International

Agricultural
Development
THIRD EDITION

Edited by
Carl K. Eicher and John M. Staatz

THE JOHNS HOPKINS UNIVERSITY PRESS

Baltimore and London
 1
© 1984. 1990. 1998 The Johns Hopkins University Press
All rights reserved Contents
First edition published 1984
Third edition published 1998
The tirst and second editions were published under the title
Agricultural Development in the Third World.
Printed in the United States of America on acid-free paper Preface ix
987654321
PART I
The Johns Hopkins University Press
2715 North Charles Street. Baltimore. Maryland 21218-4363 THE CHALLENGE
The Johns Hopkins Press Ltd., London
www.jhu.press.edu Introduction 3

Library of Congress Cataloging-in-Publication Data will be 1. Agricultural Development Ideas in Historical Perspective 8
found at the end of this book. John M. Staatz and Carl K. Eicher
A catalog record for this book is available from
the British Library. 2. Agriculture and Food Needs to 2025 39
Alex F. McCalla
ISBN 0-8018-5878-X
ISBN 0-8018-5879-8 (pbk.) 3. Foreign Aid and Agriculture-Led Development 55
John lY. Mellor

PART II
HISTORICAL AND THEORETICAL PERSPECTIVES
Introduction 69
4. Economic Perfonnance through Time 78
Douglass C. North
5. Community, Market, and State 90
Yujiro Hayami
6. Markets, Market Failures, and Development 103
Joseph E. Stiglitz
7. The Agricultural Transformation 113
C. Peter TImmer
8. Agriculture on the Road to Industrialization 136
John lY. Mellor
9. Models of Agricultural Development 155
Vemon lY. Ruttan
10. Induced Innovation Model of Agricultural Development 163
Vemon lY. Ruttan and Yujiro Hayami

v
 vi Contents

III
PART
1-- 23. How Do Market Failures Justify Interventions in Rural
Contents vii

POLICY PERSPECTIVES Credit Markets? 370

Timothy J. Besley
Introduction 181
24. Microfinance: The Paradigm Shift from Credit Delivery
II. The Macroeconomics of Food and Agriculture 187 to Sustainable Financial Intermediation 390
C. Peter Timmer Marguerite S. Robinson
12. The Case for Trade Liberalization 212 25. Micro and Small Enterprises and the Rural Poor 416
Rudiger Dornbusch Carl Liedholm
13. The Plundering of Agriculture in Developing Countries 226 C. Technology Development and Sustainability
Maurice Schiff and Alberto Valdes
26. Constraints on the Design of Sustainable Systems of
14. The Political Framework for Agricultural Policy Decisions 234 Agricultural Production 431
Robert H. Bates Vernon W. Ruttan
15. Food, Economics, and Entitlements 240 27. African Agriculture: Productivity and Sustainability Issues 444
Amartya Sen Thomas Reardon
28. Maintaining Productivity Gains in Post-Green Revolution
IV PART Asian Agriculture 458
AGRICULTURAL TRANSFORMATION AND RURAL Michael Morris and Derek Byerlee
ECONOMIC DEVELOPMENT
29. Confronting the Ecological Consequences of the Rice Green
Introduction 259 Revolution in Tropical Asia 474
A. Learning from Experience Prabhu L. Pingali

16. Agricultural Development: Transforming Human Capital, 30. Choice of Technique in Rice Milling on Java 494
Technology, and Institutions 271 C. Peter Timmer, with a comment by William L. Collier; Jusuf Colter,
James T. Bonllell Sinarhadi. and Robert d'A. Shaw and a reply by C. Peter Timmer

17. Agricultural and Rural Development: Painful Lessons 287 PART V

Hans P. Binswanger LESSONS FROM ECONOMIES IN TRANSITION
18. The Peasant in Economic Modernization 300 Introduction 515
Yujiro Hayami
31. Agricultural Development and Reform in China 523
B. Institutional and Human Capital lustin Yifu Lin
19. Reflections on Land Reform and Farm Size 316 32. The Role of Agriculture in Indonesia's Development 539
Hans P. Binswanger and Miranda Elgin C. Peter Timmer
20. Investing in People 329 33. Zimbabwe's Maize Revolution: Insights for Closing Africa's
Theodore W. Schultz Food Gap 550
21. Projects for Women: Explaining Their Misbehavior Carl K. Eicher and Bernard Kupfuma
339
Mayra Buvinic 34. Path-dependent Policy Reforms: From Land Reform to Rural
22. Agricultural Extension in the Twenty-first Century Development in Colombia 571
354
Charles H. Antholt Alain de Janvry and Elisabeth Sadoulet
viii COlltellls

35. Agricultural Refonn in Central and Eastern Europe 586

Johan F. M. Swinnen

Name Index 603

Subject Index 607
Preface

~
. . . . In 1990, when the second edition of this book was published, the
Cold War was winding down, the role of the state in development
._ was being redefined, and nongovernmental organizations were
struggling to make the transition from relief organizations to de-
velopment agencies. The decade of the nineties has turned out to be a period of
revolutionary change in thinking about the role of the state, institutions, and mar-
kets in development. State companies in Africa, Latin America, Asia, and the
fonner Soviet Union and Central and Eastern Europe have been put on the auc-
tion block like items in a gigantic "white elephant" sale. Economic growth has
exploded in many countries in Asia; China, the world's most populous nation,
has doubled its per capita income in a decade.
The sweeping political and economic changes of the nineties have ushered in
a more global and more market-driven view of development and have called into
question the simplicity of the tenn "Third World," which encompasses countries
that have become increasingly diverse since the 1970s. Grouping Singapore with
Chad, or Brazil with Bangladesh now confuses more than it enlightens. The
development of institutions adapted to individual settings is now at the core of
-,M~·'.'-'·'"
development thinking, and prepackaged institutional models such as T&V (train-
ing and visit) extension are being rapidly replaced by more pluralistic and
demand-driven models that are less dependent on the whims and pressure of
donors. Today mainstream debates about development in poor countries are cen-
tered on globalization of economies, policies, and institutions; and on issues such
as privatization and sustainability. Because of these changes, we replaced "Third
World" in the title of this edition with a more global title: International Agri-
cultural Development. The geographical scope of this new edition encompasses
low- and middle-income countries throughout the world.
Despite substantial economic growth in many developing countries during the
199Os, rural poverty, malnutrition, and food insecurity remain urgent problems
that demand attention. Various Food and Agriculture Organization and World
Bank reports estimate that there are 800 million to 1.3 billion poor in the world.
Half to three-fourths of the poor live in rural areas and depend on increasing agri-
cultural productivity and off-farm employment for their livelihood. The focus of
this edition is on improving our understanding of how to promote sustainable agri-
cultural growth and rural economic development in low- and middle-income
countries throughout the world in the context of an increasingly global economy.
This book is a product of the vast agricultural and rural development litera-

ix
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Asia has a long and rich history, one that has been marked by a series of tech-
nological achievements that today allow the region's vast population to be fed
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pressive food production gains have come during the past three decades, when t 'e' <'!"lCl 0
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tribute the bulk of the region's food supply (table I). Asia's irrigated lowland ''""
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ture may be ending. Expansion in the area planted to cereals, once a major source 0:: ;J '"
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MICHAEL MORRIS is an agricultural economist at CIMMYT. Mexico.

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DEREK BYERLEE is principal economist, Rural Development Department. World Bank. Washing-
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458 1 459
 460 Michael Morris and Derek Byerlee Maintaining Productivity Gains in Asian Agriculture 461
460 Michael Morris and Derek Byerlee Maintaining Productivity Gains in Asian Agriculture 461

TABLE 2
TABLE 2 RECENT TRENDS
RECENT TRENDS IN
IN INPUT
INPUT USE
USE AND
AND PRODUCTIVITY
PRODUCTIVITY
AVERAGE ANNUAL GROWTH IN AREA. YIELD.
AVERAGE ANNUAL GROWTH IN AREA. YIELD.
PRODUCTION OF CEREALS. ASIA. 1966-95 During
PRODUCTION OF CEREALS. ASIA. 1966-95 During the the next
next century,
century, Asia's
Asia's food food supply
supply will
will have
have to to be be produced
produced on on aa
1966-75 1976-85 1986-95 shrinking land base. The land frontier in Asia
shrinking land base. The land frontier in Asia has already been exhausted in has already been exhausted in
1966-75 1976-85 1986-95
many
many densely populated regions,
densely populated regions, and and urbanization
urbanization is is eating
eating away
away at at the
the remain-
remain-
All cereals
All cereals ing
ing supply
supply of of agricultural
agricultural land. land. This
This means
means that that farmers
farmers will will have
have to to further
further in- in-
Area 0.7 0.0 -0.1
Area 0.7 0.0 -0.1 tensify cereal production on land which in many cases is already being double-
Yield 2.8 3.9 2.3 tensify cereal production on land which in many cases is already being double-
Yield 2.8 3.9 2.3
Production
Production
3.5
3.5
3.9
3.9
2.2
2.2
and
and triple-cropped.
triple-cropped. Meanwhile,
Meanwhile, yield yield growth
growth has has slowed
slowed noticeably
noticeably in in the
the inten-
inten-
Rice (paddy)
Rice (paddy)
Area
sively cultivated irrigated
sively cultivated irrigated zones zones where
where the
the Green
Green ReVOlution
Revolution technologies
technologies made
made
1.1 0.2 0.2
Area 1.1 0.2 0.2 their initial dramatic impacts. 1
Yield 2.1 3.5 1.5 their initial dramatic impacts. I
Yield 2.1 3.5 1.5
Production
Production
3.2
3.2
3.7
3.7
1.8
1.8
In
In the
the past,
past, farmers
farmers in in Asia
Asia have alleviated growing
have alleviated growing pressure
pressure on on land
land by by in-
in-
Wheat
Wheat
Area
tensifying the use of inputs, as happened during
tensifying the use of inputs, as happened during the 1960s and 1970s followingthe 1960s and 1970s following
2.4 I.2 0.6
Area 2.4 the
the release
release of of rice and wheat
wheat MVs.MVs. The The rapid
rapid diffusion
diffusion of of MVs
MVs throughout dense-
Yield 4.6 1.2 0.6
Yield 4.6 5.4
5.4
2.1
2.1 rice and throughout dense-
Production
Production
7.0
7.0
6.6
6.6
2.6
ly populated irrigated areas of Asia is well known. Less well known is the fact
ly populated irrigated areas of Asia is well known. Less well known is the fact
Maize 2.6
Maize that use of
that use MVs subsequently
of MVs subsequently spread spread into into rainfed
rainfed areas,
areas, as as is evidenced by
is evidenced by the
the
Area I.2 0.0 0.6
Area 1.2 0.0 steady
steady growth
growth in in the
the area
area planted to MVs
MVs which which hashas continued
continued up up toto the
the present.
Yield 0.6
Yield 3.2 3.9 3.4 planted to present.
3.2 3.9 3.4
Production
Production
4.4
4.4
3.9
3.9
4.0
4.0
Currently,
Currently, the the total
total area planted to
area planted to rice
rice and
and wheat
wheat MVs MVs far exceeds the
far exceeds the irrigated
irrigated
area planted to these two crops, especially in India, confirming that MVs
area planted to these two crops, especially in India, confioning that MVs have have
SOURCE: U.N. Food and Agriculture Organization Agrostat
SOURCE: U.N. Food and Agriculture Organization Agrostat moved well beyond the irrigated
irrigated zones
database. 1995.
database. 1995. moved well beyond the zones intointo rainfed areas.
rainfed areas.
NOTE: South Asia. Southeast Asia. and East Asia. excluding
NOTE: South Asia. Southeast Asia. and East Asia. excluding
The varietal
The varietal diffusion
diffusion process
process has has generally
generally proceeded
proceeded in in two
two stages.
stages. Type Type A A
Japan.
Japan. varietal changes occurred when the original MVs,
varietal changes occurred when the original MVs, developed at the internation- developed at the internation-
al
al rice
rice and
and wheat
wheat research
research centers
centers (IRRI(IRRI and and CIMMYT),
CIMMYT),2 first first replaced
replaced traditional
traditional
lous varieties (TVs), leading to a sharp jump in
varieties (TVs), leading to a sharp jump in productivity.2 Type B productivity. Type B varietal
varietal changes
lous countries.
countries. Cereals
Cereals yields continue to
yields continue to rise, but the
rise, but the rate
rate of
of yield
yield growth
growth has has continue to occur
changes
slowed (table 2). In addition, the more intensive use of purchased inputs needed
slowed (table 2). In addition, the more intensive use of purchased inputs needed continue to occur as as newer
newer MVs MVs periodically
periodically replacereplace older
older MVs (usually at
MVs (usually at least
least
to ~aintain and extend productivity gains is undeonining the profitability of food once per decade), allowing productivity gains to
once per decade), allowing productivity gains to be sustained over an extended be sustained over an extended
to maintain and extend productivity gains is undermining the profitability of food period. Many Many of
gram
grain production
production and and inflicting
inflicting damage
damage to to the
the natural
natural resource
resource basebase upon
upon which
which period. of these newer MVs
these newer MVs were were developed
developed by by national
national research
research institutes
institutes
agriculture to
to fit specific local environments. While they generally have been much
fit specific local environments. While they generally have been much less less visi-
agriculture depends.
depends. visi-
Policy
Policy makers
makers concerned
concerned with food production
with food production in Asia face
in Asia face aa daunting
daunting task,
task, ble than the first Green Revolution MVs, the newer MVs (now involving at
ble than the first Green Revolution MVs, the newer MVs (now involving at least
least
because three
three generations)
generations) have have made
made substantial
substantial cumulative
cumulative contributions
contributions to to productiv-
extremely high rates
because extremely high rates of agricultural productivity growth will be
of agricultural productivity growth will be needed
needed ity
productiv-
to
to feed
feed aa population
population that is not
that is not only increasing rapidly
only increasing rapidly inin many
many countries
countries but in
but in ity growth. Often they have also provided greatly improved pest and disease
growth. Often they have also provided greatly improved pest and disease re- re-
many cases also experiencing income growth. To complicate matters, the tech- sistance, as
sistance, ac; well
well as as better
better grain
grain quality.
quality.
many cases also experiencing income growth. To complicate matters, the tech- Most MVs
nologies
nologies used used to
to achieve
achieve future
future productivity
productivity gainsgains will
will have
have to accommodate aa
to accommodate Most MVs perform
perform relatively
relatively well well under
under unfavorable
unfavorable production
production conditions,
conditions,
much broader range of technical, economic, and social concerns than in the but
but they express their full yield potential only with favorable management.
they express their full yield potential only with favorable management. Be-
much broader range of technical, economic, and social concerns than in the past.
past. cause
Be-
Future technologies must be evaluated not only in terms of their ability to
Future technologies must be evaluated not only in teons of their ability to raise
raise cause of of their
their responsiveness
responsiveness to to inputs,
inputs, MVs MVs becamebecame an an important
important catalystcatalyst for for
productivity the adoption of
the adoption of complementary
complementary inputs, inputs, especially
especially fertilizer,
fertilizer, which
which over over the the past
productivity but but also
also inin teons
terms of of their
their long-teon
long-term sustainability.
sustainability. three
past
This chapter reviews the recent
This chapter reviews the recent history of history technical change
of technical change in in rice
rice and wheat
and wheat three decades
decades has has been
been thethe largest
largest source
source of of growth
growth in in food
food production
production in in Asia.
Asia.
in the intensively irrigated cropping systems of Asia and examines the prospects Use of fertilizer was additionally encouraged by
Use of fertilizer was additionally encouraged by a decline in global fertilizer a decline in global fertilizer
in the intensively irrigated cropping systems of Asia and examines the prospects prices
for ~nai~t~inin~
for maintaining productivity
productivity growth
growth in in the
the post-Green
post-Green Revolution
Revolution era. era. The
The chap-
chap- prices and and byby subsidies
subsidies introduced
introduced in in many
many countries
countries to to encourage increased ap-
encourage increased ap-
ter plication. From a very small base in the 1960s, fertilizer use in Asia expanded
ter is divided into three sections. First, selected evidence is briefly reviewed on
IS dIVIded mto three sections. First, selected evidence is briefly reviewed on plication. From a very small base in the 1960s, fertilizer use in Asia expanded
to the
the point
point that
current
current trends
trends inin production,
production, inputinput use,
use, and
and productivity.
productivity. Second,
Second, potential
potential to that it it now accounts for
now accounts for nearly
nearly half half ofof total world fertilizer
total world fertilizer con- con-
sources of
sources of future
future productivity
productivity growth
growth are are discussed. Third, implications
discussed. Third, implications are are sumption. Fertilizer application levels in many irrigated lowland areas are
sumption. Fertilizer application levels in many irrigated lowland areas are now
now
drawn at or
or above
above recommended Emphasis is
levels. Emphasis is being placed on on the
the efficient
efficient man-
regarding the three likely prime movers
drawn regarding the three likely prime movers of future technical change
of future technical change in in at
agement
recommended levels. being placed man-
Asian
Asian agriculture:
agriculture: agricultural
agricultural research,
research, technology
technology transfer
transfer systems,
systems, andand eco-
eco- agement of of existing
existing doses,
doses, rather
rather than
than on on increasing
increasing application
application rates. rates.
nomic policies that support
support agriculture.
agriculture. Because intensive monocropping of rice had led to aa rapid
Because intensive monocropping of rice had led to rapid buildup
buildup in in insect
insect
nomic policies that
 ..
'~
462 Michael Morris and Derek Byerlee
populations, and because many of the early rice MVs lacked resistance to im-
portant pests, the introduction and spread of rice MVs precipitated a sharp in-
crease in the use of pesticides. But after rising steadily for several decades, pes-
ticide application rates on rice have recently started to decline in some Asian
countries, as health and safety effects have become more apparent, leading to
more widespread use of integrated pest management practices (Raheja 1995).
Pest management was and continues to be less of a problem in wheat than in
rice, partly because wheat is less prone to insect pest attack, and partly because
the early wheat MVs incorporated resistance to major diseases.
The diffusion of MVs also stimulated investment in irrigation, leading to a
surge in irrigated area during the 1960s and 1970s. However, growth in irrigat-
ed area has slowed in recent years, for two main reasons. First, many Asian ir-
rigation systems have become degraded through lack of maintenance, so a con-
siderable portion of irrigation investment now must be devoted to rehabilitating
existing systems rather than to constructing new ones. Second, most of the zones
that can be irrigated at comparatively low cost have already been identified, so
further expansion of irrigation capacity tends to be technically challenging and
correspondingly more expensive. The increasing costliness of irrigation means
that net returns to foodgrain production are often too low to justify installing ir-
rigation facilities exclusively to grow cereals. Opportunities for profitable in-
vestment still exist, but it is clear that most of the "easy" opportunities have al-
ready been exploited.
STAGES OF TECHNICAL CHANGE: A STYLIZED VIEW
The process of agricultural intensification in Asia can be depicted as occurring
in several stages, distinguished by the development and diffusion of technolo-
gies to substitute for emerging factor scarcities. According to this view, techni-
cal change in Asia's land-intensive cereals production systems proceeds through
the following four stages (Byerlee 1992):
I. Pre-Green Revolution Phase. Traditional varieties (TVs) are cultivated us-
ing negligible amounts of external inputs; productivity growth is modest,
and the main source of production increases is more extensive use of land
and water resources (e.g., expansion in area planted, a shift to more fertile
land, investment in irrigation infrastructure).
2. Green Revolution Phase. A technological breakthrough in the form of in-
put-responsive MVs provides the potential for a dramatic increase in land
productivity, expressed in the form of higher crop yields.
3. First Post-Green Revolution Phase (Input Intensification Phase). Farmers
increase their use of purchased inputs (e.g., fertilizer) and capital (e.g., tube
wells, machinery) to substitute for increasingly scarce land and labor.
4. Second Post-Green Revolution Phase (Input Efficiency Phase). Farmers
use improved information and management skills to substitute for higher
Maintaining Productivity Gains in Asian Agriculture 463
input use, leading to more efficient utilization of inputs while contributing
to the sustainability of the resource base.
These stylized stages of technical change can be depicted in the framework of
a conventional production function (figure I). During the Green Revolution Phase,
the introduction of MVs shifts the production function upwards (TV to MV 1)' in-
creasing crop response to complementary inputs such as fertilizer and irrigation
water and leading to a one-time surg~ in productivity (A to B). Initially, farmers
operate well below the production frontier MV 2' During the First Post-Green
Revolution Phase, input use intensifies as farmers become more familiar with the
technology, as input markets improve, and/or as input subsidies are introduced.
This allows them to move along the (suboptimal) production function (B to C),
using higher levels of complementary inputs to improve the allocative efficiency
of production. Finally, during the Second Post-Green Revolution Phase, farmers
approach the new production frontier (MV 2) by increasing the technical efficien-
cy with which they use inputs. Depending on the strategy followed by farmers,
use of complementary inputs may increase (D) or decrease (E) during this phase.
An additional dynamic element to be considered in interpreting technical change
in Asia is that the production frontier MV 2 can shift over time (not shown in
figure I) (upward, due to development of new land-saving technologies [e.g.,
newer MVsJ, or downward, due to natural resource degradation).
In Asia, observed changes in rates of growth of output, input use, and total
factor productivity (TFP) have been consistent with this stylized view of techni-
MV2
o
MV1
"0
aQj
>= TV
AS Phase 1 (technical breakthrough)
BC Phase 2 (input intensification)
CD, CE Phase 3 (increased input efficiency)
Input Level
Fig. I. Phases of Technical Change in Asian Agriculture (Source: Byer1ee 1992.)
 ..--- .-

464 Michael Morris and Derek Byerlee

Maintaining Productivity Gains in Asian Agriculture 465

TABLE 3
SOURCES OF PRODUCTIVITY GROWTH BY STAGE OF TECHNICAL CHANGE production in Asia will need to give greater attention to maintaining the quality
of the resource base.
Output Input TFP Main Source
Phase
Growth Rate Growth Rate Growth Rate ofTFP Growth
INSTITUTIONAL CHALLENGES
1 Pre-Green Revolution low low low
2 Green Revolution high high
3 First Post-Green Revolution
high-medium First generation MVs Since most of the easy gains from the original Green Revolution technologies
high-medium medium medium
(intensification) Second generation MVs have already been realized in Asia, particularly in areas where MVs have been wide-
4 Second Post-Green Labor-saving technologies
medium-low low medium Third-generation MVs ·Iy adopted, there will be diminishing payoffs to further intensification using current
Revolution
(increased efficiency) Labor-saving technologies input-based strategies. In many irrigated lowland areas, adoption of MVs is now
Efficient imput management virtually complete, fertilizer application rates are approaching optimal levels, with
low marginal returns to additional application, and the potential for affordable
irrigation is largely exhausted. By implication, if food production is to keep pace
cal change (table 3). Many parts of Asia are still in the First Post--Green Revo-
with projected increases in demand, new sources of productivity growth will have
IUlion Phase, as is evidenced by the persistence of a large technical efficiency
to be tapped. Future productivity growth is likely to come from three main sources:
gap for wheat and rice, which has been estimated at about 30 percent (Ali and agricultural research, technology transfer systems (extension and education), and
Byerlee 1991). This technical efficiency gap can be attributed to several factors,
agricultural support policies. However, as the following section makes clear, major
the most important of which appear to be weak adaptive research and extension institutional challenges will have to be overcome if the potential of each of these
capacity. as well as deficiencies in farmers' technical knowledge and level of three sources of future productivity growth is to be fully realized.
education (Hussain and Byerlee 1995). Some evidence suggests that the techni-
cal efficiency gap gradually narrows through time as farmers gain additional ex- AGRICULTURAL RESEARCH
perience with improved technologies and fine-tune their management practices; The four phases of technical change described earlier are useful in thinking
this narrowing of the technical efficiency gap corresponds to the Second about how the products and information needed from agricultural research sys-
Post-Green Revolution Phase, which is now under way in some areas with the
tems have changed over the years and how they will continue to change in the
adoption of input-efficient practices, such as integrated pest management and re-
duced tillage. future. During the initial phases of the Green Revolution (phases 2 and 3), pro-
duction technologies were largely input-based, and researchers focused on pro-
But the fit between the theory and the evidence is not perfect. One major in- viding MVs and standardized technical packages that could be extended to farm-
consistency involves observed changes in rates of total factor productivity
ers in blanket fashion. Strong local crop breeding efforts were needed to adapt
growth. During the transition from the First Post--Green Revolution Phase (input modem varieties to niches determined by agro-climatic conditions and cropping
intensification) to the Second Post--Green Revolution Phase (input efficiency),
patterns; national program plant breeders also helped to preserve host plant re-
TFP growth should account for a large and increasing share of output growth and
sistance to mutating insect pests and diseases. During the Second Post--Green
may even exceed output growth if input use declines due to greater efficiency of Revolution Phase (phase 4), new approaches to research are required in order to
input use. However. the record in Asia has been mixed on this score, and in re-
develop the sophisticated, site-specific management information needed to im-
cent years some regions that by now should be well into the Second Post--Green
prove input use efficiency and manage the natural resource base in the context
Revolution Phase have experienced low TFP growth coupled with rapid expan-
of increasingly complex cropping systems.
sion in input use (Pingali and Heisey 1996).3 Evidence of negligible productiv-
Over the long term, the challenge for researchers will be to continue to shift
ity growth in intensively cultivated rice-wheat systems has been reported by
the production frontier upward (outwards) through development of new tech-
Cassman and Pingali (1995) and Murghai (1996) for the Indian state of Punjab;
nologies. The major source of upward movement has been and will continue to
these authors attribute stagnating productivity to changes in the physical and
be varietal improvement. Since the Green Revolution, plant breeders have been
chemical properties of soils repeatedly flooded for rice cultivation then dried for able to raise the yield potential of wheat MVs at a rate of about I percent per
growing wheat. Recurring outward shifts of the production frontier attributable year. In rice, yield gains have been less dramatic, but recent technological break-
to continual adoption of newer MVs thus can be partially or perhaps even com-
throughs may enable more substantive shifts. Hybrid rice, which was developed
pletely offset by downward shifts caused by long-term resource degradation in China in the 1970s and has recently been introduced into other irrigated areas
(e.g., loss of soil fertility due to nutrient mining). This emerging evidence of a
of Asia, has resulted in one-time yield gains averaging 15 percent. The Interna-
slowdown in TFP growth serves as a warning that future efforts to increase food tional Rice Research Institute's much publicized effort to develop so-called "su-
 ~bb Mich<lel ."orris <llId Derek Byerlee
per rice" by drastically modifying plant architecture is expected to produce a
similar breakthrough in the next few years.
Much has been made of the potential of biotechnology to deliver technologi-
cal breakthroughs in plant breeding. While certainly important, biotechnology is
unlikely to generate another Green Revolution in the major cereal crops. In the
short-to-medium term, the main value of biotechnology will be to lower the cost
of conventional plant breeding by providing molecular markers which will allow
rapid identification of plants that carry (or lack) genes for specific traits. Also,
biotechnology is likely to enhance yield stability by allowing genes to be trans-
ferred from unrelated species into commercial cultivars. But for the next decade
or so, the only traits that are likely to be inserted successfully into cereal crops
are those conferred by a single gene or by very few genes, such as improved pest
resistance and improved herbicide resistance. To date, insect resistance has re-
ceived the greatest amount of attention in the developing world's biotechnology
laboratories. Genetically engineered rice MVs with new sources of resistance to
several major pests are expected within the next few years. Biotechnology has
also proved useful in developing maize hybrids with genes for insect resistance;
these hybrids will soon be available in Asia.
Yet, even if the remaining technological challenges can be overcome and ge-
netic transformation techniques live up to their considerable promise as tools for
applied plant breeding, there are many legal barriers to be overcome. Concerned
that transgenic plants could have negative effects on human health or the envi-
ronment, many countries have been reluctant to sanction their use, and through-
out most of the developing world it is still not possible even to test transgenic
plants (except sometimes in strictly controlled isolation facilities). In addition,
many of the tools and products of biotechnology have been developed in the pri-
vate sector and are considered proprietary. Considering the enormous sums that
private firms have invested in biotechnology research, most of them are unwill-
ing to grant access to their proprietary tools and products unless they receive
compensation (e.g., through licensing fees, royalty payments, or material trans-
fer agreements). For a number of reasons, then, commercial use of transgenics
remains a distant prospect.-l
These technological challenges underline the critical importance of increasing
investment in agricultural research. After growing rapidly during the post-Green
Revolution period, public investment in agricultural research in the developing
countries of Asia during the past decade has stagnated, at about 0.5 percent of
agricultural value added, much lower than in countries that have generated rapid
technical change on a sustained basis. The increasing commercialization of agri-
culture in many Asian countries has encouraged greater private investment in
agricultural research, but private-sector research tends to be narrowly targeted on
certain types of technology, such as hybrid seed. Other critically important ar-
eas, especially basic research activities with limited commercial applications, re-
main underfunded.
With funding for agricultural research likely to remain scarce, research man-
Maintaining Productivity Gains in Asian Agriculture 467
agers will have to identify research strategies that optimize the use of scarce hu:
man and capital resources. In seeking to identify efficient strategies, research
managers will be forced to make difficult tradeoffs between short- and long-term
objectives. One key issue involves the relative emphasis to be placed on the de-
velopment of embodied technologies (such as new seeds with enhanced input ef-
ficiency) versus the development of disembodied technologies (such as integrat-
ed pest management practices). On the one hand, committing additional
resources to efforts to embody more traits in seed necessarily means committing
fewer resources to efforts to develop new technologies capable of increasing the
rate at which the production frontier is pushed upward (Traxler et al. 1994). But
on the other hand, the cost involved in transferring embodied technologies to
small-scale farmers is usually quite small, and the technical knowledge and skills
needed to use them may be modest compared to that required for using disem-
bodied technologies.
These strategic issues have important implications for the organization of agri-
cultural research. In the years following the Green Revolution, research man-
agers in national research systems in Asia moved quickly to adopt the commod-
ity-based research strategy, which had been popularized by the international
agricultural research centers (IARCs).5 In most cases, highest priority was as-
signed to plant breeding research designed to develop second- and third-genera-
tion MVs, along with variety-specific management practices to enable these MVs
to express their superior genetic potential. The number of scientists engaged in
crop-breeding activities rose rapidly. By 1990, the level of investment in varietal
improvement research in Asia (expressed in terms of numbers of scientists per
million tons of crop output) was as high as in many industrialized countries.
Judging by the number of MVs developed and adopted, many of the specialized
rice and wheat research programs launched during and immediately after the
Green Revolution period have been very successful. Despite their record of past
achievement, however, most of these programs are unlikely to be as effective in
the future, because farmers' technology needs are changing. Future productivity
growth in Asia's intensively cultivated cereal cropping systems will come main-
ly from the adoption of improved crop and resource management practices that
are designed to close the remaining yield gap, to increase the efficiency of input
use, and to arrest or reverse the degradation of soil and water resources (Byer-
lee and Pingali 1995). Currently, most national research institutions in Asia are
not well organized to address these complex problems, which are threatening to
undermine the sustainability of intensive cropping systems. Organizational
changes will thus be needed to build multidisciplinary, systems-oriented teams
of researchers capable of working more closely with farmers to explore innova-
tive crop and resource management technologies (Hobbs and Morris 1996).
TECHNOLOGY TRANSFER SYSTEMS: EXTENSION AND EDUCATION
As Asian agriculture moves forward into the post-Green Revolution era,
knowledge and management skills will grow in importance relative to increased
 Maintaining Productivity Gains in Asian Agriculture 469
468 Michael Morris and Derek Byerlee
and pest
use of inputs as means of improving productivity. Numerous studies have
shown launch a campaign to increases farmers' knowledge about pesticide use
regular insect scouting exercise s and resortin g to pes-
that many of the variables associat ed with the technica l efficienc y gap relate to dynamics. By carrying out
ed basis, Indones ian farmers were able to reduce their
farmers' knowledge and manage ment abilities (e.g., farmers ' contacts with ex- ticides only on an as-need
ally. The campaig n was extreme ly cost effectiv e; a one-
tension, technical knowledge, and education). The increasing informa
tion inten- use of pesticides dramatic
ent of about US$40 per farmer resulted in annual savings in pesti-
ment practice s requires new and more effectiv e strate- time investm
sity of improved manage
gies for their transfer. cide costs of about US$18 per farmer (Wiebers 1996).
be ef-
the Some management practices will require community collaboration to
Given the complexity of many new information-intensive technologies, manage ment). Since indi-
technology transfer process will in future pose a much greater challeng e than in fective (e.g., water management, certain types of pest
adopt these practice s unless their
input distribu tion sys- vidual farmers will have little incentive to
the past, when the emphasis often was on strengthening market failure in the demand for infor-
comput- neighbors do as well, in order to avert
tems. The increasing reliance of farmers in industrialized countries on of mak-
erized planning systems and on farm- and crop-ma nageme nt software provide s mation it will be necessary to develop community organizations capable
s and acting upon them. This underlin es the importa nce of
a glimpse of where modem agricult ure in Asia is heading . In the many regions ing collective decision
sources of technolo gy dissemi nation to include private input
throughout Asia where farm size is too small to justify using such technolo
gies diversifying the
them at the village lev- suppliers, speciali zed consulta nts, farmer organiza tions, and NGOs.
at the farm level, ways will have to be found to employ
el. Such technologies could include soil- and tissue-testing equipme nt, pest-ide n- Complicating the issue of transferring a wider array of increasingly complex
the stage
tification kits, and, in the future, computers for accessin g expert manage ment information is the fact that Asian farmers are poorly educated relative to
which they are working . Studies
systems. of technological development of agriculture in
in educatio n, especial ly primary educa-
Farmers will increasingly tum to a range of sources for obtaining improve
d have shown that returns to investment
ion agricult ure (Hussai n and Byerlee 1995).
technical information, includin g the tradition al extensio n system, input dealers, tion, are high in post-Green Revolut
ly function ally illiterate (particu larly in South Asia),
NGOs, fanner organizations, and even paid consultancies. Public sector
exten- Because farmers are frequent
field little from written informa tion. Investm ent in rural schoolin g, as
sion services will have to be conside rably upgrade d if they are to provide they can derive
effectiv e,
staff with the advance d training and equipm ent needed to bring better decision well as in the institutional changes needed to make schooling more
ngly complex
aids to farmers. Beginning in the I970s, the training and visit (T&V) system
pro- have failed to keep pace with the demands imposed by increasi
partially
moted by the World Bank was institutionalized in many countrie s, particul arly agricultural technologies. Although improved extension services can
eness of extensio n services is
in South Asia. Although the T&V system met with some successe s, like many ... l substitute for low levels of education, the effectiv
of higher levels of educatio n, which allow the
other extension approaches it remained heavily oriented toward the promoti
on of greatly increased in the presence
n also in-
input intensification, rather than toward the promoti on of practice s designe d to use of a wider array of educational media. Higher levels of educatio
for informa tion and improve the efficienc y with which
increase input efficiency. crease farmers' demand
con- able to adapt informa tion to local situation s.
In many countries, the effectiveness of extension efforts has also been farmers are
ers, by the in-
strained hy poor linkages between extension agents and research AGRICU LTURAL SUPPOR T POLICIE S
tion, and by heavy reliance
ability of researchers to provide appropriate informa was
on a "recipe" approach to delivering extension messages, emphasizing
adoption At each stage in Asia's Green Revolution, the process of technical change
designe d to induce farmers to change their
of technological packages. In the future, extensio n services will have to give encouraged by programs and policies
policies
greater emphasis to their educatio nal role; only by understa nding the scientifi c practices. During the Green Revolution and after, these programs and
cir- of MVs and complem entary inputs, especial ly fertilize r and
basis of new technolo gies will farmers be able to adjust them to their own encouraged adoption
incentives
cumstances. The recent success achieved in several Asian countries
in training irrigation (Foster and Rosenzweig 1996). In most countries, adoption
program s (of-
farnlers to employ integrated pest management practices for rice demons trates were provided through input subsidies or through supervised credit
through public invest-
the value of this approach for improving input-use efficienc y (in this case by ten also subsidized). Food production was also promoted
s) and
sharply reducing input use). For example, in Indones ia, use of pesticid es on rice ment in rural infrastructure (irrigation systems, roads, marketing facilitie
on through supports to producer prices (Hayami and Ruttan 1985).
increased rapidly after the Green Revolution with intensification of cultivati agri-
and the associated buildup of insect populati ons. Encoura ged by extensio n and Although supporting policies continue to play an important role in Asian
evidenc e suggests that the kinds of policy mea-
pesticide dealers, farmers developed the practice of routine spraying
, as an in- culture, an accumulating body of
food pro-
surance measure. Eventually, growing recognit ion of the health and environ- sures favored in the past have outlived their usefulness. High profile
ent to such as the Masagn a 99 program in the Philippi nes and the
mental costs of excessiv e pesticid e use caused the Indones ian governm duction campaigns
 470 Michael Morris and Derek Byerlee
Maintaining Productivity Gains in Asian Agriculture 471

many rice and wheat campaigns in selected districts of India have succeeded in
and after the Green Revolution can be disaggregated into four distinct phases.
increasing production, but they have also generated fiscal costs that are proving
Prior to the release of modem varieties of rice and wheat, traditional varieties
difficult to sustain. In India, for example, fertilizer subsidies originally intro-
were cultivated using negligible amounts of external inputs; productivity growth
duced to boost cereal production now account for over 80 percent of public sec-
was modest, and production increases came mainly from greater use of land and
tor investment in agriculture and have crowded out investment in high-priority
areas such as irrigation and agricultural research. water resources (phase I). The initial adoption of MVs, which began in the
1960s, pushed the yield frontier upward and stimulated rapid increases in the use
In areas where the use of MVs and associated inputs is already intensive, in-
of external inputs, leading to a sharp jump in productivity (phase 2). Following
put subsidies can actually be counterproductive. Removal of these subsidies
the widespread diffusion of MVs, input use continued to increase steadily, reach-
gives farmers a major incentive to move toward more efficient use of inputs. This
ing high levels in many areas and reducing potential payoffs to further input in-
has been demonstrated in Indonesia, where removal of pesticide subsidies com-
tensification (phase 3). Most irrigated lowland areas are now undergoing a
bined with a massive program of farmer education in integrated pest manage-
process of technical change driven by the need to improve input efficiency, with
ment has led to a substantial reduction in pesticide use on rice (Wiebers 1996).
farmers using improved information to substitute for inputs (phase 4). Although
At the same time, new types of supporting policies are needed to foster
information-based technologies in many cases are proving successful, ~critical
changes in the way technologies are created and delivered to farmers. A good
question is whether upward shifts of the production frontier are being offset by
example involves policies relating to the protection of intellectual property rights
degradation of the resource base.
OPR) for agricultural technologies. Governments in many Asian countries ap-
With the potential of the Green Revolution technologies now largely exhaust-
preciate the importance of IPR laws in stimUlating private sector research, but
ed, new technologies will be needed to ensure continuing productivity growth in
they also realize that IPR laws are a mixed blessing. Predictably, with more at-
Asia's intensively cultivated cropping systems. The distinct features of these new
tention being paid to protecting intellectual property, most private breeding pro-
technologies will require significant changes in the organization of agricultural
grams have become less willing to exchange germplasm, and even some public
research, in the design of technology transfer strategies, and in the implementa-
breeding institutes have adopted more restrictive policies. This trend has been
tion of policies to encourage technical change.
accelerated by the decline in government support for research, which has forced
Agricultural research will need to be more decentralized, more strongly
many public breeding programs to look for alternative sources of funding; the
farmer-oriented, and more closely linked to the technology dissemination
sale of proprietary germ plasm is an obvious attraction. Thus, in seeking to de-
process. Greater fanner participation will be needed to adapt technologies to lo-
sign and implement effective IPR policies, governments are struggling to strike
cal circumstances, to improve the efficiency of technology transfer activities, and
a balance between providing enough protection to stimulate desirable levels of
to ensure the accountability of public research and extension organizations. Re-
private sector investment while safeguarding the interests of economically dis-
advantaged groups of the popUlation. search will have to be conducted within a systems framework that integrates in-
formation on several crops and management practices within a farming system.
New types of supporting policies will also be important in promoting the de-
Farmer organizations will increase in importance relative to individual fanners,
velopment and dissemination of information-based technologies, many of which
because many new informational technologies will have to be managed at the
have attributes associated with so-called public goods. Private companies con-
district and village levels.
sequently have difficulty earning profits from the production and sale of infor-
In the area of technology dissemination, the emphasis will have to shift from
mation-based technologies, which means they have little incentive to invest in
communication to education. Instead of merely seeking to deliver specific mes-
them. As a reSUlt, public research institutes generally must take the lead in their
sages to farmers, extension agents will have to concentrate on providing farm-
development, and the public sector has an important role in creating public
awareness efforts and in training. ers the knowledge and skills needed to better manage information-intensive tech-
nologies such as integrated pest management. The goal must be to increase
farmers' demand for information by strengthening their ability to seek and
CONCLUSIONS process information from diverse sources and to adapt it to their own specific
circumstances. The use of sophisticated computer-based technologies and deci-
During the past three decades, extraordinarily rapid technical change in Asia's
sion aids will increase, particularly in specialized technical areas such as soil test-
agricultural sector has allowed cereal production growth to keep pace with a
ing, tissue analysis, and pest scouting. The fact that information-based tech-
steadily expanding population, while at the same time boosting rural incomes
nologies will place a premium on literacy and education levels could increase
and redUcing real prices paid by consumers for major food staples (David and
inequalities among fanners much more than occurred during the Green Revolu-
Otsuka 1994). The process of technological change experienced in Asia during
tion. Because education is unequally distributed in the farming population,
 Maintaining Productivity Gains in Asian Agriculture 473
472 Michael Morris and Derek Byerlee

wealthier farmers are likely to benefit disproportionally from information-based Era." Natural Resources Group Paper 96-01. International Maize and Wheat Improvement Cen-

technologies, because of their greater ability to access information. ter (CIMMYT), Mexico, D.E
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Kumar, P., and Mruthyunjaya. 1992. Measurement Analysis of Total Factor Productivity Growth in
I. There is still much scope for increasing cereal yields in rainfed areas, especially through in- Wheat. Indian Journal of Agricultural Economics 47 (3): 451-58.
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