Stockholm University Department of Economic History

The Enigma of the Persistence of Family Farming

Keywords: Family farming, Productivity, Differentiation, Inverse Relationship, Pakistan, China

Master's Essay, Spring 2013 By Jonathan Clyne Supervisor: rjan Appelqvist

Abstract
This essay investigates why family farming persists historically and worldwide. Two main investigative methods are used. Firstly, field research in Pakistan and China. Secondly, an analysis of the two main historical schools concerning agricultural development. One school emphasizes the importance of differentiation of farmers into employees and employers and large scale production. Karl Kautsky's and Graham Dyer's ideas represent this school here. The other school stresses smaller farms. This school is exemplified by Alexander Chayanov's thoughts and the theory that there is an inverse relationship between yields and farm size. This essay concludes that even if both schools contribute something, neither really answers the question. Based upon this conclusion, the knowledge acquired during field research, and using a historical materialistic approach, a new theory about the persistence of family farms is developed.

Contents
Abstract Contents Table List of Tables and Graphs Abbreviations 1. Introduction 1.1 Background 1.2 Purpose, Delimitation and Research Questions 1.3 Definitions 1.3.1 Definitions and China 1.4 Field Research 1.5 Disposition 2. A Comparison of Agricultural Productivity in Pakistan and China The Research Begins 3. Field Research in Pakistan Family Farming Discovered 3.1. The Historical Background 3.2. Reflections 3.3 Islamabad, Punjab 3.3.1 Interview with Dr Muhammad Ashraf 3.3.2 Reflections 3.4 Haripur, Khyber Pukhtunkhwa 3.4.1 Farming 3.4.2 Reflections 3.4.3 Upstream and Downstream 3.4.4 Reflections 3.5 Islamabad, Punjab (Second Time) 3.5.1 Interview with Dr Abid Suleri 3.5.2 Reflections 3.6 Sukkur to Mohenjo-daro, Sindh 3.6.1 Farming 3.6.2 Reflections 3.6.3 Upstream and Downstream 3.7 Final Reflections and Some Preliminary Conclusions about Pakistani Agriculture 4. The Persistence of Family Farming Worldwide 2 3 5 5 7 7 9 10 11 12 13 14 16 16 16 17 17 18 18 18 19 19 20 20 20 21 21 22 23 23 24 26

4.1 The Pattern of Development in Industry 4.2 The Pattern of Development in Agriculture 4.3 The Persistence of the Family Farming in the Developed Countries the Facts 5. Past Discussion about Agriculture and Family Farming 5.1 The Classical View Family Farming is doomed 5.1.1 Economies of Scale and Specialisation 5.1.2 Reflections 5.1.3 The Persistence of Family Farming in Nineteenth Century Europe 5.1.4 Counter-acting Tendencies to Large-scale Agriculture 5.1.5 Reflections 5.2 The View from Russia The Resilience of Family Farming 5.2.1 Chayanov The Theory of the Peasant Economy 5.2.2 Reflections 5.3 Building on the Previous Views Differentiation vs. Inverse Relationship 5.3.1 Reasons for IR and Dyer's critique 5.3.2 The Break-down of IR 5.3.3 Reflections 5.4 Reflections and Some Conclusions that Arise from Past Discussions and Field Research in Pakistan 6. Field Research in China The Decline of Family Farming 6.1 The Historical Background 6.2 Reflections 6.3 Interviews in Beijing 6.3.1 Gene Zhao 6.3.2 Dr Guoying Dang 6.4 Visit to Huaxi 6.5 Visit to Xiangyang 6.6 Reflections 7. Towards a New Theory about Why Family Farming Persists 7.1 The Landowners 7.2 The Family Farm 7.3 The Banks and the Money-lenders 7.4 The Capitalist Farmer 7.5 Agro-business /The Middle-man/Cooperatives 4

26 27 28 31 31 32 33 33 34 35 36 36 38 38 40 44 44

45 46 46 47 48 48 48 50 50 53 55 57 59 60 61 62

7.6 Role of the State 7.7 Summary of the Theory 8. Concluding Remarks 9. References

63 64 65 67

List of Tables and Graphs

Table 1. Wheat, Rice, and Cotton Yields (China, USA, and Pakistan, 2003-2004). Graph 1. Labour Productivity in Agriculture (Pakistan and China, 1978-2008). Table 2. Output per Worker in Agriculture and the Rest of the Economy Compared (Western Europe and USA, 1953-67). Table 3. Family Farming (Western Europe, 2005, and USA, 2007). Table 4. Family Labour on Farms (USA, 2007). Table 5. Change in Farm Sizes (Germany, France, and Great Britain, 1882-1895). 27 29 30 33 14 15

Abbreviations
USDA United States Department of Agriculture IR Inverse Relationship between farm size and productivity HRS Household Responsibility System ILO International Labour Organisation FAO Food and Agricultural Organisation FMS - Farm Management Statistics PPP Pakistan Peoples Party IMF International Monetary Fund SAP - Structural Adjustment Programme TVE - Town and Village Enterprise

Land monopoly is not the only monopoly, but it is by far the greatest of monopolies -- it is a perpetual monopoly, and it is the mother of all other forms of monopoly. Land, which is a necessity of human existence, which is the original source of all wealth, which is strictly limited in extent, which is fixed in geographical position -- land, I say, differs from all other forms of property.1 Winston Churchill Speech at the House of Commons May 4, 1909

Churchill, Winston. On Landmonopoly. Andy Wightman's Blog, http://www.andywightman.com/docs/churchill.pdf (Accessed 2012-06-13).

1. Introduction
1.1 Background For a long time I have had an interest in and personal connections with Pakistan and China. The initial impulse for this essay came from my first visit almost ten years ago to Mohenjo-daro, one of the best preserved sites of the ancient Indus Civilisation in what is present day Pakistan. Along the Indus and the adjacent Ghaggar-Hakra River the original egalitarian agricultural societies evolved into a whole series of cities with advanced economies and cultures, among them Mohenjo-daro. Over five hundred sites have been discovered. Yet despite the high degree of development, the Indus civilisation did not lose its basic egalitarian structure. The cities of the Indus had populations of between 20 000 and 50 000. This allowed for an extensive division of labour and specialisation. They had a written language, advanced crafts, and traded with places as far away as Mesopotamia. For almost two thousand years, from 3300-1300 BC, the cities flourished peacefully. They were well-planned with wide streets, central squares and the first known urban sanitation systems. All houses had access to wells, baths, and covered drains. The health of the population was better than most other populations of the time. There were public amenities such as granaries and water reservoirs. Evidence of matrilocality and an abundance of female statuettes signify a relatively high degree of gender equality. The small variations in the sizes of the houses and the lack of any buildings that can be identified as temples or administrative centres point to a low degree of stratification.2 In the end, the Indus civilisation most likely succumbed to neither internal disintegration nor invasion from the outside, but due to the Indus changing course and the Ghaggar-Hakra drying up.3 Mohenjo-daro can be compared favourably with Pakistan today, where agriculture has stagnated for decades and the number of people living in absolute poverty has increased.4 The living conditions today in parts of the Indus Valley are most likely worse than they were in the egalitarian societies five thousand years ago. Open sewers run down the street, rubbish collects in piles, access to fresh water is limited, and people live in shacks or improvised tents. The second thing which captured my imagination was what I read about Chinese agriculture. Since 1978 when the Household Responsibility System, HRS, had been introduced, it has also been strikingly egalitarian. The land is owned by the villages and the use-rights of the land are leased
2 3 4

Wright, Rita P. The Ancient Indus. New York: Cambridge University Press, 2010: 329. Ibid, 37-38 and 321. People living on less than $2 a day in Pakistan have increased from 92 million in 1987 to 99 million in 2008. Figures for pre-1987 are not available. World Data Bank. Poverty and Inequality Base. http://databank.worldbank.org/Data/Views/VariableSelection/SelectVariables.aspx?source=Poverty%20and%20Ineq uality%20Database# (Accessed 2012-08-13).

more or less equally to peasant families. The exact method varies from village to village, but the system used in Xiangyang, an Anhui village that I visited in February 2012, is usual. Each villager, regardless of age, has a lease for the use-right of 1.5 mus (15 mus = 1 hectare). This puts one family's allotment at about the national average, which is 0.6 of a hectare.5 As family sizes change the land is redistributed. Despite the minute size of each household plot in China, the results are spectacular. By the latest count almost 600 million people have been lifted out of absolute poverty in China in just under three decades.6 Advances in agriculture, and industry, have transformed China from an overwhelmingly rural population to one where the majority live in urban areas. And shops in the big towns of Pakistan are stocked with fresh produce from China. This is the background that lead me to want to study the dramatic divergence between Pakistan and China in the development of agricultural productivity during the past three decades. My first hypothesis based upon the above knowledge, was that egalitarian agriculture was more productive and that a comparative study of Pakistan and China could show that. I became enthusiastic when I discovered a large body of thought that claimed to prove that there was an inverse relationship, or IR, between productivity and the size of a farm the greater the farm, the smaller the yield per hectare. I saw this as providing a scientific basis for my initial hypothesis. If smaller farms were more productive, then presumably if all farms were small, i.e. land was distributed equally, productivity would be generally higher. However, my field research in Pakistan called that into question. Farms have been fragmenting in Pakistan and the situation has got worse, not better. Although things are far from egalitarian, it seemed unlikely that the breaking up into even smaller units would help much. I also discovered that the basic unit of farming was a family, almost regardless of geographical location, crop, or even who owned the land. This unit cannot be broken up further. As I looked further afield, I discovered that the situation was basically the same world-wide family farming was the overwhelmingly most common unit of production in agriculture. This was completely contrary to what I had expected. Thus, the development of agriculture has proceeded on a different path to industry and services. At this stage my ideas were ship-wrecked. I could not find any coherent theory to explain the relationship between productivity and size of farms. I could have left it at that. Simply reporting that
5

Organisation for Economic Co-operation and Development (OECD). Agricultural Policies in non-OECD Countries: Monitoring and Evaluation 2007. OECD, 2007, p.68. According to the World Banks Poverty and Inequality Databank, people living on less than $2 a day in China has decreased from 972 million in 1981 to 907 in 1987 and to 395 million in 2008. http://databank.worldbank.org/Data/Views/VariableSelection/SelectVariables.aspx?source=Poverty%20and%20Ineq uality%20Database# (Accessed 2012-08-13).

I had failed to prove my hypothesis and why. However, I chose to think afresh, to try and make sense out of a reality that was far more complex than I had assumed. I felt that if I did not understand the persistence of family farming, I could not explain much at all about agriculture. The centre of gravity of my research and this essay shifted away from my original intention of comparing Pakistani and Chinese agriculture, to trying to understand why family farming persisted. This essay shows how my initial field research in Pakistan led me to change the aim of my research. After that the history of thought about family farming is dealt with. Finally, my field research in China is described and how it provided the basis for a consistent theory about the persistence of family farming. And thereby, the essay also contributes towards an explanation of the difference in productivity development between Pakistan and China.

1.2 Purpose, Delimitation and Research Questions The purpose of this essay is to take a broad view in order to develop a theory about why family farming persists. A broad view makes it possible to see things in their development and complexities. A broad view is also taken in the sense that there is not only a macro-perspective. There is a sliding scale of investigation right down to individual peasants. In other words, I have not only looked at aggregate figures, but also visited Pakistan and China and interviewed individuals directly involved in agriculture. I draw on the (mainly Western) theoretical discussion during the past 150 years about the development of agriculture, but also on the actual development of agriculture in England, other Western European countries, Australia and Russia. And in later years, Japan and South Korea. I have especially followed the development of US agriculture, as a representative of the most developed agriculture in the world today. Whether looking at theory, different countries, the historical perspective, the production process, or the micro view, this essay uses historical materialism as an approach to probe all these aspects of agriculture. In the context of my research, I interpret historical materialism as meaning that it is of primary importance to look at how people, or more specifically classes, interact with each other, with nature and with the tools at their disposal, in order to produce agricultural commodities. In other words, what are the social relationships of agricultural production7?

As 'social relationships of production' is a rather clumsy expression, I at times shorten it to simply 'social relationships'. With this I do not wish to imply that there are not many social relationships other than those of production.

Classes are defined by how people are related to the means of production (basically land, labour, and capital) and each other. A crucial expression of the relationships is the ownership or nonownership of the means of production. Classes are divided into different layers and sections. The success or failure of farming is measured either in terms of labour productivity or in land productivity, yields. Ecology and the quality of produce are beyond the scope of this essay. The quality of life of those working in farming is considered only in so far as it effects productivity. To begin with my research question was: Why has agricultural productivity developed much more rapidly in China than in Pakistan in the last thirty years? However this shifted to: Why has farming not followed the pattern of development of industry, i.e. centralisation and concentration of capital? Why does family farming persist?

1.3 Definitions Agriculture is everything connected with the cultivation of plants, animals, fungi, and other life forms.8 Farming is what takes place on a farm, that is to say, in close connection to land. In the past, most of agriculture was farming, but since then many inputs - seeds, fertilisers, pesticides, herbicides, machines, irrigation, finance, experience and knowledge have moved off the farm. They flow to the land after having been produced elsewhere. At the other end of farming, warehousing, processing, packaging, transportation, and sales often take place off the farm too. Even the keeping of animals has to a certain extent moved off farms. Agriculture is therefore a process consisting of upstream (inputs flow to the farm), farming, and downstream (outputs flow from the farm). The difference between a peasant and a farmer is that a peasant produces mainly for his own family or the village in which he lives in, whereas a farmer produces mainly for the market beyond the village. Peasants are therefore more connected to feudal agriculture and farmers to capitalist agriculture, although there is some overlapping. The technical level of farming is not decisive for defining the difference between a peasant and a farmer. The bulk of what is produced can be for a market regardless of whether a hoe and a sickle or a giant combine harvester is used, although the former is more common among peasants and the latter among farmers. Family farming is further defined as farming where the majority of the labour is done by members of one family. This does not exclude that they employ a few workers or even that they for short periods of time, like at harvest time, employ more labour than the family contributes itself. It is also possible that some members of the family work full-time or part-time off the farm. The main
8

Agriculture and Agronomy, Wikipedia, http://en.wikipedia.org/wiki/Portal:Agriculture_and_Agronomy (Accessed 2012-09-24).

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thing is that on a yearly basis most of the family's work consists of doing most of the work on the farm. Family farming may or may not involve owning the land which they farm. They might just as well rent it. Often an analytical mistake is made of associating family farming with small farms. I consider it vital for the analysis to clearly separate out the social relationship of production from the size, even though commonly family farming uses smaller plots of land than capitalist farming. Capitalist farming is farming done for profit-maximization and where the work is mainly done by people employed. Capitalist farming can be managed by a family or an employed manager on behalf of an anonymous joint-stock company or private owners. A capitalist farmer can either own or rent land. Agricultural labourers are people employed by peasants and farmers to work for them. The definitions above are mainly my own definitions. Other authors use other definitions. In order to maintain the integrity of other authors, I have therefore kept their usage when analysing their texts. Thus when I describe the ideas of Alexander Chayanov and Graham Dyer I use the word 'peasant' instead of 'farmer', when they do. I think that neither Chayanov's nor Dyer's use of 'peasant' is very different from my use of 'family farm'. Dyer uses the expression 'rich peasant' in a way that is similar to my use of the expression 'capitalist farmer'. However, I do think Chayanov and Dyer's terminology reflects a lack of clarity in their ideas. 'Peasant' evokes an image of backwardness. I doubt either would use the term 'peasant' for a family farm in a developed country.

1.3.1 Definitions and China Because the structure of Chinese society has been and still is very different from the AngloAmerican experience, definitions are difficult and need slightly longer explanations. In China the people working in a commune were called agricultural labourers by the Chinese state. The authorities saw communes as socialist agricultural factories that employed workers. However, I call them peasants. The commune system has more in common with a feudal system, albeit a curiously egalitarian one, than with a factory system. In exchange for working on the common land of the commune, peasants were entitled to use a small proportion of the land for their private purpose. Here they could grow fruit and vegetables for themselves and for sale in a nearby town. They were bound to the land in the sense that it was forbidden to migrate to the cities without special permission. Even the right to visit cities was difficult to obtain. In the main, production in the commune was for the commune itself. The commune had to fulfil state quotas that were sent to the urban population, but as the urban population was merely 13.9 percent of the total population as

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late as 1982, this was a small proportion of what was produced.9 After 1978 the Household Responsibility System (HRS) began to spread in China. This has created further definitional problems. There is considerable confusion as to who has property rights, as things do not fit into Western categories. Often the term fuzzy is used to describe property rights in China and unclear translations are rife. Under HRS families can be said to 'lease', 'have a contract for' or 'to own the use-right' to the land. Likewise the activity of companies involved in farming is described in many different ways. I have chosen to describe the villages as collectively 'owning' the land. The households as 'leasing the use-rights' to the land. Households 'contract out' the land to companies and individuals. And the town councils make the decisions about 'contracting out' land. HRS began a process whereby Chinese peasants were transformed from peasants to farmers or agricultural labourers. Shadowing the terminology of the Chinese state, I call the peculiar nature of much of present day farming in China for 'socialist market farming'. It is market driven, profit-maximizing, and most work is done by agricultural labourers, but the main means of production, the land, is collectively owned.

1.4 Field Research I spent three weeks travelling in Pakistan and ten days in China. During that time I interviewed many people and saw agriculture first hand. Prior reading and knowledge influenced my view when I arrived at the object of my research. Questions were formulated in advance. However, visiting a place, observing it and talking to people leaves a strong impression. All my subsequent reading and writing was related to where I had been and what I had seen. It, so to say, brought the statistics and analysis to life. The mental pictures that I carried around with me of the places I visited, led me to question what I read. And sometimes things went the other way, and my reading led me to re-evaluate what I had seen. Therefore field research was decisive for the development of my ideas. The choice of places to visit is therefore important, but it was mainly outside of my control. In China, the driver of the car that I rented in Shanghai made suggestions of what villages to visit. I spent most of the time in the village he had migrated from. The random element that this entailed was probably a positive thing for my research, but it was also limiting. In Pakistan it was longstanding friends and their contacts that helped arrange my travels. Could I trust that they would not just take me to places that they thought I ought to see?
9

Chan, Kam Wing and Xu, Xeuqiang. Urban Population Growth and Urbanisation. The China Quarterly, No 104 (Dec. 1985): 583.

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In the Sindh Province, I was the guest of the Federal Minister for Religious Affairs. Without his assistance I would not have gotten the truckload of policemen with sub-machine guns that accompanied me everywhere. I was told that this was necessary for a foreigner. Given that every McDonalds even in the capital Islamabad has a heavily armed guard outside and there are regular roadblocks with machine-gun nests, I did not doubt their word. But how did a poor share-cropper I interviewed feel about me turning up with an entourage of armed policemen and local big-wigs? In China my personal safety was never at risk. Police and military were less in evidence than in just about any place I have visited. However, it was clear that the state and the Communist Party were keeping an eye on things. To what extent did that limit what people told me? I tried to counter-act these problems by asking the people I interviewed about what they knew about other places nearby. I also asked them how typical their situation was. I felt the key to overcoming the above problems was to win people's trust. Many had never seen a foreigner in the flesh, much less talked to them. On balance though, I think being a foreigner from a faraway place probably helped. I came from outside the local power structure. But it was still a question of rapidly making contact with people so that they would speak relatively freely with me. The interviews had to be quite non-structured, so that I could feel my way. Being inexperienced, I often spent too much time messing around with the recording equipment and I risked losing the crucial first moments when it is necessary to establish personal contact with somebody. Recording was obtrusive and made people (with the exception of academics) ill at ease. People do not want to be put on the spot. I felt it was not fair to record people secretly, and it would have impinged upon my ability to gain people's trust. It was better to write notes by hand. But in order to not forget what my notes meant (writing things down literally was beyond my capacity) it was necessary to write things up on my laptop the same day. That was not easy. During my travels, periods when nothing happened were interspersed with days when everything happened at once.

1.5 Disposition After the introductory chapter, I begin the actual essay with presenting the statistics that show that agricultural productivity has developed differently in Pakistan and China. I continue with a condensed report of my field research in Pakistan, together with my impressions and the thoughts that led me to pursue the enigma of the persistence of family farming. I then look at the different patterns of development in industry and agriculture internationally. Following that I go through the history of thought around the issue of family farming, putting it in a narrative context. I focus on three books by three different authors Karl Kautsky, Alexander Chayanov, and Graham Dyer. They have been of special importance for the development of my thoughts. They are also the lens 13

through which the historical discussion about agriculture is refracted in this essay. After this comes a shortened report of my field research in China. I then summarize the results of my research and my theory about the persistence of family farming is explained. Finally, I make some concluding remarks in which possible avenues for further research are launched.

2. A Comparison of Agricultural Productivity in Pakistan and China The Research Begins

There are two principle ways of measuring productivity in farming. One is labour productivity how much labour has to be put down to reach a certain result. The other is land productivity or yields - how much does a particular plot of land produce. In developed countries both labour and land productivity tend to be high, and in developing countries they both tend to be low. However, it is far from certain that they move in conjunction. China has a tradition going back centuries of obtaining high yields with low labour productivity. For example in the early nineteenth century, land productivity in the Yangtze Delta was nine times that of England, but its labour productivity was only 90 percent of Englands.10 In other words, a lot can be squeezed out of a plot of land if one throws enough labour at it, but the more labour used, the less effect it will have. Due to high yields, China has been able to feed a large population on relatively little land. In a whole number of decisive crops, like rice and wheat, China has had and has among the highest yields, if not the highest in the world. Today, with only 10 percent of the worlds arable land, China supports 20 percent of the worlds population.11

Table 1. Wheat, Rice, and Cotton Yields (China, USA, and Pakistan, 2003-2004). Wheat12 Rice13 Cotton14 (metric tons per hectare) (metric tons per hectare) (metric tons per hectare) China USA Pakistan 3.93 2.97 2.37 6.06 7.48 2.96 .95 .82 .55

10

11 12

13 14

Allen, Robert. Agricultural Productivity and Rural Incomes in England and the Yangtze Delta, c. 1620- c. 1820. Economic History Review, vol. 62, issue 3, (2009): 540. Agriculture in China. Wikipedia. http://en.wikipedia.org/wiki/Agriculture_in_China (Accessed 2013-01-19). Agricultural Statistics. Nationmaster/CIA World Factbook. http://www.nationmaster.com/graph/agr_yie_wheagriculture-yield-wheat (Accessed 2013-01-19). Ibid,.http://www.nationmaster.com/graph/agr_yie_ric-agriculture-yield-rice (Accessed 2013-01-19). Ibid, http://www.nationmaster.com/graph/agr_yie_cot-agriculture-yield-cotton (Accessed 2013-01-19).

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High yields and low labour productivity can be a developmental trap, known as involution. Development, so to say, turns in on itself. Greater results are achieved by using more labour on the same amount of land. That in turn provides the incentive to have more children. Plots become even smaller after inheritance and are cultivated even more intensely. Leading to more children and By contrast, the development of labour productivity in farming is both a means for and a symptom of a broader development than just feeding more people. The development of labour productivity in farming frees labour and food for industry and services, and creates a demand for industrial and service commodities. From 1978 to 2008, labour productivity increased by almost three and a half times in China. In Pakistan the rate has been less than half. However, the pace of change has varied greatly in both countries during these three decades. I will deal with this later in this essay. Graph 1. Labour Productivity15 in Agriculture (Pakistan and China, 1978 to 2008).16

15

16

Labour Productivity is defined as the basic-price GDP per actual hour worked. Basic prices is defined as GDP at market prices minus net indirect taxes on products. Asian Productivity Organisation. APO Productivity Data Book (2011): 47. Nomura, Koji. Project manager APO Productivity Database Project, Professor at Keio University, Tokyo. APO Productivity Data, 2012 (forthcoming). Email, 2012-05-08. < nomura.koji@gmail.com >.

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3. Field research in Pakistan Family Farming Discovered

3.1 The Historical Background Since long before the British conquered the Indian sub-continent, self-governing villages owned the land collectively. The use of the land was decided by an, often elected, village committee. Land was assigned to households on a fairly equal basis. Taxes were collected both to take care of those that were unable to cultivate the land themselves and to pay tax to the central government. Agriculture was sufficiently productive to allow for the development of cities. They became centres of production and trade. Throughout the centuries the central government changed as India was invaded or due to conflicts among the elite, but the basic system remained intact. It was not until the British turned the central tax collectors into the formal owners of the land that the system was fundamentally changed. 17 It was an attempt to graft a feudal system onto India, where the top landowners owed their allegiance to the British crown. When India became independent in 1947 it was divided. Pakistan was formed, but Pakistan was in turn divided in 1971. West Pakistan became Pakistan and East Pakistan Bangladesh. At independence, West Pakistan had little industry. Agriculture was dominated by the families given big estates by the British. There have been several attempts at land reform in 1959, 1973, and 1977. However, none of them have broken the pre-dominance of the large estates.

3.2 Reflections I arrived in Islamabad, the capital of Pakistan, on the 24th of November 2011. I stayed for three weeks. I was received by an old friend, Chaudhry Manzoor Ahmed. I originally met him when I was an election observer in Kasur during the election of 2002, when he was elected to the National Assembly for Benazir Bhutto's party, the Pakistan Peoples Party, PPP. Since then we have met many times both in Pakistan and in Europe. He is no longer a member of the National Assembly. Instead he has spent his time organising the People's Labour Federation, a trade union federation sympathetic to the PPP. He opened many doors for me in Pakistan. Apart from my visit in 2002, I had visited Pakistan several other times. Although I had mainly been in cities - Lahore, Karachi, Kasur, and Islamabad I had also spent some time previously in the ancestral village of another friend. I had several times asked about the situation for agriculture in Pakistan. However, apart from dismissive remarks about the feudals, the big landowners

17

Nehru, Jawaharlal. The Discovery of India. New Delhi: Oxford University Press (2002).

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(including the Bhutto family) that decide much in Pakistani politics, and an emphasis on the need to redistribute the land, I was given little information. Nor did the amount of literature about Pakistani agriculture that was available to me outside of Pakistan amount to much, unlike the extensive writings about Chinese agriculture both before and after 1978. I read a World Bank report calling for land reform,18 some research that confirmed IR, although weakly,19 some statistics from FAO and bits and pieces about Pakistan's history that referred to the development of agriculture. The rest was mainly of a technical nature. I expected to find great inequalities and feudal backwardness in Pakistani agriculture.

3.3 Islamabad, Punjab 3.3.1 Interview with Dr Muhammad Ashraf My first foray into the world of Pakistani agriculture was to visit and interview Dr Muhammad Ashraf. He was formerly Director General of the National Agricultural Research Council Pakistan's foremost institute for agricultural research.20 Now he is retired, does international consultancy work, and has a small farm for his own consumption outside Islamabad. I visited him there. In Pakistan today the technical knowledge is there. There is excellent climate, land, irrigation. Five to six rivers flow down from the Himalayas. They are rich in minerals potash, calcium. This makes it possible to increase the cropping intensity to three crops per year. However, access to irrigation depends upon the strength of the farmer. Support services are weak. There are problems with inputs, electricity, and corruption. Farmers are the weakest segment of the population and have a low knowledge level. They are never given the appropriate resources. The price of fertilizers has doubled in one year. The main source of fertilizer is natural gas and there is a shortage of gas. Farmers are operating below capacity level. The rice harvest takes place during 30 days. Suddenly 15 million tons become available. Farmers just throw the rice paddy at the doors of the rice mill, because they cannot store it themselves. One family of industrialists control the processing industry. The middleman earns
18 19

20

World Bank. Pakistan Promoting Rural Growth and Poverty Reduction . Report No. 39303-PK. Hafiz, Zahid Mahmood. Accounting for Land. Saarbrucken: VDM Verlag (2010). Kiani, Adiq Kausar. Farm Size and Productivity in Pakistan. European Journal of Social Sciences, Vol 7, No 2 (2008): 42-52. Anriques, Gustavo, and Valds, Alberto. Determinants of Farm Revenue in Pakistan. The Pakistan Development Review, 45:2 (Summer 2006): 281-301. Heltberg, Rasmus. Rural Market Imperfections and the Farm Size Productivity Relationship: Evidence from Pakistan. World Development, Vol. 26, No. 10 (1998): 1807-1826. National Agricultural Research Council: http://www.parc.gov.pk/instintro.html (accessed 2013-02-12).

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all the money.

3.3.2 Reflections Dr Ashraf painted a picture of mainly poor farmers with low yields labouring without support from the authorities and forced to give up a large part of their earning to expensive inputs and expensive processing and distribution. He made no mention of feudal relationships nor other problems with inequalities in farming. One important conclusion I drew from the interview was that agriculture must be seen as a process, upstream and downstream.

3.4 Haripur, Khyber Pukhtunkhwa province In Islamabad I met Dr Faiza Rasheed. A gynaecologist educated in the Soviet Union, she returned to Pakistan and in recent years became active in the PPP. She is now a member of the Provincial Assembly of Khyber Puktunkhwa. She took me to her home town Haripur, where she and her husband Dr Sohrab Shah, an anaesthesiologist also educated in the Soviet Union, were my guides. Due to my discussion with Dr Ashraf, I specifically asked them not only to show me farming, but to show me all the different stages in the agricultural production process.

3.4.1 Farming On parts of the banks of the river Indus farming proceeded more or less as it had some 5000 years ago. Haripur district had been the heart of the ancient Gandhara civilisation. During the summer monsoon season the river swells and the surrounding areas are flooded. By November the river begins to recede. As the area exposed increases, wheat seeds are strewn out by hand. No fertilizers are needed. The river has left sufficient nourishment. There is no need to plough. No weeds have grown underwater and the top of the soil is moist and soft. Once sown nothing has to be done until harvest time. The place I visited had extended the land that was flooded and drained by building a dam. This method allows for only one crop, a winter crop - wheat. Outside of Haripur I visited a farm of eight hectares, which is a fair sized farm by Pakistani standards. The farm had been in possession of the same family for generations. However, it had expanded over time. It was now run by a farmer in his late thirties, who had spent ten years working in a car factory in Stuttgart, but then returned to take over the running of the farm from his father. He had five children. His wife took care of their home and did not work on the farm. The size of the farm had expanded gradually and was considered a fairly well-off and well-run farm. There was a tube-well with the capacity to supply sufficient water to irrigate 15 hectares, so 18

water was sold to smaller neighbouring farms. It was run by electricity, but a diesel generator was available. The land was irrigated by sending the water out into canals, 30-50 cm wide, made by pushing the earth up into small walls. All the fields were divided into patches of about 30-60 square meters. In turn, the water was led into one patch at a time until it was completely flooded. This was done during day time, so the level of evaporation was high. There were four or five cows. Their manure was also used to create biogas with a system purchased with government subsidies. The gas was used for cooking on the farm. There were two chicken houses. In each house hundreds, if not thousands, of chickens ran around in a big hall. After about eight weeks the chickens are slaughtered, the place cleaned out, and new chicks, that are hatched somewhere else, are bought. In one hall automatic feeding equipment had been bought from Italy. In the other hall this was done manually. The automatic system supplied the feed at a better pace and made the chickens grow faster. Wheat was the main crop at this farm, as it is throughout Pakistan. However, in the south there is an important summer crop of rice. This farmer also had many types of vegetables, and potatoes that were being harvested when I was there. Tractors ploughed the fields and were used for transports from the fields. The farmer owned his own tractor. All the harvesting was done by hand. Three families men, women, and children - harvested and sowed different parts of the farm. They were not natives from the area.

3.4.2 Reflections In many ways the farmer described above represented the quintessential capitalist farmer, or as he has sometimes been called in the past the rich peasant. By working abroad he got together a bit of capital that was then invested in the farm. This gave him the edge on his neighbours, who had to make do with ancient methods, and by continuously investing he could improve and expand his farm bit by bit. The only thing that did not fit the picture was that he had no workers employed. Instead three families were responsible for different parts of the farm, and they did most of the job by hand. At the time I did not understand the significance of the use of family labour. I just found it a bit odd. I did not ask how these families received their income. Some months later I met Dr Rasheed again and I asked her. She thought they were probably share-croppers.

3.4.3 Upstream and downstream I visited an ancient stone wheat mill that after hundreds of years was still in use. A small stream flowed into the mill and drove a millstone lying on top of another unmovable millstone. A trickle of wheat went into the centre of the top stone and slowly the wheat was ground between the stones. 19

Nowadays, this mill was mainly used by farmers for their own consumption. It was cheaper than the diesel-driven mill made of stainless steel that I also visited, but much slower. Farmers said that quality of the wheat was much better at the stone-mill. The slowness of the stone-grinding meant that the milling did not heat up the wheat. The stone-mill had been in possession of the same family for generations. The steel-mill was owned by a young man. It was placed in a small brick-built stall and the diesel exhausts swirled freely around the stall, creating an intoxicating air. In Haripur I saw two different ways of producing edible oil. First I visited a small stall in a market where mustard seeds were crushed in a giant mortar and pestle. The pestle was drawn round by a bullock. Out came a strongly flavoured and rich tasting oil that was sold adjacent to the stall. The second place was a factory with huge machines. Apart from mustard seeds and some other oil seeds grown locally, the main ingredient was palm oil imported from Malaysia. About 500 people worked at this factory, including many boys from about 13-14 upwards. Apart from the raw material most things connected with the product were made in the plant for example all the metal containers for the oil were cut, folded, stuck together and printed on there. It was noisy, dirty, dangerous and hot. The oil raw material went through a series of heatings and filters until a pure product was achieved that had no flavour and no vitamins left. Instead vitamins were added at the end. The factory was owned and run by a family. I also visited a juice factory. It had new machines from the Swedish company Alfa-Laval that could produce packaged juice at a phenomenally rapid rate. Otherwise the plant did not have the appearance of a modern factory. Young teenage boys worked there. This was the low season and only one of the machines was being used. The high season is the summer when juice consumption rises steeply.

3.4.4 Reflections The processing and distribution of agricultural products ranged from the extremely primitive to the most advanced. At many points it was connected to the world market.

3.5 Islambad, Punjab (Second Time) 3.5.1 Interview with Dr Abid Suleri After Haripur I returned to Islamabad where I met Dr Abid Suleri. He is executive director of an NGO in Islamabad called Sustainable Development Policy Institute.21 Middle men are vital as there is no institutionalisation. They buy standing crop, and therefore
21

More about Dr Abid Suleri can be read at http://en.wikipedia.org/wiki/Abid_Qaiyum_Suleri (Accessed 2013-0212).

20

act as insurers. They are responsible for marketing and they are prepared to give micro-credit without collateral. But the terms of trade are not equal. Most inputs are imported. The devaluation of the rupee has made them very expensive. The price of electricity and diesel has tripled. One of the problem areas of agriculture in Pakistan are the absentee landlords, especially in Sindh. This means that there is little management and little incentive to improve things as the landlords prefer to live on a fixed income from tenants. Big landlords have more influence over irrigation. They are well connected. In Punjab there is the opposite problem of too small farms as farms are fragmented due to the inheritance system. In the past attempts were made to set up cooperatives, but the cooperative movement was scandalized by various scams. Seventy per cent of the farms are small. Very few people can rely on farming. It is a way of life. He was one of four brothers, three of them lived in towns and helped the fourth brother who ran the family farm. It is an obligation. There is no cost-benefit analysis. The ownership of land is a matter of prestige. It is considered a shame to buy wheat or rice on the market.

3.5.2 Reflections Dr Suleri confirmed and deepened several of the themes that had emerged previously. There are problems upstream and downstream. Farmers pay world market prices for inputs, but receive only local prices for their produce. It is an equation that does not work for farmers, and puts them under extreme pressure. This leads to fragmentation rather than consolidation as people hang on to their land. Family farming shows a tenacity beyond economic rationality. However, he also raised the question of inequalities, citing the absentee landlords in the south. But social relationships are not feudal according to him.

3.6 Sukkur to Mohenjo-daro, Sindh I departed from Islamabad again. This time to travel south to explore the big landed estates. I was keen to visit Mohenjo-daro again, to see the ruins of the ancient Indus civilisation. Therefore a trip was arranged from Sukkur to Mohenjo-daro, with stops along the way for field research. In 1932, during the British Raj, the barrage across the Indus at Sukkur was completed. Sukkur is the Sindh provinces third largest city. The barrage diverts part of the Indus into seven canals with a total original length of almost 10 000 km (since expanded by almost six times). This created the worlds largest irrigated area. I was shown around the barrage and its functioning was explained to 21

me. All the iron parts were produced in England and transported to Pakistan. Not surprisingly, considering the scale of the irrigation system, this is an area of many large landowners. However, due to bad drainage and the use of much water for rice and sugar cane growing, water-logging of the land and subsequent salination is common. Large areas are covered by a thin white crust, with only small bushes growing here and there and camels grazing. Irrigation could therefore also be a disaster.

3.6.1 Farming I spoke to Bahadur Khan, a poor tenant farmer. He cultivates six acres. Rice in the summer and wheat in the winter. The landlord's share of his crop is 50 per cent. The landlord contributes nothing towards the farm. Khan buys the seed and fertilizer. He borrows money to be able to this. He pays for the water charges and all other expenses. He rents a tractor for ploughing the field after harvest. That is all the mechanisation he uses. The rice is harvested by hand. He cannot rent a threshing machine. In the area some peasants can afford to rent threshing machines. When I was there, he and his family of about seven or eight people of three generations were threshing by hand. This is done by grasping a bunch of the rice, approximately 1.5 meter long, and beating the top (where the rice seeds are) against an old tractor tyre lying flat on the ground. This way most of the rice seeds land in the middle of the tyre. This is then put in sacks and transported by donkey cart to a rice mill. This was the season for cauliflower picking. I talked to a group of labourers who were harvesting the cauliflowers by hand. They carry them to the side of the road, where they cut off the leaves. Everything is picked up later and the cauliflowers are taken to the market. They were employed on a day by day basis without a contract by somebody who rented the land from several owners. I met Bachal Khan Rahar who owns 500 acres. His wife and children are resident in London. He spends part of the year there. He has six or seven families who are his tenants and cultivate the land for him. For that he takes half their income, but provides them with seed. He decides what to plant and when. The farm had been in his family's possession for fifty years. Most of the tractors that I saw were labelled FIAT. I was told they were built under licence in Russia and imported. There were also a number of smaller and newer Chinese tractors. At the Green Circle Organisation, an NGO, I had the chance to discuss with a sugar cane farmer. I also saw sugar cane growing in many places. Sugar cane can be harvested for two to three years before it needs replanting. Each replanting requires substantial investments. Sugar cane is also heavily dependent on a big supply of water. The middleman supplies the inputs, but charges interest 22

of 17-20 per cent. If there is any emergency or exceptional expenditure, such as a daughter s wedding, the middle man will lend the money. This is then repaid in instalments. In a closed off section of a river a fish farm had been created. This is not as common as creating fish farms on waterlogged land that has become too saline to cultivate. Different types of fish are fished in the summer and winter. June and July are the breeding season, then there is no fishing. Five to six tons are fished with nets every year. I saw the nets being laid out by the fishermen swimming out with them, but they said that they sometimes used the land(sea)owner's boat. The farm covers 5-600 acres. The fishing is done by a tenant family and sold in the market for money. They use the same methods as their forefathers had always done. I asked them if they had ideas about how to improve the fishing, but they replied that was up to the landlord.

3.6.2 Reflections With the exception of the cauliflower pickers, all farming was taken care of by families. Although, there were large landowners in Sindh, unlike in Punjab, they were not capitalist farmers. Most landowners just drew their rent. I had been told that corporate farming (i.e. large scale capitalist farming) also existed. Big companies come in, employ people, use a high degree of mechanisation, and then produce mainly for exports. I came across no such farms although I asked to see them. Some people even denied that they existed at all, and claimed that there had been some before, but that they were forbidden now. Farming relationships can hardly be described as feudal. Production was for a market. I came across no bonded labour, although I read that it existed. I was told that the main place to find bonded labour was in the brick kilns that I saw dotted throughout the landscape. However, basically the social relationships of production were not different from nineteenth century England when tenant farming was the most common form of capitalist agriculture. The only difference being that then tenant farmers employed agricultural labourers, and not just family labour. When pressed, several people told me that the word 'feudal' was really just a term of abuse against the rich landowners.

4.6.3 Upstream and downstream I visited a rice mill owned by Javed Ahmed Soomro. His family had owned the mill for thirty years. He finances farmers. He also provides seeds. The rice is dried spread out on the ground in the yard. Then it is de-husked, and sorted by quality. Final processing takes place in Karachi. His brother is a commission agent in Karachi. The more undamaged the rice seed, the better. The bits and pieces of 23

rice that are the lowest quality are sold to industry for making rice flour and other rice products. All the highest quality rice is exported. The season for milling lasts four to five months. At most he employs eighteen people per day divided into two shifts. The Naudero Sugar Mill (Larkana) was set up in 1974 with help from China, when Ali Bhutto was president. It was privatised some years ago amidst accusations of corruption. Aznar Khan, production manager, showed me around the plant and explained how it worked. Within 48 hours of harvesting the sugar cane is brought to the plant. It undergoes cutting and shredding several times before a sugary juice is extracted. This then goes through various boiling, centrifugal, and drying stations before the final purest white sugar is packed in sacks. The rest products are either turned into fertilizer or used in a series of giant incinerators that power steam-driven generators. The plant is self-sufficient for energy. After returning to Sukkur, I went north to visit the Engro fertilizer factory at Daharki. This was a place unlike any other place I visited in Pakistan. I was shown round by Syed Riaz, public affairs and services advisor. The area is rich in natural gas. In the nineteen-sixties Esso, later to be called Exxon, established a plant to convert natural gas to the fertilizer urea. In the early nineties Exxon decided to sell all its fertilizer business. In Pakistan 200 of the 300 people employed bought out Exxon. Since then Engro has grown into a huge business with investments in many different fields. Last year Engro was Pakistan's largest private investor and the fertilizer plant has become the world's largest. However, it has had problems getting sufficient natural gas and therefore has been partially closed. The nearby fertilizer plants that are owned by the Pakistani army have not had the same problems. One of Pakistan's richest investors, Hussain Dawood, has gone into Engro as a minority owner. The plant employs thousands of people now. Many live in the gated colony which has been built next to the plant. The colony has its own shops and services. The workers live in one area and the management in another. All houses are of good standard and are well looked after. They have wellkept gardens and there is an annual competition organised by the company to award the best gardens. Schools and nurseries are provided for all. Several students at the schools have received scholarships to international universities such as Cambridge. Engro has also built up schools in many other places too, as a contribution to the community. Over 2000 pupils attend these schools. The standard of cleanliness and safety consciousness is unlike anything I experienced in Pakistan and comparable to Sweden.

3.7 Final reflections and some preliminary conclusions about Pakistani agriculture Once in Pakistan, I got hold of and read the main textbook for post-graduate students of Pakistan's 24

economic history.22 It provided me with facts and analysis that allowed me to put what I observed into a broader context. The author, Akbar Zaidi, laid emphasis on the deregulation and privatisation that began with the coming to power of the fundamentalist dictator Zia-ul-Haq in 1978. This process was greatly speeded up when the first Structural Adjustment Programme, SAP, was adopted in 1988.23 This was the followed by one plan after the other. He claims that an examination of World Bank and IMF documents since 1988 reveals that almost every decision of any consequence taken by various governments that have been in power has been predetermined by the two Washington agencies, and that Pakistan has merely followed the diktat.24 He shows the effect this had on Pakistan. The growth rate declined and both absolute and proportionate poverty increased. Although some industries could face the international competition and even thrived, many could not. I witnessed first-hand how farmers were heavily exposed to the world market upstream, but even downstream the links to the world market were greater than I expected. I saw the problems that paying world prices for inputs caused farmers. The sudden rise in labour productivity from the late eighties until the mid-nineties, followed by stagnation, must therefore be seen in the context of crisis, rather than development. This can also be observed in any slump in developed countries. The initial effect of a crisis is that labour productivity rises because fewer employed, fearful of unemployment, work harder. The situation has been similar for Pakistani farmers as the price of their inputs has risen. However, raw effort has never been an effective way to increase productivity in the long run, or even medium term. For that investments in better technology are needed. If only harder work is used to increase labour productivity it will soon come up to its physical limits, and productivity stagnates after that. I could not see how a re-division of the land to make it more equal would make a great deal of difference. Some farmers would get a bit more land to cultivate, others a little less. That was all. Of what use was that if they still had to fork out a fortune on inputs and then were fleeced when they sold their produce? Yet, to put the blame upstream and downstream was really just begging the question. Why were farmers so weak? Why were they confined to being family farms and could not invest their way into becoming companies that could negotiate deals upstream and downstream on equal terms? Instead the trend had for decades been towards more and smaller owner farms and away from large farms,

22 23 24

Zaidi, S. Akbar. Issues in Pakistan's Economy. Karachi: Oxford University Press, 2011. Ibid, chapter 14. Ibid, 7.

25

with or without tenants.25 For example between 1990 and 1998-99, farms with less than or equal to 12.5 acres increased their share from 81 percent to 88 percent of the total cultivated area.26 From what I could tell, even the larger farms all over Pakistan were subdivided into plots that were cultivated by families. Some landlords with tenants were more or less involved in what their tenants did, most were not. Without understanding the reasons for the persistence of family farming in Pakistan, I was not able to understand the stagnating productivity. I therefore felt I had to look closer at the nature of family farming in other places. After some research, I realised family farming persisted worldwide and throughout a long historical period.

4. The Persistence of Family Farming Worldwide

4.1 The Pattern of Development in Industry The development of industry has followed a distinct pattern. Economies of scale and specialisation have been the driving forces of productivity increases. In, for example, the car industry it is estimated that there have been over 1500 US car manufacturers.27 Many consisted of little more than putting together a few cars in a garage. Eventually three big manufacturers (General Motors, Ford, and Chrysler) emerged employing hundreds of thousands of workers. Similar developments happened in other countries. The whole world's car manufacturing has come to be dominated by a dozen or so manufacturers. As productivity increases are not only a result of economies of scale, but also of specialisation, manufacturing plants have declined in size in the past decades, although they produce a great deal more cars. Instead we have seen the emergence of companies that are large in their own right but produce only batteries, plastic bumpers, or dash boards. These are then assembled in the plants of the big car manufacturers. Specialisation has not prevented a rapid concentration and centralisation of ownership. A recent study of all 43 060 transnational companies by the Swiss Federal Institute of Technology in Zurich estimates that through various forms of direct and indirect ownership 1318 companies control 80 percent of world revenue. 28 This accumulation of wealth and power at one end of society is
25 26

27

28

Ibid, 42. Sustainable Development Policy Institute (SDPI). The Case for Land and Agrarian Reforms in Pakistan . Islamabad, SDPI Policy Brief Series #12, 2001: 2. Dryer, Rachel. Automotive History. University of Michigan, Bentley Historical Library (2009): http://bentley.umich.edu/research/guides/automotive/ (Accessed 2012-08-12). Coghlan, Andy & MacKenzie, Debora. Revealed The Capitalist Network that Runs the World. New Scientist, issue 2835 (2011); http://www.newscientist.com/article/mg21228354.500-revealedthe-capitalist-network-that-runs-theworld.html (Accessed 2012-08-12).

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matched by the growth at the other end of society of a pool of people who have to rely on their wage to survive, notwithstanding that they might have put some of their savings into a few shares. The development of this kind of production creates a special type of social relationship capitalists/workers - and reproduces it on a wider scale. Services, with the exception of a few personal services, have developed in the same direction and created companies like Walmart and McDonalds. Farming has not.

4.2 The Pattern of Development in Agriculture Land productivity in agriculture has increased enormously during the last century. During the interwar period the difference between the most productive and the least productive agriculture was 1 to 10. By the end of the millennium it was 1 to 2000.29 Labour productivity has developed rapidly too. As seen in Table 1 below, even during the Golden Years of the post-war upswing, when industry and services were developing more rapidly than ever, increases in labour productivity in agriculture outstripped them.

Table 2. Output per Worker in Agriculture and the Rest of the Economy Compared (Western Europe and the USA, 1953-67)30 Agriculture31 Belgium Denmark France Germany Ireland Italy Portugal Spain Netherlands UK
29 30

Rest of the economy 3.8 2.7 2.9 3.7 2.4 4.9 4.7 4.2 3.3 2.1

5.2 3.9 4.0 6.0 3.8 5.8 2.9 4.8 5.6 5.4

31

Mazoyer, Marcel & Roudart, Laurence. History of World Agriculture. London: Earthscan (2006): 11. Djurfelt, Gran. Whatever Happened to the Agrarian Bourgeoisie and Rural Proletariat under Monopoly Capitalism?. Acta Sociologica (24), 3 (1981): 168. Average annual percentage increases.

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Yet family farms are ubiquitous worldwide and have been so during the last century (the communesystem of Maoist China, the Soviet Union and the former Eastern bloc excluded). Increases in productivity mean that within the course of a century the number of people working on farms has undergone a dramatic decline, from the overwhelming majority of the population to a few percentage consisting mainly of family labour. This has been achieved by farming becoming highly capital intensive, but it has not changed the social structure. However, what happened in farming is not the same thing as what happened in agriculture as a whole. Upstream and downstream the pattern of productivity increases in agriculture has been similar to industry. Family companies have developed into a few large companies such as Dow, Dupont, and Monsanto that dominate seed and chemical inputs, John Deere machinery, and ADM and Cargill processing and distribution. These are multi-billion transnational companies that also employ hundreds of thousands of people just like Toyota or IKEA. Economies of scale and specialisation are highly developed. In Pakistan, sugar-mills are dominated by a few families and fertilizers by the military and a couple of companies. As mentioned earlier, one of them, Engro, recently opened the world largest urea fertiliser plant. 4.3 The Persistence of Family Farming in the Developed Countries the Facts Family labour remains of decisive importance in the developed countries. France, followed by the USA, has the lowest measure for family farms. But even in France the amount of family labour equals, more or less, the amount of hired labour. In most other developed countries family labour is a far greater proportion.

28

Table 3. Family Farming (Western Europe, 2005, and the USA, 2007).32 Average farm size in hectares Belgium Denmark France Germany Ireland Italy Portugal Spain Netherlands UK USA 41 71 74 77 40 16 23 30 33 154 170 80 63 49 69 93 82 83 65 63 69 56 % Family Labour % of Total Agri. area utilised by family farms 91 97 51 71 100 72 76 61 90 85 70

Breaking the farms up into different categories reveals more about the structure of ownership in farming. Non-family farms in the USA have an average of 445 hectares, a huge farm by most standards. Considering that the average size of US farms is 170 hectares, capitalist farms are thus generally speaking bigger, but fewer. However, large farms with an average size of 566 hectares can be run with a majority of family labour. A strong indication that family farming is not likely to die out in most of the world in the near future at any rate.

32

Callus, Mieke, and Van Huylenbroek, Guido. The Persistence of Family Farming: A Review of Explanatory SocioEconomic and Historical Factors. Journal of Comparative Family Studies, volume 41, issue 5 (2010): 641.

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Table 4. Family Labour on farms (USA, 2007).33 Average Farm Size34 Small family farm36 Medium family farm Large family farm Very large family farm Non-family farm 118 397 566 862 445 % Family Labour35 82 70 60 22 7

Family farms come in many sizes. In developing countries family farms dominate too, but they are considerably smaller. In Pakistan the average size of all farms is 4.12 hectares.37 As mentioned earlier, the average is a mere 0.6 hectares in China. Technology has adapted to the framework of family farming. A tractor in China can have two wheels and 6 horse power. In the USA it can have six wheels and 600 horse power. Both are driven by one person. In many countries rice planting is a laborious process. In Australia the average rice farm is 400 hectares.38 Rice is sown by one person from an aeroplane according to a computer generated pattern. The vital need of family labour on farms is expressed in today's labour laws in the USA. Despite having highly mechanised and very productive farming, farms are exempted from the ban on child labour. Farming in the USA is the most dangerous workplace of all for young workers, accounting for 42 percent of all work-related fatalities of young workers in the US between 1992 and 2000, although the farming labour force is only a couple of percent of the whole labour force. And unlike other industries, half the young victims in agriculture were under the age of 15.39
33

34 35 36

37

38

39

Hoppe, Robert A., and Banker, David E. Structure and Finances of U.S Farms. USDA Economic Research Service Economic Information Bulletin, Number 66 (2010): 8. In hectares. Paid and unpaid hours worked by the principle operator and his or her spouse. Child labour is unaccounted for. Family farms are defined slightly differently by USDA than I do. The USDA definition does not include the demand that the farms should mainly use family labour. Anrquez. Gustavo & Valds, Alberto. Determinants of Farm Revenue in Pakistan. The Pakistan Development Review, 45: 2 (Summer 2006): 283. Department of Agriculture, Fisheries and Forestry. Rice Overview. Canberra (July 2011). http://www.daff.gov.au/agriculture-food/crops/rice (Accessed 2012-08-10). Department of Health and Human Services. Preventing Deaths, Injuries, and Illness of Young Workers. Cincinnati: NIOSH Alert (July 2003): 62.

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Family farming cannot be dismissed as a remnant of feudal (with or without the prefix semi-) or other pre-capitalist modes of production. Nor can it be assumed to be something that is particularly appropriate to poor countries with an excess of cheap labour. It is an integral part of capitalism in both developed and developing countries, as common in Burundi as in the US. Family labour predominates in all countries except a few small states such as Singapore and Bermuda, parts of Latin America with their history of latifundia, and parts of Eastern Europe where the transition from Soviet-style collectives to capitalism has not been completed.40 After having discovered family farming in Pakistan, and seen that Pakistan was far from being an exception, I set out to try and understand why family farming persisted. In order to do so, I thought I had better have a look at what others had written about it in the past and the present.

5. Past Discussion about Agriculture and Family Farming

5.1 The Classical View Family Farming is doomed While the origins of agriculture lie far away, the development of modern agriculture took place above all in temperate rainy England. The Industrial Revolution of the nineteenth century was preceded by The Agricultural Revolution of the eighteenth. Already beginning in the twelfth century, enclosures, the turning of common land into private property by fair and especially foul means, had begun in England. Initially the enclosures were mainly confined to waste lands, meadows, forests, and land with extensive cultivation. The high demand from the textile industry, not least from Flanders, for wool encouraged landlords to create large lands for pasturing sheep. Until the English Revolution in the seventeenth century, this process went on despite anti-enclosure acts being passed and the church condemning it. However, after the English Revolution, parliament instead started to pass acts in favour of enclosures, and not just of common lands. The scattered strips of arable land around villages were also enclosed. By 1832, the traditional villages had basically been destroyed, replaced by large scale agriculture gathered around manor houses. The enclosures were both the pre-condition for and the consequence of the agricultural revolution. Large quantities of fodder could be collected in big barns, which in turn made it worthwhile to invest in large stables where livestock could be fed. In the stables livestock produced manure that could be easily gathered for spreading on the fields. The old system based upon fallowing was abandoned, at a stroke increasing production considerably.41 Peasants deprived of their land often protested violently, but were generally unsuccessful.
40

41

Eastwood, Robert, Lipton, Michael and Newell, Andrew. Farm Size. Handbook of Agricultural Economics, Volume III: 54. http://www.sussex.ac.uk/Units/PRU/farm_size.pdf (Accessed 2012-08-12). Mazoyer, Marcel & Roudart, Laurence. History of World Agriculture. London: Earthscan (2006): 317.

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Although some rose to become capitalist farmers, most were forced to become agricultural labourers or drifted into the towns in search of work. The Agricultural Revolution released labour, food, and capital for the development of industry. Industry in turn got a market for consumption goods and agricultural machines. Bigger, better, and cheaper machines improved agriculture further in a positive spiral. So that by the end of the nineteenth century agricultural productivity had increased many times. It was this experience that led first Adam Smith and then Karl Marx to formulate what has become the basis of one theory of agricultural development. Agriculture was basically like industry. When exposed to a market the old system of peasant farming breaks down. A division of labour takes place containing both specialisation and economies of scale. Mechanisation is the driving force. Peasants that do not move to towns are divided into rich farmers on one side and agricultural labourers on the other. In Prussia during the latter half of the nineteenth century, the nobility, under pressure from England and France and desiring to unify Germany under their sway, undertook an extensive agricultural modernisation. In giant farms they introduced such novelties as steam tractors. These were so big and heavy that they could not actually venture out onto the fields. Instead they stood by the side of the fields and, through a system of pulleys, ploughs on cables were pulled across the fields. The economic size for a farm using such a contraption was 1000 hectares.42 Things seemed to be developing in the same direction in Germany as in England. It is therefore not so surprising that Karl Kautsky, leader of the German Social Democratic Party, develops Marx discourse in his book The Agrarian Question, first published in 1899.

5.1.1 Economies of Scale and Specialisation Although Kautsky writes we scarcely need to prove that the larger household is superior to the smaller when it comes to saving labour and material, he does show in detail the advantages of large-scale agriculture compared to small-scale production.43 He argues that large farms save on fencing; there is less wasteland due to fewer boundaries and fewer roadways; more and better machines can be used; there is greater access to electricity, irrigation, and drainage; better use can be made of buildings; specialisation can be more developed; credit is cheaper; deals with buyers are easier; bulk transportation is cheaper; scientific management is more widespread.

42 43

Kautsky, Karl. The Agrarian Question. Winchester: Zwan (1988): 98. Ibid, 96.

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5.1.2 Reflections There is no reason to presume that the economies of scale and specialisation that Kautsky emphasizes are any different today. But Kautsky, extrapolating from the reality of the day, makes a logical leap. He assumes that the greater efficiency of large farms must develop a rural bourgeoisie and a rural proletariat. He presumed that family farms were remnants of a feudal mode of production or in so far as they produced for a market they were comparable to the petit-bourgeoisie of the towns - doomed to be out-competed by large-scale mechanised agriculture. Looking at the developed countries today, it is clear that this perspective has been falsified.

5.1.3 The Persistence of Family Farming in Nineteenth Century Europe Kautsky was thorough in his collection of statistical material. Notwithstanding his opinions, he did observe that small-scale farms persisted and even could increase their cultivated area. These were family farms. Table 4, which is based upon Kautsky's statistics, shows that only in France was there a clear tendency for larger farms to increase their cultivated area at the expense of smaller ones. The smallest farms also increased their proportion of cultivated area. It is reasonable to assume that they were little more than gardens that farmers that had been forced off the land kept when they got other work. On the other hand, Table 4 shows that in Great Britain the smallest and largest farms declined, while the medium sized ones increased. Finally, Germany shows a contradictory development. The medium size farmers expanded the most, but the largest ones also grew. The smallest ones and the second largest farms declined. Table 5. Change in Farm Sizes (Germany, France, and Great Britain, 1882 1895).44 Size of farms France Under 1 1-5 5 - 10 10 - 40 Over 40 243 000 -108 000 -13 000 -532 000 197 000 Change in cultivated area45

44 45

Ibid, 135-136. All figures rounded to the nearest thousands, except for those under one thousand. Both size and change in farm sizes are in hectares.

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Great Britain 0.4 - 2 2-8 8 - 20 20 - 40 40 - 120 120 - 200 Over 200 Germany Under 2 2-5 5-20 20-100 Over 100 -18 000 96 000 64 000 -38 000 46 000 -23 000 11 000 41 000 139 000 217 000 -127 000 -227 000

Kautsky did not try to hide the figures that appeared to go against his main theory. Instead he attempted to explain them in ways that did not contradict his main idea that large-scale agriculture is more efficient.

5.1.4 Counter-acting Tendencies to Large-scale Agriculture Kautsky's main argument as to why family farms survive is that they are a source of cheap labour for the larger farms. Because small family farms are hard pressed, they have to supplement their income by working on larger farms. Lack of labour holds back industry only under exceptional circumstances, but in agriculture it is a continuous problem. Agricultural labourers prefer to leave the country-side and work in the towns. Once they settle down in the towns they become unfit for labour in agriculture. Small farms and large farms therefore exist in a kind of symbiosis. If too many small farms close down, then large farms will suffer too. They will have to pay higher wages giving the small farms a new lease of life. Although, over time, Kautsky considered that as mechanisation increases small farms will become less and less important as a source of labour.

34

5.1.5 Reflections Kautsky's analysis of the relationship between family and capitalist farms is suggestive. The idea that they are dependent on each other is something I build on later. However, I do not see that dependency revolving around the demand and supply of labour. At the time when he wrote, millions were fleeing poverty in rural Europe for the USA and the colonies. His argument that urban unemployed workers were incapable for agricultural work is not convincing. Workers in the towns were certainly capable of hard physical labour in the building industry. Why should they not be capable of hard unskilled work in the country-side? Furthermore, if there was a shortage of labour, wages should have risen. But they remained stubbornly low. Some of the other counter-tendencies Kautsky outlined are also dated. Here are more of his counter-acting tendencies, and my critique of them: Land is a fixed magnitude and cannot be multiplied at will. This makes the development of consolidated farms difficult. Pockets of small land-holders can remain for some time. In the short or even medium term big farms can be more fragmented than smaller ones, but not in the long run. As has been proven by historical development since then. In industry, economies of scale rapidly transform production methods, but in farming the same methods of cultivation can be applied over a larger area. The use of an aeroplane to sow or a giant combine harvester to harvest is a big change in the production methods compared to sowing by hand and using a sickle. Again, historical hindsight shows Kautsky was mistaken. On a large farm, fields are far flung and bringing everything to the farmhouse costs more. This is especially a problem in agriculture where there is a lower ratio of value to volume than in industry. When considering transportation costs it is not enough to consider only on-farm transportation costs. Off-farm transportation must also be taken into consideration. To transport a large amount from one large farm to the market, if it is not a small local market, will be cheaper than lots of small farms each bringing their produce.

So far, none of the counter-acting tendencies to the disappearance of small farms out-lined by Kautsky are relevant in the light of what has happened since he wrote The Agrarian Question. It would appear as if an analysis of Kautsky's counter-acting tendencies actually strengthen the argument that family farms are doomed. However, there are other counter-acting tendencies that are mentioned by him in passing, that I believe still stand to this day: Land closest to the farm (and the towns) has the highest value and produces the highest 35

value crops. Thus small farms can survive if they produce for example vegetables rather than grain. An intensification of cropping can maintain smaller farms. The small farmers reduce the level of their requirements below that of wage-workers and tax their energies far more than the latter do.

After weighing up all the factors, Kautsky drew the conclusion that large-scale agriculture would prevail, even if thirteen years statistics showed the opposite. I think he was right, if one looks at things purely technically large-scale agriculture is more efficient. However, his main problem is that he equates large-scale farming with capitalist farming. He could not conceive that large-scale farming could take place with only family labour, nor that large-scale farming would have to develop through family farming. Kautsky's analysis of agriculture represents the culmination of the line of thought of classical economists that began with Adam Smith in the eighteenth century and developed through Ricardo, Marx and others. But one can also see how it was beginning to break down, despite Kautskys attempts to salvage it. Within his book The Agricultural Question are contained elements that lay the foundation for both sides in the main agricultural debate of the twentieth century. However, one of the most important ingredients for that debate came from neither Great Britain nor Germany, but Russia. 5.2 The View from Russia The Resilience of Family Farming In 1861 serfdom was formally abolished in Russia. It marked the beginning of a process whereby Russia became the big developing country of the period, much like India is seen today, except that Russia was the only major developing country at the time. Most of the world either consisted of imperialist countries or colonies, and many countries dominated by imperialism were in a process of decline. The perspectives for Russia's future roused interest among scholars of the day in Russia and internationally. Especially the future of the Russian peasants, the vast bulk of the population, was a key part of the discussion. It was a discussion that was to continue intensely until the end of the 1920's. 5.2.1 Chayanov the Theory of the Peasant Economy Alexander Chayanov, a social agronomist with a long personal experience of agriculture before the Russian Revolution, developed many ideas that have played a substantial role in the subsequent debate about agriculture. 36

After the October Revolution, the Bolshevik government appointed the non-Bolshevik Chayanov head of the Institute of Agricultural Economy, the Soviet Union's main agricultural research institute. In 1925 Chayanov published his book The Theory of Peasant Economy, a detailed explanation of his theories.46 By the end of the twenties Chayanov was in deep conflict with the dictatorship that was consolidating around Joseph Stalin. As forced collectivisation proceeded in the countryside, unheeded by Chayanov's warnings of its catastrophic consequences, he was first deposed as head of the Institute, and in the end he was executed. Chayanov saw the economy of the peasant family as different from all other modes of production such as feudalism, capitalism or socialism. At the centre of this mode was a peasant family without any employees. For this family, economic categories such as wages, rent, costs and profits were irrelevant. All that mattered was the amount that was left over after total expenditure had been deducted from total income. Chayanov formulated a theory of peasant behaviour. Unlike capitalist farmers, the peasant does not produce to make a profit. He produces to consume. When his consumption needs go up, he will work harder, even if it means that labour productivity sinks. Likewise if his income declines, he will work harder. This is completely unlike a capitalist business. Such a business will not produce unless it makes a profit. If income declines less will be produced. A peasant, and his family with him, are prepared to engage in what Chayanov called 'selfexploitation' in order to hang on to the farm. This is an important conclusion. It means that peasants can, when necessary, increase yields greatly at the expense of labour productivity. According to Chayanov, the thing that restrains peasants from producing ever more is the drudgery of work. What interests the peasant is to find the optimal balance between consumption and the drudgery of work. Based on the Zemstvo statistics47 Chayanov drew the conclusion that the peasant farm varies in size according to how many members a peasant family has. When a peasant has children and older dependants, he cultivates more land (or cultivates it more intensely). When the children grow up, he will cultivate less land. Chayanov developed his theory of the peasant mode of production by looking at the inner workings of the peasant farm. However, he did not assume that it was a mode that existed in isolation. He meant that it was very much affected by the surrounding economy, although that
46 47

Chayanov, A. V. The Theory of the Peasant Economy. Madison: University of Wisconsin (1986). A form of semi-elected local government called the Zemstvo was established in 1864. It probably collected the greatest single source of statistics about peasants of any country in modern times and was to play an important role in the discussions.

37

economy could be feudal, capitalist or socialist. Depending what surrounded his farm, a peasant needed to produce more or less of different things in order to optimize the ratio between his consumption and the drudgery of work. As a consequence of his theory, Chayanov was a strong advocate of purchasing and distribution cooperatives, although not of producer s cooperatives. The basic structure of the family farm should be left intact. Inspired by his knowledge of West-European cooperatives, he was instrumental in developing cooperatives for the distribution of the peasants produce. This was a way to give peasants the benefit of economies of scale.

5.2.2 Reflections Chayanov's assumption that it is possible to adjust the size of the land to the needs of the family is very much related to the situation in Russia a century ago. Almost everywhere the amount of arable land is in decline and under pressure from a rising population. Also, if one is to make the definition of family farms as exclusive as Chayanov does, that is that they should neither employ anybody nor receive a wage, there will not be many left that qualify. Nor can modern farms be said to be entirely free from profit and loss calculations. However, at the centre of his theory was the idea that a family farm is an economic unit for production and consumption.48 As I will explain later, I think this is a decisive insight.

5.3 Building on the Previous Views - Differentiation vs. Inverse Relationship For a period of time the discussion about size was resolved in practice. The ideologists of the Soviet Union under Stalin and the supporters of modernisation theory agreed on one thing, even if they agreed on little else. Following in the tradition of the classical economists, they all believed that the future lay with large-scale agriculture. Stalin achieved this by forced collectivisation and the governments of Western European and the USA by massive subsidies that helped consolidate larger farms. After the Second World War a new wave of radicalisation swept across the world. Its initial, and for a period of time, its strongest impulse came from the national liberation struggles. The struggle of the Vietnamese people was a focal point of world attention. And there, as in many other liberation struggles, poor farmers stood at the centre of the struggle. They no longer appeared, for better or for worse, depending upon your point of view, as a conservative force. And they wanted land for the tillers. That is for themselves. This implied smaller plots, or more or less voluntary

48

Kautsky also mentioned in passing that farms are an economic unit consisting of both production and consumption.

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collectivisation. Against this backdrop grew an academic debate, with roots in the previous discussion that has lasted to this day. Farshad Araghi has termed, what he considered the most important agricultural discussion of the twentieth century, a conflict between the teleological and the essentialist schools of thought.49 The teleologians were united by the view that peasants were destined to disappear, to become capitalist farmers, agricultural labourers or move to the towns. Essentialists on the other hand believed that peasants were essentially here to stay, despite many cross-currents. The former are the heirs of Kautsky and the latter of Chayanov. The debate consists of a vast eco-system covering discussions about size, social relationships, the impact of globalisation and more. A central part of the discussion arose out of the seminal paper written by Amartya Sen in 1962 called An Aspect of Indian Agriculture.50 His study of India's Farm Management Statistics, FMS, revealed an Inverse Relationship, IR, between farm size and yields per hectare. The bigger the farm size, the smaller the yields. For the first time, the debate seems to have been supplied with an easily quantifiable criteria. This gave economists the tools to investigate a wide range of countries. Investigation after investigation in Africa, Asia, and Latin America revealed that IR held.51 The beauty of IR is that productivity can be simply raised by land reform. If smaller plots increase productivity, then a division of the large estates will produce more. In almost all developing countries there are large numbers of landless labourers living on the margins of survival and ex-farmers eking out an existence in the urban informal economy. They could receive a piece of land and a better life. There is, at least for an initial period, no need for big investments. Land reform is practically free. The only ones that suffer are the large landlords, depending upon the degree of compensation they receive. Land reform promotes egalitarianism. Since the Second World War, land reform has been the favoured policy of the US government. In 1951 US Secretary of State Dean Acheson presented the Resolution on Land Reform to the United Nations Economic and Social Council. Land reform was presented as an alternative to Soviet collectivisation:
The peasants of Eastern Europe, like the peasants of Russia, have learned that Soviet collectivization, or land reform imposed from the top, brings worse oppression than beforewe have regarded our family sized farmsbeing of fundamental importance to the prosperity and stability of t he entire nation. Our democracy has its roots in a sound land policy. 52
49

50 51 52

Van Haute, Eric. From Famine to Food Crisis: What History Can Teach Us About Local and Global Subsistence Crises. Journal of Peasant Studies, 38:1 (2011): 58. Although much cited, I have been unable to track down the article in any database. Often the very smallest farms, those that cannot even supply subsistence to a family, are excluded from IR. Araghi, Farshad. The Invisible Hand and the Invisible Foot. In Peasants and Globalisation, Harron Akram-Lodhi, A

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The US also drove through extensive land reform in occupied Japan, South Korea, and Taiwan. This was done explicitly to both break the back of the imperial power in Japan and to stop poor farmers from turning to communism. In Italy and Germany the US also promoted land reform, and later, less successfully, in Latin America. Today the US also argues for land reform in for example Pakistan, but says that it is no longer politically feasible.53 Initially, efficiency was of secondary importance in the US discourse for land reform. However as scientists came up with more and more evidence for IR, productivity became the primary argument. Berry & Cline54 and Cornia55 are among the many that came up with a wide range of statistics that showed that the inverse relationship held. It was a greater problem to explain why this was the case. Graham Dyer, firmly in the teleological camp, divides the explanations into three areas and criticizes them. Much of the debate about IR has built on Sen's work and a continued study of FMS. Many of Dyer's criticisms are therefore related to that. Following his critique, I give his explanation for the inverse relationship and how IR breaks down with technological change.

5.3.1 Reasons for IR and Dyer's critique a. Management and Labour Quality Small farms are easier to manage. There is less demand for book-keeping, planning, and administration. There are also greater problems connected with supervising employees as the scale of farming increases. Farmers on small farms know the local conditions better and can maximize their use of them, including flexibly adapting to changing weather conditions. On larger farms the owner can be absent, leaving the management to a less motivated supervisor. Workers on small farms will be more ambitious as they are working for themselves and their family. Recruitment costs are low. Family labour has the necessary 'loving care' that is needed for some specialised techniques. Dyer points out that measuring the quality of management and labour is not part of FMS. Therefore dubious proxies are used. He questions why management and labour quality problems should be so much greater in agriculture than in industry. In any case, management and quality of
and Kay,Cristbal (eds.). New York: Routledge (2010): 126. United States Agency for International Development, USAID. Pakistan Food and Agricultural Project. Report to USAID/Pakistan (March 2009): 44. Berry, R. A. and Cline, W. R. Agrarian Structure and Productivity in Developing Countries. Baltimore: John Hopkins University Press (1979). Cornia, Giovanni. Farm Size, Land Yields and the Agricultural Production Function. World Development, Vol 13, No.4 (1985): 513-534.

53

54

55

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labour is not so different on farms that are 5 hectares or 20 hectares, yet IR still expresses itself within this range.

b. Land Fertility In contrast to the explanations connected to management and labour quality, explanations for IR based on land fertility do not claim that small farms are inherently more productive. Instead it is the fertility of land which creates smaller farms. Where the land is better, the population will expand. This can happen through higher birth rates and lower death rates, leading to pressure on the land and a sub-division by inheritance. On the other hand when the land is poor, people will tend to find alternative employment or emigrate, increasing the size of holdings for those that remain. Smaller farms tend therefore to have a higher proportion of more fertile soil. Alternatively they have a higher proportion of irrigated land. Dyer dismisses the land fertility explanations. He thinks that it misses the crucial distinction between the macro and micro levels. At a macro level, for example comparing regions, he accepts that regions with more fertile soil will have a higher population and smaller farms. But that is not an explanation for IR at a micro level, which is what the main discussion about IR is about. Within a single village smaller farms will have greater productivity than larger ones. That is an entirely different thing to explain. Roy did try to prove that IR in villages is due to different topography, specifically soil moisture. However, he is forced to admit that due to 'paucity of information' he is has to use 'indirect forms of data' of an 'illustrative and indicative nature only'. 56 Dyer also points out that both the above a) and b) categories are undermined by FMS data that show no systematic or significant relation between farm-size and the physical yield per hectare of individual crops. IR only holds when examining the total value produced per hectare. This means that small farmers are not in possession of the necessary means to make things grow better, merely that they are capable of squeezing more value out of a given bit of land. Something other than better management, labour, and soil must be at work to explain why smaller farms have a greater yield, in value terms.

c. Cheapness of labour vs. cheapness of land and capital The third category of explanation tries to explain IR by showing that smaller farms have cheaper and more plentiful labour. IR is therefore a result of a greater intensity of labour on small farms. Small farmers with under-employed family members will have them working the land even when

56

Dyer, Graham. Class, State and Agricultural Productivity in Egypt. London: Frank Cass (1997): 33.

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what they produce is of lower value than that which they would gain when employed. There can be an absence of alternatives or institutional barriers to people getting a job off the farm. Women are not allowed to do so by convention or there are legal restrictions on children working. There are costs associated with getting a job off-farm. Not only travel costs and other costs connected with actually getting a job, but also the cost of not having labour available at harvest time. It is also more difficult for a farmer who has to spend some time on his farm to compete with a fully unemployed worker for a job. The greater intensity of labour on smaller farms due to the relative cheapness of labour is complemented by a relative cheapness of land and capital for large farms. In other words, IR is the result of different factor prices for different sized farms. The factor market is imperfect. For small farms it is worth using a greater proportion of their land, including developing less fertile soil, and getting higher yields. While for larger farms it is worth investing in more land and machines. This produces IR. Dyer agrees that the facts back up a focus on differences of labour utilisation to explain IR. However, he is critical of the assumptions underlying the idea of market imperfections. He shows that, in the FMS, IR only appears when farms of different sizes use the same technology. The price of capital available for investments in machines that are to be used on larger lands is not relevant. In fact, IR breaks down if larger farms have greater capital investments.

d) Dyer's alternative explanation for IR Dyer observes:

The general conclusion after the spilling of much ink is that the inverse relationship between farm size and productivity has been confirmed as a valid empirical phenomenon in India, but not in the way conceived of in earlier studies.57

Sifting through the statistics he finds a cluster of six factors related to IR (some of which Kautsky had already taken up). There is a strong inverse relationship between cropping intensity and farm size. There is a tendency for a small farm to have more crops per year. There can be up to three crops per year, for example rice followed by wheat, followed by vegetables. Smaller farms also have a tendency to use a greater portion of their land for each crop. The greater the amount of crops and the greater the proportion of land used for each crop, the more labour and other inputs, such as fertilisers and irrigation, will be used per hectare.
57

Ibid, 20.

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The proportion of family labour will tend to be greater on smaller farms.58 The smaller the farm, the greater the proportion of crops for which there is a rapid cash return.

Dyer proposes that underlying this cluster are class relationships, more specifically he places the class relationships in the period of transition from feudalism to capitalism. He writes that class relationships are both feudal, that is based upon personal relationships of dependency, and capitalist, in the sense that production is market-orientated. In these semi-feudal relationships, the dominant classes whether they be landlords, rich peasants, money-lenders or middle-men (or any combination thereof) can force the poorer peasants to accept unfavourable terms. For example, middle-men pay very little for peasants' rice paddy, in exchange for loans or other inputs. Alternatively, landlords can get excessive rents for tenancies due to debts that have been passed down through generations. Prices are not freely negotiated in an open market. Instead the dominant class opens up one market in exchange for unfavourable terms in another. There is a hierarchical structure of dependencies. At the top are the landlords and rich peasants that can decide the functioning of at least part of the market. Then there are the middle-peasants that are more self-reliant and can to a certain extent play the market. Finally, there are the poor peasants and landless labourers. They are entirely reliant upon unloading their crops as fast as possible in order to survive. They produce only cash crops. If they do not sell, they will not be able to buy what they need for their next planting. They manifest a compulsive market involvement59. IR is therefore a result of the struggle for survival. The greater the pressure, the greater the amount of raw physical work put down (mainly from the family as it is the cheapest labour around), the more intensely the land is cultivated, the greater will yields be. IR is therefore related to farm size, but there is nothing special about farm size per se, except poverty. IR is a sign of distress, not relative efficiency. Land reform can become the means of locking peasants into poverty.

5.3.2 The Break-down of IR Dyer's most overriding criticism of all other explanations of IR is that their approach is essentially
58

59

Dyer's conclusion that when IR exists family labour declines as the farms get larger seems to contradict his claim that IR also works across a range of farms that employ only negligible amounts of family labour. However, as he considers a cluster of relationships are connected to IR, it may be that IR still exists, even though there is no family labour involved. Dyer also proposes that the choice of crop mix can be factor behind IR. As far as I can tell this is left unexplained. A possible explanation might be related to the quote from Chattopadhya and Ruhda (on p.48 of Dyers book) that a poor family farmer will try to choose such crops which after meeting his minimum consumption n eeds would meet his minimum cash needs. Ibid, 51.

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static. He places the question in a dynamic context the transition from feudalism to capitalism. As soon as landlords and rich peasants move towards adopting new technology, like during the Green Revolution in India towards the end of the sixties, IR breaks down. Even distressed peasants putting all their efforts and the efforts of their families into it cannot compete. When new technology is developed its introduction favours the rich peasants. Extension (the spreading of agricultural knowledge in the rural areas) favours the rich peasants. Credit is more easily available to peasants that have greater security. Input/output prices favour the larger buyers. And political power gravitates towards those with more economic power in the countryside. An analysis of FMS clearly shows that in those areas where new technology has spread IR is reversed. Capitalist agriculture, fully based upon markets and freed from the old feudal dependencies can rapidly improve productivity.

5.3.3 Reflections Dyer's criticism of the explanations of IR is convincing. His outline of a cluster of six factors that are related to IR seems reasonable. His introduction of IR into a dynamic context lifts the discussion to a new level. Clearly it is insufficient to look at farming, and family farming in particular, outside the context of periodic leaps in technology and farming methods. It seem to be undeniable that in a period with slow technological change a re-division of the land would lead to higher productivity, but that is only marginal. An increase of say one half in productivity (which is far beyond what any IR supporters predict) through re-division pales in comparison to the two thousand fold increase which would be possible by moving from the most backward methods to the most advanced. It is of course true that for people living in dire poverty with or without tiny patches of land it is better with a marginal improvement, but once that is achieved they are still at the mercy of the middle man and further improvement will be very slow. Dyer places IR and the halted transition from small technologically backward farms to large advanced farms in the nexus of feudalism and capitalism. If one brings in the experience of the developed countries, it becomes clear that this is mistaken. IR is a part of the normal development of capitalism. IR also operates in the most developed countries, at least periodically. In for example the US in 1992, small farms of less than 11 hectares have more than ten times greater dollar output per acre than larger farms.60 There is no reason why Dyer's cluster of factors related to IR should not work in developed countries as well as in developing countries. But IR will also tend to break

60

Rosset, Peter M. The Multiple Functions and Benefits of Small Farm Agriculture in the Context of Global Trade Negotiations. The Institute for Food And Development Policy, Policy Brief No 4 (September 1999): 7.

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down in the developed countries as a new wave of technological innovation begins. I agree with Dyer's analysis that smaller farms have greater pressure on them to survive and therefore crop more intensely and use a greater proportion of family labour. However, again relating things to the advanced capitalist countries, it is an insufficient explanation. Families hardly stay in agriculture in the developed countries to merely survive physically. For most there are alternative employment opportunities.

5.4 Reflections and Some Conclusions that Arise from Past Discussions and my Field Research in Pakistan After having been dented in Pakistan, my reading of past discussions finally killed off my initial hypothesis that egalitarian agriculture works better. Above all my hypothesis had not taken into consideration the need for technological development. A lot of the past discussion did not specifically deal with family farms. Still, I believe it is reasonable, within any given country at any given time, to take smaller farms as a proxy for family farms. A number of themes that reappear can therefore be used to explain the persistence of family farming despite great pressure on them. Above all they are both units of production and consumption. They have a greater reason to keep going. Marriages are much longer lasting on farms even in developed countries, where divorce is no sin at all. And they can keep going because family farms use cheaper, more flexible and more dedicated labour. They crop more intensely. They can focus on higher value produce and they get the benefits of cheap housing and food. Yet, although this takes the analysis of the persistence of family farms further, it still leaves one with a sense of dissatisfaction. Ok, family farms are resilient, but why do they have to be so much more resilient than family businesses in industry and services? The persistence of family farms does not preclude economies of scale. Yet it is easier for larger farms with people employed to get economies of scale, just as Kautsky outlined. Dyer correctly emphasizes that larger farms with people employed can more easily afford the latest technology. So why do they not predominate? In Pakistan I saw the pressure put on farming by the middle man, but larger farms would get better deals. So what is it that puts such great pressure on farming, reducing it to resilient family farms time and time again? I found the answer to these questions in China. In a country I least expected to find it, family farming has been rapidly disappearing since the mid-nineties. It is being replaced by socialist market farming. 45

6. Field Research in China The Decline of Family Farming

6.1 The Historical Background After the Communist Party had seized power in 1949 they moved rapidly to impose a Soviet-style economic system. By 1953 the first five-year-plan had been put in place and by 1957 almost all farms had been organised into communes. However, appearances can be deceptive. Stalin came to power as the result of a bureaucratic coup, Mao after a long guerrilla struggle. For twenty years the guerrilla army administered liberated areas before they succeeded in forming a national government in Beijing. Mao's military defence strategy after taking power was therefore different from Stalin's. Instead of relying on a centralized and heavily mechanised army, the enemy was to be lured into the country where in a sort of advanced guerrilla war, with the aid of the population, the enemy was to be defeated. The creation of more or less self-sufficient communes throughout the country, producing both agricultural and industrial goods, meant that unless the enemy managed to take control of absolutely every part of the country, it would relatively easy to start to counter-attack. As a consequence of this strategy the Chinese economy was more decentralised, experimental, and less dependent on military production than the Soviet economy. After the Great Leap Forward ended in 1961, the communes were scaled down and the peasants were allowed to have plots on which they could cultivate things for themselves and for the local market. Grain and some other crops such as cotton were subject to compulsory purchasing at a fixed price by the state, and the state monopolised distribution. This guaranteed food to the urban population, but taxed the rural population. Despite the disruption of the Great Leap Forward and the Cultural Revolution, agricultural yields developed rapidly in China, even before the Green Revolution. The commune system made the development of activities that required coordinated labour, such as irrigation, relatively easy. A strong central state provided technical advances. China's research institutes developed rice and cotton seeds with particularly high yields. Under the commune system, people were generally paid according to a labour points system. The more work they laid down on the fields, the more points they got. Part of the communes total labour points were redistributed, a sort of internal tax, to school teachers, medical staff (the so called bare-foot doctors - peasants who received an elementary medical schooling and worked part-time on the fields), pensioners, handicapped people and so on. Families with many children of working age benefited from this system. Due to population growth, labour productivity increased hardly at all. Peasants had low incomes and their situation was precarious. In the nineteen-seventies yields began to level off. The move

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from one-crop rice to two- or even three-crop annual rice harvest was possible due to a tremendous additional expenditure of labour, but each additional crop yielded less. The Household Responsibility System, HRS, was launched in 1978 in order to cure the problems of the commune system. The launching of the one-child policy the same year was part and parcel of the reform of farming. Under HRS, even though there were large geographical disparities and local variations, the equal distribution of the use-rights to the land was carefully monitored in each village. The villages are most often the equivalent of the production teams, which were a subdivision of the commune. HRS was the most egalitarian land reform in history.61 To maintain this, use-rights have been re-distributed at least once within the first decades of HRS in 66 percent of surveyed villages and at least three or four times in 25 percent of the villages.62 Change in family size due to births, deaths or migration is the most common reason for re-distributing the use-rights. However, the villages cannot take all the decisions concerning the land. The old commune structure has been transformed into what is called a town. Town councils are the lowest rung of the central state. They often decide on whether or not farmers can contract out their use-rights to others, and the conditions in the contract. The villages elect their own autonomous council that is not part of the state. One of the main sources of conflict in China today is between the towns that decide on the contracts and the villages that own the land. After the introduction of HRS the state continued to play an important role. Prices were regulated by the state. Distribution and processing of vital grains such as rice and wheat were in the hands of the state. And as most industry was in the hands of the state, inputs and credit were also mainly state controlled. However, over time, the role of the state in regulating and distributing agriculture has declined.

6.2 Reflections I arrived at Beijing airport on the 3 February, 2012. Less than two months had elapsed since I left Pakistan. My faith in the wonders of small-scale egalitarian agriculture had been dented in Pakistan. I saw it as a challenge to discover how it could be successful in China. Judging from the chaos upstream and downstream in Pakistan, I assumed that the main explanation for why things worked better in China was that things worked better upstream and downstream, that the state played a larger role in guaranteeing farmers income. For a small family farm it must have provided security,
61 62

Naughton, Barry. The Chinese Economy, Transitions and Growth . Cambridge: The MIT Press, 2007: 120. Ibid, 120.

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despite bureaucratic rules. However, although the role of the state was not insignificant, I discovered that was not the main reason for the success of Chinas farming. HRS has to be divided up into two periods. The first period from 1978 to about 1995 is the one which much of the literature about Chinese agriculture focuses on. It is often used to illustrate the blessings of free enterprise and family farming. The period after that has left a small imprint. It was not until I arrived in China that I became aware of the extent of what I have called Socialist Market Farming - HRS plus the right to contract out userights. Although it appears to be a small change, it has had wide reaching consequences. 6.3 Beijing 6.3.1 Interview with Gene Zhao The first person I interviewed was Gene Zhao, a teacher with roots in the countryside. Use-rights to the land are leases to individual peasants. There are different types of leases. In the mountains they are for 50 years, in the plains 30 years, in the grasslands 5 years, and by the coast 5-15 years. In mid-nineties in the north-east of the country, where it is colder and there is only one harvest, larger farms began to be formed of 10 to 20 000 mu (666 to 1333 hectare). This was systematic. In the South where there were a lot more people, several harvests, and local governments' fear of rivalry, the pace has been slower. There is a slogan: Big farms Specialisation Vertical integration from sowing to packaging and distribution Investment in mechanisation Higher value crops.

Larger farms are formed by peasants contracting out their use-rights to a company. Peasants get shares in the company or money. The company then employs some of them. Companies come from outside (private, state-owned, or local government owned) and get an agreement with town councils. As it is illegal for government officials to own a company, they establish one through friends or relatives. It is a legal grey zone.

6.3.2 Interview with Dr Guoying Dang Dr Guoying Dang is professor at the Chinese Academy of Social Studies, Institute of Rural Development. This is China's foremost research centre. 48

The most important reason for advances in Chinese agriculture is that farmers were given a certain amount of freedom. This improves agriculture because they can make their own choices. They can choose to grow wheat or maize, to stay in rural areas or move into the cities. They can decide according to market principals how much and to whom they sell. Normally in the past peasants worked an eight hour day, but only worked two months. Now every hectare of land is used. They have also increased their skills and competence. Agricultural development has been surprisingly successful. In Hebei province an old farmer said that they produce as many crops on his family's land now, as the earlier production team had produced on all its land. Increased freedom and open market created specialisation. Shandong is best at vegetables. Henan better at wheat. Ganzoung at potatoes. Adam Smith is a good man. He explained the need for a division of labour. Farmers create larger lands when they move to work in cities by transferring land to neighbours and relatives. In some areas they get money for that and in others they do it for free. People say it is only women, children, and old people that have farms now. These are the people who have the use-rights. But they contract out to others that take care of production. Transfers to companies is a sensitive matter. The government thinks that it is better for a family to be in charge, like in the USA, but the government must abide by WTO rules. Even in the Yangtze valley it is doubtful that one would find anything other than contracted-out farming. In the north-eastern provinces, bigger farms often have their own equipment. In Shandong, Hebei and other provinces they would not have as much equipment. They would rent or lease equipment. If companies or individuals buy machines they rent them out together with workers as a package. That is how small farms can use advanced technology. Taiwanese farmers come to produce high value crops like nuts. They contract land from local farmers in eastern provinces, often for export. It is more common for large farms to produce for export. Thirty years ago the state invested in tractor companies and then sold them to private companies. Some fertiliser factories are owned by the state, some are private. Farming must become more competitive. Land productivity is not the most important thing to compete with. The US produces things cheaper, so they can sell their products to the world. American wheat is sold to Chinese flour mills because it is cheaper. Therefore labour productivity must be raised.

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6.4 Visit to Huaxi village, Yangtze Delta After leaving Beijing I travelled south to Shanghai. My son, who is resident in Beijing, acted as my interpreter. My intention was to do research along the Yangtze River, as it in many ways is comparable to the Indus River. However, as we began our trip, it soon became clear that most of the three hundred kilometres along the Yangtze between Shanghai and Nanjing was one factory after the other. It was going to be difficult to find an agricultural village unless we went way past Nanjing. Our driver suggested we visit a village called Huaxi along the way and I readily agreed, wanting to get away from the factories. However, Huaxi was far from a typical village. Firstly, it is a village that never went over to the Household Responsibility System. It remained a people's commune that farmed the land collectively. Secondly, it was one of the earliest places to develop village enterprises, starting with screwdrivers and simple agricultural tools. Thirdly, it is considered the richest village in China. It is officially upheld as a model village. I was given a guided tour during which the village was explained to me. The original 1500 households each have a share in the 70 odd enterprises that have been created there. These shares cannot be bought and sold, but they can be inherited. Villagers are entitled to extensive social benefits. Each family, of about four people, has a house of approximately 400 square meters with all modern appliances and a car. The village has built the eighth largest skyscraper in China in its centre. The skyscraper includes a hotel with an international standard and a museum on five floors exhibiting handicrafts. Also exhibited is a bull statue made of solid gold and weighing a ton. The visit to Huaxi was interesting. It does raise the question if ways other than HRS could have developed Chinese farming as effectively as HRS, but that is not part of my research. Local officials recommended that after Huaxi I visit Xiaogang village in Anhui, and offered to prepare my visit. Xiaogang is the first village that introduced HRS. However, having read numerous journalists accounts of their visit to Xiaogang, I wanted to get off the beaten tourist track. Fortunately, we had established good relations with our driver by then, and as he had not been home for a long time, he suggested we go to Xiangyang, also in Anhui, but in the north rather than the south. Although it was not along the Yangtze River, I figured it was my best chance of getting close to a real agricultural village. 6.5 Visit to Xiangyang63
63

Xiangyang means 'towards the sun'.

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We travelled north from Nanjing for about 300 kilometres along various motorways. The motorways are of European standard, if not better. The village is about half an hour s drive from the motorway. As we approached the village the roads got worse and worse. The final kilometres to the village were along a dirt track that was in poor condition. Xiangyang is situated in the north-western corner of Anhui. Anhui is among the poorest regions and has little industry. Provinces that are poorer than Anhui have more adverse natural conditions. The village had an average income for the province. Almost everybody in the village had the same surname Ma. This report is a compilation from discussions held with farmers, distributors, the driver, teachers, a doctor, and the village cadres. And my own observations. The village is undergoing a rapid transformation. At one end of the village were the old farm buildings and at the other the new ones. The old farm buildings, for humans and animals, were low and small and made of red bricks. They were placed around a small courtyard. On the sides of the courtyards where there were no buildings there were walls, creating a closed in space. The windows were few and small and mainly faced the courtyard. They had water, but no drains. Refuse was taken to a central place where it was converted into fertilizer. When a son was old enough, the family built him a new house. He could then get a wife and move away to have children. If there was a daughter she moved into the husbands house. When the children had moved out, the grandparents moved in. Finally, when the grandparents were dead, the parents moved into the sons house. Then the house was torn down, with some of the material being recycled. Nobody wants to buy an old house in the country. At the other end of the village, people were building and moving into new houses. These houses had three stories. The houses had balconies on the roof and on the front, where they were held up by Corinthian columns. Some of the completed houses were decorated with tiles, as are many in nearby villages. Others were painted in ochre with white details. The houses are entered by elaborate plastic double doors. The houses are probably about 250 square meters. They have very large windows and the room's height is about 3.5 metres. Warm water is supplied by rooftop sunheated tanks, and the houses are equipped with water toilets. The bottom floors are used for living, unless they faced the main track through the village. Then they were prepared to be used for garages or business. On the floors above four or five people live. There were hundreds of them in various states. Each house is built individually, but with the help of neighbours and friends. They were all about the same size and style, but differed in details. Each house cost about 200 000 yuan (about the same amount in SEKs) to build. It was unclear if the 51

peasants got state subsidies to build in concentrated formations and not dotted around the countryside. Normally the farmers do not have to borrow money to build a house, unless they want to add something special. Then they would borrow from other farmers or possibly from a bank. Moving into these houses means the farmers get rid of their animals. It was said that the village had a population of 1000, although at one point a village 'cadre' (leader) said that in the new houses there would be room for 5000. In Southern Anhui there is yellow earth (loess) with rice cultivation. In the north, where this village is, there is black earth. Wheat, soybeans and corn are the main crops. There are two crops per year. The government guarantees a minimum price for the grain, but also sets a maximum price. Within that band market principles are applied. Every scrap of land was used and well kept. Even on some building sites vegetables were planted right next to the new building going up. Trees were planted alongside the tracks or in ditches. As family sizes change the village redistributed the land. One thousand mus of the villages land was contracted out to an outsider (who speaks a dialect we do not understand). For every mu the contractor paid 700 yuan per year. In addition, the farmers earned 300 yuan per year per mu by working the land, using machines which the village owned collectively. The contractor paid for seeds, fertilizers, and pesticides. The contractor also paid the Village Committee. There was no irrigation, although occasionally, if it was very dry, they spread water on the fields. The contractor had planted peonies and a medicinal plant that the farmers knew nothing about. A contractor is not necessarily an outsider, he or she can be a neighbour or relative. The contractor can be an individual or a company. Not all machines were owned collectively, some farmers had machines that they rented out to other farmers. The government subsidized the purchase of machinery. Bank loans could be taken for machines. Ten years ago nothing was mechanised and most people had livestock. Now there were fewer animals and agriculture was much more mechanised. On the land which is not used by the contractor, the farmers grew vegetables. They expressed great pride that the vegetables they grew for their own consumption are organic. They also sold some in the town market or to a middleman who sold them in the cities. In this village there were no greenhouses to grow vegetables, but in many neighbouring ones there were long simple constructions covered in transparent plastic that served as greenhouses. Thirty years ago, the village got together with a neighbouring village to dig a fish pond by hand. Now, new ones have been dug mechanically by a company. Wheat, corn and soy beans were taken to a distributor. There machines cleared away rubbish 52

from the grain. Then it was taken to a central mill or to an alcohol factory in the nearby city. Some was used for fodder. The first distributor I visited had taken over an old state distribution centre two years ago. His father had been head of the team there previously. He had recently invested in new machinery and said he managed to get by reasonably well. The government let him get on with his business and he did not need to pay any fees. A larger distributor nearby had started his business much earlier and was considered to be earning a lot of money. His place was also much larger. There were several other smaller distributors, all private. The village was administered by ten employed cadres. Seven of them were on the Village Committee. All were party members and elected. They had a village office and a meeting room in an older building. The rooms had very little heating. The toilets consisted of an outhouse with a channel for urinating and two channels for squatting and defecating. There was no water for flushing. The leading cadre was somebody who had previously worked as a schoolteacher in another village. Among the cadres there was also a female bookkeeper, some older villagers, and a young university maths' graduate (not from the village) that was doing a sort of apprenticeship. The village boss and others were determined that university graduates must take over when we retire, because they had the technical knowledge and cultural level we need. The expenditure and income of the village was written on the outside wall of the Village Committee's office building. The currency for getting favours from the village cadres was cigarettes. According to the driver, cigarettes at 20 yuan a pack had been sufficient a few years ago, but now it was 50 or even 70 yuan packs that counted. Bigger favours, such as letting me look at the whole village, necessitated inviting the village cadres to a meal at the local restaurant and generous portions of a more expensive type of baijiu (the local grain spirit) for a total of 1100 yuan, which was more than the local school teacher s annual salary. The quality of the spirits needed to oil friendship had also inflated over the last couple of years. Great emphasis was lain on the village wanting to attract more contractors. Unlike Beijing or Shanghai, it was not uncommon to see people in brightly printed padded jackets and trousers or parts of the old uniform from Maoist times, such as a blue jacket with a fur collar for cadres or a cap. Seventy percent of the village have migrated as the labour surplus increased due to improved farming techniques. There was a noticeable disproportion of old people and children in the village.

6.6 Reflections 53

Socialist market farming has unleashed a spiral of investments, mechanisation, larger farms, specialisation and division of labour, and increased land and labour productivity in a competitive market. Looking back at the family farming that preceded it makes this even clearer. Before the midnineties the contracting out of use-rights was not allowed and there was a decade of stagnation in labour productivity. In the initial period the HRS does appear to have injected vitality into farming. Labour productivity increased because families on small farms had an incentive to work harder, utilize labour more flexibly and produced higher value products that could be sold on a market. Then it was the IR mechanism, in accordance with Dyer's cluster of explanations, which was doing its work. However, this soon reached its limits. A big technological leap could not take place until later, when larger farms could be created. IR is not the whole story of the early success of the HRS. Philip Huang argues that much of the innovation that occurred had already been in the pipeline. In the seventies the state had been preparing China's Green Revolution and had launched it in some of the more advanced areas even before HRS. The people's communes in those areas had shown great advances too. HRS could take advantage of all the preparations that had been made.64 The initial period of HRS also corresponded to a time when the state raised the prices of grains boosting the incomes of farmers. Subsequently the prices of grains fluctuated, often putting severe pressure on farmers.65 Farmers also had other problems. In 1998 a national Party journal noted that during the 1990's these three categories of burdens [fees and taxes, quota apportionments, and fines] have increased markedly, and the amount of the increase has far outstripped the farmers' gains in cash income.66 Chinese farmers became increasingly exposed to the world market, especially after WTO entry. Already prior to joining the WTO, China lowered its agricultural protection to below that of most developing countries and even below that of many developed countries. After WTO accession further cuts were made and its real applied rate became negligible, a mere 3.6 percent.67 The dismantling of the communes meant the decline of the old systems of healthcare and education, and its replacement by often costly alternatives. Furthermore, the re-centralisation of credit that occurred in the first part of the nineties took its

64

65 66 67

Huang, Philip. The Peasant Family and Rural Development in the Yangzi Delta 1350-1988. Stanford: Stanford University Press (1990): 283. Unger, Jonathan. The Transformation of Rural China. New York: M. E. Sharpe (2002): 209. Ibid, 212. Rosen, Daniel, Rozelle, Scott, and Huang, Jikun. Roots of Competitiveness: China's Evolving Agricultural Interests. Washington: Institute of Internaitonal Economics (2004): 8.

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toll too.68 Unlike in Pakistan, loosing protection against the world market and many other burdens did not push Chinese farmers down onto their knees. Instead they started to out-compete others internationally and Chinese agricultural produce is appearing in shops across the world. Chinese farmers, when under pressure, found another way than Chayanov's self-exploitation to survive and even flourish socialist market farming. What is it that makes China so different that unlike almost all other places family farming is disappearing? I think the decisive reason is the collective ownership of the land. In China there are no absentee landlords that prefer to live by grinding farmers into the ground, rather than making way for capitalist farmers. Instead it is farmers themselves that benefit from contracting out. They have an incentive to let go of the use-rights of the land. The benefit is not unsubstantial, as is very much in evidence in what has been a dirt poor village such as Xiangyang. They could both 'give up' their land and keep it as a source of income. In Pakistan, once you have sold your land, you might have a fair sized lump sum in your hand, but your prospects are highly insecure.69 The pressure of having to pay more fees and of facing a highly competitive market does not lead farmers to try to eke out an existence on tiny plots of land. Instead they contract out their use-rights, and live off the income they can get from doing so and from being workers. I see this as the decisive conclusion of my research about China.

7. Towards a New Theory About Why Family Farms Persist

The initial impulse for my research was based upon two ideas. On the one hand that since 1978 Chinese agriculture has been based upon families and egalitarian, and therefore successful. On the other hand that most of Pakistani agriculture was steeped in feudal dependencies and therefore failing. In my field research in Pakistan I discovered that the basic unit of farming was fairly small, either in the form tenant-farming or independently owned land. Either way farming was divided into family size bits. There was little evidence of either feudalism or capitalist farming. This led me to study family farming globally. Family farming was the main form of farming just about everywhere. Even many extremely large farms in the USA were family farms.
68 69

Huang, Yasheng. Capitalism with Chinese Characteristics. New York: Cambridge University Press (2008): 151. The vast army of migrant workers in China is only partially due to the hukou system preventing people from becoming residents in the cities. It has become much easier to become an urban resident. However, many migrant workers do not want to do so, despite the increased social security that urban residency includes. They would lose their share of the land in their home villages and the income attached to it.

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I then tried to understand the reasons for this by looking at the past discussions about agriculture in general and family farming in particular. The classical view, based upon the experience of the agricultural revolution in England, excluded the continuation of family farms. Kautsky concretely and in detail explains why large farms are more productive, and took it for granted that family farms would follow the pattern of industry and become capitalist farms. Kautsky acknowledged that in practice things were not quite going in the direction he expected, but tried to explain this as the product of temporary factors that would disappear or at least become less significant. The next great contribution to the discussion came from Chayanov in Russia. He tried to formulate why farming would not necessarily follow the pattern of industry. Although some of his explanations are no longer valid, his main conclusion that family farms are more resilient because they are both units of production and consumption is of great significance. In the post-war period Chayanov's ideas were reformulated and developed by the essentialists, beginning with Amartya Sen. They showed empirically that there was an inverse relationship between the size of a farm and its yields. They gave a number of reasons for this. IR could be used to explain why family farming persists. However, the teleologians developed the classical position. Dyer successfully proves that IR only functions under a specific cluster of circumstances, brought about by great need, and breaks down when put into a dynamic context of technological development. The problem with Dyer is that he thinks it is feudalism or semi-feudalism that holds back the development of capitalist farming, but family farming also pre-dominates in developed economies. His thesis of feudal dependencies pushing down farmers into need and IR does not hold. Finally, my field research in China in some ways confirms Dyer's thesis, and negates the initial view I had of farming as egalitarian in China. The leap forward in labour productivity during the past fifteen years has developed through the development of large scale mechanised farming, via the contracting out of use-rights. I draw the conclusion that the main reason this was possible in China, but not in Pakistan and other places was that there were no landlords and the land is collectively owned. This led me to formulate a new theory that answers why family farms persist. It brings together all that I think is valid from both schools. It is based on an analysis of the social relationships of production. My theory arises out of a broad perspective that encompasses both the developed and the developing world, the past and the present. I have not come across any writings about farming that compare the social relationships of production in developed and developing economies. They are 56

presumed to be two different worlds, whereas I believe the social relationships are basically the same. Feudalism and other pre-capitalist modes of production were abolished worldwide some time ago, probably this was connected with the wave of colonial liberation that followed the Second World War. The whole world is basically capitalist today, although far more developed in some places than others. I have therefore developed a theory that is equally valid in developed and developing countries.

7.1 The Landowner Land has singular attributes that make it different from all other commodities. Nothing has to be done, nor can much be done, to produce land. It is an essential means of production and has no substitutes. What is grown on land can be changed from forests to pasturage to grain growing and so on but the basic quantity of land is more difficult to change. Therefore it is a monopoly. Because it is a monopoly it can command a price, ground-rent, despite having no work put down into creating it. Raw materials such as iron and oil also exist with no labour put down to create them, but they are useless from the point of view of production as long as they remain underground. Only when a lot of work has been put down to mine and process them are they useful in production. That is not the case with land. Land need simply be made available to create an income for its owner. If work has been put down to improve it, it can command a higher ground-rent. Land will also fetch a better ground-rent if it is closer to markets or naturally has better soil, but even the poorest privately owned land will give rent if there is any demand at all for it. Otherwise the owner is better off just letting it lie there, rather than make the soil condition worse. Land is different from other monopolies. If one firm has acquired a dominant position, work has still been put down towards creating a product. They can reap a higher than average profit for a period of time, but in the long run, if their profits are sufficiently above average other firms will enter or an alternative will be created. As long as something needs labour to produce it, its position as a monopoly is uncertain, unless it is sanctioned by law. Land is not an absolute monopoly either, but its monopoly cannot be broken by sufficient capital entering the land market. There are already many players in the land market. If more go in, all that happens is that the price goes up further. Land monopoly can only be broken, or at least reduced, by new tracts of land being opened up for cultivation. Under capitalism this has happened at a more rapid pace than ever. In the colonies, like the Americas and Australia, the native population was driven off the land. According to them 57

the land was owned by everyone and no one. Because land was not owned privately it was not a monopoly and had no price. Therefore it had to be given away to turn it into private property. The Homestead Act of 1862 gave anybody who was prepared to stake a claim about 65 hectares west of the Mississippi with almost no conditions attached. Similar acts were passed in Canada and Australia. Argentinian meat and US wheat arrived in Europe and pressed down the ground-rents of European landowners. In the last 25 years, due to new strains and earth treatment the Brazilian Cerrado was opened up to soy bean and corn growing. This must have had an effect on ground-rent charged for soy-bean and corn growing land elsewhere, but probably this was compensated for by the demand for soy beans and corn shooting up simultaneously. Few large area remain that can be converted into productive use. Rather, due to environmental problems, there is a struggle to maintain those that exist today. The arable land per capita has almost halved between 1960 and 2005, putting pressure on the price of land.70 In any case, the arable land in a particular geographical area is fairly fixed and is therefore a local or regional monopoly. A landlord wants to use his position as a monopolist to unhindered raise the price of land to the maximum, way beyond anything that would make it possible for a farmer to make the same rate of profit as in industry. The capitalist farmer gets a profit because he invests in machines, employs people to work the land, and sells the produce. The agricultural labourer receives wages for his work. The landowner gets ground-rent because he simply owns the land and he gets his share first, otherwise nothing happens. Industrial capitalists normally have to pay some ground-rent too, but it is a very small proportion of their costs. As the landlord does not have to work, the absentee landowner is a common phenomenon. However, it is not just for the sake of partying that landowners end up in the cities. It is not enough to own land in order to have power in poor and chaotic countries, although it still is a basis for it. But power is not safe and it shifts back and forth. Therefore a landowning family must ensure that they have one or more important family members in the justice system, in politics, the state bureaucracy, and even in industry. Otherwise they risk having their power infringed upon. It is not excluded that the landowner becomes a capitalist farmer, but that is less common. Why take the risk of investing money without being sure you can get it back when all you can do as a landowner is sit back on your monopoly and wait for the money to come in? It takes a special kind of pressure for landowners to transform themselves into capitalists like some did in England and
70

Waldman, Adam. Arable Land Shortage and the Case for Agriculture and Farmland Investing. Technorati(2012). http://technorati.com/business/finance/article/arable-land-shortage-and-the-case/ (Accessed 2012-08-12).

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Prussia. It happens when they can earn super-profits and/or risk losing their work-free income. The peculiar nature of land ownership was clear to Churchill, as witnessed by the quote at the beginning of this essay. He was not alone in this. Towards the end of the nineteenth century, Henry George got wide political support both in his native USA and internationally for his proposal for a single tax on land, which he believed would deal with the landlord problem. The development of Chinese farming during the last decades throws new light on what appear to be a few through-away sentences in Marx' Theories of Surplus Value, his draft of the never completed fourth volume of Capital. He writes Landed property is a means for grabbing a part of the surplus-value produced by industrial capital and therefore concludes that The abolition of landed property in the Ricardian sense, that is, its conversion into State property so that rent is paid to the State instead of to the landlord, is the ideal, the hearts desire, which springs from the deepest, innermost essence of capital.71 This is paradoxical. Must the bourgeoisie, in order to firmly put capitalism in the saddle, undermine one of its own fundaments, private ownership? But it makes sense, if one understands that owning land is not the same thing as owning any other means of production. If capital is invested in landownership (as distinct from farming) it will behave differently than if capital is invested in factories or anything else.

7.2 The Family Farm The existence of a landowning class has its corollary in the existence of family farming. Family farming can survive on a lower rate of profit than a capitalist farmer. Therefore the landlords and family farmers together marginalize capitalist farmers and agricultural labourers. A family farm gets the benefits of growing their own food, and often cheap housing too. Travel to work is less expensive. There is also a supportive web of family, friends, and acquaintances that can help in good as well as bad times.72 In other words, family farms are economic units of production, consumption, and mutual aid. Therefore they are prepared to keep farming although it is unprofitable in conventional terms. They pay ground-rent to a landlord even when a capitalist farmer would not. Apart from the non-marketed material benefits of family farms, the flexibility of family labour is another important reason why family farms survive. This has some similarities to other small family businesses, like the immigrant family that runs the newsagent on the corner. They would probably do better if they all got jobs and put their money in the bank, but nonetheless they don't. Partly
71

72

Marx, Karl. Theories of Surplus Value. Addenda, Revenue and its Sources, Vulgar Political Economy (1861-1863). http://www.marxists.org/archive/marx/works/1863/theories-surplus-value/add3.htm (Accessed 2013-03-01). There could also be non-economic benefits of living on a farm tradition, clean air, greater space, lifestyle and so on.

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because they probably would have difficulty getting jobs because they are discriminated against, partly because the small amounts that the old mama and the children contribute with would not be possible to convert into wage labour in any case. For family farms the unevenness of the need for labour during the farming year makes it especially advantageous to draw on family labour when needed. Family farms can also distribute work fairly flexibly throughout the day and week, making it easier for the whole family to participate, even if they study or have other jobs. Family farms are therefore able to survive on a rate of profit that is lower than the average in industry or services. Normally, except during short-term fluctuations, a sector of the economy with a lower than average rate of profit results in capital fleeing that sector. This leads to price rises until the average rate of profit is restored. However, family farms hang on while the average rate of profit falls, until it leads to the break-up of the family as an economic unit. Only when another form of employment and consumption becomes more beneficial for the family as a whole will they abandon the farm. Because landlords have a monopoly on land they can and do raise ground-rents beyond what is feasible for capitalist farmers.

7.3 The Banks and the Moneylenders There has been a long-term trend for landowners to decline as a class, either they become capitalist farmers or more commonly they sell off their land to their tenants. In as widely differing societies as Pakistan and the USA there has been a shift away from tenant-farming towards families owning their own farms. Tenants are in a clear minority in both countries. Marx called tenant-farming the classic form of capitalist farming and it was used very successfully to develop English agriculture. But it is a form of farming that is most appropriate when the use of machinery is limited. If a tenant is going to invest in machinery he must know that he will be able to use it until it is time to replace it. He cannot be left standing there with expensive machines. Similarly, long-term investments in irrigation and other soil-improvements are less likely to happen under a tenant system. The tenant does not want to give the landowner something for free. At the next rent renegotiation the tenant can lose the value of his investments. There has also been political pressure for land redistribution. The landowners also have an incentive to sell. Tenants exhaust the soil, as they have no incentive to maintain it beyond their contract, which reduces the ground-rent that the landowner can get at the next negotiation. As labour costs rise, the maintenance costs of large country houses become exorbitant. Absentee landlords discover new means of earning money in the cities or want to put their fortune in safety abroad. The move from tenancy to ownership does not mean that family farms become superfluous. It is 60

the banks, or the money-lender, that take the place of the landowner. The banks become the de facto landowners. And they extract as much as any landowner. According to one calculation farmers in a range of developed countries have to pay forty to fifty percent of their gross income to the banks in the form of interest and mortgage repayments.73 This is the same level that poor Pakistani sharecroppers pay their landlords. Just like the land-owners, the banks and money-lenders get their share first, otherwise the farmer will be left with no land to farm. Concretely this high level of indebtedness can be explained by looking at both the lender and the borrower. The banks and money-lenders are willing to lend because the value of the land is good security. On the other hand, farmers need to borrow because of a combination of the following: To buy a farm to start with. To buy out siblings when there is a generation change. To invest to compete with capitalist farmers. To extend their farms in order to benefit from economies of scale. To counter-act the insecurity of farming due to the vagaries of nature and the market. To borrow for exceptional consumption, such as marriages.

The pressure on arable land pushes up the price of land. This is far from beneficial for family farms, unless they decide to give up and sell. High land prices merely become the means that lead them into even greater debt. An expensive bit of land does not give a greater income than a cheap one. Debts have to be repaid regardless of the income. Banks and money-lenders are as effective as landowners in keeping family farms from developing into capitalist farms.

7.4 The Capitalist Farmer Despite the stiff competition from family farms, there is still a layer of capitalist farmers in almost all countries. As the income of the landowners and the banks is prioritised, if a capitalist goes into farming, investment in machinery and labour must provide for greater returns than in industry. The returns must be sufficiently larger so that after deducting for ground-rent and interest, the capitalist will get the same average rate of profit in farming that he would get from investing in industry. In other words, he must make a super-profit in farming.

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Djurfelt compares interest and repayments to Gross Agricultural Product. I have been unable to find any other reference to this form of measurement. There are plenty of statistics that relate loans to assets or liquidity and all kinds of combinations thereof, as these are the means to assess credit worthiness, but none that look at the total burden of loans in relation to total income. However, that farmers in most developed countries are heavily indebted in relation to income is not in doubt. Djurfelt, Gran. Whatever Happened to the Agrarian Bourgeoisie and Rural Proletariat under Monopoly Capitalism?. Acta Sociologica (24), 3 (1981): 189.

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A formula could express the pre-condition for capitalist farming like this: Average rate of profit in industry = average rate of profit in farming + (super-profits ground-rent/interest=0)

According to the Labour Theory of Value, super-profits are normal in capitalism. The most common means of getting them is by investing in the latest labour-saving machines and thereby lowering the cost of production. The first capitalist to invest will be able to charge the same price for his commodities as all other producers, although his costs per unit will be lower. In other words, his profits will be above average. Capitalist farmers need to be in the forefront of technology both nationally and internationally, unless there are protective barriers. Capitalist farmers in England during the agricultural revolution were in the forefront internationally, as they are in the US today. As new technology becomes generalised, capitalist farmers lose their advantage. They can no longer reap super-profits and they start selling their land or leasing it to tenants again. This explains why capitalist farms appear, and disappear like in late nineteenth century England. Family farms that can afford to invest, when the price of new technology falls, will increase their productivity and be the main winners. The poorest farmers cannot invest in new machinery even when the price drops. They are rapidly pushed to subsistence level. Things simply get worse and worse for this segment of the population and families begin to break up as economic units of production and consumption. If jobs can be found in the towns, the smallest holdings either become a supplement to another income, a hobby or they sell their land to the most successful family farms. If there are no other jobs, fragmented agriculture festers on. Capitalist farmers play an essential role for developing the productivity of family farms. Capitalist farms are the first to introduce new technology, which then becomes cheaper and available to family farms. However, there is a big threshold for capitalists to overcome before they enter farming. Governments in most developed countries therefore step in with heavy subsidies. Most of the subsidies go to the capitalist farmers.74 Without this there would be even less capitalist farming, and productivity would develop at a slower pace. However, in those parts of the agricultural process that are outside of farming there is plenty of space for capitalist firms.

74

Organisation for Economic Co-operation and Development (OECD). Farm Household Income: Towards Better Informed Policies. OECD Policy Brief (October 2004): 6.

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7.5 Agro-business /The Middle-man/Cooperatives Essentially, 'developing the means of production means the development of human cooperation. Without cooperation no division of labour, no specialisation, and no economies of scale. Therefore cooperation is the true source of economic development. This is what Marx called the socialisation of labour. Yet land acts like an opposite magnetic pole to cooperation, it pushes cooperation off the land. Therefore agriculture does not undergo the same development pattern as industry. In industry cooperation begins at the origin of production in the factory. In agriculture cooperation is concentrated not at the origin of production, the farm, but off the farm. Factories also have inputs and distribution, upstream and downstream as it is termed in agriculture, but in the past it has been rare that these have had a dominating role in the production process and take most of the profits. In agriculture the weak position of the many isolated family farms spread over great areas, gives a disproportionate share of the income to the middle-man and, in more developed economies, to agro-business. This is often a curse for the farmer, but the middleman or agro-business are a necessary link between different parts of the agricultural production and distribution process. In some cases cooperatives or the state can play a similar role to the middleman or agro-business. There are some similarities to the forms of industrial production that have taken off in the last few decades. Apple is the worlds biggest company by stock market value because it makes enormous profits. However, most of the production is done by sub-contractors and the sub-subcontractors. Although the sub-contractors do the bulk of the work, they earn the least. The case of Apple is extreme, but a similar situation exists for more and more of the large companies. The subcontractors supply a few or even only one company. This puts them under big pressure. Especially during economic crisis the sub-contractors get squeezed. Their situation is similar to a poor Pakistani share-cropper who after the harvest dumps his harvest at the local rice mill and is prepared to accept almost any price, because he has nowhere else to go.

7.6 The Role of the State In nineteenth century Europe, farming was an important discussion among academics and politicians alike. The issue was one of solving The Agricultural Question. That is, how was the poverty, backwardness, and slow development of agriculture (compared to industry) to be resolved? Yet today, it seems to be resolved in developed countries. Only a tiny proportion of the population are producing enough to feed the rest. There is even a problem of trying to deal with too much being produced. Clearly, the agricultural question was not resolved by adopting Marx' recommendation of nationalising the land and letting the market run its course. Instead the question 63

seems to have been resolved in a completely different way. Millions upon millions of poor farmers had to immigrate to the new world reducing the pressure on old world farming. In the new world, after the death of almost all of the indigenous population, virgin areas could be opened up free of charge. There were no landlords that could extract rent.75 But migration was not enough to develop old world agriculture. Vast sums of money had to be transferred from industry, and later services, in order to bring farming up to par. Although it is a fact that the EU begun as the European Coal and Steel Community, as late as 1985, 70 percent of the EU budget went to agriculture. Despite agriculture having declined to a mere 2.1 percent of EU GDP in 200676, farming and rural development still receive over 40 percent of the EU's budget.77 Perhaps all the jokes about the EU's rules about the shape of cucumber reflect less the bureaucratic nature of the EU and more their attempt to this day of trying to deal with The Agricultural Question. In the USA, the free farming of the nineteenth century paved the way to ecological disaster (the so called dust bowls of the thirties), indebtedness and massive subsidies there too, even though subsidies were less than in the EU. Japan and South Korea have a very high level of labour productivity in farming, although their farms are even smaller than in the EU and the USA. But subsidies are even bigger. The level of producer support (expressed as percentage of producer revenues) in 2007-09 was 9 percent in the USA and 23 percent in the EU, but 47 percent in Japan and 52 percent in South Korea.78 So, the paradox of the agricultural question has been reformulated. It is no longer a question of the bourgeoisie having to attack private property in order to develop capitalist farming. The new paradox is that most pro-market academics and politicians do not question the need for massive subsidies and numerous rules and regulations that place farming far from a real exposure to the market.

7.7 Summary of the Theory Industry and services nurture two classes - capitalists and workers. Due to land being a monopoly, farming must also pay a third class landlords. The landlords (or the banks in developed countries) get their share first. This leads to the constant recreation of family farming, that is farms where the labour is done by the cheapest possible labour - family labour. This means that farming normally
75

76

77

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In Spanish and Portuguese colonies the situation was different. The feudal colonial powers imposed a feudal landownership on their colonies. Economy of the European Union. Wikipedia. http://en.wikipedia.org/wiki/Economy_of_the_European_Union#Agriculture (Accessed 2013-01-15). European Commission. Myth and Facts. http://ec.europa.eu/budget/explained/myths/myths_en.cfm#3of15 (Accessed 2013-01-15). Organisation of Economic Co-operation and Development (OECD). Agricultural Policies in OECD Countries at a Glance. OECD (2010): 6.

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develops much slower than industry and services, as the possibility of investing in order to develop production is worse. The paradoxical conclusion of this is that capitalist farming cannot become dominant until private property of land is abolished, as in Chinese socialist market farming. Despite this, farming can develop rapidly even with private ownership of the land and family farming dominant. However, only if farming is in the forefront of technological development or heavily subsidized or preferably both.

8. Concluding remarks
My initial research question was: Why has agricultural productivity developed more rapidly in China than in Pakistan during the last thirty years? Such a question, like any human phenomenon, not least those involving human interaction, cannot be answered by referring to a simple law. There are always numerous tendencies, counter-tendencies, and accidental elements. In search for an answer, I had to stray so far from my original research question, that my essay turned into one where the main question became the enigma of the persistence of family farming. Having made this excursion and understood the problems of transcending family farming, I can begin to answer my original research question. The natural preconditions, the availability of knowledge, and the crying need for agricultural development has not been very different in Pakistan or China. Both have had an average size of farms that is fairly low, although China initially had an average size which would be considered below subsistence level in most countries. However, the political and economic paths they have followed have been very different in the past decades. The introduction of HRS gave an initial boost to Chinese agriculture after 1978, although prior state investment in the Green Revolution and the rise in state procurement prices played important roles. However, none of this stopped Chinese farming from moving into a decade of relative stagnation. It was not until the advent of socialist market farming in the mid-nineties that things really took off. Despite less protection by the state and more exposure to foreign competition, Chinese agriculture flourished. The state made a historic shift from subsidizing to extracting resources from farming. The added pressure from the state and the whip of the market did not lead back to the Chinese tradition of involution. There was no fragmentation into smaller plots that are cultivated more and more intensely. Instead land was contracted out and large-scale mechanised farms were created. Contracting out has kept resources in the countryside, increasing farmers wellbeing and their willingness to invest. This is a very different process from when the money disappears into the landlords pockets or the banks in the towns. 65

Undoubtedly the parallel development of Chinese industry aided this process, but if the land had not been collectively owned bigger farms had not developed, instead we would have seen the kind of fragmentation into subsistence farming that has happened in Pakistan. Pakistan has had the added burden of the middle man extracting a large part of the farming surplus, but to a large extent that must be seen as a symptom of the weakness of the farmer, unable to rise beyond family farming. During the past three decades ago, the role of the state in farming has declined and exposure to the world market has increased in both Pakistan and China. However, the effect has been very different in these countries. In the final analysis, the most important difference boils down to a difference in land ownership. It is paradoxical that collective ownership of the land leads to a differentiation of the peasantry, market and profit orientated production, and larger farms based on a leap in technology. But cutting out the landlord class as a basically parasitic class has precisely that effect. In China farming has roared ahead, whereas in Pakistan, farming has remained locked into family farming without the massive subsidies which would lift its productivity even if landlordism remained in place. China could neither afford to go the Western way nor did its leadership have the inclination. The question is: can any country that has not already undergone a transformation of its farming follow any other way than the Chinese way, where collective ownership of the land underwrites it all? And finally, after all is said and done perhaps egalitarian agriculture is necessary after all? Did not the agricultural success stories of the modern era England, USA, France, Japan and China have a more or less egalitarian starting point? Did not the English Revolution lead to sequestration of estates and better terms for tenants? The French Revolution to the division of the lands? The American Civil War to the destruction of the big plantations in the South and the Homestead Act? The US occupation of Japan to a drastic land reform? And in China, was not HRS the most equal distribution of land ever? Maybe a level playing field was necessary to kick-start healthy competition. Those are questions for further research.

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