 2 h e c t a r e p a d d y equivalent land c e n s u s : w i t h b e t w e e n 1 and 2 h e c t a r e l a n d  there are a s u f f i c i e n t  number o f c l a s s i f i c a t i o n  criteria  ^ c h a r a c t e r i s t i c s ) and c a t e g o r i e s w i t h i n e a c h c r i t e r i a insure that the households The  i n each c e l l  a r e homogeneous.  d i s t r i b u t i o n s o f t h e s a m p l e f a r m s by t h e  characteristics presented  (size, participation,  i n appendix  C,  table  C.1  2 6  four  region, time) are  .  I n summary, t h e i n f o r m a t i o n o f t h e Farm  Record  Keeping F a m i l i e s  i s of e x c e p t i o n a l q u a l i t y  the consequences  f o r f a r m i n g o f t h e s i z e and t h e d e g r e e  family  labour e f f o r t  towards  their  to  farming.  for investigating  Because  of  of the  50  daily  r e c o r d i n g of the a c t i v i t i e s by the households, the  farm p r o d u c t i o n data f o r each household and even a f t e r  i s very a c c u r a t e ,  p r o c e s s i n g , s u f f i c i e n t l y e x t e n s i v e f o r the  purpose of t h i s study. agriculture exist  Indeed,  few data samples  of t h i s q u a l i t y  and  extend.  on  51  E. NOTES 1  T h i s c h a p t e r i s p a r t i a l l y b a s e d on my p e r s o n a l e x p e r i e n c e w i t h t h e D a i l y Farm R e c o r d K e e p i n g S u r v e y and w i t h t h e v a r i o u s o r g a n i z a t i o n s that handle the Survey. I visited T a i w a n f r o m O c t o b e r 1979 t o S e p t e m b e r 1980, where I had the o p p o r t u n i t y of w o r k i n g a t the C o u n c i l of A g r i c u l t u r a l P l a n n i n g and D e v e l o p m e n t ( T a i p e i ) . Numerous v i s i t s were made t o t h e P r o v i n c i a l D e p a r t m e n t o f A g r i c u l t u r e and F o r e s t r y (Taichung), e s p e c i a l l y to the department which p r o c e s s e s t h e Farm R e c o r d K e e p i n g F a m i l i e s s u r v e y ( b u t a l s o the departments r e s p o n s i b l e f o r e x t e n s i o n , i n t e r n a t i o n a l c o o p e r a t i o n and t e c h n i c a l r e s e a c h ) . I i n v e s t i g a t e d t h e o r i g i n a l r e c o r d s ( t h e d a i l y s h e e t s ) of 60 F a r m R e c o r d K e e p i n g F a m i l i e s of t h e S o u t h R i c e r e g i o n in order t o understand the farming methods, the household b e h a v i o u r , and t h e r e l a t i o n s h i p o f • t h e o r i g i n a l r e c o r d s , to the p r o c e s s e d d a t a . I was a b l e t o v i s i t t h e S o u t h R i c e r e g i o n ( P i n g t u n g ) d u r i n g December 1979 when t h e w i n t e r c r o p s were on t h e f i e l d . I v i s i t e d the Mid-Rice r e g i o n ( C h i n z u ) d u r i n g t h e f i r s t - r i c e h a r v e s t s e a s o n and a l s o d u r i n g t h e s e c o n d - r i c e p l a n t i n g s e a s o n o f 1980. As a r e s u l t I had t h e o p p o r t u n i t y t o t a l k t o t h e d i f f e r e n t t y p e s of farmers ( c r o p , p i g , f i s h ) i n the d i f f e r e n t seasons. I a l s o v i s i t e d a F a r m e r s A s s o c i a t i o n and an A g r i c u l t u r a l r e s e a r c h s t a t i o n , and c o u l d a s k q u e s t i o n s a b o u t t h e b e h a v i o u r of t h e f a r m e r s , and t h e organizations' roles.  2  Farm R e c o r d K e e p i n g was s t a r t e d i n 1953 and t h e l i t e r a c y r e q u i r e m e n t was d i s t o r t i v e a t t h a t t i m e . Farms whose f a r m i n c o m e s h a r e was l e s s t h a t 50% were a l s o e x c l u d e d i n these e a r l y surveys. The r e p r e s e n t a t i v e n e s s p r o b l e m was t h u s more s e v e r e t h a n i n t h e s u r v e y s s i n c e 1972.  3  F a r m e r s do not f e a r t h a t t h e i n f o r m a t i o n w i l l be u s e d f o r income t a x p u r p o s e s b e c a u s e t h e r e i s o n l y a l a n d t a x on the farming households. T h e r e may be some b i a s t o w a r d s h i g h e r p r o f i t i n t h e s a m p l e , b e c a u s e t h e a c t of r e p o r t i n g may i n c r e a s e t h e f a r m e r ' s a w a r e n e s s of h i s a c t i o n s . Farm h o u s e h o l d s do n o t have t o k e e p a c c o u n t o f t h e i r f a r m b u s i n e s s , n e i t h e r f o r t a x nor o t h e r r e a s o n s , b u t t h e c a t e g o r i z e d s t a t e m e n t s o f e a c h h o u s e h o l d p r o d u c e d by t h e PDAF c a n be u s e d a s a c c o u n t i n g s t a t e m e n t s . Some f a r m e r s have i n d e e d a s k e d f o r t h e s e s t a t e m e n t s . They were u s e d to ask f a r m i n g a d v i c e from the e x t e n s i o n o f f i c e r s i n the F a r m e r ' s A s s o c i a t i o n and t o g e t l o a n s f r o m t h e FA c r e d i t department. However most f a r m e r s j u s t w r i t e down t h e i n f o r m a t i o n and n e v e r l o o k a t i t a g a i n .  52  4  P r o c e s s i n g f o r s t o r a g e was done a t t h e P r o v i n c i a l D e p a r t m e n t f o r A g r i c u l t u r e and F o r e s t r y ( P D A F ) . A l l r e c o r d e d i n f o r m a t i o n was r e d u c e d t o one s h e e t of d a t a p e r farmer. The d a t a f r o m t h e s e s h e e t s was p u t on c o m p u t e r t a p e a t t h e C o u n c i l f o r A g r i c u l t u r a l P l a n n i n g and D e v e l o p m e n t (CAPD), and t h e s e d a t a t a p e s w i l l be u s e d i n t h i s study.  5  F o r t u n a t e l y , t h e h o u s e has by f a r t h e l a r g e s t s h a r e i n the b u i l d i n g wealth. Equipment barns are u s u a l l y o n l y s h a c k s o f low v a l u e . Only i f there i s a s u b s t a n t i a l amount o f l i v e s t o c k p r o d u c t i o n ( p i g s ) i s t h e r e i n v e s t m e n t in barns. But t h i s t y p e o f s m a l l s c a l e p i g p r o d u c t i o n on c r o p f a r m s has been d y i n g o u t s i n c e t h e l a t e s i x t i e s because i t i s a labour i n t e n s i v e a c t i v i t y .  6  Income f r o m f i n a n c i a l w e a l t h was c l a s s i f i e d by t h e PDAF as o f f - f a r m income. T h i s i n d i c a t e s t h a t f i n a n c i a l w e a l t h i s n o t c o n s i d e r e d a f a r m a s s e t by t h e PDAF, and we f o l l o w t h i s p r a c t i c e too.  7  D r a f t a n i m a l s a r e used as a l a b o u r i n p u t f o r l a n d p r e p a r a t i o n , b u t t h e y a r e r a p i d l y b e i n g r e p l a c e d by tillers.  8  The and  9  The f a r m e r s were a s k e d t o w r i t e down t h e i m p u t e d v a l u e of t h e t r a n s a c t i o n , i f t h e y had n o t , t h e n t h e PDAF u s e d t h e market p r i c e .  f a r m e r s were a l s o a s k e d t o w r i t e down t h e u n i t the q u a n t i t y of each t r a n s a c t i o n .  price  10 A l l f e m a l e l a b o u r i n t h i s s t u d y i s m e a s u r e d i n m a l e equivalent units. The c o n v e r s i o n r a t e i s .8, so t e n h o u r s w o r k e d by a women were c o u n t e d a s e i g h t h o u r s of input. 11 F o r h i r e d l a b o u r no d i s t i n c t i o n was made f o r male o r f e m a l e , b u t t h e f e m a l e l a b o u r was c o u n t e d i n m a l e equivalents. The human l a b o u r c o n t e n t o f c u s t o m work i s counted i n the h i r e d l a b o u r c a t e g o r y . S i m i l a r l y , the human l a b o u r c o s t ( e v a l u a t e d a t t h e m a r k e t wage) was s u b t r a c t e d f r o m t h e c u s t o m work c o s t and t h e r e s i d u a l c l a s s i f i e d i n t h e m a c h i n e c o s t ( b e f o r e 1977 i n t h e r e n t a l cost). 12 The Farm R e c o r d K e e p i n g F a m i l i e s r e p o r t e d t h e h o u r s t h a t a d r a f t a n i m a l o r a m a c h i n e w h i c h t h e y owned had been u s e d by a f a m i l y member. I n f a c t t h e A n n u a l R e p o r t o f Farm R e c o r d K e e p i n g F a m i l i e s r e p o r t s t h e number o f d a y s p e r month t h a t t h e s e l f - o w n e d and h i r e d a n i m a l o r m a c h i n e s were u s e d . B u t t h i s d a t a was n o t r e t a i n e d f o r e a c h f a r m e r on t h e m a c h i n e r e a d a b l e r e c o r d s .  53  13 The i n v e n t o r y of l a n d and t h e l a n d use d a t a t o g e t h e r made i t p o s s i b l e to c a l c u l a t e the c u l t i v a t a b l e l a n d t h a t the f a r m e r had a t h i s d i s p o s a l . The c u l t i v a t a b l e l a n d i n c l u d e s t h e r e n t e d l a n d but e x c l u d e d t h e l a n d r e n t e d out. 14 The amount o f c r o p p e d l a n d when t h e l a n d was u s e d t o grow v e g e t a b l e s i s the hardest to c a l c u l a t e c o r r e c t l y . F a r m e r s s u b d i v i d e t h e l a n d i n s t r i p s and s e v e r a l t y p e s of v e g e t a b l e s a r e grown s i d e by s i d e . They a l s o u s u a l l y a r e p l a n t e d at d i f f e r e n t time i n t e r v a l s . Only i f the whole f i e l d i s plowed ( u s u a l l y i f the farmer r e p o r t e d a l a n d p r e p a r a t i o n a c t i v i t y w i t h a n i m a l o r m a c h i n e use) can one d e t e r m i n e t h a t t h e v e g e t a b l e c r o p was e n t i r e l y h a r v e s t e d . Thus f o r v e g e t a b l e f a r m e r s , s o m e t i m e s t h e amount of c r o p p e d l a n d i s u n d e r e s t i m a t e d b e c a u s e h a r v e s t i n g and r e p l a n t i n g of v e g e t a b l e s i s c o n t i n u o u s ( t h i s can p r o d u c e very high vegetable y i e l d s ) 15 Sen  1962.  16 The d i f f e r e n t l a n d t y p e s ( p a d d y , d r y , o t h e r ) a r e u s u a l l y t r e a t e d s e p a r a t e l y i n the a g r i c u l t u r a l p o l i c i e s . 17 Dry l a n d i s r a i n f e d l a n d as c o m p a r e d t o paddy l a n d is irrigated. 18  'Other' l a n d ponds.  i s riverbed land,  19 PDAF, t a x a s s e s m e n t  f o r e s t l a n d and  which  fish  records  20  Two more l a n d s i z e d e f i n i t i o n s c o u l d be u s e d . Rao ( 1 9 6 7 ) e x c l u d e s f a l l o w l a n d w h i l e R u d r a (1968) c o u n t s l a n d t w i c e i f i t i s cropped twice. Both a u t h o r s argue that t h e i r l a n d measure i s c l o s e r t o a m e a s u r e of s c a l e of o p e r a t i o n , the l a t t e r b e i n g a measure t h a t i n c l u d e s a l l the f a c t o r s of p r o d u c t i o n . But we c o n s i d e r t h e c h o i c e of f a l l o w l a n d and t h e l e v e l s of n o n - l a n d i n p u t s as p a r t o f t h e p r o d u c t i o n d e c i s i o n . The d i f f e r e n t l y s i z e d f a r m s s h o u l d c h o o s e i n an e q u a l l y e f f i c i e n t way.  21  See  chapter  I I , section  D.  22 Farm income c a n v a r y d r a m a t i c a l l y f r o m y e a r t o y e a r d e p e n d i n g on t h e w e a t h e r , d i s e a s e and p e s t c o n d i t i o n s . As a r e s u l t , f a r m income s h a r e s w i l l c h a n g e r a n d o m l y and do n o t r e p r e s e n t an i n h e r e n t f a m i l y c h a r a c t e r i s t i c .  54  23 The m a n u f a c t u r i n g wage was c a l c u l a t e d f r o m t h e m o n t h l y income i n t h e m a n u f a c t u r i n g s e c t o r a n d d i v i d e d by t h e a v e r a g e m o n t h l y number o f work d a y s i n t h i s s e c t o r . This i s s i m i l a r t o t h e t r e a t m e n t i n t a b l e B.3. The d a t a f o r t h e s e c a l c u l a t i o n s came f r o m a n n u a l l a b o u r s u r v e y d a t a c o l l e c t e d by t h e D e p a r t m e n t o f G o v e r n m e n t B u d g e t i n g and s t a t i s t i c s (DGBAS). 24  I n t h i s c a l c u l a t i o n f e m a l e l a b o u r was c o u n t e d i n m a l e e q u i v a l e n t t i m e , so t h a t i t w o u l d be c o m p a r a b l e t o t h e l a b o u r f r o m o f f - f a r m a c t i v i t y by f e m a l e s ( t h e use o f t h e d a i l y a g r i c u l t u r a l wage and t h e d a i l y m a n u f a c t u r i n g wage t o c a l c u l a t e l a b o u r d a y s f r o m t h e o f f - f a r m income o f females t r a n s f o r m s t h i s female l a b o u r i n t o male equivalent labour).  25 T h i s c o n s o l i d a t i o n was n o t an o w n e r s h i p c o n s o l i d a t i o n . The f i e l d s , i r r i g a t i o n and r o a d n e t w o r k were r e d e s i g n e d i n t o a more r a t i o n a l p a t t e r n . F a r m e r s r e c i e v e d 9 5 - 9 7 % of t h e i r l a n d b a c k a f t e r t h e c o n s o l i d a t i o n ( a c c o r d i n g t o my i n t e r v i e w s o f f a r m e r s i n 1980. The f a r m e r s a l s o i n d i c a t e d t h a t t h e y were v e r y s a t i s f i e d w i t h t h e r e s u l t s of t h e c o n s o l i d a t i o n , a l t h o u g h t h e y had o n l y r e l u c t a n t l y a c c e p t e d i t i n 1978). 26 A n o t h e r c o n s e q u e n c e of. t h e s e l e c t i o n p r o c e d u r e o f t h e s a m p l e i s t h a t t h e q u e s t i o n o f how and why f a r m h o u s e h o l d s d e c i d e on t h e i r f a r m s i z e and l e v e l o f p a r t i c i p a t i o n c a n n o t be a d d r e s s e d d i r e c t l y . Even i f t h e i n f o r m a t i o n on t h e q u a l i t y o f t h e h o u s e h o l d members and on t h e l a n d r e n t a l s had been r e t a i n e d , t h i s q u e s t i o n c o u l d n o t be a n s w e r e d b e c a u s e o f t h e s e l e c t i o n m e t h o d . I f t h e s a m p l e had o n l y been f a r m e r s who r e s p o n d e d f o r a l l n i n e y e a r s , t h e n t h e farm h o u s e h o l d ' s changes of farm s i z e and p a r t i c i p a t i o n l e v e l s c o u l d be t r a c e d and i n v e s t i g a t e d over these nine y e a r s . In t h i s c a s e , the d e c i s i o n c o u l d be t r a c e d i n t e r m s o f t h e h o u s e h o l d ' s e c o n o m i c c o n d i t i o n s and p e r s o n a l c h a r a c t e r i s t i c s . I f on t h e o t h e r h a n d , e v e r y y e a r a f u l l y random s a m p l e was drawn t h e n a g a i n t h e a b o v e q u e s t i o n c o u l d be a d d r e s s e d . In t h i s c a s e the sample would r e f l e c t the n a t i o n ' s change i n p r o p o r t i o n s o f s m a l l and p a r t - t i m e f a r m s so t h a t t h e s e c h a n g e s c o u l d be r e l a t e d t o t h e a g r i c u l t u r a l s e c t o r ' s conditions. But t h e Farm R e c o r d K e e p i n g F a m i l y s a m p l e i s a mix o f b o t h s e l e c t i o n m e t h o d s . S i z e and p a r t i c i p a t i o n a r e t h u s - h o u s e h o l d c h a r a c t e r i s t i c s whose c o n s e q u e n c e s f o r f a r m i n g p r o d u c t i v i t y a r e the s u b j e c t of t h i s s t u d y . This a p p r o a c h i s t h e s t a n d a r d one i n t h e s t u d i e s where o n l y the e f f e c t of farm s i z e i s i n v e s t i g a t e d . In these s t u d i e s , even though a working l a n d r e n t market e x i s t s , the l a n d s i z e i s t a k e n as a g i v e n c h a r a c t e r i s t i c of the f a r m and i t s c o n s e q u e n c e s a r e t h e n i n v e s t i g a t e d . See t h e l i t e r a t u r e overview i n chapter four.  55  CHAPTER I V PRODUCTION  A.  PATTERNS AND SIMPLE PRODUCTIVITY MEASURES  INTRODUCTION I n t h i s c h a p t e r , an i n v e s t i g a t i o n o f t h e  structure  of the small  full-time  farms w i l l  full-time,  provide  small  part-time  production and l a r g e  the answers t o t h e f o l l o w i n g  q u e s t i o n s about the s u p e r i o r i t y of the l a r g e f u l l - t i m e farms: the  1) Do l a r g e  a v a i l a b l e land  unit)  than small  2) A r e l a r g e  f u l l - t i m e f a r m s make t h e b e t t e r (higher  production  f u l l - t i m e and s m a l l  use of  and y i e l d s p e r l a n d part-time,  farms?  f u l l - t i m e f a r m s more r e s p o n s i v e t o new  c i r c u m s t a n c e s , so d i d t h e y p r o d u c e t h e n e w l y demanded agricultural the  p r o d u c t s o f t h e 1970s e a r l i e r  new p r o d u c t i o n  methods e a r l i e r ?  and a l s o  3) Do l a r g e f u l l - t i m e  f a r m s s a v e a n d i n v e s t more p e r h e c t a r e t h a n s m a l l Additionally,  this  adopt  farms?  i n v e s t i g a t i o n c a n be u s e d t o i d e n t i f y t h e  m a r k e t s w h i c h w o u l d be s e r i o u s l y d i s t u r b e d  i f a land  policy  f a r m s were  were implemented  amalgamated i n t o l a r g e  i n which a l l small  f a r m s e a c h owned ( o r o p e r a t e d ) by one  h o u s e h o l d who a g r e e d t o f a r m In efficiency  reform  full-time.  s e c t i o n B, t h e l i t e r a t u r e  i s r e v i e w e d on t h e  of the d i f f e r e n t farm s i z e s i n the A s i a n  region  56  as measured by land p r o d u c t i v i t y measures. the development of the d i s c u s s i o n  In p a r t i c u l a r ,  i n the Indian  context i s  reviewed because that debate brought out the strength and the weaknesses of the land p r o d u c t i v i t y measures and i s thus relevant to t h i s  chapter.  In s e c t i o n C, the m u l t i - c h a r a c t e r i s t i c dummy v a r i a b l e r e g r e s s i o n approach t o the comparison of the production  s t r u c t u r e between farm types i s e x p l a i n e d .  This  dummy v a r i a b l e model uses a l l of the farm type data a v a i l a b l e while keeping the i n t e r p r e t a t i o n s u f f i c i e n t l y c l e a r t o be u s e f u l . small but  f u l l - t i m e , small part-time  the r e g r e s s i o n  provide the  Thus i n the t e x t we concentrate  information  on the  and l a r g e f u l l - t i m e farms  equations given  i n appendix D a l s o  about the behaviour of medium (M) farms,  farms which are not so extreme i n t h e i r l e v e l s of  participation modified  (PT2,PT1)  and the time e f f e c t s .  (A s l i g h t l y  form of t h i s dummy v a r i a b l e model w i l l be used i n  chapter V.) The  production  structure i s investigated in  s e c t i o n s D-G, with a d i s c u s s i o n of the labour use  and machine  and the family endowment s t r u c t u r e i n s e c t i o n D, the  output s t r u c t u r e i n s e c t i o n E, and the intermediate s t r u c t u r e i n s e c t i o n F. use,  together  discussed  input  Simple measures of y i e l d and land  with the saving-investment behaviour a r e  i n s e c t i o n G.  57  The such t h a t first.  discussions  i n s e c t i o n s D to G are  the d i f f e r e n c e s between farm t y p e s are  full-time  and  very  small part-time  f a r m s , e a c h owned  agreed to farm f u l l - t i m e .  new  market s i t u a t i o n s  would r e q u i r e p r o d u c t s and sector.  run  supply  of  ascertained,  farming  s e c t o r can  be  from t h i s  t i m i n g of  of n o n - t r a d i t i o n a l c r o p s  are discussed between the  inputs  i n the  relevant  the  1970s i n T a i w a n .  agricultural  immediate  r e o r g a n i z a t i o n of  (such (such  the adoption as v e g e t a b l e ,  as  the  l a r g e farms.  response t o the 1  new  of machine  use,  f r u i t s ) and  of  insecticides,  c a s e s where t h e r e  s m a l l and  the  this  identified.  Secondly, the  intermediate  since  the  agricultural  However, t h o s e m a r k e t s where m a j o r  adjustments would occur  farm h o u s e h o l d  demand f o r  i n p u t s t o the  the  into  Long term a d j u s t m e n t s t o  about the  out  i f a l l small  farms were.amalgamated  c a n n o t be  information the  short  ( o r o p e r a t e d ) by one  who  new  pointed  T h e s e d i f f e r e n c e s i n d i c a t e what w o u l d happen t o  a g r i c u l t u r a l markets i n the  large  organized  herbicides)  is a difference  These a c t i v i t i e s were  production  circumstances  of  This d i s c u s s i o n i s thus a test  of  a s s u m p t i o n of s u p e r i o r  receptivity  farms  t o new  If large full-time  circumstances.  at adopting  new  values  i n 1972  before  1972,  by  small  of  large full-time farms are  a c t i v i t i e s then they should f o r t h e a c t i v i t i e s w h i c h were  and  there  farms i n the  should 1970s.  be For  the  faster  show l a r g e r introduced  e v i d e n c e of a c a t c h i n g a c t i v i t i e s w h i c h were  up  58  introduced there  a f t e r 1972 (where s t a r t i n g values  should  be s i g n i f i c a n t l y higher  are s i m i l a r ) ,  adoption i n the e a r l y  part of the 1970s on l a r g e rather than on small T h i r d l y , an attempt production  choice  farms.  i s made to d e s c r i b e the  behaviour of the d i f f e r e n t farm groups by  l i n k i n g the d i f f e r e n c e s i n the supply  of family  inputs  (=endowments) to the d i f f e r e n c e s of the output, the intermediate  input, the bought labour  to the y i e l d and land use measures.  inputs  s t r u c t u r e and  These l i n k s show the  adjustment s t r a t e g i e s of the farm households to t h e i r endowments and to the c h a r a c t e r i s t i c s of t h e i r activity. family  farm  On the one hand, adjustments to the d i f f e r e n t  input  substitute  endowments i s p o s s i b l e by compensation with  inputs.  Thus the evidence of s u b s t i t u t a b i l i t y  between f a m i l y labour  and h i r e d labour,  h i r e d animal and  machine s e r v i c e s and owned machines i s of i n t e r e s t . other  On t h e .  hand, adjustment t o the d i f f e r e n t family endowments i s  a l s o p o s s i b l e through the choice farms behave i n a way that  of outputs.  2  (immobile) input endowment r a t i o s .  markets f o r immobile f a m i l y  In t h i s case,  i s analogous to c o u n t r i e s i n  i n t e r n a t i o n a l trade, choosing output p a t t e r n s their  input  s u i t e d to  Thus the lack of  f a c t o r s need not l e a d to  efficiency  l o s s e s f o r the system i f there are i n s t e a d  sufficient  crop c h o i c e s  crops a c c o r d i n g  to t h e i r  so that farmers can choose t h e i r f a c t o r endowment s t r u c t u r e .  59  S e c t i o n H i s the c o n c l u s i o n and p r o v i d e s the answers to the q u e s t i o n s  of t h i s chapter.  (The estimated  dummy  v a r i a b l e r e g r e s s i o n s which were the base f o r the t a b l e s i n t h i s chapter  are r e p o r t e d i n appendix D.  More d e t a i l on the  c o n s t r u c t i o n of the y i e l d and land use v a r i a b l e s can be found  i n appendix A.)  B. LITERATURE The different Sen  d i s c u s s i o n on the e f f i c i e n c y of farms of  s i z e s i n A s i a s t a r t e d i n 1962 with an a r t i c l e by  (1962) i n which he made the f o l l o w i n g o b s e r v a t i o n s on  Indian  farm data  "Observation  f o r 1954-5, (repeated  i n Sen 1975, p147):  I : When f a m i l y labour employed i n a g r i c u l t u r e i s given an 'imputed value' i n terms of the r u l i n g wage r a t e much of Indian a g r i c u l t u r e seems unrenumerative. I I : By and l a r g e , the ' p r o f i t a b i l i t y ' of a g r i c u l t u r e i n c r e a s e s with the s i z e of h o l d i n g , ' p r o f i t a b i l i t y ' being measured by the s u r p l u s (or d e f i c i t ) of output over c o s t s i n c l u d i n g the imputed value of labour. I l l : By and l a r g e , p r o d u c t i v i t y per acre decreases with the s i z e of h o l d i n g . "  These o b s e r v a t i o n s  s t a r t e d a heated  d i s c u s s i o n which  between 1962 and 1973 and which was mostly  concerned  raged with  the land p r o d u c t i v i t y of the farms (the t h i r d o b s e r v a t i o n ) . Sen  (1962) e x p l a i n e d h i s r e s u l t s by m a i n t a i n i n g  that family  labour does not command the market wage on small farms so that more labour per acre i s used.  Since a l l other f a c t o r s  of p r o d u c t i o n are p r o p o r t i o n a l t o the labour  input there  60  will  be more o u t p u t p e r a c r e  on s m a l l  the argument t h a t b u l l o c k l a b o u r  farms.  He a l s o  is indivisible  i f no  s e r v i c e market e x i s t s so t h a t t h e b u l l o c k per a c r e higher are  on s m a l l  farms and, s i n c e the other  i n a complementary r e l a t i o n s h i p w i t h  acre  will  i t , more o u t p u t p e r  be p r o d u c e d .  c o r r e c t d e f i n i t i o n of l a n d area  which should  c a l c u l a t i o n of l a n d p r o d u c t i v i t y . land could  1964). land  give misleading  i s sold f i r s t  l a n d because  land  ( a l s o Khusro  i n d i s t r e s s s a l e s and so t h i s i n t o bigger  f a r m e r s have n o n - p e c u n i a r y  l a r g e but r e l a t i v e l y  infertile  that  population  (1969) a r g u e d t h a t l e s s  land a v a i l a b l e f o r c o l l e c t i o n larger  be u s e d i n t h e  Sen ( 1 9 6 4 ) a r g u e d  f o r c e d t h e b r e a k - u p of f e r t i l e Bhagwati-Chakravarty  on t h e  The u s e o f c u l t i v a t a b l e  results.  f a r m s had more f e r t i l e  pressure  input i s  variable factors  A second s e t of arguments c o n c e n t r a t e d  small  uses  fertile  i s the only  estates.  Also  (prestige) benefits  estates  ( a l s o Bardhan  from 1973).  These arguments r e l a t e d f e r t i l i t y of l a n d t o s i z e and t h u s to output per acre. area  should  levels.  study,  be c o r r e c t e d  Rudra  especially  A.P. Rao (1967) a r g u e d t o o t h a t  f o r f a l l o w and f o r i r r i g a t i o n  (1968) a r g u e d f o r t h e use o f g r o s s  i f there  land  was h e a v y m u l t i p l e c r o p p i n g .  we c o r r e c t f o r t h e f e r t i l i t y o f t h e l a n d  acres In t h i s  i n the  c a l c u l a t i o n of t h e farm s i z e ( s e e c h a p t e r I I I ) . A third III  concentrated  s e t of p o t e n t i a l e x p l a n a t i o n s on t h e s t a t i s t i c a l  aggregation  of  observation b i a s of t h e  61  d i f f e r e n t measurement s t u d i e s . s i z e - c l a s s average d a t a In  1975  Sen  illusion over  noted  3  households.  The  of b o t h  made l a b o u r  f o r seven I n d i a n r e g i o n s  both a g g r e g a t i n g  aggregation  over  t h e n o n - h o m o g e n e i t y of  Thus i t was  between v i l l a g e s .  1972)  Bardhan  strengthened (which  l e s s so w i t h i n  land q u a l i t y  across  1967,  Rudra  per  but v a r i e d c o n s i d e r a b l y was  1968,  l e s s than  clear  Observation data  1973).  I I I was  not  reversed  i n s t e a d of s i z e - c l a s s d a t a  (Saini  1971,  In t h i s c h a p t e r , the c o m p a r i s o n between  source  of ' i n e f f i c i e n c y  Sen's o b s e r v a t i o n s I and during this period.  s i z e s was  ignored  O n l y K h u s r o ( 1 9 6 4 ) p a i d some a t t e n t i o n  thus  of a t o t a l  s h o u l d not  (after  i n p u t s ) and  t h a t the p r o d u c t i v i t y  a s p e c i a l case  i n v e s t i g a t i o n and  the  underlying  I I were e s s e n t i a l l y  to f a m i l y s u p p l i e d non-land  (1969) saw  farm  (see c h a p t e r I I I ) .  the r e l a t i o n s h i p between the net p r o f i t  of v a l u e  the  i n s t u d i e s which  uses c l a s s average d a t a because t h e measures of  potential  on  Saini-Bhattacharya  farm c h a r a c t e r i s t i c s o n l y approximate the  Saini  and  b e c a u s e t h e d e f i n i t i o n s of a c r e a g e c h a n g e d a c r o s s  used household  to  villages  p o s s i b l e that the p r o d u c t i v i t i e s  E m p i r i c a l evidence  i s s u e (Rao A.P.  "Studies.  types  (1962).  the l a b o u r market i m p e r f e c t i o n s  a c r e d i d not v a r y w i t h i n a v i l l a g e  this  over  but  on  statistical  villages  immobile between v i l l a g e s ,  t h e v i l l a g e ) and villages.  based h i s c o n c l u s i o n s  that this could create a  b e c a u s e he was  the e f f e c t  Sen  imputation size.  of d i f f e r e n t  factor  farm  productivity  s o l e l y concentrate  on  land  62  productivity.  Bardhan's study  introduced the next efficiency  i n 1973 e s s e n t i a l l y  stage of the debate on farm  by p o i n t i n g out that the r e a l  whether the technology  size  i s s u e of s i z e i s  showed i n c r e a s i n g r e t u r n s t o s c a l e " .  He proceeded to estimate p r o d u c t i o n f u n c t i o n s of a l l f a c t o r s and  found  that decreasing or constant  the r u l e i n r i c e regions wheat regions i n I n d i a ) .  r e t u r n s to s c a l e was  (but i n c r e a s i n g r e t u r n s t o s c a l e i n Bardhan d i d i n d i c a t e that l a r g e  farms might c o n t r i b u t e to growth even i f they were statically  inefficient  because they c o u l d save more and so  i n v e s t more. Thus the optimal farm s i z e debate i n the Indian context e s s e n t i a l l y brought out both the u s e f u l n e s s and the l i m i t a t i o n ' s of the land p r o d u c t i v i t y measures. measures continue t o be very p o p u l a r . usually provides s u f f i c i e n t  These  As Census data  information for their  c a l c u l a t i o n , they can be used f o r c r o s s country e v a l u a t i o n s of the farm -size i s s u e .  Thus Barry and C l i n e  that land p r o d u c t i v i t y c o n s i s t e n t l y  f a l l s with s i z e i n the 5  P h i l l i p i n e s , West Pakistan and M a l a y s i a . evidence  on farm s i z e e f f i c i e n c y  (1979) found  The scant  i n Taiwan a l s o uses these  measures (Chen 1980). C. EMPIRICAL METHOD: THE DUMMY VARIABLE MODEL  T h i s study concentrates on the d i f f e r e n c e s i n p r o d u c t i o n p a t t e r n s and p r o d u c t i o n e f f i c i e n c y between small  63  full-time, data  s m a l l p a r t - t i m e and l a r g e f u l l - t i m e  i s a l s o a v a i l a b l e on o t h e r  farm  types.  o f some p r o d u c t i o n v a r i a b l e s i s o f i n t e r e s t because of t h e i n t e r e s t so  indifferential  i s t h e agronomic r e g i o n .  t o be f o u n d  Also the timing i n this  adoption  study  r a t e s , and  A method o f d a t a a n a l y s i s h a d  w h i c h made i n t e r p r e t a t i o n  incorporated a l l the a v a i l a b l e The  farms, but  simple but a l s o  data.  dummy v a r i a b l e m o d e l was c h o o s e n a s t h e s i m p l e s t  approximation  t o t h e method o f c o m p a r i n g t h e s i g n i f i c a n c e o f  t h e d i f f e r e n c e s i n t h e mean v a r i a b l e s f o r a l l t h e d i f f e r e n t groups of o b s e r v a t i o n s . characteristics, and  time  total  size  Four  (s), participation  ( t ) , are considered  o f 432 c e l l s  in this  study, producing a cell  20 o b s e r v a t i o n s f o r r e l i a b l e  The c o m p a r i s o n o f a l l t h e g r o u p a v e r a g e s w o u l d  produce 432!/[2!(432-2)!] computations measure.  (p), region ( r ) ,  ( s = 3 , p=4, r = 4 , t = 9 ) where e a c h  s h o u l d have a t l e a s t estimation.  classification  per e f f i c i e n c y  T h i s i s t o o many t o e s t i m a t e a n d y e t no d a t a 6  s h o u l d be d i s c a r t e d . We p r o p o s e t h e f o l l o w i n g dummy v a r i a b l e model on a l l the o b s e r v a t i o n s f o r each e f f i c i e n c y  measure:  2  a  = a  0  sprt  3 8 3 + Z a d + Z a d + Z a d + e s=1 s s p=1 p p t=1 t t r=1 r r sprt  + L a d  where: s: p: r: t:  size participation region time  64  so that each c h a r a c t e r i s t i c variable  d .  The dependent  i=s,p,t,r variable  has i t s own dummy  (a ) i s the sptr  o b s e r v a t i o n on an e f f i c i e n c y measure or a p r o d u c t i o n variable the  f o r the farmer.  average  The focus of t h i s study i s thus  (or expected) e f f i c i e n c y  who belong t o the d i f f e r e n t average  groups.  (or expected) e f f i c i e n c y  l e v e l of the farmers For example, the  l e v e l of the farmers who  belong t o the small, low p a r t i c i p a n t , region group  1979, North Rice  (s=S, p=LP, t=l979, r=NR)  E(a S,LP,1979,NR  is:  ) = a = a + a + a + a +a S,LP,1979,NR 0 S LP 1979 NR  As can be seen, i t i s easy to i d e n t i f y s h i f t s i n the average efficiency  l e v e l from group to group.  The c o e f f i c i e n t  (a ) i the value of the s h i f t  of each dummy v a r i a b l e  (d ) i n d i c a t e s i and the t - t e s t on the c o e f f i c i e n t shows whether is s t a t i s t i c a l l y  this  shift  significant.  The disadvantage of the dummy model i s that some regularity  i s imposed  on the p a t t e r n of c e l l means i f more  than one c h a r a c t e r i s t i c be t o add i n t e r a c t i o n  the  i s considered.  dummy terms  number of c o e f f i c i e n t s  One s o l u t i o n  would  (d d ), but t h i s expands s p 7  to e s t i m a t e .  T h e r e f o r e , the  disadvantage of the simple model without i n t e r a c t i o n  terms  must be weighted a g a i n s t the advantages of the c l a r i t y of interpretation the  of a few c o e f f i c i e n t s  number of o b s e r v a t i o n s .  and the c o n s t r a i n t s of  65  It c o u l d be argued that a b e t t e r model would be the simple r e g r e s s i o n model of the e f f i c i e n c y measure as a linear  f u n c t i o n of s i z e , p a r t i c i p a t i o n l e v e l and time, s i n c e  each was a numerical measure before  i n t e r v a l s were  defined.  T h i s a l s o imposes a r e g u l a r i t y on the data and there priori  i s no a  reason for assuming that the r e l a t i o n s h i p s are l i n e a r  in the c h a r a c t e r i s t i c s . The (against  second reason why we p r e f e r the dummy model  the l i n e a r  r e g r e s s i o n model) i s that each of the  measures of the c h a r a c t e r i s t i c s i s i n f a c t an approximation for  the true v a r i a b l e of i n f l u e n c e  (see d i s c u s s i o n i n  chapter I I I ) .  Thus the s i z e i s an approximation f o r s c a l e  of p r o d u c t i o n ,  the p a r t i c i p a t i o n l e v e l  aspect  of farming, the time p e r i o d  f o r the r e s i d u a l  f o r the weather  c o n d i t i o n s and the t e c h n o l o g i c a l trends, the  homogeneous agronomic a r e a .  and the region  Because of the approximate  q u a l i t y of the measured c h a r a c t e r i s t i c s we f e l t more a p p r o p r i a t e  characteristics).  that  to study households as belonging  (measured by belonging  t o a value  for  i t was  to classes  i n t e r v a l of t h e i r  Thus there w i l l be two dummy v a r i a b l e s  (d  ) a s s o c i a t e d with farm s i z e (s = S, M) and three s a s s o c i a t e d (d ) with p a r t i c i p a t i o n l e v e l (p = PT2, PT1, L P ) , P w h i l e the constant (a ) of the r e g r e s s i o n i s the value l e v e l 0 f o r the l a r g e f u l l - t i m e farm (the base l e v e l from which the s h i f t s a , a are c a l c u l a t e d ) , s p  66  We d e c i d e d because t h e four  t o estimate  regions  a dummy model f o r e a c h  are very  sample i n t o f o u r  dissimilar.  The d i v i s i o n  of  the t o t a l  r e g i o n a l samples a l s o  an  i n v e s t i g a t i o n of t h e r o b u s t n e s s of t h e s h i f t s  p a r t i c i p a t i o n a n d t i m e impose on t h e v a r i a b l e s . e f f i c i e n c y measure ( o r p r o d u c t i o n are  thus estimated,  occur  so t h a t  allows  that  size,  F o r each  v a r i a b l e ) four  regressions  i t may be shown w h e t h e r  i n t h e same d i r e c t i o n f o r a l l r e g i o n s .  region  shifts  The c o n c l u s i o n  about t h e i n f l u e n c e of t h e farm c h a r a c t e r i s t i c  will  t h e n be  stronger. The  estimation  of the time trend w i t h  t h e t i m e dummy  variables sizes.  (d ) g i v e s ah average o f t h e t r e n d i n a l l farm t B u t t h e a s s u m p t i o n t h a t l a r g e f a r m s a d o p t e d new  technology  and crops f a s t e r ( i n t h e e a r l y  1970s w h i l e  f a r m s d i d n o t y e t a d o p t them) must be t e s t e d .  small  We t e s t  this  a s s u m p t i o n by a d d i n g two i n t e r a c t i o n t e r m s the  s i z e ( s = M, S) a n d t h e f i r s t  ( d d ) between s b f i v e y e a r s of t h e sample;  t h e y a r e t h e ' b r e a k ' dummy v a r i a b l e s ( d = 1 i f t = 1972, b 1973,1974,1975,1976, o t h e r w i s e d = 0 ) . T h u s whenever t h i s b 8  break c o e f f i c i e n t  i sinsignificant,  one c a n c o n c l u d e  s m a l l a n d l a r g e f a r m s s h a r e d t h e same a d o p t i o n throughout'the So  that  trend  1970s.  f o r each r e g i o n , t h e model e s t i m a t e d  is:  2 3 8 2 a = a + L a d + Z a d + L a d + Z a d d + e 0 s=1 s s p=1 p p t=1 t t s=1 b s b s  67  We  assume t h a t t h e o r d i n a r y l e a s t E[e]  E[e e] = a  The estimated  r e g r e s s i o n s by c a l c u l a t i n g  = a  SFT  + a  land.  LP farms:  0  the farm a s s e t s taken  Family  l a b o u r was t h e sum  m a c h i n e s , t r e e s , and of t h e p r o d u c t i o n index The reported  MACHINE USE  endowments a r e t h e  asset values are  price  for  a  Family and  value  + a S  FAMILY ENDOWMENT, LABOUR AND  female,  the e s t i m a t e d  these  farms:  large full-time LFT  D.  b a s e d on  a  0  =  be  S  = a  a  = 0  farms:  small part-time SPT  -for  +  0  a  hold  1980:  small full-time a  -for  E[ed]  d i s c u s s i o n s i n the t e x t w i l l  each v a r i a b l e i n -for  1  1  = 0  square assumptions  1 0  reported  per h e c t a r e  and  equivalent  i n a c t u a l days used.  Farm  9  and  r e p o r t e d at the  and  beginning  deflated with a constructed  asset  .  main f e a t u r e of t h e  i n t a b l e 4.1  significantly  f a m i l y l a b o u r , male  of f a r m i n v e n t o r y , f a r m t o o l s  l i v e s t o c k as  year  PATTERN  less  f a m i l y endowment p a t t e r n  i s that large full-time  as  farms have  f a m i l y l a b o u r per c u l t i v a t e d h e c t a r e  (a  Table  Region  4.1: LABOUR USE, MACHINE USE a n d FAMILY ENDOWMENTS p e r HECTARE i n 1980 i n f o u r r e g i o n s f o r SMALL FULL-TIME ( S F T ) , LARGE FULL-TIME ( L F T ) a n d SMALL PART-TIME ( S P T ) FARMS  North  |  I  R i ce  SFT  LFT  SPT  303  568*  301 "  271  501 *  201 "  160"  208  330*  201 "  126*  288*  48"  59  185*  76"  85  173*  50  36  54  24  60  .1 1  .62  . 35  - . 19 +  2 . 27  2.91  1 . 79"  2.97*  2 . 42  SPT  TOT  705*  258"  464* 142*  FEM  FAM LAB  HIRED HUM  99  ANIMAL LAB  1 . 54  MACHINE HIR  1 .99*  1.02"  60788*  28802"  506*  208 "  267  104515"  1 12168  MACHINE  OWN  I  Rice  SPT  LFT  FAM LAB  South  LFT  SFT  MALE  I  r i ce  SFT  Farm g r o u p |  HUM  Mid  |  2 . 65* 62467*  1 .99 567 19  65823"  47663  277"  .21 1  143222"  134242  SFT  LFT  SPT  318*  625*  281 "  314  113"  162*  318*  134"  128  30  99*  27 1 *  109"  141  58"  57  34  37  43  40**  55520  Sugar  |  .57  6 . 66*  4 .09  2 .08  4 . 53  2 .03"  2 . 78*  1.21  1 . 24"  1 . 05  49206"  67175  44062*  26968"  32706  589*  244"  269  98217*  63497"  69966  ENDOWMENT T  FAM LAB  T FARM ASS %DRY  LAND  123158 . 16*  .30"  515* 133113  .04*  . 12  S o u r c e : b a s e d o n t a b l e s D.1-4 Notes: a: q u a n t i t i e s p e r h e c t a r e p a d d y e q u i v a l e n t above: Male ( f a m i l y ) : above: man-days  Female ( f a m i l y ) ' man-days  107393  .03  .09  cultivatable  461*  land  143" 94001"  . 29  26 1 * 133601  . 22"  . 15  . 21 "  . 30  . 28  area  b: c: d:  type of labour p r i c e 1n 1980 units reported  H i r e d Human 383.24 man-days  H i r e d Animal 345.93 day  e: f: g: h:  T o t hum: f a m i l y l a b o u r + h i r e d human l a b o u r T fam l a b : male + f e m a l e f a m i l y l a b o u r (man-days) T f a r m a s s : m a c h i n e owned + t r e e s + l i v e s t o c k + t o o l s + m i s c a l e n e o u s f a r m d u r a b l e s % d r y l a n d : d r y l a n d as s h a r e i n t h e paddy e q u i v a l e n t c u l t i v a t a b l e l a n d a v a i l a b l e  ": *: *:  s i g n i f i c a n t l y d i f f e r e n t f r o m z e r o ( s i g n i f i c a n c e l e v e l .05) u s u a l l y means t h a t t h e b a s e v a l u e was c o n s i d e r a b l y l a r g e r i n t h e e a r l y s i g n i f i c a n t l y d i f f e r e n t from l a r g e f u l l - t i m e farms  1970s  than  h i r e d machine 4592.64 ha s e r v i c e d  owned m a c h i n e 1 stock value  ( d e f l a t e d with  in  an a s s e t  T farm a s s e t 1 stock value  deflator,  1980$  )  1980 CT)  69  minimum of 250 l e s s or equal  days l e s s ) than small f u l l - t i m e farms, amounts than small part-time  farms.  and  Secondly,  land q u a l i t y i s e q u a l l y d i s t r i b u t e d over a l l farm types in all  r e g i o n s , except in the NR  region where there i s  s i g n i f i c a n t l y more dry land on l a r g e f u l l - t i m e farms than on other  farm types.  And  thirdly,  equal  on the farm types  region small f u l l - t i m e a s s e t s per  farm asset endowments are  i n the r i c e regions, but  in the  SUG  farms have s i g n i f i c a n t l y more farm  hectare.  An amalgamation of small farms would d r a m a t i c a l l y alter  f a m i l y labour a p p l i c a t i o n per hectare,  but not  the  amounts of farm a s s e t s per h e c t a r e .  Amalgamation would mean  a l o s s of employment of at l e a s t 250  (NR)  every  hectare  farms.  c o n s o l i d a t e d i f occupied  by small  full-time  A l t e r n a t i v e employment would have to be  found for  the farm household members thus  The  dispossessed.  labour and machine inputs c o n s i s t of f a m i l y  labour, h i r e d human, h i r e d animal, and  owned machine s e r v i c e s .  reported  days per year for  11  i n days e m p l o y e d .  The The  h i r e d machine s e r v i c e s  h i r e d human labour  was  h i r e d machine s e r v i c e s  were c a l c u l a t e d from the machine cost with the use of machine s e r v i c e p r i c e calculated similarly.  1 2  . The  The  h i r e d animal s e r v i c e s  1 3  were  owned machine s e r v i c e s are  assumed to be p r o p o r t i o n a l to the owned machine stock the l a t t e r was  the  d e f l a t e d with the machine and  tool  and 1  index ".  70  The and  i n v e s t i g a t i o n of  s e r v i c e s , be  reported  full-time  l e a s t of  d i f f e r e n c e s are  farms.  not  too  i n the  r i c e regions  SR  region.  between l a r g e hectare on  full-time  full-time  and  (The  i s t i e d to the  large  non-family  labour  t h e s e per  f a r m s do  hectare  small  large  between  use  significantly  than l a r g e  significant  or  hectare,  more a n i m a l l a b o u r  NR  and  shows t h a t  significant  Small part-time  more h i r e d m a c h i n e s e r v i c e s p e r farms i n the  of  i n t a b l e 4.1,  f a r m s t e n d t o use  a l t h o u g h the  use  t h e y human, a n i m a l o r h i r e d m a c h i n e  owned m a c h i n e , a s full-time  the  full-time  per  hectare  difference  farm f o r machine i n p u t  s i g n i f i c a n t l y higher  dry  farms, making r i c e machine  per  land q u a l i t y use  di f ferent.) An  amalgamation would not  h i r i n g o f human l a b o u r labour This  w o u l d not  per  s i g n i f i c a n t l y change  hectare.  be h i r e d by  the  The  newly formed l a r g e  w o u l d mean t h a t t o t a l a g r i c u l t u r a l  would f a l l labour  heavily.  I t should  a m o u n t s have n o t  wage i n c r e a s e s insignificant),  of the  so t h a t  Generally  likely  the  farms.  hired  to the  rapid  i n t a b l e s D.1-4 that  even  wages w o u l d i n c r e a s e dispossessed  family  employment  noted that  responsive  l e s s m a c h i n e s e r v i c e s and  e m p l o y e d on markets.  t o employ t h e  labour  (trends  i t i s not  decreases in a g r i c u l t u r a l sufficiently  a l s o be  been v e r y  seventies  dispossessed  family  the  are  dramatic  hiring labour.  animal s e r v i c e s would  land, creating a disturbance  i n these  be  71  Looking  f o r the evidence  of  substitution  between f a m i l y l a b o u r , h i r e d human l a b o u r , and services farms,  i n response t o the  rising  t h r e e o b s e r v a t i o n s can  l a r g e farms shared  s p e e d of t h e new all  be made.  across  the  break  w h i c h means t h a t  small  same t r e n d s and  that the  m e c h a n i z e d methods i s s i m i l a r .  i n c r e a s e i n m a c h i n e use  l a b o u r per  adoption  Secondly,  large full-time  labour than  l e s s than  substitution  on on  behaviour  small part-time  h i r e d machine  family labour  owned  amounts  reported  in  farm types, w i t h i n a  of a l l k i n d s  i s uniformly  small f u l l - t i m e small part-time  f a r m s and farms.  year  less  on  almost  Evidence  o n l y a p p e a r s between s m a l l  f a r m s where f a m i l y l a b o u r  of  full-time  i s replaced  labour.  c o n c l u s i o n on t h e s u b s t i t u t i o n  be drawn f r o m t h e  m a c h i n e use  h e c t a r e , h i r e d and  (the trends are  T h i r d l y , across  per h e c t a r e ,  The  ( t r e n d down) b u t  d i d not a l t e r  t a b l e s D.1-4).  uniformly  per  cost  with a n o n s i g n i f i c a n t decrease i n h i r e d  hectare  per h e c t a r e  can  Firstly,  or  -  ( t r e n d u p ) , and  and  1 5  farms responded t o t h e d e c l i n i n g r e l a t i v e c a p i t a l  w i t h an  and  the  machine  r e l a t i v e wage  c o e f f i c i e n t s were a l l i n s i g n i f i c a n t and  behaviour  data  f a m i l y endowment, l a b o u r u s e  i s t h a t two  the households w i t h r e s p e c t response to the  s t r a t e g i e s that and  s t r a t e g i e s h a v e been u s e d t o m a c h i n e use  i n Taiwan i n  r e l a t i v e machine c o s t d e c r e a s e  r e l a t i v e human l a b o u r c o s t i n c r e a s e ) .  (and  the  by  by  72  H o u s e h o l d s show t h a t t h e t h e m a c h i n e c o s t d e c r e a s e was constrained  t o s t a y of t h e  participation. t h a t we the  s t r a t e g y of a d j u s t m e n t  intensification  same s i z e and  are comparing households  option  of c h a n g i n g t h e i r  sample y e a r s  1 6  .  'as  the  of  presented  i s such  i f ' they d i d not  characteristics  Through t i m e ,  i f t h e y were  level  By c o n s t r u c t i o n , t h e d a t a  to  during  r e s p o n s e of  have  the  nine  these  h o u s e h o l d s t o the g r o w i n g r e l a t i v e cheapness of machines been t o add  m a c h i n e s t o an  amounts p e r  hectare.  intensively  cultivated  efficient  u n c h a n g i n g l e v e l o f human  Thus l a n d has and  this  i f output values  p a t t e r n of  per  intensification.  hectare  next s e c t i o n .  the  r e l a t i v e c a p i t a l c o s t d e c r e a s e has  all  the  and  l e v e l changed  the  participation substituting services.  other  hand, the  level declined  data  i n our  more f a m i l y l a b o u r  part-time  f a r m s but  less  nor  has  of  total risen  on  the  change).  , were u s i n g with  the  strategy  per  hectare  than  l e v e l of a s m a l l  a replacement of  of  ( h i r e d ) machine full-time  small  h i r e d machine s e r v i c e s .  whenever t h e p a r t i c i p a t i o n was  hectare  s a m p l e shows t h a t s m a l l  f a r m s use  changed t h e r e  1 7  sector  h o u s e h o l d s whose  human ( f a m i l y ) l a b o u r  The  investigated in  farm s i z e  (or could  same  been t h a t t h e  m a c h i n e r y per  f a r m s where n e i t h e r t h e  On  be  the  Thus, the consequence f o r the  of l a b o u r  participation  o n l y h a v e been  followed  will  the  application  labour  g r a d u a l l y become more  s t r a t e g y can  This  has  Thus,  full-time  family labour  with  farm  73  machine s e r v i c e s .  I n t h i s way,  t h e r e was  l a b o u r by m a c h i n e s e r v i c e s f o r t h e expansion  of p a r t - t i m e  experienced.  farming  i n c r e a s e ) has  which the  (and  been a s u b s t i t u t i o n  i n t o m a c h i n e use  on a l l t h e  decrease the p a r t i c i p a t i o n Thirdly,  1 8  farms .  of  family neither  l a b o u r per  family labour  i s a l s o the  too).  than  the machine i n p u t s not  significantly  different  Alternatively  full-time  per h e c t a r e the output warrant  v a l u e s per h e c t a r e  the  intensification  For  the  investigation  can  be  retained.  f a r m s use farms,  evidence  relative  hectare larger  family values  sufficiently  large full-time  above  farms  small f u l l - t i m e  there  large  or m a c h i n e  to  farms.  pattern,  t o f a m i l y endowments  One,  but  whether the output  the  more  that  l a c k of  of the output  main o b s e r v a t i o n s w i t h r e s p e c t l a b o u r use  i s no  farms are on  on  small  slightly  h i r e d labour  i s then  small f u l l - t i m e  on  the h i r e d l a b o u r per  stated, there  the q u e s t i o n on  level  ( i f anything,  f a r m s a t t e m p t t o add  And  i s no  large full-time  s e r v i c e s t o compensate f o r t h e i r labour.  use  s t r a t e g y of  shows t h a t s m a l l f u l l - t i m e hectare  wage  level.  intensification  data  the  f a r m s where t h e h o u s e h o l d s d i d  t o change the p a r t i c i p a t i o n  The  the r a p i d  s e c t o r of  the l a b o u r  out  of  s e c t o r as a whole  f a r m s compared t o l a r g e f a r m s i f t h e r e  possibility  are  sector through  Thus, the consequences f o r the  r e l a t i v e c a p i t a l cost decrease  small  a substitution  i s a pattern  three and of  74  increased  intensity  of l a b o u r a p p l i c a t i o n  from l a r g e f u l l - t i m e farms. use  Secondly,  i s h i g h e s t on  region  the  farms.  The  indicate  to small  family labour content  small full-time  land q u a l i t y  f a r m s as t h e i r  to small part-time  t o l a n d when  farms.  is significantly  l a n d has  a higher dry  full-time  of t o t a l  labour  T h i r d l y , i n the  different  on  pattern  responses to these  NR  large  land content  i n v e s t i g a t i o n of t h e o u t p u t  i f there are output  going  than  small  will labour  and  land conditions.  E. OUTPUT PATTERN p e r  The  output  HECTARE  p a t t e r n shows t h e c r o p c h o i c e of  '(group) average farmer' This are  'average farmer'  output  returns crop  1 9  .  one  (The  only a small f r a c t i o n  show a s i g n i f i c a n t  total  had  hectare  produced eighteen  r e p o r t e d i n t a b l e 4.2.  together not  who  v a l u e s was  other  d e f l a t e d by an  prices  c r o p c h o i c e p a t t e r n , as  fruit-orange production.  r e l a t e s to vegetable  hectare  eight crops  index  v a l u e and  of  The  production  2 0  10  were  d i f f e r e n c e between f a r m t y p e s . )  r e c e i p t s u s i n g the annual  full-time  c r o p s , of which  of the output  did The  net reported  .  reported  i s m a i n l y • d i f f e r e n t between f a r m t y p e s and  available.  C r o p q u a n t i t i e s were c a l c u l a t e d f r o m  The  the  in table  4.2,  for vegetable,  rice  most c o n s i s t e n t p a t t e r n  per h e c t a r e .  Small  f a r m s p r o d u c e s i g n i f i c a n t l y more v e g e t a b l e s  (minimum 6800 kg more) t h a n  large full-time  per  farms i n  75  all  regions,  a n d i n t h e SUG r e g i o n  a l s o p r o d u c e more v e g e t a b l e s The  rice production  quality  i t taken  choose r i c e  pattern  2 1  i s also consistent Thus s m a l l  less often  crops instead.  is the small  farms which produce  less rice while but  and  significantly  more s u g a r .  small part-time  full-time  part-time  region  farms.  farms produce s i m i l a r  but s i g n i f i c a n t l y full-time  small  less fruit  the  l a r g e r dry land content  l e s s r i c e but farms produce  However, i n t h e NR  on l a r g e f u l l - t i m e i s that  higher  farms.  on s m a l l  full-time  and s m a l l p a r t - t i m e  latter  amounts.  The primarily  similar  The  farms  farms, the  i m m e d i a t e c o n s e q u e n c e s o f an a m a l g a m a t i o n  be f e l t  rice  t o t a l output value per  t h a n on b o t h l a r g e f u l l - t i m e two p r o d u c i n g  more  than l a r g e farms, because of  e f f e c t of these crop p a t t e r n s i s significantly  full-time c r o p s as  farms produce s i g n i f i c a n t l y  significantly  fruit  i t i s the small  full-time  more o r a n g e .  potato  less rice,  farms which produce s i g n i f i c a n t l y  small  farms,  small  more c e r e a l t h a n l a r g e  I n t h e SUG r e g i o n  but  hectare  significantly  I n t h e SR r e g i o n  more sweet p o t a t o - o r a n g e w h i l e less rice  full-time  I n t h e MR r e g i o n i t  farms a l s o produce s i g n i f i c a n t l y  farms w h i l e  farms  farms produce l e s s f r u i t - s w e e t  beans but s i g n i f i c a n t l y  large  full-time  b u t more f r u i t - s u g a r t h a n l a r g e f u l l - t i m e  small part-time  full-time  farms.  ( i f land  than l a r g e  farms and choose o t h e r full-time  farms  than l a r g e f u l l - t i m e  into account).  production  small part-time  i n the vegetables  and r i c e  would 2 2  markets .  T a b l e 4.2: SELECTED OUTPUT AMOUNTS p e r HECTARE ( k g / h a ) i n 1980 i n f o u r r e g i o n s f o r SMALL FULL-TIME ( S F T ) , LARGE FULL-TIME ( L F T ) a n d SMALL PART-TIME ( S P T ) FARMS Region Farm  North  |  group|  RICE SWEET  POT  SUGAR VEGETABLES  Mid  LFT  SPT  SFT  LFT  5827*  4272"  7303*  5906*  9047"  490  230  -197  131  207  -30  11404"  +  -122  +  1439  1 1408  99  279"  71  FRUIT  261*  1058"  -6-  CEREAL  74  41  210  SPECIAL  CRO  HOG POULTRY(an)  5  R i ce  SFT  33650*  ORANGE  Rice  +  14409* -37  South SPT  92  8644 - 120  +  SFT  LFT  5039*  6270"  -477 +  -96  OUTPUT  ($)  14705*  3044  2736  -56 +  86  - 19  500  243  69  -31 +  578  121  -382  1810  89  38  69  91  RICE SW POT VEGET FRUIT HOG DRY L  1972 1972 1972 1972 1972 1972  355874* 4831  184372" 4372  170814 6207*  375749* 6239  +  1 105 15  67  .09 27 1765" 6978"  -28 +  20  27698 12927* 996*  3289"  1097*  32  1562 20987  28692" 5691 "  10535*  -883  503  4723"  2938  4406  3358"  306 1  170  314*  -12 +  87  619  886"  677  39  540  334"  147  +  30  1  -84  828  7 13  800  837  215  257  -96  103  100  54  96  76  4  -21  .03 241289  1272" . 22"  . 29 295176  237641"  +  633* . 15 227826  .30 240165*  .21" 165290"  . 28 134475  8961* 3319*  880  5970* 789  SPT  2673*  2174* 460  LFT  926  3431  3578  638  759  193* 1060 . 18  . 23  .09  S o u r c e : b a s e d o n t a b l e s D.5-8 N o t e s : a : p e r h e c t a r e paddy e q u i v a l e n t c u l t i v a t a b l e l a n d a r e a b: P r i c e s 1980: R i c e : 14.32 NT$/kg; Sweet P o t a t o : 3.668 NT$/kg; 0 r a n g e : 9 . 0 6 6 NT$/kg; F r u i t : 9.022 NT$/kg; Hog: 48.258 NT$/kg; P o u l t r y : 129 NT$ p e r a n i m a l  *  630  4651  91  . 12  668  7572"  17  .04*  2315  1 1516  2612  .30"  5923  5594  5560  . 16*  SFT  13882  +  706*  LAND%  +  Sugar  SPT  4318*  -961  BEANS DRY  I  Rice  Sugar: .795 NT$/kg; C e r e a l : 9.664 NT$/kg;  s i g n i f i c a n t l y d i f f e r e n t f r o m z e r o ( s i g n i f i c a n c e l e v e l .05) u s u a l l y means t h a t t h e b a s e v a l u e was c o n s i d e r a b l y l a r g e r i n t h e e a r l y s i g n i f i c a n t l y d i f f e r e n t from l a r g e f u l l - t i m e farms  1970s  than  V e g e t a b l e s : 6.531 NT$/kg; S p e c i a l C r o p : 11.83 NT$/kg;  i n 1980  cn  77  T h e r e w o u l d be a s i g n i f i c a n t hectare)  i n the p r o d u c t i o n  the e x i s t i n g rice  area  r e g i o n s and  occupied  fall  (minimum 6837 kg  of v e g e t a b l e s , by  s m a l l f a r m s i n t h e SUG  in proportion  small full-time  i n p r o p o r t i o n to the region.  The  would a l s o produce a r i c e p r o d u c t i o n  per to  farms i n the  t o t a l area  occupied  by  ownership c o n s o l i d a t i o n increase  2 3  .  Generally,  c o n s o l i d a t i o n of s m a l l f a r m s w o u l d d e c r e a s e t h e amount of output  produced per h e c t a r e  especially  c o n s o l i d a t i o n o f t h e more p r o d u c t i v e That l a r g e f u l l - t i m e because they crops  switch faster  supported  and  f r u i t s and  potato.  Only  i n t h e NR  rice production full-time early  and  farms,  rice  and  region vegetable  and  production on  significantly  rice,  sugar,  increased  production.  as d r a s t i c a l l y production  time  i n favour  sweet  their  significantly  as  rose  We  conclude  trends of l a r g e  In  large the  farms more  than  s m a l l farms. significantly l e s s on  the In less  large  that, i f there  i n crop production, farms.  is  vegetables  production while  declined significantly  different  are  r e g i o n they d i d not d e c r e a s e  small farms.  a r e g e n e r a l l y not  are  crops  fruit  production  t h e SUG  farms than  of t r a d i t i o n a l  region large full-time  i n t h e SR  farms.  to the newly p r e f e r r e d  Modern c r o p s  crops  alter  sweet p o t a t o p r o d u c t i o n  hog  out  decreased  1970s, i n t h e MR  small full-time  r e g i o n have s m a l l farms  farms d i d not  increased their small  (earlier)  by t h e e v i d e n c e . traditional  the  f a r m s a r e more d e s i r a b l e  while switching e a r l i e r  not  because of  are they  78  The o u t p u t p a t t e r n  shows c l e a r l y  that households are  choosing c r o p combinations which a r e r e l a t e d endowments a n d t o t h e l a b o u r u s e p a t t e r n .  to their  family  Both the t o t a l  q u a n t i t y of o u t p u t per h e c t a r e and t h e c r o p c o m b i n a t i o n s a r e influenced. Firstly,  land q u a l i t y  matters f o r the production  c h o i c e a s c a n be seen by c o m p a r i n g region.  f a r m t y p e s i n t h e NR  I n t h e NR r e g i o n , t h e d r y l a n d p r o p o r t i o n i s  significantly  h i g h e r on l a r g e t h a n on s m a l l f a r m s .  consequence i s a s i g n i f i c a n t crop) but a s i g n i f i c a n t  r e d u c t i o n of r i c e  increase i n f r u i t  l a n d c r o p ) and a tendency  on l a r g e f a r m s  l a n d c r o p s such as ' s p e c i a l '  towards  c r o p s , orange,  machines are mostly r i c e r e l a t e d .  so t h e r e was no p a d d y - d r y  land  more d r y  sugar.  It  owned) p e r  h e c t a r e was a l s o s i g n i f i c a n t l y l o w e r on l a r g e  r e g i o n t h e r e i s no s i g n i f i c a n t  (paddy  production (dry  s h o u l d be n o t e d t h a t t h e m a c h i n e u s e ( h i r e d ,  existing  The  farms  because  I n t h e MR a n d SR  land q u a l i t y  d i f f e r e n c e and  c r o p s w i t c h i n g between  farm  2  t y p e s *. S e c o n d l y , t h e amount o f l a b o u r i n p u t p e r h e c t a r e i n f l u e n c e s t h e t o t a l o u t p u t per h e c t a r e and t h e f a m i l y labour content i n f l u e n c e s the crop output combinations comparing  s m a l l f u l l - t i m e and l a r g e f u l l - t i m e  s m a l l p a r t - t i m e and l a r g e f u l l - t i m e same o u t p u t  structure.  farms  farms.  when But  show n e a r l y t h e  79  a) C o n s i d e r i n g hectare, large  cultivated  the major d i f f e r e n c e between s m a l l f u l l - t i m e  full-time  nearly  300  full-time are  the p r o d u c t i o n p a t t e r n per  farms i s t h a t f a m i l y l a b o u r  days h i g h e r farms  similar  on  small f u l l - t i m e  (see t a b l e 4 . 1 ) .  between t h e  two  The  amounts a r e  than  other  farm t y p e s .  The  i s t h a t the t o t a l output  significantly  h i g h e r , a minimum of 75000 NT$,  farm  the h i g h e r does not  ( i n s i g n i f i c a n t l y so  family labour content  u n i f o r m l y expand a l l c r o p s :  sensitive  vegetable  value  i n t h e SR  on  on  b) The  be  s e e n i n t h e MR,.SR, and  still,  large full-time  labour  input  v a l u e on  is on  the  The  between farm t y p e s  small part-time  small  region).  i n SR  any  other crop  SUG and  region).  crop output  region. small inputs,  The  output on do  not  r e g i o n where  f a r m p r o d u c e s more, v e g e t a b l e s  but  less  rice).  The pattern  c o n c l u s i o n t h a t can  i s t h a t the output  but  less  combinations  i n t h e SUG  by  crop  a t e n d e n c y t o be h i g h e r  (except  But  farms  f a r m s h a v e a t e n d e n c y t o use  t h e o t h e r h a n d , has farms.  the  i n t e r m s of l a b o u r  ( s i g n i f i c a n t l y so  large full-time differ  strong  seen  the s u p e r v i s i o n  c r o p e x p a n d s more t h a n  f a r m s i s not  (as  small f u l l - t i m e  d i f f e r e n c e between l a r g e f u l l - t i m e  part-time  inputs  result  a minimum of 6800 kg, w h i l e t h e m e c h a n i z e d r i c e d e c l i n e s as can  large  labour  i n t a b l e 4.2)  full-time  and  be drawn f r o m t h e  output  c h o i c e s of the h o u s e h o l d s  are  80  s e n s i t i v e to the f a m i l y endowments. s i g n i f i c a n t l y more f a m i l y labour  Thus households  with  - the small f u l l - t i m e  farms  - w i l l produce a higher p r o p o r t i o n of s u p e r v i s i o n s e n s i t i v e crops  in the output  hectare SR) .  i s highest  T o t a l output  l a r g e f u l l - t i m e and region).  mix.  A l s o the value of t o t a l output  f o r these  farms ( i n s i g n i f i c a n t l y  per hectare  farms (except  I t i s p o s s i b l e , however, that o v e r a l l  i s lower f o r small part-time In order  so in  i s lower.and about equal  small part-time  per  on  in the  SR  efficiency  farms.  to draw c o n c l u s i o n s about  production  e f f i c i e n c y , one more set of v a r i a b l e s i s needed, so the next s e c t i o n d i s c u s s e s the  intermediate  input p a t t e r n .  F. INTERMEDIATE INPUTS per HECTARE The  intermediate  major intermediate Each c o s t was the category.  inputs d i s c u s s e d are the  2 5  i n p u t s out of t h i r t e e n c o s t c a t e g o r i e s .  d e f l a t e d using the n a t i o n a l p r i c e i n d e x The  2 6  for  v a r i a b l e c o s t i n c l u d e s the h i r e d human,  animal and machine c o s t and price  eight  i s d e f l a t e d with the  profit  2 7  index . The  intermediate  input use p a t t e r n , as r e p o r t e d in  t a b l e 4.3, d i f f e r s mainly between farm types fertilizer, hectare,  h e r b i c i d e and  insecticide.  Variable cost  which i n c l u d e s the bought labour, has  be h i g h e s t on small f u l l - t i m e part-time  f o r seed,  farms, lowest  on  per  a tendency to small  farms ( n o n s i g n i f i c a n t d i f f e r e n c e s ) , but  the  Table for  Region farm  4.3: SELECTED INTERMEDIATE INPUTS p e r HECTARE (NT$/HA) SMALL FULL-TIME ( S F T ) , LARGE FULL-TIME ( L F T ) a n d SMALL  North Rice  group  LFT  SFT  Mid  i n 1980 i n f o u r r e g i o n s PART-TIME ( S P T ) FARMS  South  Rice SFT  LPT  3091  8915*  4428"  11241*  16805*  SPT  SFT  LFT  SPT  4270  2142 14902"  Rice  Sugar SFT  LFT  5426  8761*  5459"  5664  10949"  10448  15744*  1 1606"  1 1877  10217  8214"  6760  6980  5 146"  3647  SPT  SPT  SEED  9155*  3635"  8166*  FERT  14013*  8569"  9280  16483  REQUISITES  5213  4176"  9280  6338  462 1 "  4902  HERBICIDES  1743  1717"  1691  1377  1371 "  1572*  1633  1838"  1543  INSECTIC  4997  3758"  2507  10644  1 1785"  6816*  1 1920  12746"  8428*  7408*  5455"  4877  WATER(ha)  2 .09*  1.31"  2 . 35*  2.12  2.13"  2.42  1 .60  1.71  1.43"  1 . 52  LIVESTOCK  4199  -7379*  5134  -4 14 +  1027  17217  24635  18039  449  154  -33 +  322  159  182  172  185  83  49  144280  133002  84332  60067"  37183  35.68  37.95"  38 . 53  6299  5444  3202  1 1902  6863  8720  FEED(kg) VAR  COST  VC/OUTPUT SEED INSECT LIVEST  -1233+  97  62  220  103913  58494"  40832  143133  104941"  103264  33.93  38.27"  4 1 .34  34.34  38.41"  41.91  1972 1972 1972  7112  S o u r c e : b a s e d o n t a b l e s D.9-12 Notes: a: p e r h e c t a r e paddy e q u i v a l e n t b: c:  a l l values Herbicides  d:  the v a r i a b l e costs  cultivatable  4765  land  different  the c o s t s  from  zero  of h i r e d  41.40*  1 . 33"  132857" 49.01"  54 . 75  948"  f e e d i n kg a t 189.48 NT$/kg a n d t h e w a t e r 1978  labour  (significance  level  697*  -2673+ -42 +  3284  area  expressed i n 1980 c o n s t a n t NT$, e x c e p t were r e p o r t e d i n t h e r e q u i s i t e s b e f o r e include  1 . 57  739*  services  ":  significantly  +: *:  u s u a l l y means t h a t t h e b a s e v a l u e was c o n s i d e r a b l y l a r g e r s i g n i f i c a n t l y d i f f e r e n t from l a r g e f u l l - t i m e farms  (human,  animal,  machine) r e p o r t e d  .05), i n the e a r l y  i n ha a t  1970s t h a n  i n 1980  1898.19  in Table  4.1  NT$/ha  82  p r o p o r t i o n of v a r i a b l e c o s t s in output reverse p a t t e r n .  The  intermediate  value  input c o n b i n a t i o n s do  change s i g n i f i c a n t l y between farm types. g e n e r a l l y decrease mostly  fertilizer,-  because of the small f u l l - t i m e farms, while  insecticides.  not  in the other markets.  There i s no evidence f a s t e r at using new  that l a r g e f u l l - t i m e farms are  intermediate  inputs such as h e r b i c i d e  In the e a r l y s e v e n t i e s , the MR  small  f u l l - t i m e farms were using much more i n s e c t i c i d e than farms; s i n c e then, l a r g e f u l l - t i m e The  situation  expansion  in the SUG  of vegetable  farms have caught  production  input) on small f u l l - t i m e  closely  can conclude  (and thus  seed) and  (and thus  that the intermediate  use are mainly  production,  up.  so that these  fast the  livestock  farms.  r e l a t e d to the output  fertilizer  other  region i s r e l a t e d to the very  more r a p i d d e c l i n e of hog p r o d u c t i o n  We  not  Amalgamation would  the demand for seed and  changing the s i t u a t i o n  and  follows a  pattern.  input use i s  Both seed  inputs f o r r i c e and  and  vegetable  inputs change a c c o r d i n g to the  r e l a t i v e s t r e n g t h s of the v e g e t a b l e - r i c e p a t t e r n of p r o d u c t i o n between farm types. paddy land content  The  water use  r i s e s with  of the land, being used twice a year  the on  paddy land (so that water use d i f f e r s on l a r g e f u l l - t i m e farm i n the NR  region).  H e r b i c i d e use does not seem to be a  c l e a r s u b s t i t u t e for weeding (labour use), except p o s s i b l y on the MR  small part-time  farms and  on the l a r g e SUG  region  83  farms.  Insecticide  part-time  t e n d s t o be  farms, p o s s i b l y  b o t h v e g e t a b l e s and  G.  use  related  l o w e s t on  t o t h e l o w e r p r o d u c t i o n of  fruits.  SIMPLE PRODUCTIVITY MEASURES AND The  small  INVESTMENT p e r  HA  s i m p l e p r o d u c t i v i t y measures s t u d i e d i n t h i s  section are e s s e n t i a l l y  t h e commonly u s e d  land productivity  measures, such as t h e m u l t i p l e c r o p p i n g i n d e x , the yields,  the output  p e r h e c t a r e and  (A d e t a i l e d d e f i n i t i o n appendix  A.)  of e a c h m e a s u r e c a n  Because Bardhan  f a r m s m i g h t be n e e d e d  be  per  hectare  and  .  because they  s a v i n g per h e c t a r e  large  invest  and  are  too.  Differences  in land u t i l i z a t i o n  c a n be m e a s u r e d w i t h  a m u l t i p l e cropping index  i f a l l a v a i l a b l e c r o p s have  same l e n g t h o f m a t u r i t y .  As  general,  2 8  found i n  (1973) p o i n t e d o u t t h a t  in agriculture  s a v e more, t h e i n v e s t m e n t discussed  the p r o f i t  crop  small f u l l - t i m e  r e p o r t e d i n t a b l e 4.4,  farms  m u l t i p l e crop index to l a r g e f a r m s , however t h e  i n d e x does not  intensity  farms.  on t h e s e  indicate production  The  determined  multiple crop  index  i n c r e a s e s as v e g e t a b l e p r o d u c t i o n r i s e s but d e c r e a s e s p r o d u c t i o n of f r u i t , o r a n g e o r s u g a r occupy the l a n d f o r the y e a r . i s a cumulative e f f e c t  equal  small part-time  I t i s instead highly  by t h e c r o p m a t u r i t y s c h e d u l e s .  in  have t h e h i g h e s t o r an  f u l l - t i m e and  the  rises  s i n c e these  Thus i n t h e SR  as  the  crops  region, there  on t h e m u l t i p l e c r o p i n d e x of s m a l l  84  full-time  f a r m s b e c a u s e of s i g n i f i c a n t l y h i g h e r  and  fruit  lower  production, while  i n t h e MR  instead a neutralizing  e f f e c t of t h e h i g h e r  production.  region, there  on  I n t h e NR  the m u l t i p l e crop  significantly while  i n the  SUG  by  and  region, there  the.multiple crop the  fruit  index  region, there  is  fruit  i s a cummulative  effect  of s m a l l f a r m s b e c a u s e of  higher vegetable  e f f e c t of the h i g h e r  utilization  index  vegetable  lower  fruit  i s instead a  production.  does not  neutralizing conclude  that  i n d i c a t e the degree of  land  f a r m t y p e s , but  We  production,  can  primarily  reflects  the  crop maturity pattern instead. Rice y i e l d s are c l o s e l y rice  s t u d i e d i n Taiwan  i s t h e m a i n s t a p l e f o o d and  national  food  t a b l e 4.4,  self-sufficiency  i n general  t h e main t a r g e t of  policy.  r i c e y i e l d s do  not  between f a r m t y p e s , e x c e p t  rice yields.  I n t h i s MR  r i c e y i e l d s have shot second h a l f  of the  overall  i n f l u e n c e d by  the  farm t y p e .  obtain  large full-time  second  farms'  second  i n the  r i c e y i e l d s a r e not  is  significantly  Thus, the advantage t h a t  Sen  i n v e s t i g a t o r s found f o r the s m a l l farms does  not  i n Taiwanese r i c e p r o d u c t i o n .  no e v i d e n c e for  i n t h e MR  s e v e n t i e s s i n c e the break c o e f f i c i e n t  But  other  differ  a h e a d of s m a l l f a r m y i e l d s  significant.  and  the  R e f e r r i n g to  significantly  case,  because  of a d i s a d v a n t a g e  t h i s mechanizable crop.  consequence of a r i c e  on This  technology  However, t h e r e  s m a l l and  part-time  i s probably  is also farms  the  which i s n e u t r a l to s c a l e  2 9  Region Farm  group  ,MULT CROP  Table for  4.4: SIMPLE PRODUCTIVITY MEASURES a n d INVESTMENT p e r HA i n 1980 i n f o u r r e g i o n s SMALL FULL-TIME ( S F T ) , LARGE FULL-TIME ( L F T ) a n d SMALL PART-TIME ( S P T ) FARMS  North  Rice  I  SFT  LFT  SPT  227*  178"  198*  |  Mid  1  Rice  SFT  LFT  SPT  198  195"  206  |  South  Sugar  Rice  SFT  LFT  SPT  SFT  LFT  SPT  244*  217"  204  179  170"  153  RICE  YI ELD 1  4427  4202"  4373  5756  6233"  5851*  6006  5538"  5882  6186  6469"  6310  RICE  YIELD2  3519  324 1 "  3666  4943*  5461 "  4951  4027  4179"  3991  4751  4937"  4961  157808*  167282  150795"  102575  844 16  84250"  66329  96315*  74561"  184372"  170814  375749*  271765"  241289  295176  237641"  227826  240165*  165290"  134475  251960*  125878"  129980  232616*  166824"  138028  150896  104784"  94824  155834*  105224"  97298  38453  23738  32024  51822  40696  35677  34034  26967  25991  2391 1  3614 1"  18047"  99893*  42357"  134547*  129309  82023"  198745*  71832  52033"  179766*  32761  27485"  66640"  34974 "  49930  5015 80491  5100" 39715"  5023 15784  43493*  19120"  25405  35198  24521 "  42505"  YIELD  171429*  99654"  OUTPUT/HA  255874*  PROFIT/HA  OTH  F  INV/HA  SAV/HA  RICE Y2 1972 OTH Y 1972 63551  103622*  S o u r c e : b a s e d o n t a b l e s D.13-16 Notes: a: m u l t i p l e c r o p i n d e x : c r o p p e d a r e a p e r c u l t i v a t a b l e a r e a b: r i c e y i e l d s : f i r s t or s e c o n d s e a s o n r i c e h a r v e s t p e r a r e a p l a n t e d t o r i c e (kg) c : o t h e r y i e l d : n o n - r i c e c r o p v a l u e p e r a r e a p l a n t e d t o n o n - r i c e c r o p s ( u n d e f l a t e d v a l u e ) ( d o e s n o t i n c l u d e mushroom) d: o u t p u t / h a : o u t p u t v a l u e p e r e q u i v a l e n t c u l t i v a t a b l e h e c t a r e ( d e f l a t e d w i t h a p r o f i t d e f l a t o r ) e: p r o f 1 t / h a : p r o f i t v a l u e p e r e q u i v a l e n t c u l t i v a t a b l e h e c t a r e ( d e f l a t e d w i t h a p r o f i t d e f l a t o r ) f: investment/hectare: investment 1n f a r m i n g p e r e q u i v a l e n t c u l t i v a t a b l e h e c t a r e ( d e f l a t e d w i t h t h e c o n s u m e r p r i c e index) g: s a v i n g / h e c t a r e : f a m i l y s a v i n g s p e r e q u i v a l e n t c u l t i v a t a b l e h e c t a r e ( d e f l a t e d w i t h t h e c o n s u m e r p r i c e index) ": *:  significantly significantly  different different  from z e r o ( s i g n i f i c a n c e l e v e l formm l a r g e f u l l - t i m e f a r m s  .05)  86  and  to s u p e r v i s i o n  s e r v i c e markets The  3 0  , a n d a l s o b e c a u s e v e r y good m a c h i n e  exist  3 1  .  non-rice crop value y i e l d  i s the t o t a l  from n o n - r i c e crops per n o n - r i c e cropped most c h a r a c t e r i s t i c y i e l d measure).  The n o n - r i c e y i e l d  farms w h i l e  full-time  farm y i e l d  farm the  i s h i g h e s t on s m a l l  i n t h e NR a n d SUG r e g i o n s t h e l a r g e i s lowest  a n d i n t h e MR a n d SR r e g i o n s  s m a l l p a r t - t i m e farm y i e l d  coefficients  (sugar, the  c r o p of t h e Sugar r e g i o n i s p a r t of t h i s  full-time  the  area  income  a r e such  i s lowest.  that the r e l a t i v e  Break  p o s i t i o n s of the  t y p e s were t h e same i n t h e e a r l y y e a r s a s t h e y a r e i n recent years.  larger  H o w e v e r , t h e y i e l d d i f f e r e n c e s were much  between t h e farm  types  i n 1972 i n t h e MR a n d SR  r e g i o n s w i t h .small f u l l - t i m e  farm  large  but t h i s advantage has f a l l e n  full-time  dramatically.  farm  yields,  y i e l d s n e a r l y double the  On t h e o t h e r h a n d , i n t h e NR a n d SUG r e g i o n s ,  t h e y i e l d d i f f e r e n c e s h a v e grown l a r g e r all  farm  i n 1980 b e c a u s e f o r  t y p e s y i e l d s n e a r l y t r i p l e d s i n c e 1972.  The y i e l d  p a t t e r n s o f the r i c e and n o n - r i c e c r o p s  suggests  non-rice crops  family labour  receive the d i f f e r e n t i a l  amounts b e t w e e n farm The  output  types.  p e r h e c t a r e and t h e p r o f i t  measures of l a n d p r o d u c t i v i t y small full-time hectare full-time  that  show t h e same p a t t e r n , w i t h  farms p r o d u c i n g  (insignificantly farms which,  per hectare  significantly  more p e r  so i n t h e SR r e g i o n ) t h a n  large  i n t u r n , p r o d u c e s l i g h t l y more  than  87  small part-time  farms.  Break c o e f f i c i e n t s are i n s i g n i f i c a n t  so t h i s p a t t e r n has been s t a b l e over the sample p e r i o d . p a t t e r n of output  per hectare  and p r o f i t  per hectare  the p a t t e r n of the f a m i l y labour per h e c t a r e . hectare,  the s i g n i f i c a n t l y higher  small f u l l - t i m e  cultivation  The  matches  Thus per i n t e n s i t y on  farms produces s i g n i f i c a n t l y more output and  s i g n i f i c a n t l y more returns to the family than on large f u l l - t i m e farms (with the exception However, the s l i g h t l y higher small part-time  farms does not produce higher  problem with t o t a l  output and  farms, and may i n d i c a t e a  factor productivity.  to the investment behaviour,  r e g i o n s , small f u l l - t i m e  i n the r i c e  farms i n v e s t more per hectare (but  i n s i g n i f i c a n t l y ) than l a r g e f u l l - t i m e f u l l - t i m e and small part-time amounts.  farms).  i n t e n s i t y of c u l t i v a t i o n on  r e t u r n s than on l a r g e f u l l - t i m e  Turning  of the SR region  farms and large  farms have s i m i l a r  In the SUG region l a r g e f u l l - t i m e  investment  farms i n v e s t  more than small. f u l l - t i m e farms and s i g n i f i c a n t l y more than small part-time  farms, which i s r e l a t e d t o the r e d u c t i o n of  livestock activity  on small farms.  There i s thus g e n e r a l l y  no l a r g e v a r i a t i o n  i n annual farm investment per h e c t a r e .  On the other hand, saving per heqtare v a r i e s c o n s i d e r a b l y , with small part-time  farms saving  s i g n i f i c a n t l y more than small f u l l - t i m e farms and these saving more than l a r g e f u l l - t i m e farms. hectare v a r i a t i o n s are of course  These savings per  p a r t i a l l y a r e f l e c t i o n of  88  the  fact  that household  full-time  incomes  farms a r e l a r g e r  p e r h e c t a r e on s m a l l  t h a n on l a r g e  full-time  f a r m s and  t h a t s m a l l p a r t - t i m e f a r m s have income s o u r c e s w h i c h do n o t relate  to their  farm  size.  Thus t h e a l l o c a t i o n investment large  i s noticably  full-time  higher (half  farms and s m a l l  s m a l l p a r t - t i m e farms relative  of s a v i n g s per h e c t a r e t o farm  full-time  ( o n l y one q u a r t e r ) ,  importance t h a t  farming a c t i v i t y i t s e l f  dynamic  consequences  investment l e v e l s conclusion  indicating  the  household decisions.  For  h o w e v e r , t h e r e a r e no l a r g e  resulting  from the farm types  are not very d i f f e r e n t  i s confirmed by.the fact  asset available  f a r m s t h a n on  t h e farm h o u s e h o l d s g i v e t o the  f a r m i n g a c t i v i t y i n t h e i r dynamic the  o f t h e s a v i n g s ) on  because  per hectare.  This  t h a t t h e amounts o f f a r m  p e r h e c t a r e a l s o do n o t show much  influence  from t h e farm t y p e s . H.  CONCLUSION  There  i s no e v i d e n c e t h a t l a r g e  more ' p r o d u c t i v e '  than s m a l l  full-time  farms a r e  farms, as n o n - r i c e y i e l d s ,  output p e r h e c t a r e and p r o f i t per h e c t a r e g e n e r a l l y a r e h i g h e s t on s m a l l f u l l - t i m e  farms.  Large f u l l - t i m e  i n t h e m i d d l e but not s i g n i f i c a n t l y d i f f e r e n t small-part  time farms.  Rice yields  farms a r e  from t h e  are similar  on a l l f a r m  t y p e s , so t h a t s m a l l and p a r t - t i m e f a r m i n g does not l e a d t o yield  losses f o r t h i s mechanizable crop.  89  That respond t o new 1970s.  large  faster  f u l l - t i m e f a r m s a r e needed b e c a u s e  t o new  they  trends i n a g r i c u l t u r a l consumption  or  t e c h n o l o g i e s i s n o t c o n f i r m e d by t h e d a t a f o r t h e G e n e r a l l y t h e r e were no d i f f e r e n t i a l t i m e  effects  ( b r e a k c o e f f i c i e n t s were i n s i g n i f i c a n t ) , n e i t h e r f o r v e g e t a b l e or f r u i t  p r o d u c t i o n , nor f o r the  h e r b i c i d e or i n s e c t i c i d e use.  Thus s m a l l and  s h a r e d t h e same a n n u a l q u a n t i t y throughout  the  machine,  increase  large  farms  (or decrease)  1970s.  In a dynamic c o n t e x t , farm i n v e s t m e n t s per h e c t a r e are  not s i g n i f i c a n t l y d i f f e r e n t  rice  regions.  I n t h e SUG  between farm t y p e s i n t h e  region,  s m a l l farms  significantly  less  which  to t h e i r s u b s t a n t i a l  relates  production.  The  show  investment than large f u l l - t i m e  comparison  r e d u c t i o n of  farms  livestock  o f s a v i n g s p e r h e c t a r e and  farm  i n v e s t m e n t p e r h e c t a r e d o e s show t h a t t h e i m p o r t a n c e o f f a r m a s an  i n v e s t m e n t a r e a i s h i g h e s t on l a r g e  l o w e s t on s m a l l p a r t - t i m e f a r m s . itself  does not s u f f e r  because  full-time  i s a l s o comfirmed  and  But t h e f a r m a c t i v i t y  t h e farm investment  per h e c t a r e a r e not d i f f e r e n t a c r o s s farm t y p e s . conclusion  the  by t h e f a c t  that  levels This  farm a s s e t  l e v e l s p e r h e c t a r e a r e s i m i l a r on a l l f a r m t y p e s . The small  farms  full-time,  effect  of t h e p o l i c y  p r o p o s a l t o amalgamate  i n t o l a r g e f a r m s , where one h o u s e h o l d w o u l d would  i m m e d i a t e l y have s e r i o u s consequences  s e v e r a l a g r i c u l t u r a l markets.  Especially  because  of  farm in  the  90  a m a l g a m a t i o n of  full-time  s m a l l farms,  l a r g e amount of d i s p o s s e s s e d would not  be h i r e d by  t h e y a l r e a d y use The  family labour.  even l e s s h i r e d l a b o u r  i n p u t s t o the extremely gives l i t t l e  eventually  hope t h a t h i r i n g  a dramatic  demand. farms,  the  and  t h e m a c h i n e and a fall  suggests  the evidence  Instead, a  The  vegetable  i n supply  Generally,  intermediate  s e r v i c e market  (a rice  total input  part-time would  l e s s m a c h i n e s w o u l d be  f a m i l y l a b o u r and  services. does not  of the p r o d u c t i o n  used  data  t h a t farm h o u s e h o l d s behave r a t i o n a l l y ,  by a d j u s t i n g t h e i r o u t p u t  family  reduction  i t the  i n demand and  and  land. Overall,  of  with  animal  1972  d r a m a t i c a l l y (by  B e c a u s e of t h e a m a l g a m a t i o n of s m a l l  experience on  would f a l l  labour  h e c t a r e ) , w h i l e the  market a l a r g e i n c r e a s e i n s u p p l y .  farms.  of l a r g e f a r m s w o u l d  amalgamated).  minimum r e d u c t i o n of 6800 kg p e r  production  small  t o wage d e c r e a s e s .  days per h e c t a r e  market would e x p e r i e n c e  do  since  f a s t wage i n c r e a s e b e t w e e n  employment w o u l d f a l l  minimum of 250  than  a  labour  o f t h e h i r e d human  repond s u f f i c i e n t l y  agricultural  This  the newly formed l a r g e farms  s u r p r i s i n g unresponsiveness  1980,  t h e r e w o u l d be  p a t t e r n to t h e i r  fixed  but  so  endowment  l a n d i n s t e a d of a d j u s t i n g h i r e d  Adjustment to the  f a m i l y labour per  g e n e r a l l y take p l a c e through  land  a replacement  l a b o u r by m a c h i n e s e r v i c e s o r h i r e d l a b o u r .  cultivation  do  i s i n t e n s i f i e d on  the  small f u l l - t i m e  ratios of Instead  farm  91  (whose f a m i l y l a b o u r types),  so t h a t o u t p u t p e r h e c t a r e  t h a n on t h e o t h e r crop  per land r a t i o  farms.  labour  Additionally,  full-time  farms.  land quality The d a t a  on  family  values  i n t o t a l output  t o t h e f a m i l y endowments may t e r m s on s m a l l  farms.  ratios  per hectare  are correspondingly  hectare  full-time  higher)  on  small  and o u t p u t higher  while variable costs  Compared w i t h  r a t i o s are higher,  s o , on s m a l l p a r t - t i m e  a r e s l i g h t l y lower  (at 37%).  (The  on s m a l l p a r t - t i m e  farms.  large  full-time  but not  farms and o u t p u t  values  while v a r i a b l e cost  proportions are s l i g h t l y higher. inefficiency  farms, the  i s t h e SR r e g i o n where t h e o u t p u t v a l u e i s  farms, the labour-land  per  r e g i o n s but  significantly  p r o p o r t i o n of output  s i g n i f i c a n t l y higher.)  significantly  farms as  are s i g n i f i c a n t l y higher  250 d a y s p e r h e c t a r e  are a s l i g h t l y lower  not  be e q u a l l y  full-time  Compared w i t h l a r g e f u l l - t i m e  (at least  exception  on  be p r o b l e m s i n t h e SR r e g i o n and on t h e s m a l l  (minimum 74875 NT$ more p e r h e c t a r e )  only  i s highest  f a r m s i n t h e NR, MR a n d SUG  labour-land  full-time  i n the  Crop combinations a l s o responded to  in efficiency  t h e r e may  part-time  proportion  a l s o s u g g e s t s t h a t t h i s s t r a t e g y of  large full-time  that  the farms a d j u s t the  endowments.  adjusting production successful  higher  u s e , so t h a t t h e p r o p o r t i o n o f  s u p e r v i s i o n - s e n s i t i v e crops small  of the farm  i s significantly  combinations to the family labour  total  the  i s highest  T h i s p a t t e r n may i n d i c a t e farms r e l a t i v e t o l a r g e  92  In order to f u r t h e r production e f f i c i e n c y situation factor  of very d i s s i m i l a r  productivity  subject of  of the  the  w i l l be  next chapter.  test  the  question of the  different  total  farm types under  f a m i l y input r a t i o s , investigated.  This is  total the  this  93  I. NOTES  1  The issue of t e c h n i c a l change over the d i f f e r e n t farm types i n Taiwan i s not as great an issue as i n most developing c o u n t r i e s , because i t i s not a question of such a major change as the green r e v o l u t i o n . The green r e v o l u t i o n , and the q u e s t i o n of i t s adoption were i s s u e s of the 1930s and 1950s i n Taiwan. There i s no mention i n the Taiwan l i t e r a t u r e , where concern i s expressed about small or part-time farming, about adoption r a t e s of b i o - t e c h n i c a l i n n o v a t i o n s -(Wu, Yu (1980); Chen 1980)). If anything there i s some concern that new v a r i e t i e s i n Taiwan do not get a s u f f i c i e n t t e s t i n g p e r i o d any more because farmers take up the new v a r i e t i e s and methods too f a s t (CAPD, t a l k s with the t e c h n i c a l r e s e a r c h d i v i s i o n members).  2  Adaptation of the Hecksher-Ohlin theorem which says that a country (farm), has a comparative advantage i n those goods (crops) whose thechology i s most i n t e n s i v e i n the r e l a t i v e abundant f a c t o r of the country (farm) and so exports t h i s good (produces and s e l l s i t to the a g r i c u l t u r a l market) (Woodland (1982), O h l i n (1933)).  3  The data used i s the average value, taken over the farmers in a s i z e group. T h i s average value i s then compared with the farm s i z e .  4  In the L a t i n American context C l i n e (1970) had a l r e a d y estimated Cobb-Douglas p r o d u c t i o n f u n c t i o n s f o r B r a z i l , f i n d i n g constant r e t u r n s to s c a l e .  5  For these measures: gross income, value added, per ha c u l t i v a t e d , or c u l t i v a t a b l e .  6  The extremely l a r g e number of comparisons c o u l d be avoided by l i m i t i n g the comparisons to the small f u l l - t i m e , the small part-time and the l a r g e f u l l - t i m e farms. However, the i n f o r m a t i o n on the medium farms and those which are not so extreme i n t h e i r p a r t i c i p a t i o n l e v e l a l s o g i v e s additional insight. Spurious d i f f e r e n c e s between small and l a r g e farms can be i d e n t i f i e d i f medium farm values are not somewhere between them. S i m i l a r l y , PT2 and PT1 farm values should be i n between the values of the f u l l - t i m e and the low p a r t i c i p a n t farms r e p o r t e d i n the text.  94  7  Too many i n t e r a c t i o n t e r m s o f t h e t y p e d d w o u l d make t h e c o r r e l a t i o n m a t r i x of t h e independent v a r i a b l e s s i n g u l a r and s o make^ t h e r e g r e s s i o n e s t i m a t i o n i m p o s s i b l e .  8  We c h o o s e t h e p e r i o d 1 9 7 2 - 7 6 v e r s u s t h e p e r i o d 1977-80 because t h e growth r a t e of t h e a g r i c u l t u r a l p r o d u c t i o n was s i g n i f i c a n t l y h i g h e r i n t h e p e r i o d 1972-76 t h a n i n the f o u r y e a r s b e f o r e i t and a f t e r i t . The a v a i l a b i l i t y and a d o p t i o n of t h e new m e c h a n i z e d methods was t h e r e a s o n for t h i s higher growth r a t e which l a t e r s l a c k e d o f f . I t i s t h u s i n t e r e s t i n g t o i n v e s t i g a t e i f s m a l l ( a n d medium) f a r m s showed a s i g n i f i c a n t l y d i f f e r e n t g r o w t h p a t h t h a n the a v e r a g e l a r g e f a r m g r o w t h p a t h . F o r e c o n o m e t r i c r e a s o n s we c a n o n l y t e s t t h e d i f f e r e n c e f o r t h e f i r s t 5 y e a r s of t h e sample. An e x a m p l e can show t h e e f f e c t o f the b r e a k t e r m . E.g., i t i s o f i n t e r e s t t o measure whether the s m a l l farms l a g g e d s i g n i f i c a n t l y behind the l a r g e farms i n the a d o p t i o n of machinery. T h e r e a r e two possibilities. 1) S i n c e m a c h i n e use became a t t r a c t i v e f r o m 1968 on ( e s p e c i a l l y i n r i c e p r o d u c t i o n ) , by 1972 l a r g e f a r m s may a l r e a d y have a d o p t e d them f a s t e r t h a n s m a l l f a r m s . T h i s w o u l d be i n d i c a t e d i n t h e r e g r e s s i o n f o r t h e m a c h i n e s t o c k ( s e e t a b l e D.1-4 where a = A ) by ASB+AS<0. C a t c h i n g up i n t h e e a r l y 1970s by t h e s m a l l f a r m s w o u l d t h e n be i n d i c a t e d by ASB<0 ( g i v e n t h e g e n e r a l upward t r e n d f o r l a r g e farms of A72<A73<..<0). A l t e r n a t i v e l y , a f u r t h e r s p e e d i n g ahead by t h e l a r g e f a r m s w o u l d be i n d i c a t e d by A S B > 0 . An i n s i g n i f i c a n t b r e a k c o e f f i c i e n t ( A S B = 0 ) w o u l d mean t h a t s m a l l and l a r g e f a r m s s h a r e t h e same a n n u a l a d o p t i o n v o l u m e i n t h e 1970s. 2) I f h o w e v e r no m a c h i n e s were y e t a v a i l a b l e b e f o r e 1972, so t h a t l a r g e and s m a l l f a r m s s t a r t e d o f f e q u a l l y i n 1972 ( A S + A S B = 0 ) , t h e n e a r l i e r a d o p t i o n by l a r g e f a r m s w o u l d be i n d i c a t e d by ASB>0 ( i n a s i t u a t i o n of g r o w t h o r  s  p  A72<A73<..<0).  9  Farm i n v e n t o r y was i n c l u d e d b e c a u s e g e n e r a l l y t h i s v a l u e i s an a p p r o x i m a t i o n f o r t h e a v e r a g e amount o f p r o d u c t s t h a t t h e f a r m e r h a s c o n t i n u o u s l y a r o u n d on t h e f a r m ( f e r t i l i z e r , h e r b i c i d e s a r e b o u g h t t h r e e t i m e s a y e a r and s t o c k e d u n t i l u s e d , some p r o d u c t s a r e a l s o s t o r e d f o r a while) .  10 An i n d e x f o r t h e f a r m a s s e t s t o c k was c o n s t r u c t e d . The i n d e x i s a F i s h e r I d e a l i n d e x , b a s e d on s a m p l e s h a r e s o f the f a r m a s s e t s i n t h e t o t a l f a r m a s s e t s t o c k v a l u e , and using national price indices. The f a r m s a s s e t s a r e : l i v e s t o c k , t o o l s , m a c h i n e s , t r e e s , and f a r m i n v e n t o r y . . The f r u i t p r i c e i n d e x was u s e d a s a r e a s o n a b l e a p p r o x i m a t i o n f o r the v a l u e changes t h r o u g h the y e a r s of t r e e s a n d f o r e a c h o f t h e o t h e r a s s e t s t h e r e was a n a t i o n a l p r i c e index (DGBAS) (see appendix A ) .  95  11  The amounts of h i r e d human d a y s r e p o r t e d c o r r e s p o n d s c l o s e l y t o t h e amount t h a t can be c a l c u l a t e d f r o m t h e human l a b o u r c o s t u s i n g t h e a g r i c u l t u r a l wage r a t e . This s u g g e s t s t h a t h i r e d l a b o u r i s indeed u s u a l l y h i r e d at the a g r i c u l t u r a l wage r a t e s a s r e p o r t e d i n t h e p r i c e s t a t i s t i c s (DGBAS, P r i c e s p a i d and r e c i e v e d by farmers). F e m a l e l a b o u r was c o u n t e d a t a c o n v e r s i o n r a t e of .8 (10 h o u r s w o r k e d c o u n t e d as 8 h o u r s i n p u t ) . The m a l e wages f o r the p e r i o d were: 1972 78 1975 1 978 254 195 289 NT$ 1973 101 1976 1 93 1979 383 p e r day 1974 171 1977 213 1 980  12 DGBAS, P r i c e s p a i d and r e c i e v e d by f a r m e r s f r o m 1976 on, e a r l i e r s e r v i c e p r i c e s were c a l c u l a t e d f r o m p r i c e s r e p o r t e d i n JCRR ( a n n u a l r e p o r t s ) i n some of t h e a r t i c l e s on c o s t s i t u a t i o n s of t h e f a r m e r s ( t h u s on t h e b a s e s of s u r v e y s ) , but not a l l y e a r s were a v a i l a b l e . Where a y e a r was l a c k i n g , an a v e r a g e was c a l c u l a t e d b e t w e e n t h e available o b s e r v a t i o n s , The r e s u l t a n t m a c h i n e s e r v i c e p r i c e s used are: 1972 1150 1975 2230 1 978 3293 1973 1510 1976 2590 1979 3527 NT$ 1974 1870 1977 2627 1 980 4592 p e r ha, 13  See  p r e v i o u s n o t e , the a n i m a l s e r v i c e p r i c e s used are: 1 972 88 1 975 198 1 978 202 1 07 1 976 1 96 1 979 1 973 274 NT$ 1 75 1 977 206 1980 1 974 346 p e r day  14 DGBAS, P r i c e s p a i d  and  recieved  by  farmers,  indices,  15 The r e l a t i v e c o s t c h a n g e s can be c a p t u r e d by c o m p a r i n g t h e i n d e x of e a c h c o s t c a t e g o r y . F o r t h e 1972-80 p e r i o d , they are year male i n t e r e s t machine a n i m a l tool prof i t wage cost service service equip 1 972 90 20 25 25 52 39 93 57 1 973 26 33 31 51 1 05 51 82 1974 45 41 70 57 1 975 51 101 49 84 89 97 57 51 82 1 976 56 76 1 977 93 57 60 82 71 56 92 72 58 1978 66 83 78 78 95 77 79 1979 89 89 1 00 100 100 100 100 100 1980 16 From t h e method of a n a l y s i s and f a r m c l a s s i f i c a t i o n i n t h i s s t u d y , one c a n n o t i n v e s t i g a t e w h e t h e r f a r m s became s m a l l e r o r c h a n g e d t h e i r l e v e l of p a r t i c i p a t i o n i n  96  response t o the c h a n g i n g economic c i r c u m s t a n c e s , t h r o u g h time. As d i s c u s s e d i n c h a p t e r I I I , t h e sample s e l e c t i o n method i t s e l f a l s o p r e v e n t s t h i s i n v e s t i g a t i o n . 17 See p r e v i o u s n o t e . The c h o i c e of p a r t i c i p a t i o n l e v e l i s . a c h o i c e w h i c h c a n n o t be a n a l y s e d i n t h i s s t u d y . As d i s c u s s e d i n c h a p t e r I I , t h e phenomenon of p a r t - t i m e f a r m i n g d e p e n d s s t r o n g l y on t h e f a r m f a m i l y l a b o u r c h a r a c t e r i s t i c s , and t h i s i n f o r m a t i o n i s n o t a v a i l a b l e . 18 F a m i l y l a b o u r endowment on t h e f a r m s i s not p r o p o r t i o n a l t o t h e l a n d s i z e , so t h a t s m a l l f a r m s a u t o m a t i c a l l y have more f a m i l y l a b o u r endowment p e r h e c t a r e . I n t h e MR and SR r e g i o n s , t h e endowments a r e s i m i l a r on. a l l f a r m s (6 equivalent workers). I n t h e NR and. SUG r e g i o n s s m a l l f a r m s have 1.5 e q u i v a l e n t w o r k e r s l e s s t h a n l a r g e f a r m s , the l a t t e r having 8 workers. 19 An i n d e x o f n e t p r o f i t was c o n s t r u c t e d and u s e d on t h e t o t a l o u t p u t v a l u e , t h e t o t a l v a r i a b l e c o s t and on t h e p r o f i t , so t h a t p r o f i t can be c a l c u l a t e d f r o m t h e o t h e r two. The i n d e x f o r t h e n e t p r o f i t , o r n e t r e t u r n s t o t h e i n d e x i s a F i s h e r I d e a l I n d e x and i s b a s e d on t h e p r o f i t s h a r e s of o u t p u t s and v a r i a b l e i n p u t s c a l c u l a t e d f r o m t h e t o t a l s a m p l e (2274 o b s e r v a t i o n s : a r o u n d 250 o b s e r v a t i o n s p e r y e a r ) , and t h e p r i c e s of t h e s e c o m m o d i t y g r o u p s (DGBAS, p r i c e p a i d and r e c e i v e d by t h e f a r m e r s ) . (See a p p e n d i x A.) We u s e d t h i s p r o f i t i n d e x on b o t h o u t p u t and v a r i a b l e c o s t so t h a t o u t p u t m i n u s v a r i a b l e c o s t w o u l d be t h e p r o f i t as r e p o r t e d i n t a b l e 4.4. 20  The n a t i o n a l p r i c e i n d e x i n f o r m a t i o n d i d n o t f u l l y c o r r e s p o n d w i t h t h e c a t e g o r i e s of t h i s s u r v e y so t h a t i n d i c e s f o r s e v e r a l c o m m o d i t y g r o u p s had t o be constructed. I f the n a t i o n a l p r i c e data d i d correspond t o t h e s a m p l e c a t e g o r y t h e n t h e n a t i o n a l p r i c e i n d e x was used. The p r i c e i n d i c e s were c a l c u l a t e d f r o m n a t i o n a l c o m m o d i t y p r i c e i n f o r m a t i o n (DGBAS) and t h e s h a r e s o f t h e commodities i n the n a t i o n a l a g r i c u l t u r a l production (PDAF) o f t h e s u b g r o u p , u s i n g t h e F i s h e r I d e a l p r i c e index. P r i c e i n d i c e s were c a l c u l a t e d f o r : - c e r e a l s : sorghum, c o r n , K a o h l i a n g , wheat - s p e c i a l c r o p s : t e a , p e a n u t , sesame, c a s s a v a - f r u i t : a l l f r u i t s e x c e p t t h e c i t r u s f r u i t s (26 t y p e s ) - o r a n g e : a l l c i t r u s f r u i t s (5 t y p e s ) - v e g e t a b l e s : a l l v e g e t a b l e s (38 t y p e s ) - b e a n s : a l l bean t y p e s (5 t y p e s ) - p o u l t r y : c h i c k e n , d u c k , t u r k e y and o t h e r . (See a l s o a p p e n d e x A.)  97  21  T h i s i s not a r i c e y i e l d measure. Instead i t i n d i c a t e s how f r e q u e n t l y r i c e i s c h o s e n as a c r o p by t h e f a r m groups. The r i c e y i e l d measure i s r e p o r t e d i n t a b l e 4.4.  22  The i n f o r m a t i o n i n t h i s s t u d y g i v e s an i n d i c a t i o n o f t h e supply f u n c t i o n s h i f t . Longer term a d j u s t m e n t s because of c h a n g e s i n t h e r e l a t i v e p r o d u c t p r i c e s c a n n o t be i n v e s t i g a t e d w i t h i n t h e s c o p e of t h i s s t u d y . Knowledge of t h e m a r k e t demand s t r u c t u r e w o u l d be r e q u i r e d . However i t i s l i k e l y t h a t t h e r e l a t i v e p r i c e w o u l d r i s e of t h o s e c r o p s where t h e s u p p l y c u r v e w o u l d s h i f t i n ( v e g e t a b l e , an i n c r e a s i n g l y d e s i r e d f o o d i n T a i w a n ) .  23  The r i c e e f f e c t s i n t h e NR r e g i o n a r e r e l a t e d t o t h e l a n d quality. A c o n s o l i d a t i o n of s m a l l f a r m s w o u l d p r o d u c e l a r g e f u l l - t i m e farms w i t h s i g n i f i c a n t l y h i g h e r p r o p o r t i o n s of paddy l a n d t h a n t h e p r e s e n t l a r g e f a r m s . R i c e p r o d u c t i o n e f f e c t s w o u l d p r o b a b l y be t h e same as what can be o b s e r v e d i n t h e MR r e g i o n , where l a n d q u a l i t i e s a r e s i m i l a r on t h e l a r g e f a r m s as on t h e s m a l l f a r m s , and as on t h e s m a l l NR f a r m s . Thus t h e r e w o u l d a l s o be an i n c r e a s e i n r i c e p r o d u c t i o n f r o m t h e amalgamation.  24  The same p a t t e r n of o u t p u t a d j u s t m e n t s t o l a n d q u a l i t y d i f f e r e n t i a l s can be o b s e r v e d between t h e MR and SR region. The f a r m s i n t h e SR r e g i o n have more d r y l a n d t h a n t h o s e i n t h e MR r e g i o n , and t h e r e i s more p r o d u c t i o n of d r y l a n d c r o p s i n t h e SR r e g i o n i n c o n s e q u e n c e .  25 T h r o u g h o u t t h i s s t u d y , f a r m c o s t s do n o t i n c l u d e f a r m t a x e s , f a r m i n t e r e s t p a y m e n t s and l a n d r e n t a l p a y m e n t s . T h e s e c o s t s a r e r e l a t e d t o t h e r e p o r t e d f a m i l y endowments and n o t t o t h e use of i n t e r m e d i a t e i n p u t s . The i n f o r m a t i o n on t h e f a m i l y endowments i s i n s u f f i c i e n t t o r e l a t e t h e t a x and l a n d r e n t c o s t t o t h e owned and r e n t e d l a n d , or the i n t e r e s t c o s t t o the farm a s s e t s . 26 DGBAS, p r i c e p a i d and note  r e c e i v e d by  farmers,  indices  27  see  17.  28  S i n c e t h e s e l a n d p r o d u c t i o n measures are f a i r l y easy t o c a l c u l a t e , t h e y t e n d t o be u s e d a l m o s t e x c l u s i v e l y i n t h e Taiwan a g r i c u l t u r a l l i t e r a t u r e .  29  R i c e f i e l d s c a n n o t a r e e x t r e m e l y l a r g e b e c a u s e t h e y have t o be l e v e l . Thus e c o n o m i e s o f s c a l e w i t h r e s p e c t t o f i e l d s i z e do n o t e x i s t .  98  30 The m a c h i n e t e c h n o l o g y i m p o s e s i t s own q u a l i t y s t a n d a r d on t h e a c t i v i t y . A l s o t h e r i c e t e c h n o l o g y h a s become v e r y s t r e a m l i n e d and s t a n d a r d i z e d w i t h r e s p e c t t o f e r t i l i z e r a p p l i c a t i o n s , h e r b i c i d e use e t c . , thereby d i m i n i s h i n g t h e g a i n s from f a m i l y s u p e r v i s i o n . 31  The e x i s t e n c e o f t h e m a c h i n e s e r v i c e m a r k e t s means t h a t t h e m a c h i n e s e r v i c e s become d i v i s i b l e , t h e r e b y d i m i n i s h i n g the economies of s c a l e a s s o c i a t e d w i t h indivisibilities. A l s o t h e g r o w i n g m a r k e t f o r human labour which s p e c i a l i z e s i t s a c t i v i t i e s diminishes the g a i n from f a m i l y s u p e r v i s i o n . (There a r e a l r e a d y markets f o r m a l e s who o n l y do t h e f e r t i l i z i n g a c t i v i t y , t h e i n s e c t i c i d e spraying, pruning, e t c . ) .  99  CHAPTER V  TOTAL FACTOR PRODUCTIVITY  A.  INTRODUCTION Three question  estimating  value-added production  s u p p l i e d production increasing returns technically  are addressed i n t h i s chapter by  factors. to s c a l e ?  less e f f i c i e n t  r e d i s t r i b u t i o n of land  f u n c t i o n s of the family  Is there evidence of Are part-time  farmers  than f u l l - t i m e farmers?  Can a  improve the a l l o c a t i v e e f f i c i e n c y of  the a g r i c u l t u r a l s e c t o r by improving the deployment of land and  labour?  The l a t t e r q u e s t i o n  i s i n v e s t i g a t e d i n terms of  adjustments of land s i z e s t o households ( r a t h e r than the reverse)  because a change i n the land l e g i s l a t i o n  instrument that the government can use. i s already very  i s an  The labour  f r e e of l e g i s l a t i v e c o n s t r a i n t s and i t may be  hard t o f i n d , and u n d e s i r a b l e  to use, p o l i c y  instruments or l e g i s l a t i o n t o make households a d j u s t labour  a l l o c a t i o n to the farm To  market  their  1  land .  i n v e s t i g a t e the above questions  a special  value-added model i s developed, where net farm income i s assumed to be a f u n c t i o n of the family s u p p l i e d f a c t o r s : land  (paddy, d r y ) , labour  stock.  (male, female) and farm asset  As shown i n the p r e v i o u s  chapter,  the f a c t o r  1 00  application  on t h e l a n d  application) single  i s very d i f f e r e n t  the s o c i a l  Thus a s p e c i a l  across  efficiency  form of t h e t o t a l  approach i s attempted  only  of each farm  sufficient,  given  resource  by c o n c e n t r a t i n g on  owned.  farming  l i m i t a t i o n s , but  i s i n the e f f i c i e n t  use of t h e l a n d  s e c t o r , a s h e l d now by  and i n t h e e f f i c i e n t  use of t h e farm a s s e t s as  not recognized  u s e o f t h e economy's  be f u l l  by t h e a u t h o r i t i e s ,  resources  means t h a t  use o f i m m o b i l e f a r m f a m i l y l a b o u r .  s h o u l d n o t u s e f a m i l y members who c o u l d  somewhere e l s e , when t h e r e  farm  That i s ,  work  i n the  situation.  The l i t e r a t u r e  overview  d e v e l o p m e n t o f methods f o r t o t a l  i n s e c t i o n B shows t h e factor productivity  c o m p a r i s o n s between farms o f v a r i o u s s i z e s  i n t h e .Asian  developing  countries.  production  i n e f f i c i e n c y a r e d e f i n e d and r e l a t e d  I n s e c t i o n C, t h e t h r e e  forms of  p a r t i c i p a t i o n c h a r a c t e r i s t i c s of the farmers  This study's  there  i s unemployment on some f a r m s o f  f a m i l y members who c o u l d n o t work e x c e p t self-employed  produce.  t h a t t h e main i n t e r e s t of t h e  Also, although  efficient should  because of data  of the a g r i c u l t u r a l  households,  type.  factor productivity  f a m i l y s u p p l i e d i n p u t s and t h e net r e t u r n they  agricultural authorities  and  labour  farm t y p e s , so t h a t  level  i n t h i s chapter  This approach i s necessary is  the family  ( a v e r a g e ) l a n d p r o d u c t i v i t i e s measure  approximately  the  (especially  value-added production  to the s i z e i n Taiwan.  f u n c t i o n approach i s  101  explained  i n s e c t i o n D and t h r e e  function, a linear  f u n c t i o n s (the l i n e a r  f u n c t i o n w i t h s l o p e dummy v a r i a b l e s and  the G e n e r a l i z e d L i n e a r f u n c t i o n ) a r e proposed f o r e s t i m a t i o n i n s e c t i o n E.  The s t a t i s t i c a l  the e s t i m a t i o n s ' a r e d e s c r i b e d r e s u l t s are presented section  I.  estimation  B.  a s s u m p t i o n s and t h e d a t a f o r i n s e c t i o n F-G.  The e m p i r i c a l  i n s e c t i o n H and the c o n c l u s i o n s i n  For c l a r i t y  o f p r e s e n t a t i o n , most t a b l e s o f t h e  results are collected  i n a p p e n d i x E.  LITERATURE As i n d i c a t e d i n t h e p r e v i o u s c h a p t e r ,  the e f f i c i e n c y  of p r o d u c t i o n  concern f o r  i n t h e farms of v a r i o u s  originally  t e n d e d t o be c o n c e n t r a t e d  land use.  However, S e n ' s (1962) o b s e r v a t i o n s  on t h e e f f i c i e n c y o f  beyond t h e l a n d p r o d u c t i v i t y q u e s t i o n  I a n d I I went  by r e l a t i n g  to a l l the i n p u t s , i n c l u d i n g the farmer-supplied bullock  sizes  the  output  human and  labour. Khusro  (1964) s t r e s s e d t h e p o i n t t h a t t h e e f f i c i e n c y  q u e s t i o n not o n l y concerns l a n d p r o d u c t i v i t y but s h o u l d encompass t o t a l c o s t o f p r o d u c t i o n non-land f a m i l y s u p p l i e d inputs.  i n c l u d i n g the v a l u e of He  indicated that there i s  a problem of f i n d i n g a p p r o p r i a t e p r i c e s f o r these non-marketed f a c t o r s .  He t h e n  tried  t o c o r r e l a t e net p r o f i t  ( i n c l u s i v e o f a l l r e v e n u e s and c o s t s ) t o t h e l a n d s i z e o f the it  farms.  T h i s was t h u s an e x t e n s i o n  o f Sen's s t u d y  included family supplied f a c t o r s other  than  since  l a b o u r , and  1 02  the  net return  found t h a t  t o l a n d was b e t t e r a p p r o x i m a t e d .  net p r o f i t  per hectare  was p o s i t i v e l y  to t h e farm s i z e , but not s i g n i f i c a n t l y data  function with  (1969) who c l e a r l y  i s s u e was a q u e s t i o n  i n farming.  He e s t i m a t e d  Constant returns  and i r r i g a t i o n  farm d a t a  the production  into 3 size classes)  products  on t h e s m a l l Bardhan  5  c o s t s as arguments.  n o t be r e j e c t e d i n h i s f o u r 3  from I n d i a .  functions  of t h e farms  (1973) e s t i m a t e d  Cobb-Douglas  regions  generally  the returns  t o s c a l e were c o n s t a n t  i n wheat r e g i o n s .  labour  were  greater  production  or  he f o u n d t h a t  were h i g h e r  that  decreasing  I n t h e same s t u d y he t e s t e d f o r f o r the d i f f e r e n t  A l t h o u g h t h e r a t i o s of farm i n p u t s  were n o t c o n s t a n t , of  t h e r a t i o of  i n I n d i a and he c o n c l u d e d  d i f f e r e n c e s of the Cobb-Douglas f u n c t i o n 6  (classified  farms.  for several  farm s i z e s .  also  much l e s s t h a n one f o r b u l l o c k  functions  except  Saini  o v e r wages f o r l a b o u r very  production  pair-days,  were t h e same" a n d t h a t  or c l o s e t o one, w h i l e labour  about t h e r e t u r n s t o  a Cobb-Douglas  to scale could  samples of i n d i v i d u a l  marginal value  size-class  stated that the  l a n d , human m a n - d a y s , b u l l o c k  fertilizer-manure cost  found t h a t  so,, f o r  in India .  I t was S a i n i  scale  correlated  2  from 7 r e g i o n s  size-efficiency  Khusro  to land  the marginal value 7  t h a n t h e wage r a t e s .  products  1 03  Although  Farrell  (1957) f o r m a l i z e d t h e a n a l y s i s of  efficiency difference into Yotopoulos testing a:  and  Lau  8  i t s c o m p o n e n t s , i t was  (1971,1972) which p r o v i d e d  the e f f e c t s  a study  by  a model f o r  of:  r e t u r n s t o s c a l e (a p r o p e r t y  of t h e  production  funct ion) b:  technical inefficiency technically  inefficient  c: p r i c e e f f i c i e n c y in the c o n t e x t in a developing together  (failure  production  (failure  The  two  d e f i n e economic e f f i c i e n c y .  (1969) and  Bardhan  production  Note t h a t both  ( e q u a l i t y of the  function constants)  and  the b a s i s of I n d i a n  t h a t the technology  for  both  w i t h the market  price).  data,  e x h i b i t e d constant  returns  scale,  t h a t t h e t e c h n i c a l e f f i c i e n c y d i f f e r e n c e was  favour  of  equally  s m a l l f a r m s and  e f f i c i e n t and  maximization. The  (Labour  had was  that both  to  in  s i z e s o f f a r m s were  chosen labour a c c o r d i n g  to  a v a r i a b l e f a c t o r i n the  above e m p i r i c a l s t u d i e s used e s t i m a t i o n s of  production  Saini  price efficiency  Yotopoulos-Lau  on  farms  Cobb-Douglas  product  (1973),  small  efficiencies  ( e q u a l i t y of the m a r g i n a l  concluded  on  ( 1 9 7 3 ) were a l r e a d y t e s t i n g  technical efficiency  the  profits)  production  latter  on  function)  to maximize  of t h e a g r i c u l t u r a l country.  to operate  f u n c t i o n s b a s e d on a c t u a l p r o d u c t i o n  profit model.)  average data.  1 04  The  problem  of m e a s u r i n g  efficiency  (especially  t e c h n i c a l e f f i c i e n c y ) has a l s o been s t u d i e d i n t h e c o n t e x t of c o m p a r i n g  actual  farmer  efficiency  with  (experimental) optimal farming e f f i c i e n c y  technically levels.  The  measurement o f t h e t e c h n i c a l d i f f e r e n c e  i s then expressed  an  t a k e n by  i n d e x number.  T h i s was  the approach  by  Timmer  ( 1 9 7 0 ) , S h a p i r o and M u l l e r (1977) and H e r d t - M a n d o c  (1981).  T h i s method p r e s u p p o s e s  frontier  production  function  an  initial  e s t i m a t i o n of a  ( e i t h e r on t h e b a s i s of a  linear  p r o g r a m m i n g method on e x p e r i m e n t a l d a t a o r u n d e r econometric production function  c o n s t r a i n t s of o n e - s i d e d d i s t u r b a n c e s function  estimation).  i s c o n s t r u c t e d , an  allocative efficiency i n d i c e s are then  is calculated  f o r each  r e l a t e d t o p e r s o n a l and  study t r i e d t o i n v e s t i g a t e farmers  Once a f r o n t i e r  i n d e x of r e l a t i v e  c h a r a c t e r i s t i c s of the f a r m e r s .  Philipino  the  The  fertilizer  by c o m p a r i n g  9  i n the production  technical farmer.  and  These  environmental  Herdt-Mandoc  (1981)  use e f f i c i e n c y  the farmers'  of  technical  e f f i c i e n c y w i t h the t e c h n i c a l e f f i c i e n c y  of  R i c e I n s t i t u t e e x p e r t s , b o t h f a r m e r s and  experts producing  on p l o t s a t t h e a c t u a l  farms.  Herdt  International  and Mandoc  concluded  t h a t b o t h t e c h n i c a l and a l l o c a t i v e e f f i c i e n c y d e c l i n e d w i t h i n c r e a s e s of t h e f a r m  s i z e and w i t h a d e c r e a s e  of o f f - f a r m work d a y s by t h e  farmer.  i n t h e amount  1 05  A f u r t h e r d e v e l o p m e n t of t h e measurement o f e f f i c i e n c y w i t h t h e use  of  index  e s t i m a t i o n of t h e p r o d u c t i o n problem i s then  numbers i s t o b y p a s s  technology  altogether.  ( T h i s a p p r o a c h was  the  index  number t h e o r y  u s e d by A l l e n  Our  18th Century  (Diewert  1982).  (1982) t o compare t e c h n i c a l  e f f i c i e n c y d i f f e r e n c e s between e n c l o s e d  and  unenclosed  farms  England.)  In t h i s l i t e r a t u r e on  the  a s p e c i a l case of measuring p r o d u c t i v i t y  d i f f e r e n c e s b a s e d on  in  relative  s e c o n d p a r t of t h e o v e r v i e w  t h e e m p i r i c a l measurement of  of  the  efficiency  d i f f e r e n c e s between f a r m e r s  i n d e v e l o p m e n t c o u n t r i e s , we  could  f o r a measurement of  see a g r o w i n g c o n c e r n  efficient  use  of a l l f a c t o r s o f p r o d u c t i o n  the  l a n d p r o d u c t i v i t y measures.  the  identification  T h e r e was,  of t h r e e s o u r c e s  inefficiency  ( d i s c u s s e d i n the next  on  h a n d , a g r o w i n g use  the other  approaches (the p r o d u c t i o n a v e r a g e , and C.  the  SOURCES OF  index  of  w h i c h goes beyond on  hand,  production  s e c t i o n ) and  o f two  there  was,  measurement  function estimation, frontier  number  or  approach).  sources  of  The  inefficiency  distinguished  in production.  scale"  of e f f i c i e n c y w h i c h f o l l o w s f r o m  characteristic  t h e one  INEFFICIENCY  Generally three  source  the  of the p r o d u c t i o n  optimal production  scale.  The  first  i s "the  technology  are returns  to  the  to exhibit  s c a l e of p r o d u c t i o n  an  r e f e r s to  106  a p r o p o r t i o n a l expansion of a l l i n p u t s which, increasing  1 0  returns to s c a l e  , leads  i n the case of  t o a more t h a n  p r o p o r t i o n a l expansion of the output. The  c l a i m by e c o n o m i c  inefficient assumption  i n the mechanized  full  f a r m t e c h n o l o g y (Wu, Y u , 1980;  I f t h e r e a r e no r e n t a l m a r k e t s  then only  f o r "machines  capacity.  l a r g e farms can use machines  Thus s m a l l  would have a h i g h e r agricultural  machine c o s t  system of s m a l l  could  p e r u n i t o f o u t p u t a n d an  Even i f s h a r i n g  be u s e d on l a r g e r f i e l d s ,  farmer's f i e l d  of machines  thus  i f the  diminishing  f r o m g o i n g f r o m one  to another's.  However, t h e s e c o n d i t i o n s s c a l e may n o t h o l d g i v e n great  efficient  be more e f f i c i e n t  time l o s s (and t r a n s a c t i o n c o s t )  small  to their  f a r m s w o u l d be l e s s  i s p r a c t i c e d , l a r g e farms c o u l d machines  o r own them  f a r m s , who own a n d u s e m a c h i n e s  than a system of l a r g e farms.  f o r increasing returns to  t h e Taiwanese  situation.  Firstly,  c a r e was made t o d e v e l o p l o c a l l y made s m a l l  (similar  t o the imported Japanese  'machine c u s t o m the  to scale'  f a r m e r s do n o t s h a r e t h e u s e o f t h e m a c h i n e s  jointly,  the  farms a r e  f o l l o w s from t h e ' i n c r e a s i n g r e t u r n s  Chen, 1 9 8 0 ) . and  planners that small  rice  network  s e r v i c e ' market  regions,  the' l a n d  farm machinery) and a  has developed.  i s irrigated  ( n o t from p r i v a t e w e l l s ) , w h i c h  on t h e f i e l d  structure.  machines  Secondly, i n  f r o m an  irrigation  imposes  limitations  T h i r d l y , t h e 'custom  service'  system quotes c o n t r a c t s p e r h e c t a r e s e r v i c e d , not t h e time  1 07  used.  Where l a r g e m a c h i n e s a r e u n a v o i d a b l e ,  harvesting, harvesting for  f o r t h e sugar  t h e r e f i n e r i e s own t h e m a c h i n e s a n d do t h e f o r a l l the farmers.  Thus, a l t h o u g h  the planners  t h e o r e t i c a l reasons b e l i e v e i n i n c r e a s i n g returns to  scale,  t h e a c t u a l s t r u c t u r i n g of the a c t i v i t y  well allow  constant  returns  to s c a l e  1 1  i n T a i w a n may  , so t h a t  the returns  t o s c a l e must be e m p i r i c a l l y m e a s u r e d . The  second s o u r c e of i n e f f i c i e n c y  inefficiency failure  1957, Y o t o p o u l o s - L a u  1971) w h i c h i s a  t o o p e r a t e on t h e t e c h n i c a l l y e f f i c i e n t  function inputs  (Farrell  i s technical  1 2  .  Thus, t e c h n i c a l l y i n e f f i c i e n t  f o r a same l e v e l  production  f a r m e r s use more  of output as t e c h n i c a l l y e f f i c i e n t  farmers. The  claim that part-time  farmers are i n e f f i c i e n t i s  b a s e d on t h e a s s u m p t i o n o f r e s i d u a l i t y part-time labour  farms.  The f i r s t  of farm l a b o u r  argument a b o u t t h e r e s i d u a l  i s directly a technical inefficiency  argument.  a s s u m p t i o n s a r e (a) t h a t non-farm a c t i v i t i e s put  on  t i m e a n d e f f o r t c o n s t r a i n t s on t h e l a b o u r a n d (b) t h a t  The  of the f a m i l y which i s  available  f o r farming  sensitive  t o t i m i n g o f t h e a c t i v i t i e s and t o s p e e d y r e a c t i o n  to unexpected weather, disease r e s u l t , part-time  farmers,  farm p r o d u c t i o n  and pest  i s very  conditions.  who must be a t t h e i r  As a  off-farm  work, w i l l  n o t be a v a i l a b l e a t t h e s e c r u c i a l moments and  there  be l e s s p r o d u c t i o n  will  full-time  farms.  f r o m t h e i n p u t s t h a n on  108  The  s e c o n d t y p e argument a b o u t t h e r e s i d u a l  which claims quality  that off-farm a c t i v i t i e s absorb the higher  labour  argument o n l y  of t h e f a m i l y , i s a t e c h n i c a l i f more a s s u m p t i o n s a r e a d d e d .  inefficiency These  assumptions a r e (a) t h a t t h e lower q u a l i t y f a m i l y make t h e d e c i s i o n s on p a r t - t i m e  farms,  are  q u a l i t y members a n d so w i l l  f o r a same l e v e l  of o u t p u t .  g e n e r a l l y u s e more  The l o w q u a l i t y members  t h e p h y s i c a l l y weak, t h e o l d , t h e u n e d u c a t e d a n d t h e  women, t h u s t h e f a m i l y members who d i d n o t f i n d employment. possibly  T h a t low e d u c a t i o n  true  1 3  leads  , but that the other  i n f l u e n c e management a b i l i t y  does not f o l l o w . then t h i s part  1  Also  that  members o f t h e f a m i l y  I f none o f t h e l a t t e r a s s u m p t i o n s  second argument about t h e r e s i d u a l l a b o u r  the a l l o c a t i v e The  inefficiency  third  efficiency  (Farrell  i s not  issue. i s allocative  1957, Y o t o p o u l o s - L a u  1971) a n d i s  t o m a x i m i z e p r o f i t s when t h e  t o equate the marginal  t o i t s p r i c e and t h e m a r g i n a l  its price.  holds,  issue but i n s t e a d i s part  source of i n e f f i c i e n c y  d e f i n e d as a f a i l u r e  farmers f a i l input  t o bad management i s  i s debatable.  of t h e t e c h n i c a l e f f i c i e n c y  normally  off-farm  characteristics "  management must be done by t h e f a r m i n g  of  farms, and  l o w e r q u a l i t y f a m i l y members a r e w o r s e m a n a g e r s  than higher inputs  members  (b) t h a t t h e h i g h e r  q u a l i t y members make t h e d e c i s i o n s on f u l l - t i m e (c) t h a t  labour,  value  product of each  cost of each output t o  The p r o f i t m a x i m i z i n g b e h a v i o u r o f e a c h  farmer  1 09  thus ensures that t h e marginal and  the marginal  farmers.  p r o d u c t i v i t y o f each f a c t o r  c o s t of each output  i sequalized  across  And t h i s e q u a l i t y o f f a c t o r p r o d u c t i v i t i e s a n d  marginal  crop costs across  maximal t o t a l  production  farmers  i s the condition f o r the  of outputs  from t h e a g r i c u l t u r a l  resources. However, n o t e t h a t t h e a l l o c a t i v e e f f i c i e n c y is closely the  tied  farmers  variables  t o the e x i s t e n c e of markets which  issue  provide  w i t h t h e o p p o r t u n i t y p r i c e s of t h e p r o d u c t i o n  for their allocative decisions.  P a r t of t h e  question  i n t h i s t h e s i s i s whether t h e l a n d market i s  working,  and, i f i tdoesn't,  c h o i c e on t h e a l l o c a t i o n The  latter  whether t h e farmers  have  full  of t h e other p r o d u c t i o n v a r i a b l e s .  d e p e n d s on t h e e x i s t e n c e o f m a r k e t s f o r a l l  non-land production  variables.  B u t t h i s b r i n g s us t o t h e  issue of t h e f a m i l y s u p p l i e d l a b o u r .  Farm h o u s e h o l d members  may be o f two t y p e s : 1) t h e m o b i l e  members f o r whom t h e d i s u t i l i t y  work i s e q u a l work.  T h e s e members w i l l  the marginal supply  value product  f o r farming  variable. the  t o the d i s u t i l i t y  land  of o f f - f a r m  of self-employed  farm  compare t h e m a r k e t wage w i t h i n farming  and thus  the labour  f r o m t h e s e members i s a c h o i c e  H e r e one c a n e x p e c t  an a d j u s t m e n t o f l a b o u r t o  allocation.  2) t h e i m m o b i l e members f o r whom t h e d i s u t i l i t y work i s much g r e a t e r t h a n  the d i s u t i l i t y  of  of o f f - f a r m self-employed  1 10  farm work.  T h e s e a r e t h e f a m i l y members who do n o t want  t o work away f r o m t h e home ( m o t h e r s w i t h s m a l l o l d e r women) o r who do n o t want t o be t i e d time p e r i o d s  (older farmers,  want t o s e t t h e i r farming  from t h e s e  in the farming structure) solved.  those  (determined  who do  The l a b o u r s u p p l y f o r  f a m i l y members i s t h u s a f i x e d  activity  factor  by t h e f a m i l y  i f we assume t h e l e i s u r e - l a b o u r c h o i c e t o be  In t h i s  situation,  system of a l l o c a t i n g important  to contracted  weaker p e o p l e ,  own work p a c e ) .  children,  t h e q u e s t i o n of a  flexible  l a n d t o t h e h o u s e h o l d s becomes  f o rthe f u l l  employment o f t h i s  agricultural  resource. T h u s where t h e l a b o u r  i s not f u l l y mobile,  t h e r e c a n be  u n d e r e m p l o y m e n t o f i m m o b i l e l a b o u r on c e r t a i n on  small f u l l - t i m e ) ,  on y e t o t h e r  labour f o r  f a r m s (maybe-on l a r g e f u l l - t i m e ) .  l a n d c o u l d be t r a n s f e r r e d w i t h o u t be more a g r i c u l t u r a l  (maybe  u n d e r e m p l o y m e n t o f t h e l a n d on o t h e r s  (maybe on s m a l l p a r t - t i m e ) a n d u s e o f m o b i l e farming  farms  output  constraints, there  If  would  ( u s i n g the underemployed  i m m o b i l e l a b o u r o f some h o u s e h o l d s on t h e u n d e r e m p l o y e d l a n d of o t h e r h o u s e h o l d s ,  or r e p l a c i n g mobile  l a b o u r ) a n d a l s o more o u t p u t mobile  i n the other  larger,  immobile  sectors (using the  labour s h i f t e d out of a g r i c u l t u r e ) .  a g r i c u l t u r a l production the  with  This gain i n  f r o m a l a n d r e a l l o c a t i o n w o u l d be  t h e l e s s t h e l a n d and t h e immobile l a b o u r a r e  substitutable  i n the a g r i c u l t u r a l  production  technology,  111  since marginal  value  with the d i f f e r e n t Note t h a t  products  would then vary  labour/land  r a t i o s on t h e f a r m  this substitution possibility  number o f p o s s i b l e c r o p s  considerably  (each having  types.  d e p e n d s on t h e  a very  different  t e c h n o l o g y ) a n d on t h e s u b s t i t u t a b i 1 i t y of t h e i m m o b i l e labour  with other  inputs.  U l t i m a t e l y , t h e concern of t h i s t h e s i s i s the proper allocation  of l a n d and l a b o u r  the a g r i c u l t u r a l labour  and l a n d r e s o u r c e s .  labour  This  1 5  working of the land m a r k e t .  option  (and thus t o  i s not o p t i m a l  i s effectively  because  b l o c k i n g the  The a l t e r n a t i v e t o t h e  the labour  t o t h e l a n d endowment.  i f a w e l l working labour  the m o b i l e  hypothesis  o f l a n d t o t h e h o u s e h o l d s w o u l d be t o have  households adjust an  from i t s  of l a n d t o the households  land l e g i s l a t i o n  distribution  output  i s a t e s t of the  endowment o f t h e f a m i l y )  the p r e s e n t  f a r m h o u s e h o l d s so t h a t  s e c t o r h a s an o p t i m a l  that the d i s t r i b u t i o n the  across  market e x i s t s , and  f a m i l y members c a n a n d have a d j u s t e d  endowment by t h e e x p a n s i o n o f p a r t - t i m e  This i s indeed  to the land  farming.  But  h o u s e h o l d s have an endowment o f i m m o b i l e f a m i l y members t o o , and if  t h e economy i s n o t m a k i n g o p t i m a l the a g r i c u l t u r a l The  choice  use o f i t s  s e c t o r does not use t h i s of the o p t i m a l  resources  labour.  size-participation  c o m b i n a t i o n . f o r t h e s e c t o r must u l t i m a t e l y be d e t e r m i n e d by the o p t i m a l  use of t h e l a n d , t h e m o b i l e f a m i l y  household  members a n d t h e i m m o b i l e members, a l l w i t h i n t h e c o n t e x t  of  1  the  need  of t h e n o n - a g r i c u l t u r a l  sectors  f o r the mobile  f a m i l y members a n d t h e f o o d n e e d s o f t h e i n c r e a s i n g l y population  1 6  12  rich  .  D. TREATMENT OF THE V A R I A B L E INPUTS-OUTPUT MIX  The  value-added  functions  forms of a v a r i a b l e p r o f i t  estimated are special  function  income i s assumed t o be a f u n c t i o n family  supplied  estimation inputs, family  inputs.  This  of the returns  ( 2 ) a comparison supplied  comparison  inputs  i n which r e a l net farm of t h e q u a n t i t i e s of  s p e c i f i c a t i o n allows  to scale  i n family  ( 1 ) an  supplied  of t h e m a r g i n a l p r o d u c t s of the  across  of t h e net incomes  farm types, of f u l l -  relative to their quantities of.family These r e s u l t s bear d i r e c t l y  and ( 3 ) a  and p a r t - t i m e supplied  on t h e i s s u e s  farms  factors.  of r e t u r n s t o  s c a l e , a l l o c a t i v e e f f i c i e n c y and t e c h n i c a l e f f i c i e n c y respectively. We s t a r t f r o m a m o d e l w h i c h e x p r e s s e s t h e g e n e r a l concern of t h e a g r i c u l t u r a l a u t h o r i t i e s . want an o p t i m a l  use of a g r i c u l t u r a l r e s o u r c e s ,  system uses H p r i v a t e the  (1)  The^ a u t h o r i t i e s but the  f a r m e r s as the d e c i s i o n makers.  So  a i m o f t h e a u t h o r i t i e s c a n be f o r m a l i z e d a s : H h H h Max pZy - wZx h h  h h h s . t . g ( y ,x ,v ) > 0  where y ( o u t p u t s ) a n d x ( i n p u t s )  H a n d Zv -V h  = 0  a r e marketed a t  r e s p e c t i v e l y p a n d w, b u t v a r e f a m i l y  supplied  f a c t o r s who  11 3  are not t r a d e d .  The s e c t o r h a s a t o t a l  latter  resources.  The o p t i m i z a t i o n  (2)  h h h h p - 9 g ( y ,x ,v )/9y = 0  Vh  (3)  h h h h -w - 9 g ( y ,x ,v )/9x = 0  Vh  requires:  (4)  h h h g.(y ,x ,v ) > 0  Vh  (5)  h h h h X - 9 g ( y ,x ,v )/9v = 0  Vh  These c o n d i t i o n s e x c e p t t h e l a s t each  farmer h maximizes h  (6) and  Max py y ,x  the value-added h  the c o n d i t i o n value-added  h  on h i s f a r m : h  s . t . g ( y ,x ,v )>0  the resource a l l o c a t i o n  the d i s t r i b u t i o n  households  one, a r e a l s o s a t i s f i e d i f  h - wx  number V o f t h e  i n the sector  of the f a m i l y  supplied factors  (5) i s s a t i s f i e d .  approach  for this  i s then o p t i m a l i f i s such  that  We d e v e l o p t h e s p e c i a l  latter  investigation.  The s p e c i a l v a l u e - a d d e d a p p r o a c h  used  in this  study  i s a b l e n d o f t h e i n d e x number a p p r o a c h and t h e p r o d u c t i o n f u n c t i o n approach.  The p u r e  t h e most s i m p l e a p p r o a c h productivity  constant  farm t y p e s  assumptions  1 7  .  in t h i s study.  and t h a t a l l m a r k e t s  factor  However, i t  technical  e x i s t e x c e p t one: l a n d ,  Under t h e s e a s s u m p t i o n s ,  same f o r a l l f a r m e r s , n e t p r o f i t  be  that the technology i s  r e t u r n s t o s c a l e , t h a t t h e r e i s no  inefficiency,  would  t o t h e measurement o f t o t a l  on t h e d i f f e r e n t  requires the a p r i o r i  i n d e x number a p p r o a c h  i f p r i c e s are the  per u n i t of l a n d  i s the  1 14  marginal  value  efficiency differ net by  p r o d u c t of l a n d , and f o r a l l o c a t i v e  i t should  be e q u a l  between farmers,  across  a l l farmers.  a d e f l a t o r method c a n be u s e d on t h e  r e t u r n so that the a l l o c a t i v e e f f i c i e n c y the value real  return  from t h e land  (7)  and  (8)  farmer  (p  net r e t u r n and t h e o p t i m a l  1 y  p o s s i b l e r e a l net  input:  1:  1  c a n be m e a s u r e d  o f k i n the' f o l l o w i n g r e l a t i o n s h i p s b e t w e e n  actual  for  If prices  where p: o u t p u t p r i c e w: i n p u t p r i c e 1  1  1  1  - w x )/[n( ,w )/n( °,w°)] = k P  1  P  n(p°,w°)v  1  y: o u t p u t x: bought i n p u t V: l a n d i n p u t  f o r f a r m e r 0:  0  0  0  0  (p°y° - w ° x ) / [ n ( p , w ) / n ( p ° , w ) ] = k° n(p°,w°)v°  Where n(p°,w°) i s t h e s o l u t i o n t o ( 6 ) f o r t h e p r i c e s and  V=1 u n i t o f l a n d .  k=1,  (less e f f i c i e n t  A l l o c a t i v e e f f i c i e n c y means t h a t  f a r m e r s have  method, o v e r a l l a l l o c a t i v e  k < l ) . Thus i n t h i s  i n e f f i c i e n c y of l a n d  k v a r i a t i o n s , a n d no i n f o r m a t i o n  i s given  i n e f f i c i e n c y , only  inefficiency.  There a r e s e v e r a l problems w i t h It isvitally  that  (p,w) a r e t h e c o r r e c t o p p o r t u n i t y  full  s e t o f m a r k e t s must e x i s t . some f a m i l y l a b o u r  there  i s allocative this  index  d e p e n d e n t on t h e a s s u m p t i o n  than  section,  shows i n  on t h e s o u r c e s o f  the a l l o c a t i v e  number a p p r o a c h .  (p°,w°)  p r i c e s , so t h a t a  As a r g u e d t h e p r e v i o u s  may n o t be m a r k e t a b l e , a n d  1 15  assuming a g r i c u l t u r a l be d i s t o r t i v e .  wage r a t e s a s t h e o p p o r t u n i t y  Inversely, the family  labour  could  cost  be t a k e n  i n s t e a d of land as the f a c t o r of e v a l u a t i o n , but since m a r k e t s may n o t have been v e r y opportunity  a c t i v e and c o r r e c t  costs are hard t o f i n d ,  distortive.  may  land  land  t h i s may w e l l be e q u a l l y  A d d i t i o n a l l y , the issue of constant  returns to  s c a l e a n d t e c h n i c a l i n e f f i c i e n c y must be m e a s u r e d , n o t assumed  a priori.  Thus we d e c i d e d  a p p r o a c h was n o t u s e f u l l  that  t h e index  number  in i t s entirety.  The a l t e r n a t i v e was t o u s e t h e t r a n s f o r m a t i o n profit  f u n c t i o n approach.  equation better  bias  i n a transformation  to estimate  derived  To a v o i d  profit  the simultaneous  function estimation,  function (1976),  f u n c t i o n s , by e s t i m a t i n g t h e  This  w o u l d mean t h e e s t i m a t i o n  from t h e a c t u a l p r o f i t ,  (10)  of the p r o f i t  a s i n Y o t o p o u l o s a n d Nugent  p97-8: where  with  i t is  supply-demand system of t h e v a r i a b l e s f o r which  markets e x i s t .  (9)  or  (qk/A) . z = II(qk/A;v)  the estimation  z i  = an/9(k i i  The a l l o c a t i v e  q=p =w z=y =-x v  : : : : :  output p r i c e input p r i c e output input fixed factor  of a system:  q /A) = f ( q k / A ; v )  inefficiency  . A/k i  i n t h e use of marketed v a r i a b l e s  (z ) c a n be m e a s u r e d by t h e v a l u e o f k a s s o c i a t e d w i t h i each farm type. The t e c h n i c a l i n e f f i c i e n c y c a n be m e a s u r e d  116  by  the v a r i a t i o n  in A  a s s o c i a t e d w i t h each farm  R e t u r n s t o s c a l e c a n be d e t e r m i n e d If  there  i s more t h a n one f i x e d  from t h e f u n c t i o n n ( ) .  f a c t o r v, then the  variations  i n the marginal  farm t y p e s  c a n i n d i c a t e t h a t t h e r e may be a g a i n  sector  type.  value  products  from o r g a n i z i n g markets f o r these  (9II/9v)  across f o rthe  factors.  Thus  this  a p p r o a c h i s c o m p l e t e , b u t we c a n n o t u s e i t b e c a u s e we do n o t have e n o u g h p r i c e o b s e r v a t i o n s II(qk/A;v)  i n our sample t o e s t i m a t e  f o r t h e p a r a m e t e r s o f q.  We e s t i m a t e  a v a l u e - a d d e d model t h a t h a s f e a t u r e s o f  b o t h a p p r o a c h e s : a) t h e i n d e x  approach i s used t o d e a l  t h e o u t p u t a n d b o u g h t i n p u t s , a n d b) t h e p r o d u c t i o n  with  function  a p p r o a c h i s used t o d e a l w i t h t h e f a m i l y f a c t o r s . We s t a r t  from t h e a s s u m p t i o n t h a t t h e farmer  a t t e m p t s t o c h o o s e t h e o u t p u t mix a n d t h e b o u g h t i n p u t m i x to maximize the net p r o f i t  a v a i l a b l e as a r e t u r n t o the  family  supplied f a c t o r s , given  choice  f o r a f a r m e r f a c i n g t h e p r i c e s (p,w)>>0 w i t h a  transformation (11)  max y,x  the technology.  Thus t h e  function g(y,x,v) i s t o :  {py - wx  | g ( y , x , v ) > 0} where:  and  the s o l u t i o n i s n(p,w,v).  the  s o l u t i o n to equation  ( 2 ) - ( 4 ) t o be s a t i s f i e d . )  y: x: v: p: w:  output q u a n t i t i e s bought i n p u t s family inputs output p r i c e input p r i c e  (Note t h a t t h i s  i s also the  (6) and thus i m p l i e s c o n d i t i o n s  11 7  As t h e sample  contains only nine observation y e a r s  a r e n o t enough o b s e r v a t i o n s on p r i c e s p a r a m e t e r s of II(p,w,v) i n ( p , w ) .  (p,w)  1 8  , there  to estimate the  So we assume t h a t p and  w  a r e s e p a r a b l e from v: (12) We  n(p,w,v) = n [ f ( p , w ) , v ]  assume i n f a c t  (13)  t h a t the r e l a t i o n s h i p i s :  n [ f ( p , w ) , v ] = f(p,w)  G(v)  so t h a t t h e o b s e r v a t i o n  f o r each  (14)  G(v)  The  py - wx left  = f(p,w)  hand s i d e  value-added.  On  i s the o b s e r v e d net p r o f i t  the r i g h t  h a n d s i d e we  a f u n c t i o n of t h e p r i c e s and The  second p a r t G(v)  self-supplied  farmer i s :  or  have f(p,w) which i s  i s thus a value-added  i s a value-added  function  f a c t o r s and t h u s a f o r m of o u t p u t  p r o d u c e d by t h e f a m i l y  factors.  So t h e  price.  of quantity  self-supplied  f a c t o r s p r o d u c e an o u t p u t G ( v ) w h i c h i s p r i c e d a t f ( p , w ) this  i s e q u a l t o t h e o b s e r v e d f a r m income f o r t h e T h i s form of s e p a r a b i l i t y assumption  family.  i s equivalent  t o i m p o s i n g c o n s t r a i n t s on t h e t e c h n o l o g y , s u c h t h a t Hicks-Allen  substitution elasticities  self-supplied  factors  ( v ) and  and  the  between the  the v a r i a b l e commodities  are:  118  (15)  *  = ( n 3 2 n/3q3v)/[ o n / 3 v ) o n / 3 q ) ] = g(q)«G(v)  (3g/3q)•(3G/3v) = 1  q = p,w  g(q)•(3G/3v) • G(v).(3g/3q)  where II = g(q) G(v) i s the net revenue f u n c t i o n . interpretation inputs that  i s that  there are no outputs nor bought  have a s p e c i a l l i n k to any s e l f - s u p p l i e d  If we now compare two farmers f a c i n g prices:  (16)  farmer 1:  p y  (17)  farmer 0:  p°y° - w°x° = f(p°,w°) G(v°)  1  1  1  - w'x  1  = f(p\w )  factor.  different  market  or  The  1  G(v )  f o r farmer 1:  (18)  1  (p y  1  1  - w'x  1  1  )/[f ( p ,w )/f (p°,w°) ] = f(p°,w°)  G(vM  and f o r farmer 2: (19)  (p°y° - w°x°)/[f(p°,w°)/f(p°,w°)] = f(p°,w°) G(v°)  Thus net income d e f l a t e d in the same way  1  1  by [f(p ,w )/f(p°,w°)] depends on v  f o r a l l farmers.  The l i n k between  the index  number approach and t h i s value-added approach can be seen i n comparison of equations (7)-(8) and (18)-(°19). Note that  1  1  [f(p ,w /f(p°,w°)] i s a 'true'  price  index:  (20)  P  1  1  1  1  1  1  = P [ p , y \ p ° , y ° , w ,x ,w°,x°] = f ( p ,w )/f (p° , w° )  1 19  w h i c h we  (21)  P  assume t o be  1  =  1  input  1  (x  1  i  i  1  1  > 0)  2  1  [ Z s (q°/q  1  i  1  the  since  (22)  z = (y,-x).  f o r f(p,w) =  of  Diewert  input  prices  I t s h o u l d be  1 9  The basis  the  o u t p u t s and Diewert  inputs  or  an  t h i s index  of  following  2  the  No  mean of  the  1978; use  than the  of  usual  separability is  variable  factors  order  r=2  Allen, this double imposed  i n our  study  1975).  using  sample s h a r e i n f o r m a t i o n  o u t p u t s and  I n summary, we  derived  p r o d u c t i o n s i t u a t i o n of e f f i c i e n c y issues  family  > 0)  dssuming the  (Diewert  n i n e y e a r s of p r i c e o b s e r v a t i o n s  between the  of  1  i n d e x of p r i c e s (P) i s c a l c u l a t e d on t t p r i c e d a t a (p , w' ) f o r t h e f a r m o u t p u t s t  o b s e r v a t i o n s f o r 26  the  (y  Fisher  national  variable  use  noted that  value-added d e f l a t o r method .  ( B r u n o 1975,  output  for a quadratic  d e f l a t o r method i s l e s s r e s t r i c t i v e  between the  1/2  ) ]"  i  The are  q=(p,w)  = [Z Z a q q ]' i j i j i j  variable  1981).  we  1  i n d e x of  g(q):  index i s exact  o u t p u t and  i  1  f(p,w) = g(q)  This Fisher  i  s h a r e of an  p r i c e s e s s e n t i a l l y means t h a t function  ideal price  i  = q z /Zq z 1  0  [Z s ° ( q / q ) ] ' i  where s  a Fisher  actual  supplied  the  (nine  (s ) ,  annual  the and  using  price  inputs). a model w h i c h e x p r e s s e s  f a r m e r s , so  that  i n t h e i r e f f e c t on  the  we  can  examine  relationship  deflated  net  revenue a v a i l a b l e t o  f a c t o r s and  the  l e v e l s of  the  the  family  the  1 20  supplied (23)  factors:  (p'y  - w'xM/P  1  T h i s m o d e l was The  five  = f(p°,w°)  c h o o s e n f o r two  family  added f o r the output value  1  supplied  sector (see  which i s from 51%  t a b l e 4.3)  concern to the a g r i c u l t u r a l  used  the  land area  ( m a l e , f e m a l e ) and  2) T h e r e was  not  inefficiencies choice  are  i n the  land,  family  households i s able the  sector  these f a c t o r s are  over the  the  h o u s e h o l d s i s of  authorities.  total  The  value  five  family  of t h e  labour-  farm  investigate  assets.  the  the  c o n s e q u e n c e s of  and  bought  o b s e r v e d net  does m e a s u r e t h e  input  revenue  choice  farm a s s e t  these value,  efficiency.  i s thus d i r e c t e d to  present agrarian  such  family  However, s i n c e i n the  value farm  the  whether the labour  the  and  problem studied  question  of  crop choice  t h i s method i n d i r e c t l y  the  the  produce a  (paddy, d r y ) , the  the  concentrated  The  and  1)  t o 63%  enough p r i c e d a t a t o  in d e t a i l .  choices  main r e a s o n s :  factors considered  v a r i a b l e s whose d i s t r i b u t i o n  f a c t o r s are  G(v')  answering  structure with i t s  distribution  over  the  to produce the maximal v a l u e - a d d e d  from t h e s e r e s o u r c e s .  This  will  depend  for  on:  1) w h e t h e r v a l u e - a d d e d e x p a n d s more, l e s s o r p r o p o r t i o n a l a p r o p o r t i o n a l e x p a n s i o n of a l l t h e returns (24)  to scale k  i s s u e ) as e s t i m a t e d  G(Xv)=X G(v)  family  farm f a c t o r s  by H  0  :  k>0  to (the  121  2) W h e t h e r some h o u s e h o l d s ,  particularly  households,  have l e s s a c t u a l v a l u e - a d d e d  family  f a c t o r s than  farm  households can produce  similarly  the part-time (II) from  endowed  their  full-time  (the technical e f f i c i e n c y  issue) as  e s t i m a t e d by  (25)  And  FT FT PT PT PT G(v ) = n = n = G(v ) - E  H  : E  0  farmers  t h e f a m i l y s u p p l i e d f a c t o r mix o f  (thea l l o c a t i v e  efficiency  issue).  This  q u e s t i o n c a n be a n s w e r e d by c o m p a r i n g t h e m a r g i n a l products  of each f a m i l y f a c t o r a c r o s s t h e farmers  allocative optimality farmers,  (26)  >0  3) w h e t h e r t h e r e c o u l d be a g a i n i n t h e s e c t o r ' s t o t a l  v a l u e a d d e d by c h a n g i n g the  PT  r e q u i r e s these  as the system  t o be e q u a l  value since  across  ( 1 ) - ( 5 ) h a s now become:  H h Max Zf(p°,w°) G ( v )  s.t.  H h Zv -V=0 h  h with f i r s t  (27) (28) This  order c o n d i t i o n :  h h - X = 0 f(p°,w°) 9G(v )/9v H h Iv - V =0 h  Vh  i s e q u i v a l e n t t o a s k i n g whether farmers  to a l l o c a t e  the outputs  the p r o d u c t i v i t y  are either  able  a n d b o u g h t i n p u t s i n s u c h a way t h a t  l e v e l s of the ( f i x e d )  are e q u a l i z e d across farms,  self-supplied  or a l t e r n a t i v e l y , whether  factors they  are a b l e t o choose t h e f a m i l y f a c t o r s because t h e markets  122  work a n d t h u s farmers  the family f a c t o r s a r e mobile  may even f o l l o w b o t h  s t r a t e g i e s a t t h e same  d e p e n d i n g on t h e f a m i l y p r o d u c t i o n e x a m p l e , amounts o f f a r m c a p i t a l  factors.  c o s t a n d t h e wage r e s p e c t i v e l y ( t h e r e b y of these  factors),  while  Thus f o r  farmers  have  to the i n t e r e s t  i n d i c a t i n g the  f o r l a n d and female  t h e r e m i g h t be an e q u a l i z a t i o n o f t h e m a r g i n a l across  The  time,  a n d male l a b o u r c o u l d  been c h o s e n t o e q u a l i z e t h e p r o d u c t i v i t i e s  mobility  ( t h e n X=w).  labour  products  because of c o r r e c t c h o i c e of output  mix ( a n d  i t s a s s o c i a t e d bought i n p u t m i x ) .  E.  FUNCTIONS Our  (29) The  aim i s t o estimate  py - wx / P left  =  functions of:  f(p°,w°)G(v)  =  n(v)  h a n d s i d e i s r e a l n e t income and i s d i r e c t l y  computed from t h e d a t a .  To e s t i m a t e  choose f u n c t i o n a l forms f o r H ( v ) .  t h e m o d e l , we must  These i n d i c a t e t h e  r e l a t i o n s h i p of the f a m i l y s u p p l i e d f a c t o r s t o t h e r e a l net income.  As n o t a l l f a r m s u s e m a l e l a b o u r o r f e m a l e  labour,  some o f t h e c o m p o n e n t s o f v c a n be z e r o , t h e r e f o r we c a n n o t use  Cobb-Douglas or t r a n s l o g s p e c i f i c a t i o n s .  use  the l i n e a r  functional the  f u n c t i o n a n d two o f i t s more  forms.  Also, production  l a n d i n p u t so t h a t t h e e s t i m a t e d  constant  2 0  .  In the next  Instead,  we  flexible  i s not p o s s i b l e  without  f u n c t i o n cannot have a  s e c t i o n s we d e s c r i b e t h e l i n e a r  1 23  function  with  'generalized  dummy v a r i a b l e s linear'  function  ( c a l l e d ' l i n e a r dummy'), t h e and t h e r e s t i c t e d  approximation of both: the ' l i n e a r ' .function. E.1  The L i n e a r  Dummy model  The f i r s t  function  that  we p r o p o s e a s an  approximation of n(v) i s a l i n e a r f u n c t i o n coefficients of v and with  participation slope  .  This  t h e farm  size  i s thus a l i n e a r function  of v  dummy v a r i a b l e s d :  farmers with  product  c h a r a c t e r i s t i c s (s,p), the value marginal k ( o r shadow p r i c e ) o f t h e f a m i l y f a c t o r v i s : k  (31)  k  VMP  = a sp  This  2 1  t o vary with  k k k k n(v) = Z (a + Z a d + Z a d ) v k 0 s s s p p p s : size class p :participation k = 1. . . 5 inputs  (30)  For  a r e allowed  i n v where t h e  function  Allocative types,  k  + a 0  allows  k + a s p  s=S,M p = LP,PT1,PT2 0 = L,FT ( b a s e )  us t o e x p l o r e  e f f i c i e n c y c a n be t e s t e d  because t h e magnitude of a  some e f f i c i e n c y i s s u e s . directly and a  s  f o r t h e farm  shows w h e t h e r t h e P  v a l u e m a r g i n a l p r o d u c t s of t h e f a c t o r s vary w i t h participation. can  I f m a r k e t s e x i s t f o r t h e f a c t o r , t h e n one  compare t h e v a l u e m a r g i n a l p r o d u c t s t o t h e m a r k e t  prices.  I f m a r k e t s do n o t e x i s t , o n e c a n compare t h e v a l u e  marginal products across farmers since the  s i z e and  this  shows w h e t h e r  factor i s allocated correctly i n the sector.  1 24  The  l i n e a r dummy v a r i a b l e p r o d u c t i o n  automatically technology. small  to scale  t o scale  size.  given  Measurement o f t e c h n o l o g i c a l  i n IT(v)  2 2  and t h e a c t u a l  of  with  improves  e f f i c i e n c y c a n be  returns,  i n v e s t i g a t i n g whether t h i s d i f f e r e n c e associated  on t h e  increasing  from t e c h n i c a l e f f i c i e n c y t h a t  done by c o m p a r i n g t h e e x p e c t e d n e t r e t u r n s as  model  B u t we c a n compare t h e e f f i c i e n c y o f l a r g e a n d  f a r m s , a l t h o u g h we c a n n o t d i s t i n g u i s h  returns with  imposes c o n s t a n t r e t u r n s  function  from t h e f a c t o r s a n d by  i s systematically  the p a r t i c i p a t i o n c h a r a c t e r i s t i c or the size  t h e farm.  E.2  The L i n e a r The  the  model  simple l i n e a r function  i s a r e s t r i c t e d form of  t h e ' l i n e a r dummy m o d e l ' a s t h e c o e f f i c i e n t s o f t h e  dummy v a r i a b l e s a r e r e s t r i c t e d t o be z e r o :  (32) The  k k = Z a v k 0  n(v)  simple l i n e a r function  generalized If  l i n e a r f u n c t i o n , as presented the value-added function  assumption that input family  i s a l s o a r e s t r i c t e d form of t h e  choice  i slinear,  f a r m e r s have s u f f i c i e n t  to adjust  next. then t h e  o u t p u t and bought  p e r f e c t l y t o f i x e d endowments o f t h e  f a c t o r s c a n be a c c e p t e d .  m a r k e t s f o r some o f t h e f a m i l y  In t h i s case, lack of f a c t o r s does not c r e a t e  1 25  allocative linearity  inefficiency  of resources  i n the sector.  o f t h e e s t i m a t e d f u n c t i o n means t h a t  p r o d u c t s . a r e c o n s t a n t s , and thus e q u a l  The  marginal  f o r a l l f a r m e r s , so  t h a t t h e r e c o u l d n o t be a g a i n f o r t h e s e c t o r from a t r a n s f e r of family resources  from  one f a r m e r  to another.  E.3 The G e n e r a l i z e d L i n e a r M o d e l An  alternative  t o t h e p r e v i o u s p r o d u c t i o n models i s  t o choose a p r o d u c t i o n t e c h n o l o g y  where a l l f a r m e r s a r e  assumed t o h a v e t h e same b a s i c t e c h n o l o g y technology  i s more f l e x i b l e  i n i t s s t r u c t u r e of  f a c t o r s t o produce net p r o f i t . impose c o n s t a n t  combining  T h i s f u n c t i o n does not  returns to scale a p r i o r i  r a t e s of s u b s t i t u t i o n  but t h i s  and t h e m a r g i n a l  between f a c t o r s can change w i t h i n  this  technology. We a p p r o x i m a t e between f i x e d  the t e c h n o l o g i c a l r e l a t i o n s h i p  f a c t o r s and t h e net r e t u r n s f o r f i x e d  with the generalized l i n e a r  factors  f u n c t i o n ( D i e w e r t , 1973;  p. 2 9 5 ) : (33)  1 / 2  n ( V ) = 21 a v i i i  1 / 2  land.  N o t e , when a  the g e n e r a l i z e d l i n e a r function.  No c o n s t a n t  i s present  of net revenue w i t h o u t  and a i  2  v  where symmetry i s i m p o s e d . t h e r e i s no p o s s i b i l i t y  1  + 21 I a v ' + Z. 0 v i#j i ji j i i i  are restricted  because  t h e use of  t o be z e r o , t h a t  ij function c o l l a p s e s into the l i n e a r  1 26  Of  the three proposed  functions, this function  a l l o w s us t o e x p l o r e t h e e f f i c i e n c y  issues i n greatest  detail.  homogeneous i f  a =0 i which  The t e c h n o l o g y  i s linearly  V i , thus constant  returns to scale i s a hypothesis  c a n be t e s t e d .  not h o m o t h e t i c .  I f t h e a *0 t h e n t h e t e c h n o l o g y i s i (See i n t e r p r e t a t i o n o f n o n - h o m o t h e t i c i t y i n  t h e comments t o t a b l e E.9 i n a p p e n d i x  fixed  E.)  The v a l u e m a r g i n a l p r o d u c t ( o r shadow p r i c e ) o f a k factor v f o r a farmer his:. h  (34)  VMP  h = a ( 1/v ) k k k  1/2  h h + I a (v /v ) i i k i k  1/2  Thus t h e shadow p r i c e o f t h e f a c t o r v endowments o f a l l t h e f a c t o r s when a  + 0 k  i s d e p e n d e n t on t h e *0 .  The  technology  ij a l l o w s the farmers factors these  of combining  i n s u c h a way t h a t e q u a l i t y  f a c t o r s a c r o s s f a r m e r s may  possibility then  the p o s s i b i l i t y  by c a l c u l a t i n g  testing  participation  o f t h e shadow p r i c e s o f  result.  each farmer's  We t e s t  for this  shadow p r i c e s  t h e i r e q u a l i t y a c r o s s the farm characteristic.  their  2 3  and  s i z e and  Thus we e s t i m a t e dummy  v a r i a b l e r e g r e s s i o n s of the c a l c u l a t e d , k (VMP ): sp k k k k (35) VMP = 7 + I 7 d + I 7 d s p O s s s p p p  shadow  prices  A  k = 1...5 i n p u t s h: f a r m e r s: s i z e p: p a r t i c i p a t i o n  k  A  where we c a l c u l a t e d VMP S  according to equation  P using estimated coefficients  A  (a , a , /3 ). k kj k  (34) and  1 27  For  t h e measurement o f t e c h n i c a l  compare t h e e x p e c t e d n e t r e t u r n  i n e f f i c i e n c y we  of t h e f a c t o r s as p r e d i c t e d  A  by n ( v ) w i t h difference  the actual  net return.  i ssystematically  characteristic regression  We t h e n t e s t  influenced  o f t h e f a r m e r s , by u s i n g  on t h e d i f f e r e n c e .  i f the  by t h e p a r t i c i p a t i o n t h e dummy  variable  T h i s method i s b a s e d on t h e  A  fact that function  t h e e s t i m a t e d n ( v ) i s an a v e r a g e (not a f r o n t i e r production  assertion  that  part-time  thus s y s t e m a t i c a l l y  production  function).  farms a r e t e c h n i c a l l y  producing  than f u l l - t i m e farms produce  less output with  The inefficient, their  factors  f r o m t h e i r f a c t o r s , s h o u l d mean A  that the  the estimated net return actual  net return  below t h e a c t u a l  n(v) i s systematically  on p a r t - t i m e  net return  above  farms and s y s t e m a t i c a l l y  on f u l l - t i m e f a r m s . . The dummy  v a r i a b l e approach t e s t s whether  the difference  actual  (n-n) i s s y s t e m a t i c a l l y  and e s t i m a t e d n e t r e t u r n  between much  l o w e r on p a r t - t i m e f a r m s t h a n on f u l l - t i m e f a r m s o f t h e same 2  size " F. DATA The described  three s p e c i f i c a t i o n s are estimated with  i n chapter three.  revenue and f i v e f a m i l y The  The m o d e l u s e s d a t a on n e t  supplied  factors.  f i v e components of v a r e t h e f a m i l y  factors: 1) Paddy l a n d  area  the data  ( c u l t i v a t a b l e i n ha)  supplied  128  2) D r y l a n d a r e a 3) F a m i l y  (cultivatable  male l a b o u r  reported either  i n ha)  days a c t u a l l y  the days  used.  (counted  The f a m i l i e s  a s 10 h o u r s ) ,  d a y s , o r h o u r s t h a t were s p e n d on t h e f a r m  half  production  2 5  .  T h e r e was no f u r t h e r i n f o r m a t i o n t h a t m i g h t h a v e g i v e n us the p o s s i b i l i t y a mobile  of d i s t i n g u i s h i n g  f a m i l y member o r a n i m m o b i l e f a m i l y member.  Questions  about t h e c o n t r i b u t i o n of male l a b o u r t o  value-added  (the marginal  opportunity cost can thus labour  i s mobile  product)  i n comparison t o the  only broadly  (when m a r g i n a l  the wage), or t h a t 4) F a m i l y  i f t h e l a b o u r came f r o m  productivity i s close to  i t i s generally  female labour days.  i n d i c a t e t h a t male  immobile.  The f a m i l i e s  reported the  a c t u a l amounts o f work t i m e , b u t i n t h e p r o c e s s i n g a conversion  r a t e o f .8 was c o n s i s t e n t l y a p p l i e d t o make  female labour 5) D e f l a t e d t o t a l  e q u i v a l e n t t o male farm a s s e t  i s a F i s h e r p r i c e index with asset  shares  labour  stock value.  2 6  .  The d e f l a t o r  used  which uses n a t i o n a l p r i c e data  c a l c u l a t e d from t h e sample.  The a s s e t s  i n c l u d e d a r e : t o o l s and machines  (37%), farm  (28%), l i v e s t o c k  (21%) and t r e e s  (14%), a l l as reported  on b a l a n c e  at the beginning  sheet  inventory  of t h e y e a r  2 7  .  An  a l t e r n a t i v e t o u s i n g s t o c k v a l u e s w o u l d be t o u s e t h e service  flow.  H o w e v e r , t h e r e was  information t o attempt a reasonable service  flow f o r these  insufficient calculation  Taiwanese a s s e t s  2 8  .  of t h e  Questions  129  about  t h e c o n t r i b u t i o n of c a p i t a l  study w i l l  to value-added i n t h i s  t h u s n o t s o much be a b o u t  the t e c h n i c a l  c o n t r i b u t i o n of f a r m a s s e t s t o v a l u e - a d d e d , b u t a b o u t t h e c o n t r i b u t i o n of t h e c a p i t a l to  t h e net farm  return  2 9  i n the farm a c t i v i t y  .  The d e p e n d e n t v a r i a b l e the  invested  i s the net revenue.  sum o f a l l t h e c r o p and n o n - c r o p a c t u a l  farm 3 0  from which a l l the p a i d c o s t s a r e d e d u c t e d . profit  i s t h e n d e f l a t e d by a F i s h e r p r i c e  national  p r i c e d a t a and average  variable  inputs  s a m p l e o f 2274  in profit  It is incomes  T h i s net  i n d e x b a s e d on  s h a r e s of o u t p u t and  as c a l c u l a t e d  from t h e t o t a l  observations.  To d i s t i n g u i s h t h e c o n s e q u e n c e s  o f t e c h n o l o g y and  farmer b e h a v i o u r from t h e i n f l u e n c e s of v a r i a t i o n s  in soil  and c l i m a t e , we s u b d i v i d e t h e s a m p l e i n t o g r o u p s o f f a r m s with similar  environmental conditions.  ( d e s i g n a t e d a) a r e d i s t i n g u i s h e d farms  Thus a l l - p a d d y  from mixed paddy-dry  ( d e s i g n a t e d b) a n d p u r e d r y - l a n d  farms  farms land  (designated c ) .  The s a m p l e i s a l s o s u b d i v i d e d a c c o r d i n g t o t h e r e g i o n s described  i n c h a p t e r t h r e e : N o r t h R i c e ( N R ) , M i d - R i c e (MR),  S o u t h R i c e (SR) and S u g a r mixed paddy-dry had s u f f i c i e n t  i n d i c a t e s the  farms o f t h e M i d - r i c e r e g i o n ) . observations for estimation  and t h e p a d d y - d r y sufficient  (SUG) ( t h u s MRb  all-dry  region  i n the all-paddy  c a t e g o r y , but o n l y the Sugar farms.  Each  r e g i o n had  1 30  G. THE S T A T I S T I C A L PROPERTIES OF THE MODELS  We e s t i m a t e generalized method.  (36)  the l i n e a r ,  the l i n e a r  dummy and t h e  l i n e a r model w i t h t h e o r d i n a r y l e a s t  squares  The model i s t h u s :  n  = TI(v ) + e h h  h  h: household h  With the usual ordinary least (a)  E(e)= 0  (b)  E[e ] = a  (c)  E[e  2  j  squares  assumptions:  2  e ] = 0  j , h : households  h  (d)  the explanatory  (e)  by a f i n i t e c o n s t a n t |v | < 1/^ they a r e a l s o d i s t r i b u t e d independently  (f)  a n d t h e r a n k o f V i s f u l l : r=5 Assumptions  v a r i a b l e s (v) a r e u n i f o r m l y  of the error  ( b ) g e n e r a l l y mean t h a t we assume t h a t  there  i s no s y s t e m a t i c  error  t e r m s , t h u s no h e t e r o s k e d a s t i c i t y , w h i l e  i n f l u e n c e on t h e v a r i a n c e o f t h e  that there  i s no i n f l u e n c e f r o m one f a r m e r  the next.  Assumption  definite  bound  ( c ) means  i n t h e sample t o  ( d ) i s no p r o b l e m s i n c e t h e r e a r e  bounds on t h e f a c t o r s t h a t any f a m i l y h a s  available.  131  Assumption s t u d y , as  i n the  from the  family  inputs  influences.  I t should  a l s o be  a p o s t e r i o r i v a l u e - a d d e d can i s a p o s i t i v e use b o t h p a i d and  of  family  negative  factors.  family supplied  b e c a u s e of  the  argument  other  insect  i n our  model,  These are  (or the  because t h i s  the  there  c a s e s where  misallocated l a c k of  given  output)  random w e a t h e r - d i s e a s e i n f l u e n c e .  exclude these observations  error  even t h o u g h  f a c t o r s are  a p o s t e r i o r i l e v e l s of o u t p u t  the  variables),  and  and  noted that  be  of  i s independently  (explanatory  s u c h as d i s e a s e  this  (1965), the  i s l i n k e d t o random w e a t h e r c o n d i t i o n s  net  in  Using the  a p o s t e r i o r i (actual) value-added  conditions  the  satisfied  Z e l l n e r , Kmenta, D r e z e  agricultural  the  t o be  f a c t o r s of p r o d u c t i o n .  (1965) and  distributed and  is likely  i t i s a value-added f u n c t i o n estimation  family supplied of Hoch  (e)  We  cannot  i s a genuine part  of  revenue s i t u a t i o n f a c i n g f a r m e r s i n Taiwan. This  assumption average  brings  to the  (a) t h a t E [ e ]  = 0,  d i s c u s s i o n of so t h a t we  the  are  would r e q u i r e  not  frontier  relationships.  t h a t a l l e r r o r s be  function should  then g i v e  v a l u e - a d d e d f r o m t h e amounts of estimation,  we  are m a i n t a i n i n g  enough o b s e r v a t i o n s  on  of  the  The  and  latter  same s i g n , s i n c e  factors.  s a m p l e , and  and  the  possible In  assumption that  e x t r a g o o d , e x t r a bad  w e a t h e r - d i s e a s e s i t u a t i o n s i n the  factors  the maximal  family the  first  estimating  (expected) r e l a t i o n s h i p between f a m i l y  v a l u e - a d d e d , and  estimated  us  our there  are  average  that  there  are  1 32  enough f a r m e r s a t a l l l e v e l s o f t e c h n i c a l e f f i c i e n c y . actual  estimated  function  family  f a c t o r s and t h e v a l u e - a d d e d they c a n produce  i s t h u s t h e r e l a t i o n s h i p between  average weather-disease c o n d i t i o n s efficiency  l e v e l s of  We c a n i n f a c t  The  and a t average  given  technical  production. investigate  i f t h e r e a r e any  c h a r a c t e r i s t i c s of the farmers which s y s t e m a t i c a l l y  p u l l the  actual  given  v a l u e - a d d e d above o r b e l o w t h e e x p e c t e d one,  the  family  inputs  and t h e e s t i m a t e d v a l u e - a d d e d  The  year of production  functions.  i sa candidate for the investigation  of  the weather-disease influence  or  extra  in  f a r m p r o d u c t i o n c a n be u s e d f o r t h e i n v e s t i g a t i o n o f  bad p r o d u c t i o n y e a r s .  to identify the extra  The d e g r e e o f p a r t i c i p a t i o n  systematic technical e f f i c i e n c y differences. analyse the structure with  of t h e e s t i m a t e d e r r o r  a dummy v a r i a b l e m o d e l .  technical  inefficiency.)  (This  estimations  (37)  of production  A dummy v a r i a b l e model i s function  A  (n-n)=e:  e = a + La d i O i i i  We a r e t h u s m a i n t a i n i n g  + r? i  d , = 1972... 1980 dummy o r d = participation g r o u p dummy o r d, = s i z e dummy 1  the hypothesis that the  weather-disease conditions  and t h e t e c h n i c a l e f f i c i e n c y  l e v e l s of production are neutral properties  Thus we a l s o  i s i n f a c t our t e s t f o r  e s t i m a t e d on t h e e r r o r s o f t h e v a l u e a d d e d A  good  of the production  to thea l l o c a t i v e  s i t u a t i o n with  respect t o the  133  family supplied  inputs  (isoquants  the p o s i t i o n of t h e average very  heuristic  isoquant).  approach t o the t e c h n i c a l  measurement s i n c e t h e s t a t i s t i c a l regression  on t h e e s t i m a t e d  allocative  efficiency  on  the estimated  equation  (34)  are shifted p a r a l l e l to Note t h a t t h i s inefficiency  p r o p e r t i e s o f t h i s dummy  e r r o r s a r e unknown.  The  i s i n v e s t i g a t e d v i a a dummy  marginal  is a  regression  p r o d u c t i v i t i e s according to  and (35); a g a i n  the s t a t i s t i c a l  p r o p e r t i e s of  t h i s dummy v a r i a b l e r e g r e s s i o n a r e unknown.  H. ESTIMATION RESULTS  H. 1 I n t r o d u c t i o n Before  addressing  the main c o n c e r n i n t h i s  the efficiency study,  i s s u e s which a r e  the s a l i e n t  econometric  r e s u l t s a r e reviewed. Coefficients in  t a b l e E.15-18, t e s t s t a t i s t i c s  r e s u l t a n t marginal for  small  2  full-time,  a t l e a s t .86).  (MRb)  i n t a b l e E.5-6, a n d t h e  products of t h e f a m i l y s u p p l i e d  f a r m s i n t a b l e 5.7. (R  f o r t h e ' l i n e a r dummy m o d e l ' a r e shown  small part-time Generally  and l a r g e  the s t a t i s t i c a l  inputs  full-time f i t was good  F o r t h e M i d - r i c e mixed paddy-dry  and t h e Sugar a l l - p a d d y  farms  (SUGa) f a r m s t h e h y p o t h e s i s  t h a t t h e s i z e a n d p a r t i c i p a t i o n dummy c o e f f i c i e n t s a r e z e r o i s not rejected linear  ( s i g n i f i c a n c e .05).  function i sappropriate  In these cases the  and marginal p r o d u c t i v i t i e s  1 34  of  the factors are constants  NRa,  (isoquants  On t h e  MRa a n d SUGc f a r m s , s i z e a n d p a r t i c i p a t i o n dummy  c o e f f i c i e n t s are significant, are  are linear).  only  size effects while  participation statistical least  on t h e SRa a n d SRb f a r m s  on t h e SUGb f a r m s t h e r e  e f f e c t s ( t a b l e E.15-18).  f i t of t h e ' l i n e a r '  there  a r e only  Note t h a t t h e  function  i shigh  2  (R at  .81) e v e n t h o u g h i n most c a s e s t h e ' l i n e a r dummy*  function  fits  the data s i g n i f i c a n t l y  better.  C o e f f i c i e n t s of the 'generalized shown i n t a b l e E.8, t e s t s t a t i s t i c s  l i n e a r model' a r e  i n t a b l e E.1-2, t h e  s i z e - p a r t i c i p a t i o n dummy v a r i a b l e r e g r e s s i o n s  on t h e  c a l c u l a t e d m a r g i n a l p r o d u c t s i n t a b l e E.19-22 a n d t h e r e s u l t a n t marginal products of f a m i l y full-time,  small  part-time  f u l l - t i m e farms i n  5.6.  least  . 8 3 ) . As c a n be s e e n i n t a b l e E . 2 , t h e h y p o t h e s i s o f  of  l i n e a r function  the s t a t i s t i c a l  f i t was good  2  table  the  Generally  and l a r g e  factors f o r small  i s not rejected a t s i g n i f i c a n c e l e v e l s  .05 f o r t h e NRa, MRb a n d SUGa f a r m s .  cases agree with model.)  linear  the conclusion  For the other regions  generalized  l i n e a r model f i t s  model.  generalized constant  (R at  (The MRb, SUGa  o f t h e ' l i n e a r dummy' the constant returns  t h e d a t a much b e t t e r  t o scale than t h e  O n l y i n t h e SRa f a r m s i s t h e n o n - h o m o t h e t i c  l i n e a r model s i g n i f i c a n t l y  returns  to scale  model.  better  than t h e  1 35  T h e r e i s one d i f f i c u l t y generalized regularity Returning  linear  with  c o n d i t i o n of n e o - c l a s s i c a l v a l u e - a d d e d t o system  resources,  rewrite  estimated  f u n c t i o n s : t h e y do n o t s a t i s f y t h e  (26)-(28),  the second order  f o r m a x i m i z a t i o n of the p r o d u c t i o n  definite  the  require  conditions  from t h e a g r i c u l t u r a l  t h e b o r d e r e d H e s s i a n t o be  negative  o r G ( v ) t o be q u a s i - c o n c a v e o r c o n c a v e . system  functions  ( 2 6 ) by i n c o r p o r a t i n g t h e  I f we  resource  constraints:  (38)  H-1 h H-1 h Max Z G ( v ) + G(V - Z v ) h=1 h=1 H-1 h = Max Z G ( v ) + G ( z ) h=1.  then the f i r s t  (39)  order  H-1 h w h e r e : z=V-Z v h=1  conditions are:  h h 9G(v )/9v - 9 G ( z ) / 9 z =0 i i i  V i = 1..5  factors  V h,k=1..H-1 k 9G(v  and  k )/9v - 9 G ( z ) / 9 z =0 i i i  households  the second order  Hessian associated  Vh,k=1..H-1 (39)  holds:  V i  conditions  with  require the [5(H-1)x5(H-1)] h h k k t h e v e c t o r [ d v ,dv ,dv ,dv ] i j i j  a n d V i , j = 1 . . 5 , must be n e g a t i v e  definite  where  136  (40) h  r  3G(v  h )/3v  h 3v  i  -,  + 3 G ( z ) / 3 z 3z j i j  3G(z)/3z i k  3 G ( z ) / 3 z 3z  i  L  3G(v  k  )/3v  j  which i m p l i e s that  diagonal  j  k  3v  i  the  3z  + 3G(z)/3z  j  3z  J  i  e l e m e n t s must n o t  J  be  positive: h (41)  3G(v  h )/3v  h 3v  i This  + 3 G ( z ) / 3 z 3z i  further implies h  (42)  3G(v  h )/3v  (41)  has  i  that  h 3v  i since  i  < 0  < 0 i  to hold  f o r any  h o u s e h o l d s c h o s e n as  the  H-the h o u s e h o l d . The  evidence for a l l nine  'generalized values with not  of  the  respect hold  and  'linear  for both  dummy' f u n c t i o n s  on  t o an  a d d i t i o n of t h a t  linear'  factor i s that  A sufficient condition  f u n c t i o n to s a t i s f y  of c o e f f i c i e n t s ,  as  reported  have a l l i t s o f f - d i a g o n a l e l e m e n t s  (42)  the  the  c h a n g e i n t h e m a r g i n a l p r o d u c t s of e a c h  for a l l factors.  'generalized matrix  linear'  s a m p l e s and  factor  (42)  does  for  the  i s that  the  i n t a b l e E.8-9, w o u l d (a  ) non-negative.  This  i j i s not  the  c a s e i n our  cases there  i s a strong  female-paddy term is a negative  estimated negative  functions.  In a l l nine  coefficient  for  (female-dry term i n Sugc).  coefficient  the  Added t o  f o r t h e p a d d y - a s s e t t e r m on  this the  1 37  all-paddy  (all-dry)  farms  (except  p a d d y - m a l e t e r m on t h e p a d d y - d r y These  e f f e c t s dominate  shifts.  The r e s u l t  i n SRa) a n d a n e g a t i v e farms  ( a n d SRa c a s e ) .  t h e f u n c t i o n s and t h e shadow p r i c e  i s that the Hessian  order d e r i v a t i v e s of the estimated  matrices  of second  f u n c t i o n s (when  evaluated  a t t h e i n p u t l e v e l s w h i c h a r e u s e d by t h e h o u s e h o l d s ) a r e not n e g a t i v e  definite  f o r most h o u s e h o l d s a n d on a v e r a g e ,  since t h e diagonal elements a r e not a l ln e g a t i v e 9G(v)/9v i  3 1  .  Thus  9v >0 f o r a t l e a s t one f a c t o r f o r most h o u s e h o l d s j  i n t h e g e n e r a l i z e d l i n e a r model.  However, t h e ' g e n e r a l i z e d  l i n e a r ' m o d e l p r o d u c e s p a t t e r n s o f s h i f t s o f t h e shadow p r i c e s w h i c h g e n e r a l l y a r e n o t c o n t r a d i c t e d by t h e d i r e c t i o n of t h e s h i f t s  o f t h e shadow p r i c e s i n t h e ' l i n e a r  m o d e l , a s c a n be s e e n by c o m p a r i n g t a b l e s E.19-22 a n d t a b l e s E.15-18. specification priori  i svery  dummy'  the sign patterns i n The ' l i n e a r  dummy'  f l e x i b l e a n d d o e s n o t impose many a  r e s t r i c t i o n s on t h e v a l u e  added  functions.  specification  i s t h e same a s an e s t i m a t i o n f i r s t l y ,  simple  approximation  linear  o f t h e v a l u e added  This of a  function for  each farm t y p e , and t h e n , a c o m p a r i s o n of t h e r e l a t i v e p o s i t i o n s o f t h e r e s u l t a n t shadow p r i c e s o f t h e p r o d u c t i o n f a c t o r s between linear'  t h e farm types.  Both the ' g e n e r a l i z e d  a n d ' l i n e a r dummy' a p p r o a c h e s c o n f i r m e a c h o t h e r s o  that t h i s  s u g g e s t s t h a t t h e shadow p r i c e p a t t e r n s a r e n o t a  consequence  of t h e choice of t h e f l e x i b l e  f u n c t i o n a l form  (e.g. t h e g e n e r a l i z e d l i n e a r as a g a i n s t t h e t r a n s l o g or  1 38  generalized should  l e o n t i e f or another  be n o t e d t h a t  function).  t h e i s s u e of r e t u r n s  neutral to the curvature as  flexible  to scale i s  problem of the estimated  functions  a l l t h e f a c t o r s a r e e x p a n d e d p r o p o r t i o n a l l y when  e f f e c t s are considered. violation  It  scale  The i s s u e o f t h e r e g u l a r i t y  i n the estimated  functions  w i l l be  considered  f u r t h e r when a l l o c a t i v e e f f i c i e n c y i s d i s c u s s e d . The  next three  sections are a discussion  r e s u l t s of the ' g e n e r a l i z e d as  linear'  of t h e  and t h e ' l i n e a r '  t h e y b e a r on t h e i s s u e s o f r e t u r n s  t o s c a l e , of  a l l o c a t i v e e f f i c i e n c y and of t e c h n i c a l e f f i c i e n c y . 'linear' linear'  model i s a r e s t r i c t e d v e r s i o n  models  The  of the 'generalized  m o d e l where e s s e n t i a l l y e q u a l i t y a c r o s s  farms of t h e  shadow p r i c e s i s i m p o s e d  (.these r e s t r i c t i o n s a r e '.  statistically  acceptable  i n t h e NRa, MRb a n d SUGa  Alternatively  i n t e r p r e t e d , t h e f i x e d shadow p r i c e s a s  derived  from t h e ' l i n e a r '  model c a n be c o n s i d e r e d  cases).  a s an  a v e r a g e o f t h e ' l i n e a r dummy' m o d e l shadow p r i c e s w h i c h i s then compared t o t h e a v e r a g e as c a l c u l a t e d i n t h e 'generalized  linear'  model.  H.2 R e t u r n s t o s c a l e The  hypothesis  tested directly hypothesis  of constant  i n the 'generalized  c a n be a c c e p t e d  c a s e where t h e t e c h n o l o g y  returns linear'  t o s c a l e c a n be model.  The  i n a l l t h e c a s e s , e x c e p t t h e SRa 3 2  i s non-homothetic .  (Test  1 39  statistics  are reported  i n table  hypothesis  of c o n s t a n t  The be  tested directly  E.1.)  i n the ' l i n e a r '  returns  to scale  cannot  model.  I n t h i s c a s e we  h a v e t o b u i l d an a p p r o x i m a t i v e t e s t , a s o u t l i n e d i n section E.1.  The h y p o t h e s i s  c a n be a c c e p t e d  e x c e p t t h e SRa e a s e , a s a v e r a g e e r r o r full-time large  farms i s g e n e r a l l y  f u l l - t i m e farms.  significant full-time  Only  overestimation  farms w i t h  (n-n)  as  'generalized  i n t h e SRa r e g i o n  small  i s there  o f t h e a c t u a l n e t r e t u r n on  the estimated  linear'  on  e q u a l o r even l a r g e r t h a n on  linear  Thus t h e d i r e c t t e s t o f c o n s t a n t the  i n a l l cases,  a small  function. returns  to scale i n  m o d e l p r o d u c e s t h e same  the approximate t e s t i n t h e ' l i n e a r ' model.  conclusion The  assumption of i n c r e a s i n g r e t u r n s  t o s c a l e c a n be r e j e c t e d i n  all  This  c a s e s , e x c e p t t h e SRa c a s e .  means t h a t  the optimal  s i z e o f t h e f a r m need n o t be l a r g e and a s y s t e m o f s m a l l farms i s e q u a l l y  efficient  from a r e t u r n s  to scale  perspect i v e . H.3  Allocative efficiency In t h i s  section a l l o c a t i v e efficiency i s f i r s t  investigated against farm groups.  the opportunity  The f i r s t  supplies  costs  and then  information  on t h e o v e r a l l  a l l o c a t i v e e f f i c i e n c y of t h e farms i n each r e g i o n l a n d t y p e and t h e g e n e r a l  across  and f a r m  working of t h e market system.  second i n v e s t i g a t e s the f a c t o r p r o d u c t i v i t i e s across t h e  The  1 40  T a b l e 5.1: SHADOW PRICES (NT$) FOR LABOUR 1 (FARMS WITH GOOD OFF-FARM EMPOYMENT OPPORTUNITIES)  NRa  +  NRb  MRa  SRa*  L  Male  270 (28)  214 (48)  292 (32)  347 (na)  L  Female  1 53 (54)  101 (109)  222 (40)  1 84 (na)  GL  Male  271 (4)  1 94 (29)  299 (22)  183 (66)  GL  Female  1 72 (39)  200 (54)  1 78 (50)  227 (84)  Notes C a l c u l a t e d l a b o u r p r o d u c t i v i t y w h i c h c a n be c o m p a r e d t o t h e a v e r a g e n a t i o n a l f a r m wage: M a l e 275, F e m a l e 249 NT$ L: L i n e a r m o d e l GL: G e n e r a l i z e d l i n e a r m o d e l +  a: a l l paddy f a r m s b: p a d d y - d r y f a r m s  : L i n e a r m o d e l c a n n o t be r e j e c t e d ( s i g n i f i c a n c e Non c o n s t a n t r e t u r n s t o s c a l e GL m o d e l , and L i n e a r s i z e dummy model i n s t e a d o f L m o d e l (standard deviations i n brackets)  farm g r o u p s and r e q u i r e s the  estimated First  with  functions  linear' tables  an i n t e r p r e t a t i o n o f t h e s h a p e of and i t s p o s s i b l e  cause.  the r e s u l t s of the ' l i n e a r '  t h e a v e r a g e shadow m o d e l and w i t h 5.1-5.  prices derived  model a r e compared  from the  The shadow  the  first  prices  'generalized  the market p r i c e s as r e p o r t e d p r i c e s of t h e f a m i l y  f a c t o r s a r e t h e c o e f f i c i e n t s of t h e ' l i n e a r ' f i n d t h e shadow  .05)  i n the 'generalized  in  supplied  function.  linear'  To  model,  o r d e r d e r i v a t i v e s of t h e f u n c t i o n a r e c a l c u l a t e d  141  f o r each farmer's l e v e l of i n p u t s sample.  The m a r k e t p r i c e s a r e c a l c u l a t e d a s t h e a v e r a g e s ,  over 9 sample y e a r s , deflated with reported of  o f t h e m a r k e t p r i c e s w h i c h were  the p r o f i t  index  are f o rthe 'linear'  the linear  linear'  and then averaged over t h e  3 3  .  The s t a n d a r d  model t h e s t a n d a r d  function coefficients  deviation  and f o r t h e ' g e n e r a l i z e d  model, t h e standard d e v i a t i o n s  coefficient  deviations  i n e a c h dummy r e g r e s s i o n  of t h e base  of the c a l c u l a t e d  3  shadowprice ". C o m p a r i s o n s o f t h e shadow p r i c e s w i t h prices are tests for a l l o c a t i v e farmers i n the choice if  the family  considered  efficient  of t h e f a m i l y  farm a s s e t s ,  then  b e h a v i o u r by t h e  f a c t o r and so i n d i c a t e  factors are mobile.  then  t h e market  First  labour i s  land.  When f a r m e r s have good o p p o r t u n i t i e s  f o r off-farm  employment, e s t i m a t e d m a r g i n a l p r o d u c t s of l a b o u r a r e similar  t o t h e n a t i o n a l wages.  regions  are close  close  to Taipei  F a r m s i n t h e NRa a n d NRb  a n d K e e l u n g ; f a r m s i n SRa a r e  t o K a o h s i u n g , a n d f a r m s i n MRa a r e i n an a r e a  much r u r a l  industry.  T a b l e 5.1 shows t h a t m a r g i n a l  are  similar  t o the average n a t i o n a l  and  249 NT$ f o r w o m e n .  products  f a r m wage o f 275 f o r men  35  The  o t h e r farms a r e f u r t h e r  from  industrial  employment, u s u a l l y because t h e y a r e f u r t h e r T a b l e 5.2 shows t h e i r are  with  erratic  labour  i n the h i l l s .  marginal products.  and u s u a l l y l e s s than t h e n a t i o n a l  The v a l u e s f a r m wage.  1 42  T a b l e 5.2: SHADOW PRICES (NT$) FOR LABOUR 2 (FARMS WITH POOR OFF-FARM EMPLOYMENT OPPORTUNITIES) MRb  +  SRb  SUGa  +  SUGb  SUGc  L  Male  141 (41)  79 (51 )  81 (50)  1 44 (43)  236 (83)  L  Female  31 (61 )  181 (61 )  2 (58)  85 (47)  -33 (79)  GL  Male  222 (54)  96 (25)  1 39 (83)  141 (14)  1  GL  Female  -20 (53)  1 46 (17)  -3 (28)  i 11 (32)  98 (57)  -129 (105)  Notes: C a l c u l a t e d l a b o u r p r o d u c t i v i t y w h i c h can be c o m p a r e d t o a v e r a g e n a t i o n a l f a r m wage: M a l e 275, F e m a l e 249 NT$ L: L i n e a r model GL: G e n e r a l i z e d l i n e a r ' m o d e l +  The  :  a: a l l paddy f a r m s b: paddy d r y f a r m s c: a l l d r y f a r m s  l i n e a r m o d e l c a n n o t be r e j e c t e d ( s i g n i f i c a n c e (standard deviations i n brackets)  male shadow p r i c e i s g e n e r a l l y h i g h e r  shadow p r i c e .  This  the  r e s u l t may  than the  .05)  female  i n d i c a t e more m o b i l i t y  for  males. T a b l e 5.3 the  construction  shows t h e of t h e  ought t o e q u a l the if  the  f a r m e r has  capital.  The  asset  chosen the  official  l e a s t cover the  appreciation  i s not  Given  shadow p r i c e  the d e p r e c i a t i o n  rate  p r o f i t maximizing quantity  agricultural 3 6  at  v a r i a b l e , the  i n t e r e s t rate plus  t h e m a r k e t r a t e 4 0 . 8 % , and should  shadow p r i c e s f o r a s s e t s .  the  i n t e r e s t r a t e was  shadow p r i c e o f  c a p i t a l cost  (assuming  l a r g e r than d e p r e c i a t i o n  3 7  ).  the  of  18.9%, assets  that The  shadow  143  T a b l e 5.3: SHADOW PRICES (%) FOR FARM ASSETS Dominant farm f o r t h e r e g i o n NRa MRa +  SRa+-  SUGb  L  34.6 (3)  10.3 (3)  26. 1 (na)  26.8 (5)  GL  29.5 (3)  -1.5 (6)  35.6 (6)  28.5 (4)  SRb  SUGa  SUGc  Non-dominant farm f o r the r e g i o n NRb MRb*  +  L  17.9 (4)  23.9 (5)  51 .6 (6)  59. 1 (4)  41.7 (10)  GL  40.0 (8)  44.5 (8)  44.9 (4)  61 .9 (4)  74.7 (16)  Notes: C a l c u l a t e d r a t e o f r e t u r n on f a r m a s s e t s w h i c h c a n be compared t o t h e 1 8 . 9 % average o f f i c i a l a g r i c u l t u r a l i n t e r e s t r a t e o r t h e 40.8% average n a t i o n a l market i n t e r e s t r a t e i f no d e p r e c i a t i o n i s assumed L: L i n e a r model GL: G e n e r a l i z e l i n e a r  a : a l l Paddy f a r m s b: P a d d y - d r y f a r m s c: a l l - d r y farms  model  +  : L i n e a r model c a n n o t be r e j e c t e d ( s i g n i f i c a n c e .05) t-: Non c o n s t a n t r e t u r n s t o s c a l e GL m o d e l , a n d L i n e a r s i z e dummy m o d e l i n s t e a d o f L m o d e l (standard deviations i n brackets)  p r i c e s a r e h a l f w a y between c a p i t a l cost (all-paddy region).  theo f f i c i a l  on t h e d o m i n a n t  l a n d t y p e farm f o r each  i n the r i c e regions,  mixed dry-paddy  Presumably, t h e a g r i c u l t u r a l  most a t t e n t i o n t o t h e s e f a r m s a n d t h e r e that, as a r e s u l t , official the  region  i n t h e Sugar  a u t h o r i t i e s devote i s some e v i d e n c e  t h e s e farms have b e t t e r a c c e s s t o t h e  agricultural  non-dominant  and t h e market  land  c a p i t a l markets.  The shadow p r i c e s on  t y p e farms a r e a t o r above t h e market  1 44  T a b l e 5.4: SHADOW PRICES  NRa  +  (NT$) FOR PADDY LAND  MRa  SRa*  +  SUGa  L  1 4656 (5199)  41 1 29 (5858)  1 7354 (na)  47866 (6747)  GL  13181 (3765)  44953 (9150)  35609 (9493)  46948 (3626)  NRb  MRb*  SRb  L  28183 (8702)  76407 (9441)  56758 (8379)  52257 (6315)  GL  5143 (7292)  461 72 (11846)  36566 ( 10420)  54905 (2228)  SUGb  Notes: C a l c u l a t e d r e n t a l r a t e f o r l a n d w h i c h c a n be c o m p a r e d t o t h e a v e r a g e o f f i c i a l r e n t a l r a t e f o r l a n d o f 16634 NT$ L: L i n e a r model GL: G e n e r a l i z e d l i n e a r model  a : a l l paddy f a r m s b: p a d d y - d r y f a r m s  +  : L i n e a r m o d e l c a n n o t be r e j e c t e d ( s i g n i f i c a n c e .05) t-: Non c o n s t a n t r e t u r n s t o s c a l e GL m o d e l , a n d L i n e a r s i z e dummy model i n s t e a d o f L model (standard deviations i n brackets)  c a p i t a l cost  indicating less access t o the o f f i c i a l  capital  markets. T a b l e s 5.4 a n d 5.5 show t h e shadow p r i c e s o f paddy land and d r y l a n d .  Except f o r d r y land  i n the rice  and f o r t h e NR r e g i o n , t h e y e x c e e d t h e o f f i c i a l of NT$ 16634.  For t h i s  rental rate  reason r e n t i n g does n o t o c c u r .  W i t h i n e a c h r e g i o n , paddy l a n d shadow t h e two l a n d  regions,  p r i c e s a r e e q u a l on  t y p e f a r m s , s h o w i n g t h e r o b u s t n e s s o f t h e paddy  1 45  T a b l e 5.5: SHADOW PRICES  NRb  MRb  +  (NT$) FOR DRY LAND  SRb  SUGb  SUGc  L  7096 (9199)  10241 (10332)  9297 (12844)  36942 (6179)  40936 (10125)  GL  -63652 (19571)  -3372 (8510)  -35978 (18445)  59760 (4214)  21785 (7820)  Notes: no a v e r a g e o f f i c i a l  rental rate  L: L i n e a r m o d e l GL: G e n e r a l i z e l i n e a r model +  b: p a d d y - d r y f a r m s c: a l l d r y farms  : L i n e a r model c a n n o t be r e j e c t e d ( s i g n i f i c a n c e .05) (standard deviations i n brackets)  land  shadow p r i c e  rice  regions,  long  fallow periods  hope t o s e l l in  i s a v a i l a b l e f o r dry land  i n each r e g i o n .  Dry land  i s farmed i n the  even t h o u g h i t h a s a n e g a t i v e r e t u r n , a r e l i m i t e d by l a w a n d s i n c e  i t eventually  t h e Sugar r e g i o n  fornon-agricultural  d o e s d r y l a n d have a h i g h  the farmers uses.  land production  methods  are well  Having thus discussed issue against the  characteristic factors. family  that  suited  established).  the a l l o c a t i v e e f f i c i e n c y  t h e m a r k e t p r i c e s , we now d i s c u s s  differences  Only  shadow p r i c e  because i t i s devoted t o a use f o r which i t i s w e l l (dry  since  t h e i s s u e of  the s i z e and p a r t i c i p a t i o n  may make f o r t h e shadow p r i c e s o f t h e f a m i l y  Thus t a b l e s  5.6-7 show t h e shadow p r i c e s o f t h e  f a c t o r s of the small  full-time,  large  f u l l - t i m e and  1 46  small part-time linear'  farms as c a l c u l a t e d .  For the 'generalized  m o d e l , t a b l e 5.6 i s b a s e d on t a b l e s E . 1 9 - 2 2 ,  (standard d e v i a t i o n s of the l a r g e f u l l - t i m e  farm  coefficient).  for the a l l - d r y  (Table  5.8 c o n t a i n s t h e d a t a  farms o f t h e Sugar r e g i o n .  B e c a u s e t h e r e were n o t e n o u g h  o b s e r v a t i o n on l a r g e f u l l - t i m e  farms i n t h e sample, t h e base  g r o u p i s t h e f a r m s w i t h more t h a n 'linear  dummy' m o d e l  size-participation deviation  3 8  ,  1 hectare.)  For the  t a b l e 5.7 i s b a s e d on t h e  dummy c a s e  i n t a b l e s E.15-18  of the l a r g e f u l l - t i m e  farm  (standard  coefficient).  same i n f o r m a t i o n a s i n t a b l e s 5.1-7 c a n be f o u n d a r r a n g e m e n t by r e g i o n In t h i s  (The  i n an  i n t h e a p p e n d i x t a b l e s E.23-26.)  investigation  of t h e e f f e c t s of t h e farmers'  c h a r a c t e r i s t i c s we h a v e t o come t o an u n d e r s t a n d i n g  of the  i m p l i c a t i o n s of the curvature p r o p e r t i e s of t h e f u n c t i o n s , which w i l l  be d i s c u s s e d a f t e r  shadow p r i c e assets,  shifts.  First  a general overview  t h e male l a b o u r , then  t h e paddy l a n d a n d f i n a l l y  p r i c e s are presented  f o r t h e farm  M a l e shadow p r i c e s a c r o s s insignificantly  different  3 9  t h e farm  t h e female labour  shadow  groups. farm  types  from each o t h e r  tend  (except  In f a c t a g e n e r a l i z e d l i n e a r model w i t h t h e male price held constant  of t h e  u s u a l l y d o e s n o t mean a  t o be i n SRa). shadow  significant  l o s s o f f i t a g a i n s t t h e u n r e s t r i c t e d model a n d t h i s r e s t r i c t e d model p r o d u c e s a l m o s t p r i c e s of the other constant  across  farm  factors.  no c h a n g e s i n t h e shadow  Thus t h e m a l e shadow p r i c e i s 0  types" .  1 47  There i s a g e n e r a l t o be  stable across  (SUGa, SUGb).  the  In the  tendency f o r a s s e t  farm groups i n the  Sugar  r i c e r e g i o n , the a s s e t  full-time  farms are  f a r m s and  at or above the market o p p o r t u n i t y  capital  generally higher  (40.8%) (except  agricultural  c a p i t a l cost  In s i x c a s e s , full-time equal  on  and  the  official  r e a s o n why and  there  t h a n on  and  ( 1 8 . 9 % ) on  a t the  p r i c e on both  In the  two  and  The  l a n d on  farms tend  region,  t o be  Again, rent  out  general  from s m a l l p a r t - t i m e  small part-time  tendency  significantly  f a r above  small  1  the  shadow p r i c e s i s  small  the  farms.  small  h a v e an  farms. paddy  farms are  equal.  i n c e n t i v e to  T h e r e i s however a  full-time  full-time  be  shadow p r i c e of  full-time  not  small  I t a l s o shows, even i f  f o r paddy l a n d shadow p r i c e s t o  r e n t a l r a t e i n the  MRb" ).  and  f a r m s do  l o w e r on  shadow p r i c e on land  SRa)  large  same  to large f u l l - t i m e  (NRb,  land to f u l l - t i m e  farms.  similar,  r e n t i n g of l a n d b e t w e e n farms.  farm  official  small part-time  e q u a l i t y of t h e  large full-time  small part-time  other  p a d d y - d r y f a r m s of t h e  i s no  other' c a s e s  small  price for  a r e n t a l m a r k e t were o p e n e d , t h a t l a n d w o u l d n o t transferred  region  paddy l a n d shadow p r i c e s o f  e x c e p t f o r t h e NR  rental rate.  part-time  NRb)  small part-time  both all-paddy  r e g i o n , and,  the  MRa,  shadow p r i c e s  be  farms b r i n g i n g  farms c l o s e t o the  r i c e regions(  except  i n NRb  the  official and  T a b l e 5.6: f o r SMALL  Reg i o n  1  Farm  |  group  ALL-PADDY  PADDY  MALE  FEM  F  LAND  PADDY  FEM  F  FARMS  LAND  LAND  LAB  LAB  ASSETS  I  Rice LFT  SPT  Mid  |  LFT  SFT  I  NRa +  SPT  21546*  281 " (4)  272*  306  266" (22)  130  100" (39)  181*  263  41.1*  21.4" (3)  10.0  19229  22.2  NRb  22622" (7292)  2836  -23319" ( 19571 )  -4860*  -1 17844*  -32706*  283*  86" (29)  83  278  378" (54)  104*  24.5 " (8)  59. 1*  16 . 2  45503" (9150)  .  SPT  |  SFT  I  LFT SUGa  326*  562" (66)  -77*  -5*  78 (83)  236*  182" (50)  77*  316*  -396" (84)  499*  168*  6" (28)  -79*  .4 (6)  -8 . 2  51.6" (6)  17.0*  48.5  +  55031  60. 9  -1872 (8510)  23470*  9167  150" (54)  -70185  352*  169*  -112" (53)  -62  75.6*  40. 2" (8)  22 . 3*  58 .0" (4)  o f f i c i a l rental rate: a v e r a g e wage: 275 NT$ bank-market i n t e r e s t :  16634 NT$ 18.9-40.8%  D F  60.4  69052" (10420)  19308*  43108*  53424" (2228)  61131*  -47565" (18445)  1 1007*  77107*  59050" (4214)  59659  35  70" (25)  97  197*  85" (17)  156*  60.6*  38.6" (4)  40. 7  107" ( 14)  129  9*  116" (32)  132  28 . 1  28.8" (4)  27 .4  189  +  paddy land, male l a b o u r farm a s s e t s  49004  SUGb  SRb  61207  51332" (3626)  S o u r c e : t a b l e E. 19-22 N o t e s : * : s i g n i f i c a n t l y d i f f e r e n t from the l a r g e farmer group " s i g n i f i c a n t l y d i f f e r e n t from z e r o : L i n e a r model c a n n o t be r e j e c t e d ( s i g n i f i c a n c e .05) $ : Non c o n s t a n t r e t u r n s t o s c a l e model ( s t a n d a r d d e v i a t i o n o f b a s e c o e f f i c i e n t i n t h e dummy r e g r e s s i o n u s e d f o r t h e c o n f i d e n c e interval) P M A  +  308*  56443  33551*  SPT  51651" (9493)  68131 " ( 1 1846)  171  LFT  Sugar  13791*  • MRb  -9265*  I  Rice  SRa*  2 70*  -7986*  SFT  MRa  22506" (3765)  FARMS  South  r i ce  5055*  LAB  PADDY-DRY  MALE  SFT  LAB  ASSETS  DRY  North  ESTIMATED SHADOW PRICES i n t h e GENERALIZED LINEAR MODEL i n f o u r r e g i o n s FULL-TIME ( S F T ) . LARGE FULL-TIME ( L F T ) a n d SMALL PART-TIME ( S P T ) FARMS  : dry land : female labour  na average  wage: 249  NT$  Table  1  Region Farm  PADDY  MALE  FEM  F  LAND  387  LAB  PADDY  1 16*  65.4*  FEM  F  FARMS  LAND  ESTIMATED SHADOW PRICES i n t h e LINEAR S I Z E - P A R T I C I P A T I O N DUMMY MODEL i n f o u r SMALL FULL-TIME ( S F T ) , LARGE FULL-TIME ( L F T ) a n d SMALL PART-TIME ( S P T ) FARMS  LFT  -17450 ( 1 1887)  SFT  9064*  SFT  I  MRa  -10093  |  South  49224" (16290)  47691  6208  235 (82)  369  404*  656" (200)  338  253*  40 (99)  108  185  42.5" (5)  42.7  48 . 1 *  . 3*  24 .0" (24) MRb  21.5  88877*  33761  66065 (37037)  75887  66200  91252*  -30157  -39107 (32284)  56715  -54443  -439  194  276" (92)  - 184*  351*  834  117  99 ( 162)  76  16  35.2  18.6  178  229 ( 125)  212  613" (216) 11.6 (5)  -12.1*  52.7  SPT  Sugar SFT  23506 ( 16581 ) 833 (85) -426 (226) 37 . 3" (16)  56564  32246  16.5 (24)  S o u r c e : t a b l e E.15-18 Notes: * : s i g n i f i c a n t l y d i f f e r e n t from t h e l a r g e farmer group : L i n e a r model c a n n o t be r e j e c t e d ( s i g n i f i c a n c e .05) ( s t a n d a r d d e v i a t i o n of the base c o e f f i c i e n t , used  SPT  LFT SUGa  +  47015" ( 17311)  80992  318*  -69  134 (126)  -162  41  105  -122 (153)  -16  76 .0" (20)  44 .O  . 32.7  101 . 1  SUGb  SRb  +  -9700 ( 19532)  LAB  I  Rice  LFT  regions  SRa  346  14964 ( 18746)  -45. 1*  SPT  LFT  NRb  39301  I  rice  279  45595  ASSETS  SPT  Mid  442" (88)  LAND  LAB  I  Rice  NRa  -21697  LAB  PADDY-DRY  MALE  SFT FARMS  ASSETS  DRY  North  group  ALL-PADDY  5:7: for  1 13052" ( 15742)  69129  53635  63533" (10280)  53878  7178 (24498)  -69545  67615  60356" (9228)  58900  124  68 (98)  -329*  409*  -73 ( 128)  414*  -274 (222)  246  57  88 (79)  21.5  31.6  19.8" (8)  51.4 ( 16)  " : significantly  different  from  -12.7  zero  +  P M A  : paddy l a n d : male labour : farm a s s e t s  o f f i c i a l rental rate: a v e r a g e wage: 275 NT$ bank-market i n t e r e s t :  f o r the confidence  16634 NT$ 18.9-40.8%  interval)  D : dry land F : female labour  na average  wage: 249 NT$  ^ uo  1 50 T a b l e 5.8: SHADOW PRICES f o r t h e SUGAR ALL-DRY FARMS i n t h e GENERALIZED LINEAR a n d LINEAR DUMMY MODEL MODEL:  GENERALIZED LINEAR SFT  DRY  M+LFT  LAND - 2 5 6 9 5 *  S I Z E - P A R T I C I P A T I O N DUMMY  SPT  SFT  9454 (7820)  54019*  MALE  432  305" (57)  -41 *  FEMALE  -76  -68 (105)  -203*  99.4*  69. 1" (16)  58.5  F ASSETS  M+LFT  SPT  -7643 (na)  1 12245  571 1 0  • -4.9  450" (na)  63  -89  -91 " (na)  17  58.4  92.1" (na)  -44.2  S o u r c e : t a b l e s E.15-22 N o t e s : The b a s e f a r m g r o u p i s t h e f a r m s o v e r 1 h e c t a r e ( i n s t e a d t h e u s u a l f a r m s o v e r 2 h e c t a r e ) b e c a u s e t h e r e were not enough l a r g e f u l l - t i m e farms i n t h e sample. Generally, t h e w h o l e s a m p l e may be t o o s m a l l (91 o b s e r v a t i o n s ) t o g i v e reasonable estimates of t h e s h i f t c o e f f i c i e n t s )  There i s a l s o a g e n e r a l p r i c e s of s m a l l f u l l - t i m e f e m a l e wage (249 NT$)  f a r m s t o be a r o u n d o r a b o v e t h e  (except  SRa a n d SUGb), w h i l e t h e  shadow p r i c e s on l a r g e f u l l - t i m e a r e much l o w e r Dry full-time type  and v e r y  t e n d e n c y f o r f e m a l e shadow  and small p a r t - t i m e  farms  erratic.  l a n d shadow p r i c e s a r e h i g h a n d s h a r e d  and s m a l l p a r t - t i m e  f a r m s on t h e d o m i n a n t  farms i n the Sugar r e g i o n , w h i l e the s m a l l  shadow p r i c e s a r e e v e n h i g h e r .  by l a r g e land  full-time  I n the r i c e r e g i o n s , d r y  l a n d shadow p r i c e s a r e e r r a t i c a n d g e n e r a l l y  negative.  151  The  preceding discussion  of  the  shadow p r i c e s  the  farms w i t h d i f f e r e n t c h a r a c t e r i s t i c s  the  farm groups i n the  overall to the  suggests that a l l  a l l - p a d d y North r i c e region share  tendency t o equate the national  for  family  average market p r i c e s  factor or  productivities  official  prices  ( a l t h o u g h s m a l l f u l l - t i m e f a r m s seem t o h a v e l e s s a c c e s s the  official  full-time  asset market).  f a r m s of  regions also  the  Additionally,  all-paddy  show t h i s t e n d e n c y  w i t h l e s s a c c e s s to the Additionally,  farms i n the  official  a l l the  asset  the  r i c e r e g i o n s and  the  than the  productivities r e n t and land.  dry  W i t h i n the  nearly  2.5  rice  SRa  region  times the  region  economic  are  generally  the  factor  productivities  the  d i s t r i b u t i o n of  the  there  i s not  between the  family  factors  lower  land  official  national  shows p r o d u c t i v i t i e s c o m p a r a b l e t o region,  the  productivities  a g r i c u l t u r a l wage, w h i l e  are  land  Sugar  the  Thus l a b o u r p r o d u c t i v i t i e s  national  other  t e c h n o l o g y than  factor  s u g g e s t a much more r u r a l s t r u c t u r e - o f environment.  small  i n the  farms i n the  S U G b " ) work w i t h a v e r y d i f f e r e n t  f a r m s of  to  market).  2  (SRa,  the  (although  the  paddy  a great v a r i a t i o n f a r m g r o u p s , so d o e s not  need  in  that to  change. The  e s t i m a t i o n s f o r the  paddy-dry mixed farms i n  R i c e r e g i o n s , tend to produce s h i f t s i n the prices the  two  which suggest that land  t y p e s i s not  the  e f f e c t and  land  shadow  interaction  captured very well  the  i n the  between model.  1 52  T h i s may little dry  be  dry  land  land together  curvature  i n s e c t i o n H.1,  important  it  f o r the  i s now  nearly  have a l r e a d y  further discussed  i n t e r p r e t a t i o n of  g e n e r a l l y the  shown  i n the  family supplied  estimated  because i t i s  f a c t o r mix  functions.  estimated  changes.  is influenced,  the  norm and 4 3  s e p a r a b i l i t y a s s u m p t i o n , the the e s t i m a t e d female l a b o u r labour  unit value 4 4  .  The  value  We  the  full-time  farms have a h i g h e r  part-time  f a r m s and  The  paddy l a n d  discussed  around and female  farm groups f o l l o w s  shape o f  the  four  labour-land  i s such t h a t the i s an  be  constant  p a d d y l a n d and  However, t h e  whenever t h e r e  resultant  between paddy l a n d  ratio.  female labour  land.  the  large full-time  of t h e falls  because of  that  labour-land  the  As  know f r o m c h a p t e r  lowest  relationship  land.  movements i n t h e  p r o d u c t i v i t i e s between the  isoquant.  and  i s s u e can  isoquant  endowment s t r u c t u r e and  the  farm groups i s the  r e l a t i o n s h i p between female l a b o u r t o s c a l e was  The  f u n c t i o n s and  paddy l a n d p r o d u c t i v i t i e s of t h e  to  t h e movements i n f a c t o r  land p r o d u c t i v i t y pattern  which dominates the  returns  very  totally  i s n e c e s s a r y t o i n v e s t i g a t e t h e p o s s i b l e c a u s e s of  difficulty  the  farms w i t h  farms which are  p r o b l e m t h a t we  p r o d u c t i v i t i e s when t h e Since  with  the  farms. The  exist  a c o n s e q u e n c e of c o l l e c t i n g  a d d i t i o n of  from  estimated  that  small  r a t i o than f a r m s have  estimated  unit  small the  influence  land p r o d u c t i v i t y female labour  shadow p r i c e i s t h u s l o w e s t  on  to  the  small  1 53  full-time area  f a r m s b e c a u s e more f e m a l e  t h a n on  the other  f a r m s and  labour  i s used per  the e s t i m a t e d  land  isoquants  are  concave. T h e r e c o u l d be result.  The  first  s e v e r a l c a u s e s of t h i s e s t i m a t i o n  c a u s e c o u l d be a d a t a p r o b l e m , i n t h e  measurement o f t h e amounts of f a m i l y s u p p l i e d especially  the  female  labour  the model s p e c i f i c a t i o n , a s s u m p t i o n b e t w e e n on i n p u t s and 2)  on  The  second cause c o u l d  w h i c h r e l i e s on  t h e one  1)  the  hand the o u t p u t  t h e o t h e r hand t h e  be  separability  and  bought  family supplied factors  t h e o p t i m i z a t i o n a s s u m p t i o n of t h e c h o i c e o f o u t p u t  bought i n p u t The to  .  factors,  measurement of t h e  inappropriate  quality. that the  and  mix. family supplied factors  s t a y a t a l e v e l of a g g r e g a t i o n  in Taiwan.  and  No The  f o r the a c t u a l i t y differentiation  which c o u l d  o r i g i n a l d a t a was  situation  p o s s i b l e i n the  very c a r e f u l l y  l a b o u r d a y s were c o u n t e d .  t h a n what i s a v a i l a b l e  be  of t h e p r o d u c t i o n was  labour  collected  This i s indeed  f o r most a g r i c u l t u r a l  had  so  better  s t u d i e s where  o n l y t h e numbers of f a m i l y members i s known ( s o t h a t u s u a l l y l a b o u r d a y s must be a p p r o x i m a t e d ) . Taiwanese c a s e , w i t h the opportunities  However, i n t h e  increase in education  (the l a t t e r s e l e c t i v e  i n the c h o i c e  member's q u a l i t i e s ) , h o m o g e n e i t y of t h e f a r m on t h e d i f f e r e n t Additionally,  farms can  no  and  l o n g e r be  off-farm of  labour  quality  assumed.  the v a r i a t i o n s of the d i s u t i l i t y  of farm  work  1 54  for  the  i m m o b i l e f a m i l y members h a v e p r o b a b l y  between f a r m  become b i g g e r  t y p e s b e c a u s e o f t h e o f f - f a r m income  possibilities  ( c o m b i n e d w i t h income s h a r i n g p r a c t i c e s i n t h e  households).  Thus c o u n t i n g o n l y t h e l a b o u r d a y s  introduce large s t a t i s t i c a l  variation  may  i n t h e measurement o f  t h e r e l a t i o n s h i p of l a b o u r t o t h e v a l u e a d d e d and the p r o d u c t i v i t y is  interesting  of t h e o t h e r  t h a t i t i s the  c a u s e s t h e p r o b l e m and male l a b o u r  not  factors. female  family labour  v a r i a b l e was  The  of w o r k i n g ,  a l s o very aggregated,  b e c a u s e i t p r o v i d e s an o b s e r v a b l e  system.  bought w i t h c r e d i t Thus f o r t h e  farm m a c h i n e r y will  farm  E.g.  collateral,  asset  machinery, can  from the o f f i c i a l  more  banking  i n the farm a s s e t v a l u e , the o p p o r t u n i t y c o s t bank i n t e r e s t c o s t ,  model s p e c i f i c a t i o n  relies  so t h a t t h e e s t i m a t e d  a d d e d and  the  disturbed  i f t h e s e a s s u m p t i o n s do  exist  farm  so t h a t v a r i a t i o n s i n  e s t i m a t e d p r o d u c t i v i t i e s of a s s e t s may  assumption,  in  t y p e s w i t h h i g h p r o p o r t i o n s of  be c l o s e t o t h e o f f i c i a l  The  because  r e l a t e s more t o  measurement o f t h e  opportunity cost structure could r e s u l t .  be  and  is  which  i s b o t h more homogeneous i n q u a l i t y and  the market s i t u a t i o n .  to  In t h i s c o n t e x t  the male l a b o u r , p r o b a b l y  e v a l u a t i o n of the d i s u t i l i t y  easily  thus  reflect  and  this.  on s e v e r a l  r e l a t i o n s h i p between  f a m i l y s u p p l i e d f a c t o r s may  value  s y s t e m a t i c a l l y be  not h o l d .  Thus i f t h e r e  s e v e r a l s e t s of c r o p s , e a c h s e t d i s t i n g u i s h a b l e by  major d i f f e r e n c e s i n t h e i r  t e c h n o l o g i e s and  factor  1 55  intensities factors),  ( w h i c h r e l y i n f a c t on  then the  ( 1 3 ) — ( 1 4 ) d o e s not  s p e c i f i c family  s e p a r a b i l i t y a s s u m p t i o n as hold.  We  v e r y l a r g e , and  the  c r o p s have d i s t i n c t i v e  because p r o d u c t i o n  i s s e n s i t i v e to c a r e f u l l  (e.g. This a  thus r e q u i r i n g the  sugar) because the  s i t u a t i o n can  1 $ - i s o q u a n t FF  and  a  Female labour  labour  per  be  of  1 $ - i s o q u a n t LL  /  drawn as  the of  S F T  land  family  (e.g.  can  i n f i g u r e 5.1,  choose i s  vegetables)  family per  be  land  mechanized.  where t h e r e  labour-intensive  land-intensive  crop.  If  the  L  D  0  land figure  5.1  0  land figure  5.2  is  crop  Female Labour  /  the  labour  labour  production  female f a m i l y the  that  self-supervised  O t h e r c r o p s need l i t t l e  rice,  four  technologies.  family  labour.  in  f a r m e r s can  Some need a l o t o f  application,  stated  know f r o m c h a p t e r  s e t of a v a i l a b l e c r o p s f r o m w h i c h t h e  supplied  156  assumption that farmers mix  perfectly  are choosing  is also violated,  the o p t i m a l c r o p  then  the r e l a t i o n s h i p s  v a l u e added t o f a m i l y s u p p l i e d f a c t o r s c o u l d v e r y produce the concave isoquant  choice  in estimations.  of  well  T h u s , i f most  o b s e r v a t i o n s are d i s t r i b u t e d around these crop  value  i s o q u a n t s then  envelope  f u n c t i o n AA. farmers*  5  the e s t i m a t i o n s w i l l The  i s s u e becomes t h u s a q u e s t i o n o f  a r e are not m a x i m i z i n g  allocating  their  p r o d u c e an  their  value-added  f a m i l y f a c t o r s a c r o s s the c r o p s  the v a l u e m a r g i n a l  products k e a c h c r o p p r o d u c t i o n (VMP FF  crop a  farmer  such  that  LL  p r o d u c t i o n of the  f o r farmers  by  of e a c h f a c t o r a r e e q u a l i z e d i n k = VMP Vk=inputs). T h i s would  mean a p r o d u c t i o n a l o n g ABCD i n f i g u r e simultaneous  whether  5.2,  with a  l a b o u r and l a n d - i n t e n s i v e  on endowment r a y s b e t w e e n OB  and  OC.  w i t h an endowment a t E w o u l d p r o d u c e OE  Thus  of  the  FF  l a b o u r - i n t e n s i v e c r o p and  OE  of the l a n d - i n t e n s i v e c r o p LL  and  h a v e more t h a n  1$ t o t a l  value-added,  i n s t e a d of  o n l y the l a b o u r - i n t e n s i v e c r o p , or l e s s than the  land-intensive crop.  e s t i m a t e d value-added farmers  m i x e s , and difficult  to suggest  i n o p t i m a l l y choosing  f o r the farmers  the  crop  especially  whose endowment r a t i o s a r e f a r o r OC  where s p e c i a l i z a t i o n  Correct crop d i v e r s i f i c a t i o n  amount o f v e r s a t i l i t y ,  only  that  the  t h e d i f f i c u l t y of t h e c h o i c e becomes  f r o m t h e endowment r a t i o s OB optimal.  1$ f r o m  from  Thus t h e c u r v a t u r e p r o p e r t y of  f u n c t i o n s tends  have d i f f i c u l t y  1$  accuracy  and  is  requires a large  a good k n o w l e d g e of  both  157  t h e l a b o u r and  land-intensive crops.  l a c k i n g on  farms ( e s p e c i a l l y  the  groups f a l l and  i n the c a t e g o r y  may  s i n c e the p a r t - t i m e  be  farm  w i t h endowment r a t i o s b e t w e e n  OB  OC). Further research  needed t o r e s o l v e t h i s directed and  This accuracy  issue.  in this  separate  research should  reported  farm  detailed  study.  crops.  i n f o r m a t i o n c o u l d be The  data  e s t i m a t i o n s c o u l d then c r o p mix  be  c h o i c e and  t o the a v a i l a b i l i t y  of the  mix The  a p p r o p r i a t e f o r the e s t i m a t i o n of  f u n c t i o n s as  t o the d i f f e r e n t  be  be  separate crop technologies.  sample i s n o t  crop production  allocated  annual  The  will  t o w a r d s the c h o i c e mechanism of t h e p r o d u c t i o n  t h e s t r u c t u r e of t h e  data  i n t o the p r o d u c t i o n process  i n p u t s cannot  However, the  be  original  t h e b a s i s of s u c h  from the c r o p  a  production  u s e d i n a d e t a i l e d a n a l y s i s of t h e r e l a t i o n s h i p of t h i s  the  choice  f a m i l y endowments i n e a c h  farm  group. We  conclude  efficiency,  t h a t the  from the  investigation  p r o d u c t i v i t y a t the l e v e l t o be  investigation  on t h e f a r m s has  The  factor  of t h i s c h a p t e r  production  p a t t e r n s of the e s t i m a t e d  However,  model  the  land productivity differences  t y p e s , t o g e t h e r w i t h t h e s h a p e of t h e  v a l u e a d d e d f u n c t i o n s , do  has  situation  become v e r y c o m p l e x , so t h a t s i m p l e  s p e c i f i c a t i o n s become l e s s a p p r o p r i a t e .  between f a r m  allocative  of the t o t a l  of a g g r e g a t i o n  i n t e r p r e t e d as p r e l i m i n a r y .  of  seem t o s u g g e s t  that land  estimated and  1 58  female  f a m i l y labour a r e not v e r y mobile,  so t h a t t h e r e i s  no a c t i v i t y o f a d j u s t i n g t h e l a n d t o t h e f a m i l y l a b o u r endowments o r t h e r e v e r s e .  Thus, each f a r m i n g  household  is  bound by t h e f a m i l y l a b o u r a n d l a n d endowments a n d s h o u l d correctly  a d j u s t the output  the e s t i m a t e d  mix a c c o r d i n g l y .  f u n c t i o n s suggest  The s h a p e s o f  that t h i s output  mix c h o i c e  may be p a r t i c u l a r l y u n s u c c e s f u l l f o r t h e f a r m e r s f a c t o r endowments a r e s u c h diversify. sector  t h a t they  should  carefully  T h i s means t h a t t h e r e c o u l d be a g a i n  i f more a t t e n t i o n was g i v e n t o t e a c h i n g  accuracy  whose  f o r the  farmers  i n the c h o i c e of c r o p d i v e r s i f i c a t i o n .  H.4 T e c h n i c a l  efficiency  Technical efficiency  c a n n o t be t e s t e d d i r e c t l y i n  the c o n t e x t of t h e ' l i n e a r ' and ' g e n e r a l i z e d l i n e a r ' specifications  of the v a l u e - a d d e d  very d i f f i c u l t  to separate  value-added farm  than  technical  I t i s also  inefficiency  (less  f r o m a g i v e n s e t o f i n p u t s on an i n e f f i c i e n t on an e f f i c i e n t f a r m ) f r o m a l l o c a t i v e  when t h e d i f f e r e n t producing  functions.  c a t e g o r i e s of farmers  on d i f f e r e n t  several outputs.  endowment  The r e a s o n  o b s e r v i n g the t o t a l output  efficiency  a r e known t o be  r a y s and have a c h o i c e of  for technical  inefficiency  or the t o t a l value-added  when  from t h e  i n p u t s c o u l d be t h e i n a p p r o p r i a t e c h o i c e o f t h e o u t p u t m i x , w h i c h i s an a l l o c a t i v e  issue.  Thus t e c h n i c a l  is only c l e a r l y defined i n the s i t u a t i o n  inefficiency  where o n l y one  1 59  output  i s produced.  investigate  However, i t i s s t i l l  valuable  to  i f part-time farmers' actual value-added i s  systematically  below  t h e amount t h a t t h e e s t i m a t e d f u n c t i o n A  would  predict  from t h e i r  factor  inputs  (II-n<0), w h i l e t h e r e A  i s a s y s t e m a t i c u n d e r e s t i m a t i o n on  full-time  farms  (II-n>0).  A  Dummy v a r i a b l e  r e g r e s s i o n s on  (n-n) were e s t i m a t e d and  r e s u l t s are presented i n table  E.12-14.  Given the ' g e n e r a l i z e d l i n e a r ' e f f e c t s are s i g n i f i c a n t o n l y on t h e d o m i n a n t all-paddy  farms  sugar r e g i o n ) .  i n the r i c e The  model,  participation  i n f a v o u r of f u l l - t i m e  farm type f o r each  effect.  farms, small  full-time  (the  r e g i o n s , the mixed  farm  So c o m p a r i n g  dominant  be p r e d i c t e d  from t h e i r  s m a l l p a r t - t i m e f a r m e r s have l e s s v a l u e - a d d e d predicted  from t h e i r  The model. NRa,  MRa  On  i n the  show  land  farms have s y s t e m a t i c a l l y  than would  farms  region  non-dominant l a n d type farms  participation  value-added  and  the  no  type more  factors  and  than would  factors.  same c o n c l u s i o n c a n be drawn i n t h e the dominant  'linear'  farm l a n d t y p e s of t h e r e g i o n  (on  and SUGb) t h e d i f f e r e n c e between t h e a c t u a l and  e s t i m a t e d net r e t u r n s  is significantly  n e g a t i v e ) on p a r t - t i m e f a r m s t h a n on t h e o t h e r c a s e s t h e r e i s no e f f e c t We  be  smaller  full-time  from  can c o n c l u d e f o r t h e dominant  t h a t g e n e r a l l y more v a l u e - a d d e d f a c t o r s on t h e f u l l - t i m e  the  (more farms.  In  participation. land  type  farms,  i s generated from the  family  f a r m s t h a n on t h e p a r t - t i m e f a r m s .  1 60  This  i s probably the consequence of the f a c t that the  development of exact  farming methods i s u s u a l l y  concentrated  on the methods f o r prime land farms of each region. there  will  be a s i g n i f i c a n t  e f f e c t from c a r e f u l l  Thus,  farm  choices' (as main family a c t i v i t y ) , which i s l o s t on part-time  farms.  I . SUMMARY AND CONCLUSION The  i n v e s t i g a t i o n i n t h i s chapter  there are no gains  i n d i c a t e s that  from a system of l a r g e farms.  The  evidence a l s o p o i n t s to problems with the marketing of both land and female family labour  i n the present  land l e g i s l a t i o n and the c h a r a c t e r  context  of the  of f a m i l y labour.  There  i s a l s o some evidence, for a .loss of e f f i c i e n c y on  part-time  farms of the dominant land type i n each r e g i o n , but there are no e f f e c t s on the other The production profit  approach was to estimate a value-added f u n c t i o n which i s a s p e c i a l case of the v a r i a b l e  function.  Because of p r i c e data l i m i t a t i o n s , the  entire variable profit only and  land type farms.  f u n c t i o n c o u l d not be estimated but  the r e l a t i o n s h i p between the f a m i l y s u p p l i e d  factors  the r e a l net return from farming. For  a linear  the e s t i m a t i o n s ,  we s p e c i f i e d a l i n e a r  function,  f u n c t i o n with slope dummy v a r i a b l e s f o r the farm  c h a r a c t e r i s t i c s , and a g e n e r a l i z e d  linear  f u n c t i o n between  r e a l net r e t u r n and the f i v e f a m i l y f a c t o r s : paddy and dry  161  l a n d , m a l e and for  soil  m i x e d and a l l - d r y  regions.  This  was  farm a s s e t s .  all-dry  g e n e r a l l y very  conclusions  estimating  c a s e s as o n l y  observations.  good w i t h R  2  those of the g e n e r a l i z e d  f o r the  the  The  at least  where m e a n i n g f u l , t h o s e o f t h e l i n e a r  returns  all-paddy,  statistical  linear  (and  increasing  all-paddy  c a s e where t h e t e c h n o l o g y i s  Constant returns to scale p r e v a i l ,  i s p r o p o r t i o n a l t o the s c a l e of f a m i l y  operation.  There  i n the Our  i s no g a i n  farm  large  scale  f i n d i n g s mean t h a t t h e m e c h a n i z a t i o n o f production  to scale.  The  has not i n t r o d u c e d  indivisibilities s c a l e because  p o s s i b l y because  rice production size  that there  i n machine use.  of f i e l d  increasing  machine s e r v i c e market  s u f f i c i e n t l y well organized  field  from h a v i n g o n l y  so n e t  sector.  agricultural  the  model  function).  value-added  role,  the  t o s c a l e c a n be r e j e c t e d i n a l l c a s e s e x c e p t t h e  non-homothetic.  returns  Also,  dummy model  c a n c o n c l u d e t h a t t h e a s s u m p t i o n of  South Rice  farms  Sugar  .81.  t h a t c a n be drawn f r o m t h e l i n e a r  generally confirm  We  We c o n t r o l l e d  farm l a n d h o u s e h o l d s  gave us n i n e  r e g i o n had s u f f i c i e n t fit  and  and c l i m a t e by s e p a r a t e l y  paddy-dry four  female labour  size  are  no  Increasing  advantages  i s thus  returns  to  a l s o do n o t p l a y a  of the r e q u i r e m e n t of l e v e l  fields in  ( t h e most m e c h a n i z a b l e c r o p ) and b e c a u s e limitations  i n an  irrigated  system.  s e r v i c e c o n t r a c t s where p r i c e s a r e q u o t e d p e r h e c t a r e  of  Machine and  1 62  not  per  time p e r i o d , a l s o d i m i n i s h the advantage f o r  w i t h l a r g e and The  unfragmented  fields.  i s s u e of a l l o c a t i v e  g e n e r a l l y by  farmers  e f f i c i e n c y can  be  discussed  comparing the average f a c t o r o p p o r t u n i t y  cost  w i t h t h e a v e r a g e f a c t o r p r o d u c t i v i t i e s as g e n e r a t e d by generalized  l i n e a r model.  Average labour  productivities  c l o s e t o m a r k e t wages where good i n d u s t r i a l opportunities exist. p r i c e s are labour  erratic  Everywhere e l s e the  and  employment o p p o r t u n i t i e s i n t h e p r o d u c t i v i t i e s tend capital  cost  t o be a t , o r  (18.9%) on  farms.  differential regions.  Farm  slightly  ( 4 0 . 8 % ) on  This suggests d i f f e r e n t i a l  more i n c o r p o r a t e d of t h e g e n e r a l  i n t o the  official  receive.  The  two  the o f f i c i a l  times  i n the  Thus, i n the  bank  farm and*at  the o t h e r  access  a t t e n t i o n that these  of  asset  to  land  the  farmers  are  c a p i t a l market as  rental  r a t e , except  are a t or below the  r e n t a l a g r e e m e n t s a r e no  land r e a l l o c a t i o n . high  Thus  part  farmers  a v e r a g e paddy l a n d p r o d u c t i v i t i e s a r e a t  r e g i o n where t h e y legalized  official  female  above, the  c a p i t a l m a r k e t s where t h e d o m i n a n t l a n d t y p e  why  shadow  existence  the dominant l a n d type  or above t h e market c a p i t a l c o s t type  labour  b e l o w t h e wage r a t e s , w i t h  reflect  Dry  Sugar r e g i o n d r y  negative  least  i n the North  rental cost. longer  i n the  Rice  This  is  a v e h i c l e of  l a n d p r o d u c t i v i t i e s are a l s o  Sugar r e g i o n but  are  employment  shadow p r i c e s b e l o w t h e m a l e shadow p r i c e .  shadow p r i c e s of l a b o u r  the  rice  very  regions.  l a n d i s an a g r i c u l t u r a l  asset  163  of e q u a l  value  a s paddy l a n d , w h e r e a s i n t h e  rice  regions i t  i s h e l d f o r s p e c u l a t i v e purposes because c o n v e r s i o n c o m m e r c i a l use The family  i s expected  future.  p a t t e r n of the m a r g i n a l  f a c t o r s on  full-time  i n the  small f u l l - t i m e ,  farms suggest t h a t both  seem t o be  l a n d and  access  female labour  ( b u t t h i s may of t h e  t h a t the p r o d u c t i o n  longer a p p r o p r i a t e l y captured  subsets  of  r e s u l t s of both  and  tend  a  to point  i n Taiwan  i n s i m p l e model  i s no  (based  The  female labour are  start  situation),  and  of crops  immobile  (with  and  disutility  to i n f l u e n c e the  this,  on  estimation  the aggregated model used tends t o suggest  differences  to  specifications  i s imposed  variables).  consequence t h a t labour q u a l i t y  factors,  be  s e p a r a b i l i t y a s s u m p t i o n s between  the production  l a n d and  variety  the  farm a s s e t s ) .  situation  where a l a r g e d e g r e e of a g g r e g a t i o n maximizing  not  i n p a r t be  H o w e v e r , t h e e s t i m a t i o n r e s u l t s do  profit  are  Farm a s s e t s a l s o  t o c a p i t a l m a r k e t s may  f o r a l l farm types  fact  large  seems t o r e s p o n d t o  situation.  consequence of the c o m p o s i t i o n  the  the  u s e d i n - a c c o r d w i t h t h e e x i s t e n c e o f an a c t i v e  market, a l t h o u g h uniform  p r o d u c t i v i t i e s of s m a l l p a r t - t i m e and  f i x e d endowments, w h i l e male l a b o u r l o c a l employment o p p o r t u n i t y  to  work farm  that  as  production  combined w i t h the e x i s t e n c e of a l a r g e  with d i f f e r e n t  requirements  t e n d s t o make t h e a c c u r a c y  choice d e c i s i o n c r u c i a l  for  these  of t h e a n n u a l  f o r t h e o p t i m a l use  of the  crop family  1  resources. functions  In t h i s context,  the shapes of the  resource  estimated  seem to suggest that not a l l farmers are  s u c c e s s f u l at a d j u s t i n g t h e i r production endowments.  E s p e c i a l l y the  64  pattern  equally  to  their  farmers without  endowment mixes that give them a r e a d i l y i d e n t i f i a b l e compartative advantage towards a s p e c i a l i z a t i o n in the production small  of c e r t a i n , crops seem to make the mistakes.  f u l l - t i m e farms with t h e i r high  r a t i o and  labour-land  l a r g e f u l l - t i m e farmers with t h e i r  low  endowment labour-land  endowment r a t i o tend to c o r r e c t l y choose the output because t h e i r endowments very crop choices: crops on the  s u p e r v i s i o n - s e n s i t i v e and small  supervision-neutral However, the  obviously  f u l l - t i m e farms and crops on  small part-time  large  r e q u i r e s much more v e r s a t i l i t y ,  extension  optimal  labour-intensive  between these  choose a c r o p  extremes.  knowledge and  which the shapes of the estimated value-added suggest as l a c k i n g .  to the  and  full-time.farms.  should  which i s a combination of the two  mix  land-intensive  farms f a l l  with t h e i r endowment r a t i o and  point  Thus  This  two  mix  choice  flexibility, functions  Thus a t t e n t i o n by the a g r i c u l t u r a l  establishment  to the  issue of a c c u r a t e  d i v e r s i f i c a t i o n might produce a gain  for the  crop  sector.  However, f u r t h e r i n v e s t i g a t i o n of t h i s issue i s necessary and  would r e q u i r e data which was  not a v a i l a b l e , but  c o u l d be a v a i l a b l e i f the o r i g i n a l data c o u l d be  which  used.  1 65  On t h e a l l - p a d d y f a r m s r e g i o n and t h e dry-paddy there  mixed  i s a l s o some e v i d e n c e  f o r t h e N o r t h and M i d R i c e farms o f t h e Sugar  region,  f o r an added e f f i c i e n c y  loss  b e y o n d t h e c o n s e q u e n c e s o f t h e endowment r a t i o s w h i c h i s specifically farms.  connected  t o t h e p a r t - t i m e c h a r a c t e r of t h e  This i s probably linked  detailed  t o t h e e x i s t e n c e of v e r y  p r o d u c t i o n methods f o r t h e s e l a n d t y p e s , as  r e s e a r c h t e n d s t o c o n c e n t r a t e on t h e s e f a r m s . farmers can take advantage farmers cannot  as t h e i r  non-dominant farms,  Full-time  of t h e s e methods, but p a r t - t i m e  farm time i s r e s i d u a l .  On t h e  f a r m i n g methods a r e more g e n e r a l l y  specified  so t h a t  so t h a t  full-time  advantage  over p a r t - t i m e farmers.  f a r m e r s do n o t have an  1 66  J . NOTES  1  T h i s i s t h e p r o b l e m o f t h e i m m o b i l e f a m i l y members who are p r o d u c t i v e as farmers but not otherwise.  2  The s a m p l e d a t a was d e v i d e d i n t o s i z e c a t e g o r i e s . F o r e a c h s i z e c l a s s t h e a v e r a g e n e t p r o f i t was c a l c u l a t e d a n d then graphed a g a i n s t t h e farm s i z e - c l a s s .  3  Two r e g i o n s were s a m p l e d f o r two y e a r s  4  T h r e e p r o d u c t i o n f u n c t i o n s were e s t i m a t e d a n d t h e i r p a r a m e t e r s were n o t v e r y d i f f e r e n t f r o m e a c h o t h e r .  5  F o r e a c h f a r m s i z e , t h e m a r g i n a l v a l u e p r o d u c t s was c a l c u l a t e d a t t h e g e o m e t r i c mean o f t h e f a r m i n p u t s o f the s i z e - c l a s s .  6  T h i s was t e s t e d by u s i n g s l o p e dummy v a r i a b l e s f o r t h e s i z e - c l a s s on t h e c o e f f i c i e n t s o f t h e C o b b - D o u g l a s f u n c t i o n a n d an a d d i t i v e dummy v a r i a b l e on t h e i n t e r c e p t . The dummy v a r i a b l e c o e f f i c i e n t s were n o t s i g n i f i c a n t l y d i f f e r e n t f r o m z e r o , s o t h a t t h e p r o d u c t i o n f u n c t i o n was t h e same f o r a l l f a r m s i z e - c l a s s e s .  7  A l t h o u g h i t i s d i f f i c u l t t o a s c e r t a i n from t h e a r t i c l e , B a r d h a n seems t o h a v e c a l c u l a t e d t h e m a r g i n a l v a l u e product of l a b o u r f o r each farmer, u s i n g t h e e s t i m a t e d labour e l a s t i c i t y and t h e farmer's average labour productivity. The d i f f e r e n c e between t h e f a r m e r ' s wage r a t e a n d h i s MVP was c a l c u l a t e d . The a v e r a g e d i f f e r e n c e o v e r a l l f a r m e r s was s i g n i f i c a n t l y h i g h e r t h a n z e r o . However, t h i s c a l c u l a t i o n o f B a r d h a n d o e s n o t t e l l u s w h e t h e r t h e d i f f e r e n c e was a l s o l a r g e r t h a n z e r o f o r small farms.  8  A v e r y good e x p o s i t i o n o f t h e p r o b l e m s o f m e a s u r i n g e f f i c i e n c y of farms of v a r i o u s s i z e s i n d e v e l o p i n g c o u n t r i e s ( I n d i a , Greece) i s presented i n Yotopoulos, Nugent ( 1 9 7 6 ) , c h 4 - 6  9  see Forsund  et a l .  (1980)  10 The t e c h n o l o g y w o u l d e v e n t u a l l y have t o t u r n i n t o a decreasing return t o scale technology or the optimal s i z e of t h e . f a r m w o u l d be t h e t o t a l c u l t i v a t a b l e s i z e o f t h e country. I n t h e Taiwan case our i n t e r e s t i s d i r e c t e d t o a s i z e i n t e r v a l o f .25 t o 7 h e c t a r e s , t h e p r e s e n t l y  1 67  e x i s t i n g farm s i z e hectares.  r a n g e , w h i c h m i g h t be e x p a n d e d t o  10  11 E m p i r i c a l s t u d i e s i n o t h e r d e v e l o p i n g c o u n t r i e s c o n s i s t e n t l y f i n d c o n s t a n t r e t u r n s t o s c a l e t o be t h e norm, e x c e p t i n wheat p r o d u c t i o n , see e.g. B a r r y ( 1 9 7 0 ) , C l i n e (1973), Bardhan (1973). 12 T e c h n i c a l e f f i c i e n c y , s t r i c t l y s p e a k i n g , can o n l y be d e f i n e d f o r each output t e c h n o l o g y . If there i s a m u l t i - p r o d u c t s i t u a t i o n , t h e n t h e a s s u m p t i o n of s i m i l a r p r o d u c t i o n mix must be a d d e d i n t h e t e c h n i c a l e f f i c i e n c y argument, o t h e r w i s e t h e r e i s a c o n f u s i o n between t e c h n i c a l e f f i c i e n c y and a l l o c a t i v e (mix c h o i c e ) efficiency. 13 As d i s t r i b u t i o n of f a r m t e c h n o l o g y i s i n c r e a s i n g l y done v i a f a r m m a g a z i n e s and l a b e l i n g on t h e p a c k a g e s of t h e f e r t i l i z e r , i n s e c t i c i d e s and h e r b i c i d e s , f u n c t i o n a l l i t e r a c y i s a n e c e s s i t y f o r a b s o r p t i o n o f t h e new technologies. 14 U n l e s s b e i n g a woman o r o l d i s e x a c t l y c o r r e l a t e d w i t h low l e v e l of e d u c a t i o n . 15 L a n d m a r k e t r e g u l a t i o n s may d r i v e a l a r g e t r a n s a c t i o n c o s t ( o r r i s k c o s t ) wedge b e t w e e n l a n d r e n t r e c e i v e d and p a i d , o r between l a n d v a l u e r e c e i v e d and p a i d i n a s a l e , t o t h e p o i n t where no t r a n s a c t i o n s t a k e p l a c e and l a n d i s a f i x e d q u a n t i t y f o r the household. 16 The g r o w t h of income p e r c a p i t a i s s h i f t i n g t h e f o o d demand o u t of s t a p l e c r o p s ( r i c e ) i n t o h i g h e r q u a l i t y food (vegetables, f r u i t s ) . 17 T h i s a p p r o a c h was  u s e d by A l l e n  (1982).  18 E v e n i f r e g i o n a l p r i c e s were a v a i l a b l e , t h i s w o u l d n o t h e l p the e s t i m a t i o n s , because the r e g i o n s are e s t i m a t e d separately. 19 The u s u a l v a l u e - a d d e d a p p r o a c h assumes s e p a r a b i l i t y b e t w e e n t h e s e t o f o u t p u t s , t h e s e t of i n t e r m e d i a t e i n p u t s and t h e p r i m a r y f a c t o r s . On t h e o t h e r h a n d , a p r o d u c t i o n f u n c t i o n a p p r o a c h assumes s e p a r a b i l i t y between t h e s e t o f o u t p u t s and t h e s e t o f a l l t h e i n p u t s , t h u s b e i n g l e s s r e s t i c t i v e , but i t i s b e t t e r t o e s t i m a t e p r o f i t f u n c t i o n s (see below). The l e a s t r e s t r i c t i v e approach i s the t r a n s f o r m a t i o n f u n c t i o n approach, but i t w o u l d a l s o be b e t t e r t o e s t i m a t e p r o f i t f u n c t i o n s ( b a s e d on t h e a s s u m p t i o n t h a t f o r t h e c r o p s and t h e i n p u t s w h i c h came on t h e m a r k e t t h a t t h e r e was an a t t e m p t a t p r o f i t  1 68  maximazing w i t h r e s p e c t t o the p r i c e s , which i n t r o d u c e s a v i o l a t i o n of the r e g r e s s i o n e s t i m a t i o n assumptions i n the transformation function estimation or the production f u n c t i o n e s t i m a t i o n ) . But the v a r i a b l e p r o f i t f u n c t i o n a p p r o a c h c a n n o t be u s e d b e c a u s e we do n o t have enough p r i c e data p o i n t s ( a l s o i n the d e r i v e d output supply f u n c t i o n s e s t i m a t i o n s , t h e p r o b l e m o f t h e l a r g e number o f z e r o o b s e r v a t i o n s w o u l d be a p r o b l e m ) . A s we have t o impose s e p a r a b i l i t y , we d e c i d e d t o impose i t b e t w e e n t h e set o f a l l o u t p u t s + bought i n p u t s and t h e f a m i l y i n p u t s , t h e r e b y l e a v i n g t h e r e l a t i o n s h i p between t h e o u t p u t s and the bought i n p u t s u n r e s t r i c t e d . 20 The s a m p l e d o e s n o t i n c l u d e p u r e a n i m a l f a r m s , a l l a r e c r o p f a r m s , w i t h some l i v e s t o c k a s a s i d e l i n e ( c h i c k e n s , d u c k s a n d a t most 10 p i g s ) . Thus l a n d i s an e s s e n t i a l factor 21  T h i s i s s i m i l a r t o B a r d h a n ' s method o f a l l o w i n g s l o p e dummy v a r i a b l e s i n t h e C o b b - D o u g l a s f u n c t i o n . The i n t e r p r e t a t i o n for the v a r i a t i o n i n the marginal products i s h o w e v e r v e r y d i f f e r e n t i n o u r GL m o d e l v e r s u s B a r d h a n ' s CD m o d e l .  22 T h i s m e t h o d i s d e s c r i b e d  i n more d e t a i l  i n s e c t i o n E.3.  23 T h i s i s s i m i l a r t o B a r d h a n who a l s o c a l c u l a t e d t h e f a r m e r s ' shadow p r i c e s t o compare them t o t h e wages. 24 T h i s i s s i m i l a r t o B a r d h a n ' s method o f a l l o w i n g i n t e r c e p t dummy v a r i a b l e s on t h e c o n s t a n t o f t h e C o b b - D o u g l a s p r o d u c t i o n f u n c t i o n . B o t h m e t h o d s were d e s i g n e d t o t e s t technical efficiency. 25 The h o u r s s p e n t on f a r m b u s i n e s s by g o i n g t o t h e m a r k e t o r t h e F a r m e r s ' A s s o c i a t i o n , o r d o i n g t h e b o o k s , were n o t a l w a y s r e p o r t e d , s o t h a t male l a b o u r i s somewhat underreported. 26 T h i s i s t h e c o n v e r s i o n r a t e u s u a l l y u s e d on a l l f e m a l e labour i n p u t i n Taiwan a g r i c u l t u r a l p r o d u c t i o n information. 27 The s h a r e s o f t h e d i f f e r e n t a s s e t s d i d c h a n g e o v e r t h e nine years: 1 972 AVER Year 1980 Livestock 21 31 13 37 Machines+tools 30 48 13 14 14 Trees Farm i n v e n t o r y 26 25 28  169  28 We f o u n d no s t u d i e s t h a t c o u l d h e l p us t o assume reasonable d e p r e c i a t i o n - a p p r e c i a t i o n r a t e s f o r the Taiwanese farm a s s e t s . S t u d i e s from developed c o u n t r i e s do not a p p l y . P o s s i b l y f o r machinery, Japanese r a t e s might a p p l y . But f o r t h e t r o p i c a l f r u i t t r e e s , t h e r a t e s a r e as y e t unknown. F o r l i v e s t o c k n e i t h e r t h e W e s t e r n s t u d i e s ( t o o h o t ) nor the p e a s a n t A s i a n systems ( t o o commercialized) apply. 29  The m e a n i n g f u l o p p o r t u n i t y c o s t i s t h u s t h e i n t e r e s t rate. S i n c e a l l o w a n c e s h o u l d be made f o r d e p r e c i a t i o n - a p p r e c i a t i o n , and g i v e n t h e f a r m a s s e t s h a r e s , net d e p r e c i a t i o n i s . p r o b a b l y p o s i t i v e , the i n t e r e s t r a t e w i l l be t h e minimum v a l u e t h a t t h e shadow p r i c e of a s s e t s s h o u l d be f o r a l l o c a t i v e e f f i c i e n c y .  30 Tax, i n t e r e s t c o s t and l a n d r e n t c o s t s were n o t d e d u c t e d . We a r e t h u s a s s u m i n g t h a t t h e n e t p r o f i t ( b e f o r e t a x e s , l a n d r e n t and i n t e r e s t c o s t s a r e d e d u c t e d ) must pay f o r t h e t o t a l amount of l a n d c u l t i v a t e d ( r e g a r d l e s s of o w n e r s h i p ) and f a r m a s s e t s ( r e g a r d l e s s of i t s f i n a n c i n g ) and t h e o t h e r f a m i l y i n p u t s . Our d e f i n i t i o n o f n e t r e t u r n i s t h u s n o t e n t i r e l y t h e same as f a r m income g o i n g t o the f a m i l y . The l a t t e r i s c a l c u l a t e d a f t e r t a x e s and l a n d r e n t s a r e p a i d and a f t e r i n t e r e s t i s p a i d on l o a n s . 31  U s u a l l y i f the d i a g o n a l elements are p o s i t i v e f o r the whole sample, they are a l s o p o s i t i v e i n the subsamples where t h e f a r m s a r e g r o u p e d a c c o r d i n g t o s i z e and participation.  32  See comments t o t a b l e E.9 f o r t h e n o n - h o m o t h e t i c c a s e an i n t e r p r e t a t i o n i n t e r m s o f s c a l e e c o n o m i e s .  for  33 The o f f i c i a l l a n d r e n t , t h e a v e r a g e m a l e and f e m a l e ( c o n v e r t e d ) wage and t h e o f f i c i a l and m a r k e t i n t e r e s t rates. See a p p e n d i x A and t a b l e A.1. 34  Thus f o r t h e ' l i n e a r ' model p r o d u c t i v i t y of t h e f a c t o r the standard d e v i a t i o n s are d i a g o n a l e l e m e n t s of ( V ' V ) ~  1  n=va, t h e m a r g i n a l ( 3II/3V=a) i s r e p o r t e d , and the square r o o t s of the o- = v a r ( a ) . 2  For the ' g e n e r a l i z e d L i n e a r ' model of e q u a t i o n ( 3 3 ) , the m a r g i n a l p r o d u c t i v i t y (VMP) f o r e a c h f a r m e r i s g i v e n a s i n e q u a t i o n ( 3 4 ) , where w e r e p o r t t h e a v e r a g e o v e r t h e H-number of h o u s e h o l d s : ZVMP /H and t h e standard d e v i a t i o n o f t h e base^ c o e f f i c i e n t (y ) i n t h e dummy r e g r e s s i o n s on t h e VMP as i n e q u a t i o n (35): V M P = 7 + Z 7 d + L y d , so t h e s t a n d a r d d e v i a t i o n i s t h e s q u a r e r o o t of 'the e l e m e n t o f t h e variance-covariance matrix (D'D)" a that i s associated with 7 . T h i s base 7 i s t h e VMP f o r t h e l a r g e f u l l - t i m e f a r m . A  h  0  0  i  4  1  2  0  0  170  35 The a v e r a g e f e m a l e wage was 199 NT$-; b u t a f t e r i s 249 NT$: t h e f e m a l e wage f o r t h e e q u i v a l e n t f r o m women.  conversion labour  36 The most common f o r m o f a p r i v a t e m a r k e t c r e d i t s y s t e m i s the s a v i n g s p o o l system. The o f f i c i a l c r e d i t s y s t e m i s c o l l e c t e d under t h e U n i f i e d A g r i c u l t u r a l C r e d i t P r o g r a m and t h e i n t e r e s t r a t e s q u o t e d i n t h i s s t u d y a r e f o r unsecured loans. 37 I f we were t o assume d e p r e c i a t i o n - a p p r e c i a t i o n r a t e s a s i n Canada ( l i v e s t o c k , t r e e s : a p p r e c i a t i o n 4%, m a c h i n e r y : d e p r e c i a t i o n 13%, i n v e n t o r y : d e p r e c i a t i o n 0%) a n d u s e t h e sample w e i g t h s o f t h e a s s e t s , t h e n e t d e p r e c i a t i o n r a t e w o u l d be 3.41%. 38 A l t h o u g h i t i s o b v i o u s t h a t t h e g e n e r a l i z e d l i n e a r f u n c t i o n d o e s impose somewhat more r e g u l a r i t y on t h e m a r g i n a l p r o d u c t i v i t i e s . T h i s r e s u l t s from t h e r e q u i r e m e n t s t h a t a l l o b s e r v a t i o n s h a v e t o be i n c l u d e d i n the form of t h e g e n e r a l i z e d l i n e a r f u n c t i o n . The l i n e a r dummy v a r i a b l e f u n c t i o n d o e s n o t impose a s much s i m i l a r i t y i n t e c h n o l o g y on a l l f a r m g r o u p s . 39 T h i s i s t h e model where t h e g e n e r a l i z e d l i n e a r f u n c t i o n i s e s t i m a t e d w i t h t h e r e s t r i c t i o n s : a = a.,j = a = a = 0 The t e s t s t a t i s t i c s for. t h i s a s s u m p t i o n a r e r e p o r t e d i n t a b l e E.3. P M  M  M F  M h  40 T h i s i s t r o u b l i n g a s t h e m a l e wage h a s been r i s i n g f r o m 200 NT$ i n 1972 t o 383 NT$ i n 1 9 8 0 , t h u s i n d i c a t i n g t h a t male shadow p r i c e s a r e p r o g r e s s i v e l y more o u t o f l i n e . T h i s may be a c o n s e q u e n c e o f an i n c r e a s i n g i n c i d e n c e o f i m m o b i l i t y of the a g r i c u l t u r a l male labour f o r c e as the male a g r i c u l t u r a l f a m i l y w o r k e r s become o l d e r , w i t h o u t m o b i l e young members e n t e r i n g t h e f a r m a c t i v i t y . . 41 The MRb c a s e where t h e shadow p r i c e o f l a n d on s m a l l f a r m s i s n e g a t i v e c o u l d be l i n e a r h o w e v e r , s o t h a t a l l f a r m g r o u p s s h a r e t h e same p o s i t i v e shadow p r i c e . 42 The SUGc e s t i m a t i o n s o f t h e VMP dummy r e g r e s s i o n s a r e e r r a t i c p r o b a b l y b e c a u s e t h e r e a r e t o o few o b s e r v a t i o n s i n e a c h f a r m g r o u p c e l l , a s t h e t o t a l number o f o b s e r v a t i o n i n t h e sample i s o n l y 91. 43 T h i s i s t h e c o n s e q u e n c e o f t h e s e p a r a b i l i t y a s s u m p t i o n i n s e c t i o n D., a s s e p a r a b i l i t y means:  171  9  —  9q  311/3 v.  [  9n/9v  k  where v i s a f a m i l y i n p u t and q i s a p r i c e , e i t h e r of o u t p u t o r b o u g h t i n p u t s . T h u s p r i c e c h a n g e s do n o t c h a n g e t h e shape o f t h e v a l u e - a d d e d i s o q u a n t s i n t h e f a m i l y i n p u t space. 44 G e n e r a l l y e v i d e n c e p o i n t s t o m o b i l i t y o f m a l e l a b o u r a n d f a r m a s s e t s , so t h a t t h e m a i n f a c t o r w h i c h c h a n g e s t h e l a n d p r o d u c t i v i t y i s t h e female l a b o u r amounts. 45 T h i s i s v e r y s i m i l a r t o i n t e r n a t i o n a l t r a d e t h e o r y , where c o u n t r i e s (farmers) are unable t o trade t h e i r f a c t o r s across t h e i r borders (farms). Instead they trade p r o d u c t s ( c r o p s ) a t t h e p r i c e s s e t i n t h e w o r l d market ( a g r i c u l t u r a l product markets). The d e c i s i o n i s t o m a x i m i z e t h e c o u n t r y ' s ( f a r m ' s ) v a l u e - a d d e d by f i n d i n g the p r o d u c t ( c r o p ) mix w h i c h i s o p t i m a l f o r t h e c o u n t r y ( f a r m ) , n a m e l y where t h e p r o d u c t i v i t i e s o f t h e i m m o b i l e production factors are equalized across industries (crops). I n t h e c o u n t r y c a s e t h i s means t r a d i n g o f t h e s e f a c t o r s of p r o d u c t i o n between t h e i n d u s t r i e s i n s i d e t h e c o u n t r y and thus i n t r a - c o u n t r y market p r i c e s f o r t h e f a c t o r s because separate agents decide t h e p r o d u c t i o n o u t p u t o f e a c h i n d u s t r y . However i n t h e c a s e o f t h e f a r m e r , s i n c e he i s t h e same a g e n t who p r o d u c e s t h e s e v e r a l c r o p s , t h e r e i s no n e e d f o r an i n t r a - f a r m f a c t o r market. The n e c e s s i t y o f e q u a l i z i n g t h e v a l u e m a r g i n a l p r o d u c t s o f t h e f a c t o r s a c r o s s t h e p r o d u c t s i s however s t i l l t h e r e on t h e f a r m f o r t h e o p t i m i z a t i o n o f t h e value-added (Hechsher-Ohlin and Stolper-Samuelson theorems). N o t e t o o t h a t , where i n t h e i n t e r n a t i o n a l trade s i t u a t i o n i t i s dubious t h a t the assumptions of these theorems a r e f u l f i l l e d , they a r e almost a u t o m a t i c a l l y f u l f i l l e d i n t h e farmer case.  1 72  CHAPTER VI CONCLUSION  The  question  that this  study  has a t t e m p t e d t o answer  is:  'Is there  the  p o l i c y makers i n Taiwan t h a t t h e p r e s e n t  agriculture part-time  empirical justification  f o r t h e c l a i m s made by stagnation i n  i s l a r g e l y a t t r i b u t a b l e t o the smallness  operation  the  late  the  adoption  o f an i n c r e a s i n g number o f f a r m s ? '  1960s, a g r i c u l t u r a l  g r o w t h h a s been s l o w ,  of a l a b o u r - s a v i n g  response t o the competition non-agricultural  and t h e  sectors.  Since  despite  development s t r a t e g y i n  f o r labour  from t h e  The c o n t i n u e d  slow growth has  prompted t h e a g r i c u l t u r a l a u t h o r i t i e s t o r e c o n s i d e r the 1949-53 l a n d r e f o r m  laws i n t h e i r  i n t h e number o f l a r g e f u l l - t i m e identified decline  three  concern about the d e c l i n e farms.  In chapter  I I , we  f a c t o r s w h i c h have c o n t r i b u t e d t o t h e  i n farm s i z e :  the land reform  laws,  the inheritance  c u s t o m a n d t h e i n c r e a s i n g demand, f o r l a n d f o r n o n - a g r i c u l t u r a l uses. having  F o u r f a c t o r s were i d e n t i f i e d a s  i n f l u e n c e d t h e growth of p a r t - t i m e  market t h a t works w e l l ,  farming:  a  labour  the extended f a m i l y system, the  e x p a n s i o n o f t h e s p e c i a l i z e d 'custom s e r v i c e s ' m a r k e t i n t o more f a r m a c t i v i t i e s , growth.  and t h e r a p i d d e c e n t r a l i z e d  P a r t of the s t a g n a t i o n  i n the a g r i c u l t u r a l  industrial growth  i s t h u s i m m e d i a t e l y a t t r i b u t a b l e t o t h e l o s s o f l a b o u r and  1 73  land resources i n a g r i c u l t u r e . however, e x p r e s s e s i t s e l f  This l o s s of resources,  i n Taiwan  by an i n c r e a s e  number o f s m a l l and p a r t - t i m e f a r m s . authorities,  i nthe  The a g r i c u l t u r a l  i n t h e i r w i s h t o promote t h e l a r g e  full-time  f a r m s w i t h t h e methods p r o p o s e d under t h e s e c o n d l a n d r e f o r m d e b a t e , have i n d i c a t e d large  full-time  t h a t they b e l i e v e t h a t a system of  farms would r e v i v e t h e s e c t o r ' s  growth.  T h e s e f a r m s a r e assumed t o be t h e most p r o d u c t i v e f a r m s i n the  s e c t o r and t h i s h y p o t h e s i s i s t e s t e d  i n t h i s study.  F o r t u n a t e l y , we l o c a t e d an e x c e p t i o n a l d a t a s e t : t h e a n n u a l Farm R e c o r d K e e p i n g F a m i l i e s s u r v e y .  The d a t a f r o m  nine recent  agricultural  (1972-80)  s e c t o r s of Taiwan  s u r v e y s f o r four major  ( t h e N o r t h , M i d - , South r i c e and Sugar  r e g i o n s ) were u s e d .  The q u a l i t y  of t h i s data i s b e t t e r  than  d a t a f r o m most o t h e r s o u r c e s w h i c h r e l y on t h e memory o f t h e farmers.  In t h i s  survey, farmers d a i l y  household's t r a n s a c t i o n s  recorded a l l the  ( i n k i n d and c a s h ) a n d a c t i v i t i e s ,  be t h e y f o r f a r m i n g , f o r n o n - f a r m i n g o r c o n s u m p t i o n .  Thus  an a n a l y s i s o f t h i s d a t a c o u l d p r o v i d e a r e l i a b l e t e s t o f the  superiority  of the l a r g e  full-time  measure t h e l i k e l y consequences reform  farms and a l s o  o f some o f t h e s e c o n d  land  proposals. A system of l a r g e f u l l - t i m e  farms i s c o n s i d e r e d t o  be s u p e r i o r t o a s y s t e m o f s m a l l a n d e s p e c i a l l y p a r t - t i m e f a r m s f o r many r e a s o n s .  First,  large  of s m a l l full-time  f a r m s a r e c o n s i d e r e d t o be more r e s p o n s i v e t h a n s m a l l  farms  174  t o changes i n the c o m p o s i t i o n p r o d u c t s and chapter The  supply  IV shows no  of new  farms, except higher  h e r b i c i d e s and  i n the N o r t h R i c e  s m a l l and  'productive' analysis  s t r a t e g y on  and  staples  new  IV  as  large full-time  b o t h o u t p u t and  profit  large full-time  farms. per  farms.  a m a t t e r of c r o p p i n g  m u l t i p l e cropping Instead,  manifested production,  where  small  small  index the  farms.  e v i d e n c e on  Also,  on On  hectare  The  o u t p u t and small  intensity  profit  slightly  farms farms than  difference is  the c r o p  the  maturity  productivity difference i s  family supplied  per  lower  d i f f e r e n c e s as  r e f l e c t s only  more The  full-time  I n t e r e s t i n g l y , the  r i c e y i e l d s are  farms.  average  small part-time are  as  r e a d i l y by  large full-time  through y i e l d d i f f e r e n c e s i n non-rice while  farms  a l s o assumed t o be  the  the  i n p u t s , such  indicates otherwise.  i s s u b s t a n t i a l l y higher  lengths.  region  small part-time, farms.  l a n d p r o d u c t i v i t y , m e a s u r e d by  t h a n on  the  farms are  t h a n s m a l l and  i n chapter  hectare,  large  intermediate  small part-time  (rice  of  i n s e c t i c i d e s were a d o p t e d j u s t as  Large f u l l - t i m e  the  responsiveness.  f a r m s r e s p o n d e d much more  paddy l a n d endowment on  mechanized production  agricultural  analysis in  i n t h e demand s h a r e of  promoted a r i c e p r o d u c t i o n  not  The  sweet p o t a t o ) t h a n t h e o u t p u t c o m p o s i t i o n  significantly  on  demand f o r  inputs.  of s m a l l  to the d e c l i n e  full-time  the  the  e v i d e n c e of t h i s g r e a t e r  output composition  readily and  the  of  mainly crop  s i m i l a r on a l l f a r m s .  f a c t o r use  i n d i c a t e s that  So  175  small f u l l - t i m e the  f a r m g r o u p s , by u s i n g t h e i r  labour  full-time family per  substantially  t o l a n d endowment i n t h e p r o d u c t i o n  supervision  i n t e n s i v e crops  labour  than  labour  farms,  l a c k of  per hectare  i s less.  relative  l a c k of  but then produce s i m i l a r  farms a r e needed because  i n v e s t more t h a n  by  the evidence  as  the farm a s s e t  either.  s m a l l farms i s not  The i n v e s t m e n t  l e v e l per hectare  stock per hectare, are s i m i l a r o n l y two e x c e p t i o n s :  is falling  farm investment  farms,  i n the North  on t h e  because  livestock  a n d t h e owned m a c h i n e  Rice region  rice related  There a r e  per hectare  farms because they have a h i g h e r  l a n d , so t h a t l e s s  supported  a n d t h e owned m a c h i n e  f o r a l l farms.  on t h e s e  they  per h e c t a r e , as w e l l  s m a l l farms of t h e Sugar r e g i o n i s lower  stock per hectare  outputs  farms.  That l a r g e f u l l - t i m e  full-time  Large  by h i r i n g more m a c h i n e s e r v i c e s p e r h e c t a r e  large full-time  production  o f l a b o u r and  relative  f a r m s do r e s p o n d t o t h e i r  small full-time  save and then  family  by h i r i n g more s e r v i c e s o r u s i n g more m a c h i n e s  h e c t a r e , and t h e r e f o r p r o d u c t i o n  family  of a l l  higher  such as v e g e t a b l e s .  f a r m s do n o t r e s p o n d t o t h e i r  Small part-time  as  f a r m s u s e t h e l a n d most i n t e n s i v e l y  i s lower share  on l a r g e  of d r y  machines a r e needed (but  more i s i n v e s t e d i n t r e e s ) . The favour  main r e a s o n  cited  by T a i w a n e s e p o l i c y  makers i n  of l a r g e farms i s t h e p r e s e n c e of economies of s c a l e  which are a s s o c i a t e d w i t h the mechanization  of  agriculture.  1 76  The  a n a l y s i s of c h a p t e r V r e f u t e s t h i s h y p o t h e s i s  i n c r e a s i n g economies of s c a l e (except region); to  the p r o d u c t i o n technology  scale.  The  indivisibility by  exhibits constant  use  total  that as  f a c t o r p r o d u c t i v i t y a n a l y s i s of c h a p t e r  inefficient  family factors  use  of t h e  a r e c h a r a c t e r i z e d by  dominant i n the r e g i o n Mid-Rice  region).  and  Full-time  t h e p a d d y - d r y m i x e d f a r m s of t h e loss  effort,  i s probably  can  effort  i s r e s i d u a l , cannot.  on  farms w i t h the other  land q u a l i t i e s  a r e d e f i n e d l e s s e x a c t l y , and  These is Rice  Sugar  consequence the farms.  l a b o u r time i s no  such  i n chapter  loss  since production  thus  there  i n the l a b o u r  is less  application.  shown t o be c o u n t e r p r o d u c t i v e , u s i n g IV and V.  An  and and  p o l i c y p r o p o s a l s w h i c h impose a minimum s i z e  farm are e a s i l y  analysis  whose f a r m  However, t h e r e  g a i n f r o m h a v i n g more f l e x i b i l i t y The  for these  V  an  reap t h i s g a i n from o p t i m a l t i m i n g  while part-time farmers,  techniques  the  f a r m i n g methods by  research establishment  farmers  i n some c a s e s .  (the a l l - p a d d y farms of N o r t h  This e f f i c i e n c y  agricultural  leads to  f a r m s whose l a n d q u a l i t y  o f t h e d e v e l o p m e n t of e x a c t  the  avoided  t h e m e c h a n i z e d methods as e f f i c i e n t l y  that part-time farming  the  to  ' c u s t o m s e r v i c e ' m a r k e t so  p r o v i d e s some e v i d e n c e  and  returns  farms. The  cases  Rice  a s s o c i a t e d w i t h m a c h i n e s , have been  farms can  large  i n the South  s c a l e economies, u s u a l l y r e l a t e d  t h e o r g a n i z a t i o n of t h e  small  of  amalgamation of  small  on the  177  farms i n t o l a r g e farms, household,  t h e r e w o u l d be a l a r g e l o s s o f (probably mostly  w o r k e r s who labour  one  full-time  agricultural  i n the category  of  a r e u n e m p l o y a b l e on t h e m a r k e t ) . resource  by  market  B e c a u s e o f t h e a m a l g a m a t i o n of s m a l l  employment  the  full-time  w o u l d have s u b s t a n t i a l u n d e s i r a b l e  effects. farms,  each operated  agricultural T h i s l o s s of  would c r e a t e a s u b s t a n t i a l l o s s of  production, especially  of v e g e t a b l e  production  (an  i n c r e a s i n g l y d e s i r e d f o o d ) and an i n c r e a s e i n r i c e production full-time  (a s t a p l e ) .  There i s l i t t l e  hope t h a t t h e l a r g e  farms would respond t o a p o s s i b l e c o l l a p s e of the  agricultural  wages by h i r i n g more ( a n d t h u s p r o d u c i n g  a s t h e r e has been a s u r p r i s i n g u n r e s p o n s i v e n e s s labour  1972 and  part-time animal  of h i r e d  t o t h e r a p i d i n c r e a s e s of the a g r i c u l t u r a l  between  farms,  1980.  more),  wage.rate  Because of the amalgamation of s m a l l  t h e r e w o u l d be l e s s demand f o r m a c h i n e  s e r v i c e s i n these  'custom s e r v i c e ' m a r k e t s .  G e n e r a l l y , l e s s m a c h i n e and i n t e r m e d i a t e used i n a g r i c u l t u r e .  and  Thus p o l i c i e s w h i c h  i n c r e a s e t h e number o f l a r g e f u l l - t i m e  i n p u t s would  be  artificially  farms,  by  imposing  l a n d t h r e s h o l d s , would g r e a t l y reduce l a n d p r o d u c t i v i t y because of a g e n e r a l d e c l i n e of labour application. improvement employed  (and o t h e r  input)  T h e r e w o u l d o n l y be a s l i g h t c o m p e n s a t i n g i n the t o t a l  resources  f a c t o r p r o d u c t i v i t y of the  a s t h e r e a r e no g a i n s  s c a l e t o be e x p e c t e d  still  from economies of  and o n l y modest e f f i c i e n c y  gains  from  178  the  reduction  of s m a l l p a r t - t i m e  farming.  The i n v e s t i g a t i o n o f t h e a l l o c a t i v e e f f i c i e n c y i n chapter  V, a n d o f t h e p r o d u c t i o n  revealed the  the great  complexity  Taiwanese a g r i c u l t u r a l  patterns  i n chapter  of t h e p r o d u c t i o n  sector.  IV,  decision in  The p a t t e r n s  of the  a v e r a g e shadow p r i c e s do i n d i c a t e t h a t t h e f a r m e r s t r y t o efficiently  a l l o c a t e the resources  f o r which markets  exist.  B o t h t h e i n v e s t i g a t i o n s o f t h e a v e r a g e shadow p r i c e s i n e a c h f a r m l a n d t y p e and b e t w e e n f a r m g r o u p s p o i n t mobility  of male l a b o u r .  Thus a v e r a g e m a l e l a b o u r  p r i c e s a r e h i g h where i n d u s t r i a l  shadow  employment o p p o r t u n i t i e s  e x i s t a n d t h e shadow p r i c e s do n o t d i f f e r between farm groups.  to the r e l a t i v e  significantly  A l s o average farm a s s e t  shadow p r i c e s  i n d i c a t e t h a t t h e d o m i n a n t l a n d t y p e f a r m may h a v e more access to the o f f i c i a l of t h e g e n e r a l authorities.  f i n a n c i a l markets, probably  attention that However, t h e r e  these farmers r e c e i v e i s a l s o some s u g g e s t i o n  b o t h l a n d and female a r e i m m o b i l e . that accurate  Generally,  the  i n d u c e more  land  The l o w d r y l a n d shadow p r i c e s i n t h e r i c e  indicate that dry land  purposes.  f o r the  c l e a r that t a k i n g the  r e s t r i c t i o n s o f f the l a n d market w i l l  regions  that  of l a n d over t h e h o u s e h o l d s .  i t i s not e n t i r e l y  transactions.  from t h e  T h i s w o u l d t h e n mean  c r o p mix d e c i s i o n s become i m p o r t a n t  e f f i c i e n c y of the a l l o c a t i o n  as p a r t  Also the o f f i c i a l  i s held  land rent  for speculative i s much l o w e r  l a n d shadow p r i c e e x c e p t t h e N o r t h R i c e  than  r e g i o n , which i s  1 79  why  there  similar cases,  i s no  on and  similar other  on  and  small  cases.  part-time  T h i s means t h a t a r e l a x a t i o n of not  induce land  transfers  farmers,  despite  (technical) efficiency  dominant l a n d type.  l a n d shadow p r i c e s were s i g n i f i c a n t l y t h a n on  are  farms i n s i x  small  farmers to f u l l - t i m e  f a r m s of t h e  full-time  shadow p r i c e s  f u l l - t i m e and  e v i d e n c e of some o v e r a l l  part-time  But  small part-time  l a n d m a r k e t r e s t r i c t i o n s may  from s m a l l p a r t - t i m e the  tenancy.  large full-time  farms i n the the  official  large full-time  However,  l o w e r on  farms.  loss  on  the  small  These l a n d  shadow  p r i c e p a t t e r s were i n t i m a t e l y l i n k e d t o t h e d i f f e r e n c e s i n female f a m i l y labour estimated  per  l a n d endowments and  r e l a t i o n s h i p s b e t w e e n l a n d and  Female f a m i l y l a b o u r  to  female  seems t o r e q u i r e t h e  the labour.  f a r m employment  (whether because i t i s unemployable o f f - f a r m , or because disutility  o f o f f - f a r m work i s f a r above t h e d i s u t i l i t y  s e l f - e m p l o y m e n t ) and  contains  important  f o r some o f  full-time  farmer c o n s i d e r s  asking-price will because b o t h the be  covered.  doubtful  l a n d and there  than the  the  be  no  f a r m s can  r e a s o n s why  the  l a n d shadow p r i c e  e c o n o m i e s of  f u l l - t i m e and  p a r t of t h e  small  f e m a l e employment r e t u r n s  than t h i s a s k i n g - p r i c e .  between s m a l l  T h e s e may  are  Thus when a  r e n t i n g or s e l l i n g h i s l a n d ,  higher  of  s e l f - s u p e r v i s i o n which i s  the c r o p s .  that large full-time  land return result  As  be  the  scale, i t i s  produce a  Thus no  higher  trade  large full-time the  must  new  rental  will farms.  180  arrangements disappointing  such as ' c o n t r a c t  f a r m i n g ' seem t o h a v e s u c h a  r a t e of a d o p t i o n .  To c o n c l u d e , T a i w a n e s e substantially markets  a g r i c u l t u r e has b e n e f i t t e d  from t h e u n d i s t o r t e d  f u n c t i o n i n g of the  f o r l a b o u r and o t h e r i n p u t s .  The e m p i r i c a l  evidence  s u g g e s t s t h a t t h e r e s h o u l d be no d e p a r t u r e f r o m t h e p o l i c i e s which f a c i l i t a t e  t h e market  reduce the r e s t r i c t i o n s The that  processes.  Thus p o l i c i e s  on t h e l a n d m a r k e t  a r e recommended.  p r o m o t i o n o f t h e new r e n t a l a r r a n g e m e n t s t h o s e who r e n t w i l l  which  (with  assurance  n o t be f o r c e d t o s e l l ) a n d t h e  relaxation  of t h e mortgage market  continue.  P o l i c i e s which would  r e s t r i c t i o n s should  impose  r e s t r i c t i o n s on t h e l a n d m a r k e t ,  different  such as a lower l i m i t  on  f a r m o p e r a t i o n o r l a n d h o l d i n g a n d an e n f o r c e d  amalgamation,  are counterproductive.  small  full-time exist.  There  i s no r e a s o n why  f a r m s s h o u l d d i s a p p e a r a s no e c o n o m i e s  Indeed t h e i r  h i g h e r t h a n on l a r g e  average  land p r o d u c t i v i t y  full-time  d i s p r o p o r t i o n a l l y produce  i s much  farms and they  the n o n - s t a p l e crops which the  p o p u l a t i o n more a n d more demands.  The r e l a x a t i o n o f t h e  c o n s t r a i n t s on t h e t r a n s f e r  of farm l a n d between  s h o u l d p r o v i d e t h e economic  environment  decision  i s left  of s c a l e  to the full-time  farmers  i n which the  farmers t o induce the  p a r t - t i m e f a r m e r s t o l e t go o f t h e l a n d when t h e gap b e t w e e n t h e r e t u r n s t o t h e two f o r m s o f f a r m i n g w i d e n s a n d when r u r a l p a r t - t i m e f a r m e r s become more c e r t a i n  of c o n t i n u e d  181  n o n - a g r i c u l t u r a l employment. a l s o be  facilitated  organized  i f the  investors  provide  (those  additional  long  selling  market).  This  The  labour  increase  main r e a s o n  resources  i n the  land).  number of  s m a l l and  (and  i s the  recent  the  present generation  resource  of o l d e r  I f the  organization to f i n d  the  long  initiative i s t a k e n now,  agricultural  to the  i n an  is a  increase immediate  process of  the  future  However, s t a r t i n g  l o s s may  become a c u t e when  immobile f u l l - t i m e farming The  adjustment to t h i s  of  situation will functioning  t e r m c r e d i t m a r k e t e x i s t s by  t o w a r d s a new there  land  demand  This  i f a w e l l e s t a b l i s h e d and  rural  of  workers.  i t s farm o r g a n i z a t i o n  be much f a c i l i t a t e d modern l a n d and  slower  farms i n the  workers s t a r t s to disappear too. a g r i c u l t u r e and  organization  s t e a d y d e c l i n e of b o t h  to express i t s e l f  f i v e - ten years,  rural  term r u r a l c r e d i t  i n a g r i c u l t u r e due  part-time  for  g r o w t h of a more modern  a long  a l o s s o f young a g r i c u l t u r a l  time.  be  T h e r e i s an  non-agricultural sectors.  continue  the  their  t o blame f o r t h e  which w i l l  in  term f i n a n c i a l a s s e t s  study e s t a b l i s h e d that the  i s not  growth.  and  mortgage market would  reason f o r p r o m o t i n g the  l a n d market o r g a n i z a t i o n  and  possibly  v i a the Farmers A s s o c i a t i o n c r e d i t d e p a r t m e n t s ,  which could  farming  This process could  land  market  i s time to experiment  s t r u c t u r e s w h i c h work b e s t  that  i n Taiwan.  and  1 82  BIBLIOGRAPHY Taiwan:  Land  Chen Cheng, 1961, Land r e f o r m i n T a i w a n , T a i p e i , C h i n a p u b l i s h i n g C o . 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J . , 1973, A t e s t f o r r e l a t i v e e f f i c i e n c y : some f u r t h e r r e s u l t s , A m e r i c a n E c o n o m i c R e v i e w , v61 n 1 , M a r c h , p 9 4 - l 0 9 Z e l l n e r , Kmenta, D r e z e , 1966, S p e c i f i c a t i o n and e s t i m a t i o n of C o b b - D o u g l a s p r o d u c t i o n f u n c t i o n m o d e l s , E c o n o m e t r i c a , v34 n4, O c t , p784~885 Sectorial  data  PDAF, a g r i c u l t u r a l y e a r b o o k s P F o o d b u r e a u , Food p r o d u c t i o n i n Taiwan ( a n n u a l ) r i c e review magazine Taiwan economic a b s t r a c t (annual) DGBAS, p r i c e s and p r i c e i n d i c e s ( a n n u a l ) s t a t i s t i c a l yearbook of Taiwan (annual)  1 90  JCRR (CAPD), a n n u a l  reports  CAFC, t h e r e p o r t o f a g r i c u l t u r a l c e n s u s o f T a i w a n - F u k i e n d i s t r i c t o f t h e R e p u b l i c o f C h i n a ( 1 9 6 0 , 1970, 1975, 1980) p r o d u c t i o n d a t a , p r i c e d a t a , n a t i o n a l l a n d a l l o c a t i o n data e t c .  191  APPENDIX A PRICES AND LAND PRODUCTIVITY MEASURES  A. INTRODUCTION I n t h i s a p p e n d i x a more d e t a i l e d e x p l a n a t i o n of  the v a r i a b l e s  In  section  explained,  w h i c h were u s e d i n t h i s  B, t h e p r i c e s a s u s e d i n t h i s and i n s e c t i o n  C, t h e s i m p l e  m e a s u r e s w h i c h were d i s c u s s e d  study  o f some  i s provided.  study are productivity  in., c h a p t e r  IV a r e defined i n  detail.  B.  P R I C E S , PRICE DEFLATORS We u s e s e v e r a l  of  price deflators  in this  the d e f l a t o r s a r e taken from the n a t i o n a l  information  a n d some have been  study.  Some  price  constructed.  B.1 I n d i v i d u a l c o m m o d i t y g r o u p p r i c e s The n a t i o n a l correspond with d a t a , so t h a t groups.  price  index  the categories  we c o n s t r u c t e d  I f the n a t i o n a l  information  d i d not f u l l y  of the household d a i l y indices  f o r several  report  commodity  p r i c e data d i d correspond t o our  s a m p l e c a t e g o r y t h e n we u s e d t h e n a t i o n a l p r i c e  index.  192  The  price  commodity p r i c e  i n d i c e s were c a l c u l a t e d  information  commodities i n the subgroup, using  - cereals:  national  the  calculate a price  and  Fisher  index  the  from  s h a r e s of  national the  a g r i c u l t u r a l p r o d u c t i o n of Ideal price  index.  We  the  had  to  for:  sorghum, c o r n ,  Kaohliang,  wheat  - s p e c i a l c r o p s : t e a , p e a n u t , sesame, c a s s a v a -  fruit:  a l l fruits  except the  - orange: a l l c i t r u s  fruits  (5  - vegetables: a l l vegetables - b e a n s : a l l bean t y p e s - poultry: We national  chicken,  price  indices and  (used i n chapter  types)  also quantity  indices  constructed  returns  t o the  chapter  f ive) .  from the  other.  family  we  profit  could  f o r the  index  (used  calculate  real  above commodity  an  ( V a l u e added t o t h e  index  supplied  index i s a F i s h e r  f o r the  net  family  profit,  or  f a c t o r s of p r o d u c t i o n  Ideal  s h a r e s o f o u t p u t s and  total  a net  the  four).  The i n d e x of Net P r o f i t supplied factors)  profit  types)  types)  f i v e ) so t h a t  groups  the  (38  to construct  and  The  (26  types)  d u c k , t u r k e y and  profit  We  fruits  u s e d t h e s e c a l c u l a t e d p r i c e d e f l a t o r s and  in chapters four  B.2  (5  citrus  I n d e x and  variable  s a m p l e (2274 o b s e r v a t i o n s :  i s based  net (see  on  inputs  calculated  around  250  193  o b s e r v a t i o n s per  y e a r ) , and  the  p r i c e s of t h e s e  commodity  groups. This deflate  index  i s used i n c h a p t e r s  t h e net p r o f i t  and  the output  B.3  The  index  We  (or v a l u e  v a l u e and  c o n s t r u c t e d an  The  index  the  farm a s s e t s  five,  in table  A.1.  Prices  index  f o r the  i s a Fisher Ideal index, i n the t o t a l  using n a t i o n a l p r i c e indices.  b a s e d on  farm asset The  farm a s s e t  stock.  sample shares  stock value,  farms a s s e t s  t o o l s , m a c h i n e s , t r e e s , s t o r e d p r o d u c e and  supplies.  We  used the f r u i t  trees; price  index.  The  farm  reasonable the y e a r s ,  t h e r e was  of  a national  A.1.  The  prices  interest  r a t e s w e r e c a l c u l a t e d as a  a v e r a g e of t h e o f f i c i a l reported  (weight prices  and  c a l c u l a t e d farm asset p r i c e i s reported  Miscaleneous  annual  as a  f o r the value changes, through  f o r each of the other' a s s e t s  table B.4  p r i c e index  75%)]  interest  and  market  r e c e i v e d and  interest  agricultural  paid  rate i s reported  interest  (weight  25%)].  in table  A.l.  weighted  rates  rates for agricultural (private) interest  of  are:  livestock,  approximation  to  added) the v a r i a b l e c o s t s  is reported  of Farm A s s e t  f o u r and  [JCRR,  loans  rates  [DGBAS,  The c a l c u l a t e d  in  1 94  The  p r i c e w h i c h gave us  t h e most p r o b l e m s was  l a n d r e n t a l p r i c e b e c a u s e of t h e v i r t u a l l a n d r e n t a l market had  1976,  T h e r e i s an o f f i c i a l  and  we  a l s o f o u n d one  (JCRR 1 9 7 0 ) .  1969-amount of rent, while the  1976  We  hectare  amount of  1973  i n 1973,  stress).  The  official  calculate  the  rental value.  The statistics  from the  closely  agricultural  in table  i n the  same  for  rent  was  experienced to land  A.1.  wages were a v a i l a b l e i n t h e n a t i o n a l r e c e i v e d by  h i r e d labour  labour  cost  i n the  s a m p l e was  wage r a t e s .  The  farmers).  sample c o u l d  r e p o r t e d and  T h e s e wages i n t h e  in table The  were n o t  sector  be  t h e amounts of  sample c o r r e s p o n d e d  t o t h e male a g r i c u l t u r a l wage r a t e .  labour  reported  t h a t the  resultant o f f i c i a l  (DGBAS, p r i c e s p a i d and  hired labour.  that  reported  labour  paid  in  government changed i t s  when t h e  The  since  t h a t the  kg/ha) was  1976,  (The  1972  we  land rent  r i c e p r i c e s were t h e n u s e d  wages as p a i d t o t h e  calculated  to  47.36 k g / h a .  policies  r e n t a l p r i c e s are  (59.2  f o r the to  a  rental  r e n t a l p r i c e quoted  assumed f o r 1969  r i c e per  of  Because of t h i s  observation  f o r the p e r i o d  agricultural  The  two).  non-existence  t o c o n s t r u c t a v e c t o r of p o s s i b l e o f f i c i a l  prices.  1969  (see c h a p t e r  the  indeed  This  h i r e d at  suggest  the  a g r i c u l t u r a l wage r a t e i s  A.1.  m a c h i n e s e r v i c e c o s t and  a v a i l a b l e before  the animal  1976.  A f t e r 1976  f o u n d i n DGBAS, P r i c e s p a i d and  r e c i e v e d by  they  service cost could  farmers.  be Thus  1 95  T a b l e A . 1 : SELECTED PRICES USED I N THIS STUDY LAND RENT per HA (1 ) NT$ 1 972 1 973 1 974 1975 1 976 1977 1978 1 979 1979  8466 1 0332 1 371 2 1 5332 1 6098 1 3050 1 0370 1 0370 1 0370  Notes:  (1) (2) (3) (4) (5) (6) (7) (8)  the e a r l i e r reported cost  MALE WAGE per DAY (2)  FEM WAGE per DAY (3)  CAP COST per $ (4)  NT$  NT$  %  78 101 171 195 213 213 256 298 383  54 73 1 19 1 39 1 55 1 55 1 78 217 280  15 16 20 19 17 16 15 16 18  MACH SERV per HA (5)  ANIM SERV per DAY (6)  NT$  NT$  1 1 50 1510 1870 2230 2590 2627 3293 3527 4593  PROFIT ASSET INDEX INDEX (7)  88 1 07 175 198 1 97 207 202 274 346  39 51 70 84 76 71 78 89 1 00  (8)  48 48 71 89 78 80 87 89 1 00  c o n s t r u c t e d a n n u a l l a n d r e n t p e r ha s o u r c e : DGBAS, p r i c e s p a i d a n d r e c e i v e d s o u r c e : " " " " " by f a r m e r s c o n s t r u c t e d i n t e r e s t c o s t p e r NT$ c o n s t r u c t e d m a c h i n e s e r v i c e c o s t p e r ha c o n s t r u c t e d a n i m a l s e r v i c e c o s t p e r day c o n s t r u c t e d p r o f i t index c o n s t r u c t e d farm a s s e t index  s e r v i c e p r i c e s were c a l c u l a t e d f r o m p r i c e s  i n JCRR  (annual  reports)  s i t u a t i o n s of the farmers  surveys), but not a l l years  i n some o f t h e a r t i c l e s on  ( t h u s on t h e b a s e s o f  were a v a i l a b l e .  Where a y e a r  was l a c k i n g , an a v e r a g e was c a l c u l a t e d b e t w e e n t h e a v a i l a b l e observations.  The r e s u l t a n t m a c h i n e a n d a n i m a l  prices are reported per  i n t a b l e A.1.  service  The m a c h i n e s e r v i c e c o s t  ha r e f e r s t o t h e c o s t o f one s e r v i c e ( s u c h a s  t r a n s p l a n t i n g , or harvesting)  d e l i v e r e d on one h e c t a r e  land.  196  C. LAND PRODUCTIVITY MEASURES  C.1 The m u l t i p l e c r o p  The cropped  index  m u l t i p l e c r o p i n d e x i s t h e amount o f l a n d  ( g r o s s ) p e r c u l t i v a t a b l e h e c t a r e and  the i n t e n s i t y  approximates  of l a n d use i f a l l a v a i l a b l e c r o p s have t h e  same l e n g t h o f m a t u r i t y ( s o t h a t p e r i o d s o f l a n d f a l l o w be t h e o n l y s o u r c e o f m u l t i p l e c r o p i n d e x v a r i a t i o n ) . assumption  range  c h o i c e s w i t h v a r y i n g l e n g t h of l a n d o c c u p a t i o n full  year; r i c e  1 : one s e a s o n ;  sweet p o t a t o : two s e a s o n s ; The  definition  T h e r e i s no c o r r e c t i o n  rice  of crop  (fruits,  2: one s e a s o n ;  etc.).  of the m u l t i c r o p index i s :  MC = ( Z S 4 f ) / S  S4i S  f o r the q u a l i t y  measure o f t h e c u l t i v a t a b l e the measure o f t h e cropped l a n d s used  This  i s p r o g r e s s i v e l y becoming l e s s a p p l i c a b l e f o r  T a i w a n where t h e f a r m e r s have an i n c r e a s i n g  sugar:  will  f o r each c r o p  land put i n t o crop i c u l t i v a t a b l e area of the land i n t h i s  l a n d (Sen d e f i n i t i o n ) , l a n d S4, w h i c h  nor i n  i s t h e sum o f  (Rudra d e f i n i t i o n ) .  Thus  d o u b l e - t r i p l e usage o f a p h y s i c a l p i e c e o f l a n d i s p o s s i b l e and  counted  by t h e m u l t i p l e c r o p  index.  1 97  C.2 R i c e  yields The  put  rice yield  i s t h e h a r v e s t of r i c e per h e c t a r e  t o r i c e , and m e a s u r e s t h e t e c h n i c a l a b i l i t y  to produce r i c e .  Two r i c e  seasons e x i s t  January-May season u s u a l l y p r o d u c i n g June-October The RYt  =  of t h e farm  i n Taiwan, w i t h the  higher y i e l d s than t h e  season. rice y i e l d s are defined as:  H(Rt)/S4(Rt) H(Rt) : r i c e harvest i n p e r i o d t S4(Rt): r i c e land i n period t RYt : rice yield i n period t t = 1 ,2  Only farmers  who p r o d u c e r i c e were  C.3 N o n - r i c e  crop value  The  yield  non-rice crop value y i e l d  from a l l n o n - r i c e c r o p s per cropped counted  counted.  i s the t o t a l 1  hectare .  income  The l a n d i s  t w i c e o r more i f i t p r o d u c e d two o r more n o n - r i c e  harvests during the year.  The n o n - r i c e y i e l d s a r e d e f i n e d  as:  OVY = Z p  i y i  /ZS4i Pj : yj : S4j: OVY:  p r i c e of c r o p i h a r v e s t of c r o p i l a n d put t o crop i other value y i e l d  198  The t o t a l n o n - r i c e c r o p v a l u e was n o t d e f l a t e d so t h a t t h e time  trend includes the p r i c e  not c o r r e c t e d f o r f e r t i l i t y use land  C.4  trend.  The l a n d m e a s u r e s were  because p a r t of t h e e f f i c i e n t  o f l a n d s h o u l d be t h e a p p r o p r i a t e c r o p c h o i c e s f o r t h e qualities.  The o u t p u t  per h e c t a r e  The o u t p u t  per hectare  i s t h e sum o f a l l t h e  incomes per e q u i v a l e n t h e c t a r e a v a i l a b l e  to the  T h i s i s t h e most o f t e n q u o t e d m e a s u r e of l a n d The o u t p u t  v a l u e was d e f l a t e d by t h e p r o f i t  t o make i t c o m p a r a b l e t o t h e p r o f i t that output  in this  v a l u e h a s been d i s c u s s e d i n d e t a i l but  the main r e s u l t s a r e r e p e a t e d  C.5 P r o f i t  farmer.  productivity.  price  per hectare gives the  reporting).  This  i n the previous  output chapter,  here.  per hectare  The p r o f i t p e r h e c t a r e variable costs  i s t h e v a l u e of output  (including hired  T h i s measure t a k e s account  deflator".  of v a r i a b l e c o s t s as w e l l  a n d a l s o shows t h e n e t r e t u r n t o t h e f a r m e r  the s e l f - s u p p l i e d  input  factors.  minus  forms of l a b o u r ) per  e q u i v a l e n t h e c t a r e s and d e f l a t e d w i t h t h e p r o f i t  outputs  deflator*  p e r h e c t a r e measure (so  per h e c t a r e minus p r o f i t  v a r i a b l e c o s t per h e c t a r e  farming  as from a l l  1 99  C.6  Farm i n v e s t m e n t  Bardhan large  and  s a v i n g s per  (1973) argued  f a r m s m i g h t be t h e i r  savings e f f o r t .  The  farm  hectare  t h a t t h e a d v a n t a g e of  h i g h e r l e v e l s of investment  effort  having  investment i n a l l farm  a s s e t s p e r h e c t a r e of e q u i v a l e n t l a n d i s c a l c u l a t e d balance  s h e e t s and  given.  T h e s e v a l u e s were d e f l a t e d w i t h t h e  and  the s a v i n g s e f f o r t per h e c t a r e index  from  the  is also of  consumer p r i c e s p a i d by t h e f a r m e r s  v  approximation  t h a t w o u l d be a p p r o p r i a t e  for both  t o a common d e f l a t o r  the investment  investment  and  as t h e  and the s a v i n g s amounts.  the s a v i n g s per h e c t a r e  INV/ha = [ I p j ( t ) v i ( t )  best  The  are:  - Z p j . ( t - 1 )v.j[(.t-1 ) ] / S ( t )  SAV/ha = [ F I ( t ) + N F l ( t ) -  C(t)]/S(t) p ( t ) v ( t ) : v a l u e of a f a r m a s s e t a t end o f y e a r t FI : f a r m i n c o m e N F I : non f a r m income C : consumption S(t): equivalent cultivatable land area  The  d i f f e r e n c e between investment  of s a v i n g s t h a t i s spent indication activity  and  s a v i n g i s t h e amount  on consumer a s s e t s and  of t h e r e l a t i v e w i l l i n g n e s s t o i n v e s t  by t h e  household.  i s thus i n the  an farm  200  APPENDIX B INFORMATION  FOR CHAPTER II  - Growth r a t e s of production i n s p e c i f i c a g r i c u l t u r a l crops ( t a b l e B.1) -Agricultural  exports  (table B.2)  - Labour market s i t u a t i o n (table B.3) - Farm machine stock  (table B.4)  - Farm"machine stock by s i z e ( t a b l e B.5) - P a t t e r n s of emigration-immigration ( t a b l e B.6) and comments  into  agriculture  Table B.1: GROWTH RATES OF PRODUCTION IN SPECIFIC AGRICULTURAL CROPS  1960 Amount  1968 Index  Amount  1976  1972 Index  Amount  I ndex  Amount  1980 I ndex  Amount  I ndex  0 HA P  1912018 766409  81 120  2518014 789906  107 124  2440329 741570 5.95  104 116 33  27 12985 786343 12 . 96  1 15 123 72  2351824 639151 18 .07  100 100 100  MT ha NT$  Sweet Potatoe  0 HA P  2978676 235387  282 378  3444619 240316  326 386  2927708 210609 .973  277 338 38  1850992 123735 1 . 790  175 199 70  1055134 62255 2 . 570  100 100 100  MT ha NT$  Sugar Cane  0 HA P  792132 95543  94 90  886127 95902  102 91  732939 90329 .317  87 86 40  814493 1094 11 . 664  96 103 84  845825 107200 . 795  100 100 100  MT ha NT$  Bananas  0 HA P  104216 12709  49 137  645467 43806  301 473  3664 1 1 22830 2 . 390  171 246 38  213446 1 1 152 4 . 320  100 120 68  214323 9268 6 . 370  100 100 100  MT ha NT$  P1neapple  Q  166730 9746  73 133  311364 1 1842  136 161  334384 13128 1 . 327  146 179 28  278830 9706 2. 749  122 132 58  228804 7352 4 . 740  100 100 100  MT ha NT$  175578 19138  47 59  290609 26010 3 . 592  78 80 40  383972 33682 5. 123  103 103 57  374383 32696 9 .066  100 100 100  MT ha NT$  1703663 148557 21 .85  52 64 69  2446282 191966 18 . 92  75 82 59  3260921 233941 31.81  100 100 100  MT ha NT$  1261628 109584 3 .039  78 84 34  1373523 122728 5 . 320  85 95 59  1615558 129869 9.031  100 100 100  MT ha NT$  R 1 ce (brown)  HA P C 1 trus  0 HA P  52866 8099  14 25  Vegetables  0 HA P  802801 91601  25 39  All  0 HA. P  Fruits*  1209293 . 118462  Source: PDAF A g r i c u l t u r a l Yearbooks Note:0 : q u a n t i t y (metric ton: MT) HA: land area (hectare) P p r i c e per kg (average over a l l p r e f e c t u r e s ) * : i n c l u d e d bananas and pinapples  37 51  T a b l e B.2:  Total Value X 1000NTS 1972 1974 197S 1978 1979  %  5683686 6448910 12981394 15777698 1565821 1  i n Exports  4.87 3.08 4 . 19 3 . 37 2 . 70  AGRICULTURAL  Fresh F ru i t Pr i ce Value X 1000NT$ p e r kg 588984 461674 447062 527622 499372  AGRICULTURAL  Total Value X 1000NTS 1972 1974 1976 1978 1979  12491731 24120072 25498486 35257743 39226568 '  %  i n Exports  10. 71 1 1 . 50 8.23 7 . 53 6 . 77  EXPORTS: AGRICULTURAL  5 . 20 9.23 9.30 12 . 49 1 1 . 35  8.84 17.13 19.37 23 .08 21 .32  74535 49860 490 1961969 3113020  4.61 9.71 14.41 8 . 25 7.61  Source: Taiwan Economics S t a t i s t i c s ( I n d u s t r y of Free China, Note: %: p e r c e n t i n t h e t o t a l e x p o r t of Taiwan ( a g r i c u l t u r a l *: c a l c u l a t e d a s ( v a l u e / w e i g h t )  % .60 . 37 . 17 .08 . 10  Rice Price* Value X 1000NTS p e r kg 1972 1974 1976 1978 1979  .51 . 22 . 15 .1 1 .09  EXPORTS: FOODS  Canned P i n e a p p l e Pr i c e * Value per kg X 1000NT$ 694370 784826 537566 352060 608051  %  % .07 .02 0 . 42 .54  PRODUCTS  Banana Pr i ce Value X 1000NT$ p e r kg 1210874 744667 721496 647834 892377  5.26 5.18 8 .43 7 . 99 8 . 72  Vegetables Va 1 ue Pr i c e X 1000NTS p e r kg  %  363748 406089 902360 1457462 1 139137  1 .04 . 36 . 23 . 14 . 15  4 . 54 6.85 8 . 72 10. 85 9 . 19  % .31 . 19 . 29 .31 .20  (continued)  C a n n e d Mushroom Pr i c e * Value p e r kg X 1000NTS 2219869 1709910 2205416 3992581 3277943  35.09 35 . 02 43 .04 53.62 48.81  Sugar Value Pr i c e * p e r kg X 1000NTS 3339144 11387824 5931413 2565930 2969648  V o l L 1 1 1 , n 5) + industrial)  1980  6.85 20.66 11.51 7 . 26 7 . 72  % 1 .90 .82 .71 .85 .57  Canned A s p a r a g u s Va 1 ue Pr i c e * X 1000NTS p e r kg 1658221 3226883 3788703 4206367 3966407  23 . 64 46 .56 47 .97 50. 25 57 . 33  % 1 .42 1 . 54 1 .22 .90 .68  % 2 .86 5 . 43 1 .92 . 55 .51  ro o ro  T a b l e B.3:  1960 1968 1972 1976 1980  Population Employable X 1000 (1)  Total Employed X 1000 (2)  % Total Employed (3)  (4)  5687 7333 8699 9828 1098 1  3344 4337 5812 6837 7797  63 64 72 76 79  56 49 40 35 29  LABOUR MARKET  % Employed Agr i c u l t u r e  % Employed Agr1culture Ma 1 e (5)  % Employed Agr i c u l t u r e Fema1e (6)  Males Employed Agr i c u 1 t u r e X 1000 (7)  Females Employed Agr i c u 1 t u r e X 1000 (8)  1341 1466 1464 1503 144 7  74 62 50 40 29  51 45 36 32 28  Manufacture Monthly Income  SITUATION  537 677 846 862 757  Agr1cu1ture  Monthly Workdays  Average Wage  Wage Farm/Man  (9)  (10)  (11)  (12)  621 1232 1990 4707 9198  30.6 31 .0 28.4 27.9 27 .6  20. 3 39.7 70. 1 144 . 5 333 .0  Monthly Income  (14)  (15)  Constant GDP X 10 ( 16)  15 . 4 16.3 16.3 15.2 17.0  35 .03 50.99 78 . 13 193.98 383.24  161021 3331 19 515724 701117 1004613  Monthly Workdays  Average Wage  Agr i c u 1 t u r e % GDP (17)  Constant Agri. GDP X 10 (18)  29 19 12 1 1 8  46696 63293 61887 77123 80369  6  6  1960 1968 1972 1976 1980  1 . 73 1 . 28 1.11 • 1 . 34 1.15  (13) 540 829 1276 2942 6515  Yearbook DGBAS S t a t i s t i c a l p o p u l a t i o n o v e r 15 y e a r s o l d a n d n o t e n r o l l e d 1n s c h o o l s ( h o u s e h o l d r e g i s t r a t i o n d a t a ) (1) g a i n f u l l y employed p o p u l a t i o n (labour survey data) (2) e m p l o y m e n t r a t e when o l d p e o p l e a r e d e d u c t e d (men +65, women +60) t o o (") (3) e m p l o y m e n t i n a g r i c u l t u r e as p e r c e n t a g e o f e m p l o y e d (calculated) (4) e m p l o y m e n t i n a g r i c u l t u r e as p e r c e n t a g e o f e m p l o y e d : m a l e s (") (5) e m p l o y m e n t i n a g r i c u l t u r e as p e r c e n t a g e o f e m p l o y e d : f e m a l e s (") (6) males employed i n a g r i c u l t u r e (") (7) females employed i n a g r i c u l t u r e (") (8) m a n u f a c t u r e : m o n t h l y income (") (9) (") ( 1 0 ) m a n u f a c t u r e : w o r k d a y s ( m o n t h l y h o u r s d i v i d e d by 8) (") ( 1 1 ) m a n u f a c t u r e : a v e r a g e d a i l y wage: ( 9 ) / ( 1 0 ) . (") ( 1 2 ) wage o f f a r m i n g o v e r m a n u f a c t u r i n g wage (13) (14) (15) (16) (17) (18)  f a r m i n g : m o n t h l y income: ( 1 4 ) X ( 1 3 ) (") f a r m i n g : m o n t h l y w o r k d a y s ( t o t a l a n n u a l w o r k d a y s In f a r m i n g d i v i d e d by 12 t i m e s t h e number o f w o r k e r s ) ( C h e n , Wang, 1980) f a r m i n g : wage " (DGBAS, Commodity P r i c e S t a t i s t i c s , p r i c e s p a i d by f a r m e r s ) g r o s s d o m e s t i c p r o d u c t i n c o n s t a n t v a l u e (GDP) (1976 p r i c e = 100) (DGBAS, S t a t i s t i c a l yearbook) a g r i c u l t u r a l d o m e s t i c p r o d u c t a s p e r c e n t a g e o f GDP (") g r o s s a g r i c u l t u r a l d o m e s t i c p r o d u c t i n c o n s t a n t v a l u e (GDP) (")  ro o oo  T a b l e B.4:  1960 1968 1972 1976 1980  FARM MACHINE  Number o f Households  Power Tiller  Power Sprayer  Water Pump  785592 877114 879526 870787 872267 (1)  3239 12517 24400 46084 65745 (2)  317 12901 25309 37489 50656 (3)  8378 49310 65755 123645 141242 (4)  Size -1 ha 1-2 ha 2+ ha  Source:  FARM MACHINE  Ti1ler  658 6538 32581 (5)  STOCK. BY  Combine .  6.27 20. 79 24 .05  Agricultural  . 39 2 . 56 4 . 50  Census,  (units)  Rice Transplanter  ( 1 ) number o f h o u s e h o l d s i n v o l v e d i n a g r i c u l t u r e (PDAF A g r i c u l t u r a l ( 2 ) - ( 9 ) PDAF A g r i c u l t u r a l Y e a r b o o k s , Peng ( 1 9 8 0 )  T a b l e B.5:  STOCK  1980  Rice Combine  154 2487 13745 (6)  Rice Dryer  361 8413 29109 (7)  Yearbooks)  SIZE  ( p e r 100  Transp1anter . 36 4 . 57 9.60  Households)  Dryer 1.61 5 . 45 7.91  Pedal Thresher  177338 201706 196637 128232 na (8)  Power Thresher  na na 30470 35103 (9)  205  Comments t o T a b l e B.6 The e x a m i n a t i o n o f t h e l a b o u r f l o w s t o and f r o m a g r i c u l t u r e by age, shows t h a t o n l y t h e a g e g r o u p s f r o m 20 t o 44 r e s p o n d t o t h e r e l a t i v e p r o d u c t i v i t y l e v e l s i n a g r i c u l t u r e and i n d u s t r y . The m i g r a t i o n p a t t e r n s of t h e age g r o u p s show t h a t s t r u c t u r a l p r o c e s s e s can be a s s o c i a t e d w i t h e a c h age g r o u p , b u t o n l y t h e age g r o u p s f r o m 20 t o 44 r e s p o n d t o r e l a t i v e e c o n o m i c c o n d i t i o n s i n t h e non-agricultural sector, a) The number of young e n t r a n t s ( t h o s e b e t w e e n 15 and '19 y e a r s o l d ) i n t o t h e a g r i c u l t u r e has declined steadily. T h i s i s p a r t i a l l y t h e r e s u l t of t h e i n c r e a s i n g e n r o l l m e n t i n s e n i o r l e v e l s c h o o l i n g . More s c h o o l i n g r e p l a c e s t h e w a i t i n g p e r i o d f o r employment w h i c h u s e d t o be s p e n d w o r k i n g on t h e home f a r m . b) F i v e y e a r s a f t e r e n t r a n c e many h a v e f o u n d n o n - a g r i c u l t u r a l e m p l o y m e n t , c ) A n o t h e r f i v e y e a r s l a t e r some m a l e s have r e t u r n e d t o a g r i c u l t u r e , w h i l e f e m a l e s have c o n t i n u e d t o l e a v e . Some males, a f t e r e x p e r i e n c e w i t h the n o n - a g r i c u l t u r a l s e c t o r , d e c i d e t h a t a g r i c u l t u r e i s t h e i r c h o i c e . The f e m a l e s a r e s t a r t i n g f a m i l i e s and t h u s l e a v e t h e work f o r c e , d) A n o t h e r f i v e y e a r s l a t e r t h e r e i s f u r t h e r s e a p a g e away from a g r i c u l t u r e t o n o n - a g r i c u l t u r e • w h i c h c o n t i n u e s f o r t h e age g r o u p s u n t i l 44. P r o c e s s e s b, c , d a r e i n f l u e n c e d by t h e r e l a t i v e a t t r a c t i v e n e s s of t h e a g r i c u l t u r a l s e c t o r . The p e r i o d l e a d i n g t o 1977 saw a s l o w n o n - a g r i c u l t u r a l s e c t o r g r o w t h b e c a u s e of t h e o i l c r i s i s w h i l e on t h e o t h e r hand m e c h a n i z a t i o n was r a p i d l y s p r e a d i n g i n t h e a g r i c u l t u r e and made i t more p r o d u c t i v e . The r e s u l t was l e s s o u t f l o w i n p r o c e s s b, more i n f l o w i n c, and t h e r e v e r s a l of t h e o u t f l o w i n p r o c e s s d compared t o the f l o w between the f i v e y e a r s l e a d i n g t o 1972 and t h e y e a r s l e a d i n g t o 1982. e) B e f o r e t h e m e c h a n i z a t i o n e x p a n s i o n b e t w e e n 1972 and 1977, t h e p e o p l e b e t w e e n 40 and 44 y e a r s o l d c o n t i n u e d t o work i n a g r i c u l t u r e d u r i n g the next f i v e y e a r s of t h e i r l i f e ( s i m i l a r l y f o r t h e 45-9 age g r o u p ) , d) L o s s o f l a b o u r f o r c e b e c a u s e o f r e t i r e m e n t s t a r t e d f o r p e o p l e of 50-4 as f i v e y e a r s l a t e r f e w e r w o r k e r s a r e l e f t i n t h e 55-9 b r a c k e t ( s i m i l a r f o r t h e o l d e r age g r o u p s ) I n t h e m e c h a n i z a t i o n e x p a n s i o n p e r i o d h o w e v e r , a l o t of p e o p l e l e f t t h e a g r i c u l t u r a l s e c t o r o f t h o s e o v e r 40 y e a r s o l d . T h i s c a n n o t be a t t r i b u t e d t o a f l o w t o t h e n o n - a g r i c u l t u r a l s e c t o r s i n c e t h a t s e c t o r was d e p r e s s e d . T h i s means t h a t m e c h a n i z a t i o n seems t o h a v e l e d t o e a r l y r e t i r e m e n t f o r a l o t of f a r m e r s .  Table  B.6:  numbers o f e m p l o y e d i n the age  PATTERNS OF EMIGRATION-IMMIGRATION  Sex  15-9  20-4  25-9  30-4  35-9  1967  •M F M F M F M F  161 140 122 108 95 51 40 18  85 72 74 72 85 50 59 24  164 64 102 46 107 38 103 33  171 69 135 60 102 51 87 43  162 67 148 79 142 70 81 44  1977 1982  flow Per i od  between Sex  five  (1000  persons)  bracket  Year  1972  INTO AGRICULTURE  40-4  Age  120 55 154 79 164 82 1 14 59  45-9 105 45 121 57 138 62 1 19 70  50-4 91 24 106 35 102 43 125 61  55-9  60-4  65+  59 12 76 18 90 24 103 43  32 4 28 2 56 7 81 19  15 2 8 1 10 0 25 2  •  Employed 1 168 554 1076 556 1091 478 936 4 16  years  15-9  20-4  25-9  30-4  35-9  40-4  Age  45-9  50-4.  • 55-9  60-4  65+  Emigration  Employed Employment Beg i n End Change  1967-72  M F  122 108  -87 -68  17 -26  -29 -4  -23 10  -8 12  1 2  1 - 10  - 15 -6  -31 - 10  -24 -3  -15 -2  -213 - 105  1168 554  —> —>  1076 556  -92 2  1972-77  M F  95 51  -37 -58  33 -34  0 5  7 10  16 3  - 16 - 17  -19 -14  - 16 -11  -20 - 1 1  -18 -2  -8 -1  -78 -130  1076 556  —> —>  1091 478  15 -78  1977-82  M F  40 18  -36 -27  18 -17  -20 5  -21 -7  -28 - 1 1  -45 -12  -13 - 1  1 0  -9 -5  -31 -5  - 10 0  -194 -90  1091 478  —> —>  936 416  -155 -62  by a g e a n d s e x  (various  b a s e d o n DGBAS yearbook) A cohort  labour  survey data:  c a n be t r a c e d  from  1976  1967: 1972: 1977: 1982:  161 74 107 87  Numbers o f w o r k e r s e m p l o y e d i n a g r i c u l t u r e to  issues  of  the  statistical  1982:  newly still again still  employed employed employed employed  15-9 y e a r s o l d (161 m a l e e n t r a n t s i n t o t h e s e c t o r ) b u t now 2 0 - 5 y e a r s o l d (87 l e f t t h e s e c t o r b e t w e e n 1967 a n d 1972) b u t now 2 5 - 9 y e a r s o l d (33 r e t u r n e d t o t h e s e c t o r b e t w e e n 1972 a n d 1977) b u t now 3 0 - 4 y e a r s o l d ( 2 0 l e f t t h e s e c t o r b e t w e e n 1977 a n d 1982)  207  APPENDIX C INFORMATION FOR CHAPTER I I I  a. L i s t o f v a r i a b l e s i n t h e D a i l y R e c o r d K e e p i n g Survey  Family  S o u r c e : P r o v i n c i a l department of a g r i c u l t u r e and f o r e s t r y , Farm r e c o r d k e e p i n g r e p o r t ( a n n u a l l y ) , on t a p e flow  data  farm  expenses: Seed Fertilizer R e q u i s i t e ( u n t i l 1977 i n c l u d e d h e r b i c i d e s ) Herbic ide Insecticide R e n t a l c o s t ( u n t i l 1977 i n c l u d e d m a c h i n e c o s t ) other d i r e c t costs Building Tool Water charge Other i n d i r e c t c o s t s Livestock Feed H i r e d human H i r e d animal H i r e d machine Other I n t e r e s t cost (farm asset cost) Land r e n t a l ( l a n d c o s t ) Taxes ( l a n d a s s o c i a t e d c o s t )  farm  receipts: Rice Sweet P o t a t o e Sugar Vegetables Beans  208  Special crops Mushroom Orange, c i t r u s Other f r u i t Pigs Poultry Other l i v e s t o c k Processed food Forestry products Fishery products Other o f f - f a r m expenses: a t t a c h e d to o f f - f a r m a c t i v i t i e s extra ordinary losses (theft, disaster) off-farm  receipts:  property temporary s e r v i c e s f u l l - t i m e off-farm labour other  consumption expenses: Stock  income  17 c a t e g o r i e s  data  b a l a n c e s h e e t a t t h e b e g i n n i n g and a t t h e end Assets: current: Cash Financial assets Produce Livestock Growing stock Processed stock Other fixed: L a n d (owned) Buildings Trees Machines L i a b i l i t i e s : short: Short loans Accounts payable Accounts prereceived long: Long l o a n s  of the  other area: cultivatable: cropped:  paddy, d r y , o t h e r F i r s t r i c e , second r i c e , other annual crops,perpetual crops  year  209  manpower: f a m i l y members: m a l e , f e m a l e , o l d , young l a b o u r day i n p u t t o t h e f a r m  rice yields: crop  first  and  activity: f a m i l y male, female, h i r e d labour days  second  districts  8 r e g i o n s : N o r t h , M i d and South R i c e , Sugar (used i n s a m p l e ) , Tea, South-West Mixed, B a n a n a - P i n a p p l e , East Taiwan  b. S e c t o r i a l  data  Sources: PDAF, a g r i c u l t u r a l P Foodbureau,  yearbooks  Food p r o d u c t i o n i n Taiwan ( a n n u a l ) r i c e review magazine ( q u a r t e r l y ) Taiwan economic a b s t r a c t ( a n n u a l )  DGBAS, p r i c e s a n d p r i c e i n d i c e s ( c o l l e c t e d monthly through the Farmers' A s s o c i a t i o n s a n d l o c a l m a r k e t s i n 55 t o w n s ) s t a t i s t i c a l yearbook of Taiwan ( l a b o u r s u r v e y d a t a b a s e d on q u a r t e r l y s u r v e y s January, A p r i l , J u l y , October) JCRR (CAPD), a n n u a l r e p o r t s CAFC, t h e r e p o r t o f a g r i c u l t u r a l c e n s u s o f T a i w a n - F u k i e n d i s t r i c t o f t h e R e p u b l i c o f C h i n a ( 1 9 6 0 , 1970, 1975, 1980) land a l l o c a t i o n data e t c .  210  T a b l e C.1: DISTRIBUTION  OF SAMPLE OBSERVATIONS  Number o f O b s e r v a t i o n s FT PT2 PT 1 LP T o t a l  FT  % Observations PT2 PT1 LP T o t a l  NR S M L  74 80 40  42 58 17  77 38 17  80 28 6  273 204 80  13 14 7  8 10 3  14 7 3  14 5 1  11 4  557  35  21  24  20  18  1 22 57 9  1 27 18 7  382 1 94 48  1 1 1 1 2  10 8 3  20 9 1  20 3 1  150  1 34  188  1 52  624  24  21  30  24  32 77 47  47 53 13  66 62 4  1 19 6 1  264 198 65  6 15 9  9 10 2  13 12 1  23 1 0  126  527  30  21  25  24 17 44 5 33 1 . 24  1 94  1 1 7 1 32  49 37 14  MR S M L  68 68. 14  65 51  61 31 8  SR S M L  1 56  1 1 3 .1 32  50 38 12  SUG S M L  48 68 80  24 26 38  81 61 13  94 29 4  247 184 1 35  8 12 14  4 5 7  14 1 1 2  196  88  1 55  127  566  35  16  ' 27  1972 NR MR SR SUG Note:  60 72 42 62  Number o f O b s e r v a t i o n s i n E a c h Y e a r 73 74 75 76 77 78 79 62 78 45 64  64 69 64 63  P a r t i c i p a t i o n and  63 68 64 64  63 66 62 64  62 70 64 63  62 71 64 60  60 59 61 62  22 80  Total  61 71 61 64  557 624 527 566  size are defined as:  %PT = F L / NFL + FL %PT: p a r t i c i p a t i o n r a t e FL: farm l a b o u r NFL: non f a r m l a b o u r FT: f u l l - t i m e f a r m LP: low p a r t i c i p a n t farm  EP = P + .87D + . 1 80 EP: P : D : O :  e q u i v a l e n t paddy l a n d paddy l a n d dry land other land  21 1  APPENDIX D INFORMATION FOR CHAPTER I V  -Introduction  t o t h e dummy v a r i a b l e  regression tables  -NR : L a b o u r u s e p e r h e c t a r e  (Table  -MR : L a b o u r u s e p e r h e c t a r e  ( T a b l e D.2)  -SR : L a b o u r u s e p e r h e c t a r e  ( T a b l e D.3)  -SUG: L a b o u r u s e p e r h e c t a r e  ( T a b l e D.4)  D.1)  -NR : S e l e c t e d o u t p u t  amounts p e r h e c t a r e  (Table  D.5)  -MR : S e l e c t e d o u t p u t  amounts p e r h e c t a r e  (Table  D.6)  -SR : S e l e c t e d o u t p u t  amounts p e r h e c t a r e  (Table  D.7)  -SUG: S e l e c t e d o u t p u t  amounts p e r h e c t a r e  (Table  D.8)  -NR : S e l e c t e d  intermediate  i n p u t s per h e c t a r e  ( T a b l e D. 9)  -MR : S e l e c t e d  intermediate  i n p u t s per h e c t a r e  ( T a b l e D. 10)  -SR : S e l e c t e d  intermediate  i n p u t s per h e c t a r e  ( T a b l e D. 1 1 )  -SUG: S e l e c t e d  intermediate  i n p u t s per h e c t a r e  ( T a b l e D. 12)  -NR : s i m p l e p r o d u c t i v i t y m e a s u r e s ( T a b l e D.13) -MR : s i m p l e p r o d u c t i v i t y m e a s u r e s ( T a b l e D. 1 4) -SR : s i m p l e p r o d u c t i v i t y m e a s u r e s ( T a b l e D. 1 5) -SUG: s i m p l e p r o d u c t i v i t y m e a s u r e s ( T a b l e D. 1 6)  212  INTRODUCTION TO THE REGRESSION TABLES We a p p l i e d t h e dummy v a r i a b l e m o d e l on e a c h o f t h e production  v a r i a b l e s f o r each r e g i o n and these  multi-characteristic following  tables.  regressions  standard  f o r each c h a r a c t e r i s t i c  are the F - s t a t i s t i c  were z e r o  i s the associated  more t h a n  deviations.  Also  reported  f o r the  that a l l the c o e f f i c i e n t s associated  the c h a r a c t e r i s t i c value  i n the  R e p o r t e d a r e t h e dummy v a r i a b l e  c o e f f i c i e n t s and t h e i r  null-hypothesis  are reported  with  (underneath the F - s t a t i s t i c  significance level,  i f t h i s value i s  .05 o r .10 t h e n t h e n u l l - h y p o t h e s i s c a n be  rejected).  The r e p o r t e d  R  2  i sthe corrected R  2  f o r the  degrees of freedom i n the • r e g r e s s i o n . The read, study.  m u l t i - c h a r a c t e r i s t i c s t a b l e s a r e not simple t o  b u t t h e same s t r u c t u r e w i l l  be u s e d t h r o u g h o u t  E a c h dummy v a r i a b l e r e g r e s s i o n  reported  this  i s of the  form: 2 a  = a  0  3  + L a <$  s=1  s s  8 2 d + Z a d + Z a d d + e p=1 p p t=1 t t s=1 s b s b  + L a  s: p: t: b:  size participation year 1972-76 p e r i o d  213  These a r e t h e g u i d e l i n e s reported:  f o r e a c h dummy v a r i a b l e  regression  - a : t h e b a s e i s t h e l a r g e , f u l l - t i m e f a r m i n 1980. 0 (L,FT,1980). This c o e f f i c i e n t i s always s i g n i f i c a n t e x c e p t when n e g a t i v e . - ifa  < 0 : p o s i t i v e e f f e c t of farm s i z e ( l a r g e r show a h i g h e r v a r i a b l e v a l u e )  s - ifa p  < 0 : p o s i t i v e e f f e c t from p a r t i c i p a t i o n t i m e f a r m s show a h i g h e r v a r i a b l e  - ifa  and a sb  - i f  a  >a 72  - ifa -a s a p a sb a  s  and a sb t  (fullvalue)  o f t h e same s i g n t h e n t h e v a l u e l e v e l s o f t h e l a r g e and s m a l l e r f a r m s grew c l o s e r together through time. > a  73  farms  ...>0: 74  t h e r e h a s been a n e g a t i v e t r e n d i n t h e development f o r the large farms.  o f t h e same s i g n t h e n b o t h f a r m s show t h e same t r e n d  sizes  = AS : s m a l l f a r m (up t o 1 h a ) AM : medium f a r m (between 1 a n d 2 ha) = APT2 : p a r t i c i p a t i o n l e v e l 2 ( b e t w e e n 50% a n d 75%) APT1 : p a r t i c i p a t i o n l e v e l 1 ( b e t w e e n 2 5 % a n d 50%) ALP : low p a r t i c i p a t i o n l e v e l ( l e s s t h a n 25%) = ASB : s m a l l f a r m u n t i l 1976 AMB : medium f a r m u n t i l 1976 = A1972 : y e a r  1972, e t c .  t F-s : F-t e s t F-p : F-t e s t F-b : F-t e s t F - t : F-t e s t F :- F- t e s t ': t - t e s t * : t -t e s t ** beneath each  - NR : MR : SR : SUG:  f o r H . AS = AM = 0 for H APT2 = APT 1 = ALP = 0 for H ASB = AMB = 0 for H A1972 = ... = A1979 = 0 for H a l l c o e f f i c i e n t s zero for H : t h e c o e f f i c i e n t i s z e r o a t .05 s i g n . for H " a t .10 s i g n i f i c a n c e l e v e l . F - s t a t i s t i c i s the significance l e v e l i n brackets. 0  0 0  0  0  0 0  North Rice region Mid Rice region South Rice region Sugar region  214  An e x a m p l e b a s e d on t h e t a b l e D.1. input  shows how t h e t a b l e  f o r the t o t a l  labour  s h o u l d be r e a d , we c o n s i d e r  t h e NR  region: -a s m a l l  f u l l - t i m e f a r m e r i n 1972 had t h e f o l l o w i n g L, 1980,FT + AS + A1972 .+ ASB = 258 . + 447 + 9 2 + 19 = 816  -a s m a l l ,  low p a r t i c i p a n t f a r m e r i n 1972: L,1980,FT + AS + A1972 + ASB + ALP = 258 + 447 + 9 2 + 19 - 402 = 414  -a l a r g e  f u l l - t i m e f a r m i n 1972: L,1980,FT + A1972 = 258 + 92 350  -a s m a l l  f u l l - t i m e f a r m e r i n 1979: L,1980,FT + AS + A1979 = 258 + 447 + 48 732  -a s m a l l  low p a r t i c i p a n t f a r m e r i n 1979: L,1980,FT + AS + A1979 + ALP = 258 + 447 + 48 - 402 = 351  -a l a r g e  f u l l - t i m e f a r m e r i n 1980: L,1980,FT + A1979 = 258 + 48 306  amount:  The o t h e r f a r m g r o u p m u l t i p l e c r o p i n d i c e s c a n be constructed presentations  3-  similarly.  This  dummy v a r i a b l e a p p r o a c h  a r e c o n s i s t e n t l y used throughout  this  and i t s study.  Table  size  D . 1 : NORTH R I C E :  and break  coefficients  ASB  AS  LABOUR USE p e r H E C T A R E :  AM  participation  base AMB  DUMMY VARIABLE  L,1980,FT  APT2  flPT1  REGRESSION  hypothes is  coefficients ALP  tests  F-s  F-p  F-b  F-t  F  T LABOUR R = . 18  447* (94)  19 (116)  121 (95)  -15 (120)  258 (98)  -90 (51)  -248* (50)  -402* (54)  20.02 (0)  2 0 . 75 (0)  .09 ( .91)  (. 9 9 )  . 23  9.09 (0)  MALE FAM LAB R ' = . 17  304* (61)  -13 (75)  79 (62)  -10 (79)  160 (64)  -47 (33)  -163* (32)  -256* (35)  22 . 31 (0)  20.66 (0)  .01 ( .99)  .21 ( . 99)  8.81 (0)  FEM FAMILY LAB R ' = . 17  94* (21)  17 (26)  27 (22)  1 1 (27)  48 (22)  5 ( 12)  . -36* (11)  -83* ( 12)  16.47 (0)  18.63 (0)  . 22 ( .80)  . 72 ( .67)  8 . 74 (0)  HIRED LABOUR R = .01  49 (40)  15 (49)  15 (41)  - 17 (51)  50 (42)  -48* (22)  -44* (21)  -63* (23)  1 . 27 ( .28)  3. 39 ( .02)  . 43 ( .65)  .09 ( . 99)  1 . 47 ( . 11)  2.21 (1.54)  .41 (1 . 2 7 )  .05 ( 1 .59)  2 . 97 (0)  .40 ( .28)  J  !  ANIMAL LAB R = . 05 1  MACHINE R'=.26  1 . 43 (1.25) .97* ( .27)  HIRED  -.55** (.34)  . 1 1 (1.30)  .07 (.68)  - . 12 ( .67)  - .92 ( .72)  1.12 ( .32)  .69 ( .56)  2 . 40 ( .09)  1 . 33 ( . 22)  - . 21 ( .35)  1 .02 ( .28)  .11 .( • 15)  .51* ( . 14)  .66* ( . 16)  9. 19 (0)  7 . 88 (0)  1 . 89 ( . 15)  4.81 (0)  13.69 (0)  1679 (7886)  2.99 ( .05)  3. 10 ( .03)  . 78 ( .46)  . 37 ( .94)  2 . 33 (0)  -10990 (11859)  .41 ( .66)  1 . 30 ( .27)  . 29 ( .75)  . 38 ( .93)  . 94 ( .51)  MACHINE OWNED R =.03  31986* (13635)  -20643 (16863)  20021 ( 13864)  -13712 (17389)  28802 ( 14263)  7657 (7429)  T FARM R =0  18643 (20504)  -4507 (25359)  14769 (20848)  - 15928 (26149)  104515 (21448)  3414 ( 1 1 173)  1  ASSETS  !  *:  significantly  (.05) di f f e r e n t  a:  quantities  b: c: d:  type of labour p r i c e i n 1980 units reported  e: f:  l a b o u r : f a m i l y l a b o u r + h i r e d human l a b o u r T f a r m a s s e t s : m a c h i n e owned + t r e e s + l i v e s t o c k  per hectare above: above:  from  zero  paddy e q u i v a l e n t Male  (family)  man-days  (**:s ign  .10)  cultivatable  Female  (family)  man-days  (standard land  12957 (10823)  deviations  in brackets)  ( t h e r e p o r t e d R*  i s the  corrected  R ) 1  area  H i r e d Human 383.24 man-days  + tools  20535* (7197)  H i r e d Animal 345.93 day  + miscaleneous  h i r e d machine 4592.64 ha s e r v i c e d  farm d u r a b l e s  (deflated  owned m a c h i n e 1 stock value  w i t h an a s s e t  T farm a s s e t 1 stock value  deflator)  T a b l e D . 1 : NORTH R I C E :  LABOUR USE p e r HECTARE:  annua 1 s h i f t  T LABOUR  DUMMY VARIABLE  REGRESSION  (continued)  coefficients  A1972  A1973  A1974  A1975  A1976  A1977  92 ( 123)  15 ( 122)  33 ( 122)  9 (123)  45 (123)  12 (79)  A 1979  A1978  s  16 (79)  48 (79)  25 (80)  -7 (80)  14 (79)  - 1 1 (80)  18 (80)  - 1 1 (51)  4 (51)  35 (51)  FEM FAMILY LAB  29 (28)  -1 (28)  -10 (28)  3 (28)  4 (28)  13 ( 18)  7 ( 18)  9 ( 18)  HIRED  37 (52)  23 (52)  29 (52)  17 (52)  22 (52)  11 (33)  5 (33)  4 (34)  .48 ( 1 .63)  2.81 ( 1 .62)  .39 (1.62)  . 17 ( 1 .63)  . 24 ( 1 .64)  1 .89 ( 1.04 )  . 86 (1.05)  . 72 ( 1 .05)  MALE  FAM LAB  LABOUR  ANIMAL MACHINE  LABOUR HIRED  -1 . 0 6 * ( .36)  -1.15* ( .35)  -1.08* (.35)  -1 . 0 8 * ( .35)  (  - .97* 36)  -1.20* ( .23)  - . 12 ( .23)  - . 50* ( .23)  MACHINE OWNED  -4676 (17867)  -7832 (1771 1 )  - 16125 ( 17744)  - 15474 (17826)  -5896 ( 17895)  - 10778 (11475)  -9370 ( 1 1429)  -5375 ( 1 1497 )  T FARM  -7052 (26869)  -2088 (26633)  -17407 (26683)  -25378 (26806)  -6630 (26910)  -2927 ( 17256)  - 6 3 16 ( 17187)  3567 ( 17289)  ASSETS  ( . 0 5 ) d i f f e r e n t from z e r o  *:  significantly  a:  quantities  b: c: d:  type of labour p r i c e i n 1980 units reported  e: f:  l a b o u r : f a m i l y l a b o u r + h i r e d human l a b o u r T f a r m a s s e t s : m a c h i n e owned + t r e e s + l i v e s t o c k  per hectare  paddy e q u i v a l e n t  a b o v e : Male ( f a m i l y ) : above: man-days  (** s i g n  .10)  cultivatable  Female  (family)  man-days  (standard land  deviations  brackets)  (the  reported R  !  i s the c o r r e c t e d  R )  area  H i r e d Human 383.24 man-days  + tools  in  H i r e d Animal 345.93 day  + m i s e a 1eneous  h i r e d machine 4592.64 ha s e r v i c e d  farm d u r a b l e s  (deflated  owned m a c h i n e 1 stock value  with an a s s e t  T farm 1 stock  asset value  deflator)  2  Table  s 1 z e and  D . 2 : MID R I C E :  LABOUR USE p e r HECTARE:  break coef f I c l e n t s  participation  base  AS  ASB  AM  T LABOUR R* = . 18  267* (79)  50 (96)  94 (82)  -4 (101)  MALE FAM LAB R =.28  129* (35)  28 (42)  34 (36)  FEM FAMILY LAB R* = . 17  109* (30)  7 (36)  HIRED LABOUR R* = . 0 2  30 (35)  DUMMY VARIABLE  coefficients  APT2  APT 1  ALP  301 (85)  -33 (35)  -194* (32)  16 (44)  201 (37)  -29* (15)  58** (31)  -24 (38)  76 (32)  13 (43)  2 (37)  4 (45)  24 (38)  .54 ( 1 .65)  3 .09 (2.01)  .91 (1.72)  .39 (2.10)  - . 19 (1.78)  HIRED  . 20 ( .37)  - .04 ( .45)  .06 ( .39)  .09 ( .48)  1 . 79 ( .40)  MACHINE OWNED R =. 1 1  -9104 ( 14064)  -569 (17177)  15190 (14662)  -22896 (18008)  65823 (15107)  4103 (6240)  -4702 (5795)  T FARM ASSETS R = . 02  -10109 (25005 )  27487 (30539)  4195 (26069)  -261 1 (32017)  143222 (26858)  687 (11093)  -12926 (10303)  different  from z e r o  !  ANIMAL LAB R = . 08 !  MACHINE R* = .21  !  1  (.05)  AMB  *:  significantly  a:  quantities  b: c: d:  type of labour p r i c e i n 1980 units reported  e: f:  l a b o u r : f a m i l y l a b o u r + h i r e d human l a b o u r T f a r m a s s e t s : m a c h i n e owned + t r e e s + l i v e s t o c k  p e r h e c t a r e paddy e q u i v a l e n t a b o v e : Male ( f a m i l y ) : above: man-days  (**:sign  L,1980,FT  REGRESSION  .10)  cultivatable  Female  (family)  man-days  land  F  F-t  F-.P  F-b  -297* (35)  13.01 (0)  31 . 0 9 (0)  . 56 ( .57)  . 74 ( .65)  9:94 (0)  -122* (14)  -204* (15)  18 . 4 7 (0)  71 .36 (O)  . 29 ( .75)  . 37 ( .94)  17 . 35 (0)  -1 (13)  -65* (12)  - 100* (13)  10.69  CO)  26 .94 (0)  1 . 23 ( .29)  1 . 29 ( .25)  9 . 26 (0)  -3 (16)  -7 ( 15)  6 ( 16)  1 . 33 ( .27)  . 29 ( .83)  . 12 ( .89)  1 . 22 ( .28)  1 . 77 ( .04)  . 29 73)  .86 ( .68)  1 .92* (.73)  . 18 ( . 83 )  2 . 59 ( .05)  3.69 (.03)  2.48 ( .01)  4 . 54 (0)  .83* ( . 15)  . 98* ( • 17)  .'35 ( .70)  14 . 6 9 (0)  (  . 16 85)  4.83 (0)  1 1 . 99 (0)  1 . 59 ( • 18)  3 .00 ( .05)  2 .62 ( .01)  5.89 (0)  .93 ( .43)  1 .83 ( . 16)  1 . 46 ( . 17)  1 . 63 ( .06)  . 39* .( . 16)  deviations  -9036 (6231 )  5 . 74 (0)  1 129 ( 1 1078)  in brackets)  . 65 ( .52)  (the reported  R*  is the c o r r e c t e d  R )  area  H i r e d Human 383.24 man-days  + tools  tests  F-s  (  (standard  hypothesis  H i r e d Animal 345.93 day  + miscaleneous  h i r e d machine 4592.64 ha s e r v i c e d  farm d u r a b l e s  (deflated  owned m a c h i n e 1 stock value  w i t h an a s s e t  T farm 1 stock  asset value  deflator)  !  T a b l e D . 2 : MID R I C E :  LABOUR USE p e r HECTARE:  DUMMY VARIABLE  annua 1 s h i f t  REGRESSION  (continued)  coefficients  41972  41973  A1974  41975  41976  41977  54 ( 100)  55 (101)  63 ( 102)  58 (101)  - 12 ( 104)  32 (49)  68 (19)  -10 (51)  -13 (44)  -10 (44)  -27 (45)  -1 (45)  -31 (45)  -0 (22)  10 (22)  1 (23)  FEM FAMILY LAB  26 (38)  46 (38)  28 (39)  39 (38)  7 (39)  12 (19)  30 ( 19)  - 1 1 (20)  HIRED  41 (45)  19 (45)  63 (46)  20 (46)  12 (46)  20 (22)  28 (22)  (23)  1.14 (2.09)  .31 (2.10)  1 .39 (2.13)  3 .09 (2.13)  .82 (1.03)  .65 (1.03)  T LABOUR MALE  FAM LAB  LABOUR  ANIMAL LAB MACHINE  HIRED  -1.63* ( .47)  -1.52* ( .48)  -1.41* ( .48)  -  - 1 . 35 ( 2 . 16)  1.36* ( .48)  1.01* ( .49)  - .98* ( .23) -23876* (8771)  MACHINE OWNED  -34936** ( 17929)  -38388* ( 17984)  -38844* (18191)  -32030** (18202)  - 17229 (18507)  T FARM A S S E T S  -59652** (31875)  -48846 (31974)  -53917** (32342)  -45648 (32361 )  -22904 (32904)  *:  significantly  (.05) di f f e r e n t from z e r o  a:  quantities  b: c: d:  type of labour p r i c e i n 1980 units reported  e: f:  l a b o u r : f a m i l y l a b o u r + h i r e d human l a b o u r T f a r m a s s e t s : m a c h i n e owned + t r e e s + l i v e s t o c k  p e r h e c t a r e paddy e q u i v a l e n t above: Male ( f a m i l y ) : above: man-days  (** s i g n  .10)  cultivatable  Female  (family)  man-days  (standard land  deviations  (the  reported R  . 75 (1.08)  - . 53* (23)  -25571 ( 15594)  brackets)  -o  !  . 07 ( .24)  -13871 (8758)  2359 (9175)  -15509 ( 15571 )  1214 (16312)  i s the c o r r e c t e d  &')  area  H i r e d Human 383.24 man-days  + tools  in  41979  4 1978  H i r e d Animal 345.93 day  + miscaleneous  h i r e d machine 4592.64 ha s e r v i c e d  farm d u r a b l e s  (deflated  owned m a c h i n e 1 stock value  w i t h an a s s e t  T farm 1 stock  asset value  deflator)  T a b l e D . 3 : SOUTH R I C E :  s 1 z e and  ASB  AM  AMB  T LABOUR R = . 27  300* (37)  -4 (47)  93* (37) •  22 (48)  MALE FAM LAB R = . 24  175* (22)  -1 (29)  65* (22)  FEM FAMILY LAB R ' = . 23  143* (20)  -5 (26)  HIRED LABOUR R = . 13  - 18** ( 10)  2 (12)  !  J  ANIMAL LAB R = . 14  DUMMY VARIABLE  participation  base  break c o e f f ic i ents  AS  !  LABOUR USE p e r HECTARE:  coefficients  APT2  APT 1  ALP  201 (39)  15 (21)  -77* (21)  -183* (24)  21 (29)  113 (24)  -2 (13)  -74* ( 13)  43* (20)  4 (27)  30 (21)  31* C12)  -15 (10)  -3 ( 13)  58 (10)  . 23 ( 1 .90)  .57 (1.52)  - . 57 ( .39)  26.89 (0)  . 35 ( .70)  1 . 73 ( .09)  13 . 8 5 (0)  - 126* ( 15)  42 . 9 9 (0)  33.51 (0)  . 74 ( . 48 )  . 56 ( .81 )  1 1 .83 (0)  -4 (12)  -74* (13)  38 . 76 (0)  22 . 17 (0)  . 12 ( .89)  1 . 38 ( .20)  1 1 . 50 (0)  -13* (6)  1 (6)  17* (6)  1 . 72 ( ..18)  8.23 (0)  .18 ( .83)  2.21 ( .03)  6.14 (0)  -2.17* ( .84)  - . 14 ( .83)  3 . 75* ( .95)  1.31 ( .27)  13.88 (0)  1 . 22 ( . 30)  .48 ( .87)  6 . 56 (0)  2 .03 ( .31)  - . 14 ( . 17)  . 12 ( . 17)  36** ( .20)  2 . 96 ( .05)  2 . 39 ( .07)  1 .96 ( . 14)  3.31 (0)  8.14 (0)  2 . 50 08)  1 . 26 ( .29)  1 .44 ( .24)  1 .08 ( .38)  2 . 72 (0)  3.19 ( .04)  1 .42 ( .24)  .87 ( . 42 )  1 .07 ( .38)  2.13 (.01)  -.11 ( .38)  MACHINE OWNED R = . 05  6314 (12029)  -21 15 (15230)  -1 1368 ( 1 1882)  14973 ( 15676)  49206 (12603)  '4688 (6922)  - 1876 (6894)  1 1655 (7883)  T FARM ASSETS 13392 R = . 03 (23903)  -10654 (30262)  -26241 (23610)  16302 (31 149)  94001 (25043)  1 1664 ( 13755)  25567** ( 13699)  26208** (15665)  different  from z e r o  !  !  *:  significantly  (.05)  a:  quantities  b: c: d:  type of labour p r i c e i n 1980 units reported  e: f:  l a b o u r : f a m i l y l a b o u r + h i r e d human l a b o u r T f a r m a s s e t s : m a c h i n e owned + t r e e s + l i v e s t o c k  per hectare above: above:  :  paddy e q u i v a l e n t Male  (family)  man-days  (**:sign  .10)  cultivatable  Female  (family)  man-days  F  51 . 30 (0)  . 39 ( .29)  . 68* ( .29)  F-t  F-b  HIRED  !  tests  F-p  1 .97 ( 1 .84)  MACHINE R = . 17  hypothesis F-s  2 . 34 ( 1 .45)  !  1 . 78 (1.43)  L,1980,FT  REGRESSION  (standard land  deviations  (the reported  R'  i s the c o r r e c t e d  R )  area  H i r e d Human 383.24 man-days  + tools  in brackets)  (  H i r e d Animal 345.93 day  + miscaleneous  h i r e d machine 4592.64 ha s e r v i c e d  farm durables  (deflated  owned m a c h i n e 1 stock value  w i t h an a s s e t  T farm 1 stock  asset value  deflator)  !  T a b l e D . 3 : SOUTH R I C E :  A1972  LABOUR USE p e r HECTARE:  A1973  DUMMY VARIABLE  REGRESSION  (continued)  A1974 A1975 A1976 coefficients annua 1 s h i f t  A1977  A1979  A1978  T LABOUR  93** (53)  135* (53)  56 (51)  57 (50)  47 (50)  34 (30)  52** (30)  16 (30)  MALE  16 (32)  23 (32)  2  (3D  -6 (31)  -9 (31)  -9 ( 18)  6 ( 18)  -1 ( 19)  FEM FAMILY LAB  46 (29)  61* (29)  24 (28)  34 (28)  24 (28)  26 (17)  3 1** (17)  9 (17)  HIRED  31* (14)  51* ( 14)  30* ( 13)  29* (13)  32* (13)  FAM LAB  LABOUR  ANIMAL LAB  .66 (2.07)  1 . 27 (2.06)  1.15 ( 1 .99)  1 .84 (1.97)  .28 (1.98)  - .95* ( .24)  1.15 (1 . 18)  1.12 (1 . 19)  . 40 ( .24)  - .08 ( .25)  - 1 .32* ( .43)  MACHINE OWNED  -40537* (17194)  -35808* (17092)  -35543* ( 16451 )  -32945* ( 16293)  -23687 (16315)  -15496 (9849)  -5048 (9776)  -7097 (9906)  T FARM ASSETS  -38873 (34165)  -15961 (33963)  -20455 (32688)  -25885 (32375)  -8232 (32419)  -6332 ( 19569)  -8895 ( 19424)  31451 ( 19683)  significantly  a:  quantities  b: c: d:  type of labour p r i c e i n 1980 units reported  e: f:  l a b o u r : f a m i l y l a b o u r + h i r e d human l a b o u r T f a r m a s s e t s : m a c h i n e owned + t r e e s + l i v e s t o c k  p e r h e c t a r e paddy e q u i v a l e n t above: above:  Male  (family)  man-days  (** s i g n  .10)  cultivatable  Female  (family)  man-days  (standard land  deviations  in  brackets)  (the  r e p o r t e d R*  is the c o r r e c t e d  R )  area  H i r e d Human 383.24 man-days  + tools  -1.01* ( .41)  8 (8)  - 1.34* (.42)  *:  -1.03* ( .41)  1 . 54 (1.18)  (8)  MACHINE HIRED  (.05) di f f e r e n t from z e r o  - 1 . 27* ( .41)  14**  16* (8)  H i r e d Animal 345.93 day  + miscaleneous  h i r e d machine 4592.64 ha s e r v i c e d  farm d u r a b l e s  (deflated  owned m a c h i n e 1 stock value  w i t h an a s s e t  T farm 1 stock  asset value  deflator)  !  T a b l e D . 4 : SUGAR:  s i z e and  LABOUR USE p e r HECTARE:  break c o e f f i c i e n t s  ASB  AM  AMB  T LABOUR R =.29  344* (37)  -28 (46)  127* (38)  - 14 (49)  MALE FAM LAB R = . 33  184* (19)  -23 (24)  68* (20)  FEM FAMILY LAB R =.21  162* (20)  -10 (25)  HIRED LABOUR R = .01  -3 (11)  5 (14)  2.01 ( 1 .38)  2 . 38 (1.73)  !  !  !  J  ANIMAL LAB R' = .06 HIRED  " - .03 ( • 18)  MACHINE OWNED R»=.08  17094* (4813)  T FARM ASSETS R = .05  34720* (9288)  MACHINE R ' = .09  J  (.05)  .21 (.23) -10095** (6016) -8096 (11609) different  participation  base  AS  DUMMY VARIABLE  REGRESSION  coefficients  APT2  APT 1  281 (38)  -52** (27)  - 173* (24)  -311* (27)  - 10 (25)  134 ( 19)  -25** (14)  - 103* (13)  60* (21)  -1 (27)  109 (20)  - 12 (15)  0 (12)  -4 (15)  37 (12)  2.38** (1.43)  L,1980,FT  1 . 79 (1.87)  - .63 (1.03)  F-s 49 . 26 (0)  47 . 32 (0)  . 19 ( .83)  . 92 ( . 50)  16 . 0 6 (0)  - 190* (14)  53 . 28 (0)  66.81 (0)  . 52 ( . 59)  1 .52 ( . 15)  19 . 2 7 (0)  -70* (13)  - 130* ( 15)  37 . 22 (0)  28.84 (0)  . 12 ( . 89)  .64 ( .75)  1 1 . 27 (0)  - 1 (8)  9 (8)  .05 ( .95)  2 .08 ( . 10)  . 26 ( .77)  . 68 ( .71)  1 . 30 ( .20)  . 44 (1.01)  1 . 50 ( .22)  2 . 30 ( .08)  .96 ( . 39)  1 . 34 ( .22)  3.41 (0)  .02 ( . 12)  - . 16 (.13)  . 18 ( .83)  . 78 ( .51)  .51 ( .60)  4 .47 (0)  4 . 58 (0)  10.03 (0)  5.47 (0)  2.95 ( .05)  1.61 ( . 12)  4 . 44 (0)  7 . 35 (0)  7 .02 (0)  . 59 ( . 56)  1 .09 ( .37)  3 . 10 (0)  -.11 (.19)  .21 ( .24)  1 .24 ( . 18)  - .06 ( . 13)  967 (5002)  2290 (6420)  26968 (4917)  2064 (3572)  -8650* (3192)  - 1 1356* (3495)  -13417 (12389)  63497 (9488)  -2409 (6894)  -19479* (6 159 )  -28251* (6745)  16909** (9652)  *:  significantly  from z e r o  a:  quantities  b: c: d:  type of labour p r i c e i n 1980 units reported  e: f:  l a b o u r : f a m i l y l a b o u r + h i r e d human l a b o u r T f a