List of Contents

Page
Introduction to the Series (iii)
Introductory Remarks Professor Syed Nawab Haider Naqvi 3
Lecture I Agricultural Growth and Employment 13
Discussion 34
Concluding Comments
Professor Syed Nawab Haider Naqvi 49
Lecture II Research Needs for an Agricultural and Employment
Growth Strategy 55
Discussion 75
Further Reading 85
References 85
Concluding Remarks Professor Syed Nawab Haider Naqvi g^
Appendix: Biographical Sketch of Prof. John W. Mellor 95
 LECTURES IN DEVELOPMENT ECONOMICS
The purpose of this new series is to create useful knowledge about
development economics and to disseminate it widely. It is not possible
to prescribe exactly the topics that will be discussed in this series.
Indeed, it would not even be desirable to do so because this subject is
still developing. The mystery of the development process is not yet fully
understood. The days of chivalry, when economic development was seen
as simply a function of physical capital formation, are gone. The
importance of such factors as human capital, education and religion as
determinants of both the rate and the composition of economic growth
is now gradually recognized. And then there are the efforts to understand
more clearly the relationship between economic growth and income
distribution, In this connection, the vital role of structural reform is
also being realized. The practical (social and political) requirement of
alleviating the incidence of absolute poverty has brought to the fore the
key role of agricultural development. Furthermore, there is now a
greater awareness of the importance of endogenizing the demographic
variables in order to understand fully the problem of underdevelopment
as well as the many ways of solving it.

In direct proportion to the comprehension of these issues, the

intellectual fashions have changed among economists. And there are no
signs — a healthy sign, of course — that economists will remain far
behind Valley Girls in their love of fashion. As such, we have left it to
the contributors to this series to decide on the topics of their lectures.
Still, it is to be expected that economists, as if guided by an 'invisible
hand', will select areas of enquiry that are most relevant not only
theoretically but also for practical policy-making.
 The contributors to this series are all members of the Advisory
Board of the Pakistan Institute of Development Economics (PIDE) and
of the Editorial Board of The Pakistan Development Review. The visits
of these outstanding economists have been made possible by a generous
grant from the. Ford Foundation, which is administered by the Institute
of International Education (HE), New York. It is to be hoped that the
success of this series, which we can predict with certainty, will lead to
greater financial support from the Ford Foundation and other donor
agencies. Even more important is the 'fact' that these contributions will
serve the cause of knowledge formation in an area where its marginal
productivity is most likely to be optimized.
The present lecture by Prof. John W. Mellor is the seventh in the
series. Prof. Mellor, a member of the International Editorial Board of
The Pakistan Development Review (PDR), is an outstanding authority in
the general area of Agricultural Economics. It is in this area that his
intellectual contributions are most noteworthy. The two lectures pub-
lished here, along with the lively discussion that follows, should be of
great interest to academic economists and also to policy-makers. It is
hoped that this publication will be read with interest throughout the
world by the concerned social scientists.

Syed Nawab Haider Naqvi

(iv)
 INTRODUCTORY
REMARKS
by
Professor Syed Nawab Haider Naqvi
 INTRODUCTORY REMARKS
by
Professor Syed Nawab Haider Naqvi
Professor Mellor, distinguished guests, ladies and gentlemen;
It is my pleasure to briefly introduce, in the next ten minutes or
so, our distinguished speaker in the PIDE/PSDE series of Lectures in
Development Economics.
Professor John W. Mellor is one of the leading lights in the foggy
area of agriculture economics. His work, along with that of a few others,
is largely responsible for lending legitimacy and respectability to agri-
culture economics as a distinct and important field of enquiry in its
own right—indeed, for bringing agricultural economics within the fold
of the highly cultivated culture of economics. I am sure that there would
not be many serious graduate students who have not benefited from his
seminal contributions to the subject which are invariably marked by an
exceptional degree of expositive lucidity. I myself had the privilege of
reading his many articles as a graduate student at Princeton.

Professor Mellor is currently the Director of the International

Food Policy Research Institute. — IFPRI, for short — at Washington,
D.C., a position that he has held since 1977. To get there he has had to
work hard. To begin at the beginning, he entered Cornell in 1950 as
an undergraduate student and did not really leave Cornell's precincts till
1977. His first (intellectual) 'crush' on Cornell culminated in his
accepting a lectureship there in 1952. He obtained his Ph. D. in 1954.
4

In the meantime, as if to inhale some fresh air, he also went to Oxford

University from where he obtained a diploma in agriculture economics
with distinction. He reached the apex of the academic profession —
won full professorship — in Agricultural Economics in 1965.
While establishing himself firmly as a first-rate academic, he also
started accumulating a lot of academic-cum-administrative experience.
He was Acting Director, Centre for International Studies, and Director
of the Program on Comparative Economic Development, and Chief
Economist and Associate Assistant Administrator for Policy Develop-
ment and Analysis with USAID. He has also been the Director of
several important research projects, including the USAID and Cornell
University projects on "Agricultural Prices in Economic Development:
Their Role, Function and Operation" and the "Analysis of the Direct
and Indirect Effects of Technological Change in Agriculture". As
Director of IFPRI, Professor Mellor has been instrumental in furthering
research ties with several institutions in the developing world, including
our own. With our mutual blessings, the PIDE-IFPRI collaboration has al-
ready given birth to a full-length study, Household Food Security in
Pakistan: The Ration Shop System. I am sure that time will confirm that
the institutional collaboration between the PIDE and IFPRI is more than
just a marriage of convenience.
Professor Mellor has published more than a hundred research
papers and several books that have helped to bring about a "structural
transformation" in the realm of agricultural economics (see Appendix
A for a list of his complete works). In recognition of the many shining
landmarks that he has created for the students of the subject, a grateful
academia has showered on him many an honour and award. In 1967, he
won "the best published research award" of the American Agricultural
Economics Association for his pioneering work, "Towards a Theory of
Agricultural Development". In this paper, he takes issue with the
accepted litany of the Lewis, Fei-Ranis models on the ground that these
models "tend to minimize the difficult problem of how surplus is
extracted from agriculture" (p. 25). On the other hand, the Jorgenson
model is found wanting because, contrary to all empirical evidence, it
"emphasises a situation in which the entire agricultural population is
 5

living at minimum subsistence levels" (p.26). But he does glean from

the Lewis model the key role of food as a wage good, and from the
Jorgenson model the central importance of technological change in the
agricultural sector, Both these ideas are put to good use in Professor
Mellor's own model, In 1978, the American Agricultural Association
honoured him by recognizing his book, The Economics of Agricultural
Development, with the award of "publication of enduring quality".
The book has since then passed the stiff 'endurance test' prescribed by
the academic profession for classics. Most of the ideas that he later
elaborated are stated there. Again, in 1986, the Association bestowed
the "enduring quality" award on his seminal paper, with Bruce Johnston,
that appeared in the AER in 1961 and was largely responsible for defin-
ing the state of the art at the time by dispelling the "false dichotomy of
agricultural versus industrial development". A major contribution of
this paper was its thesis that to free the (agricultural) leviathan from the
chains of Ricardian diminishing returns, agricultural productivity must
be increased through technological change. His "constructive work
which has remarkably promoted and developed the securing of nutrient
supply for mankind" won him the Wihuri International.Prize in 1985.
He is the first social scientist to win this prize. In 1987, he received the
Outstanding Alumni Award from his alma mater; and in the same year,
he won the Presidential End Hunger Award. To have won so many
awards for breaking new ground in the 'labour abundant' and 'capital
scarce' discipline of agricultural economics is a truly great achievement.
Professor Mellor has spent a lifetime analysing the nature and role
of agriculture in the process of economic growth and attempting to
determine "the scope for synthesizing an agricultural role into the
mainstream of development thought". He has persistently argued
1

"for treating agriculture as a separate delineable sector in the theories

of development" because the growth of agriculture depends not only
2

on the sector itself but also on what happens in the rest of the economy.

'john W. Mellor. "Agriculture on the Road to Industrialization". Ch. 2 in J. P. Lewis

and Kallab (1986). Development Strategies Reconsidered. Overseas Development Council, p. 67.
2John W. Mellor. " T o w a r d s a Theory of Agricultural Development". In H. M. Southworth
and B. F. Johnston (1969). Agricultural Development and Economic Growth. New York:
Cornell University Press, p. 21.
6

By thus delving deeper into a lot of virgin territory, he has helped to

understand the "dynamic balance between food supply and demand".
He has focussed specifically on increasing the supply of food to
mobilize labour and to contain the rising capital intensity in developing
countries; on the inevitability of introducing technological change to roll
back the onslaught of the Ricardian diminishing returns; on the need to
increase rural employment to stimulate growthi in the non-agricultural
sectors by restructuring effective demand in favour of wage goods; on
the necessity of achieving a better allocation of scarce capital resources
between agricultural and non-agricultural activities; and on studying the
effects of changes in food prices on agricultural output and rural
poverty.
He emphasized quite early in his academic career the need to
study the relationship between agricultural and non-agricultural sectors,
and to build empirical bridges between these sectors to facilitate an
understanding of the "nature of agriculture's role in the process of
economic growth". In his classic paper of 1961 he clearly recognized
that "economic development is characterized by a substantial increase
in the demand for agricultural products, and failure to expand food
supplies in pace with the growth of demand, can seriously impede
economic growth". This is so because "if food supplies fail to expand
in pacc with the growth of demand the result is likely to be a substan-
tial rise in food prices leading to political discontent and pressure on
wage rates with consequent adverse effects on industrial profit, invest-
ment and economic growth". The concern for increasing food supplies
3

as a means of mobilizing rural labour force has since then remained a

central theme in Professor Mellor's thinking on the subject.
In his authoritative 1984 paper, which he terms a "lineal descend-
ant" of his 1961 article, he cites yet another basic reason why the
growth in the agricultural and non-agricultural sectors should be seen as
interdependent. Recognizing that "extremely low capital/labour ratios
in the dominant rural sector are at the heart of the development
3B. F. Johnston and J. W. Mellor. "The Role of Agriculture in Economic Development".
American Economic Review. Sept. 1961. (pp. 571, 573 respectively).
 7

problem", a dualistic pattern of development which concentrates capital

4

in the modern manufacturing sector is seen as counterproductive.

He, therefore, prescribes that scarce capital resources be 'spread'
between sectors to optimize overall growth. He argues for a "food-
and labour-intensive" development and shows that the increased
production of food plays the role of promoting a pattern of effective
demand which is consistent with the low capital/labour ratios in
developing countries; as well as the role of providing wage goods essential
to labour mobilization.
Professor Mellor's intellectual odyssey, in the forbidding and
dense area of agricultural economics, of which I have just recounted the
basic dimensions, has had but one overarching conception as his guide,
namely, to relate agricultural and overall economic growth to the
reduction of widespread poverty and hunger. Indeed, he is one of very
few economists who have understood the complexity of the prob-
lems of relating economic growth to poverty. He shows his full
awareness of this problem in his 1984 article, wherein he states that
"the reduction of malnutrition and related manifestation of poverty
requires a set of interacting forces, characterized as a ring, that link
nutritional need, generation of effective demand for food on the part of
the poor, increased employment, a strategy of development that
structures demand towards goods and services which have an employ-
ment content, production of wage goods and an emphasis on growth in
agriculture" (p. 533). What Professor Mellor is stressing is that, in order
to make an impact on poverty, economic growth must focus on a strat-
egy which is essentially "agriculture-led" and (rural) "employment-
led". Notice that this is not exactly the same thing as the "balanced
growth" strategy, which he whole-heartedly advocated in his 1961 paper
to promote agricultural and industrial development. This transition in
his thinking reflects a refinement of his earlier ideas based on nearly
three decades of exhaustive research in the developing countries, espe-
cially India — where, incidentally, he also found his "better half". While
accepting that the eventual transition of underdeveloped economies from

4 J . W. Mellor and B. F. Johnston. "The World Food Equation". Journal of Economic

Literature. June 1984. p 551.
8

a predominantly agricultural to a predominantly industrial-cum-services

economy must take place as the economy moves up the development
ladder, he has come to realise, even more than in the past, the virtues of
his first love, namely agriculture, in maximizing growth and employment.
And in order to prove that his love for agriculture (and food pro-
duction) is not merely an infatuation, but is based on "rational"
grounds, he has made several important contributions. Notable
amongst these is the 1981 Lele and Mellor study, which showed labour
supply as a function of the separate but related food and labour
markets. Out of this Lele-Mellor symbiosis has been born a clear
5

understanding of the crucial relationship between the need for expand-

ing agricultural employment and of increasing the production of the
wage good, i.e., food. As higher agricultural employment puts greater
income in the hands of the poor people who tend to spend 60 to 80
percent of their incomes on food, a failure to increase the output of
food would raise food prices, which is undesirable because a higher
price of food is poverty-increasing. Hence, the need for achieving "a
6

high-level equilibrium between food production and employment",

which Mellor justifies both "on social-welfare grounds and because it
leads to a higher overall rate of growth".
Ploughing ever deeper, Professor Mellor parts company with the
traditional Lewis and Fei-Ranis formulations, which model developing
countries as 'blessed' with highly elastic, "unlimited supplies of labour",
possessing zero, or very low, levels of productivity. In the Lewis and
Fei-Ranis models, since the surplus agricultural labour lives on the
margin of subsistence, no additional food (wage goods) supplies are
needed to mobilize labour for. employment in the manufacturing sector,
which is seen as essentially a capital-intensive activity. Thus the employ-
ment growth in these traditional models is constrained by the availa-
bility of capital. Not so in the Mellor model, in which "if food supply
sUma Lele and John W. Melloi. "Technological Change, Distribution Bias and Labour
Transfer in a Two-Sector Economy". Oxford Economic Papers. November, 1981.
Mellor showed in his 1966 paper that a higher-price food relative to non-agricultural
6

goods also turns the (domestic) terms of trade in favour of agriculture, which is undesirable for a
number of reasons-e.g., it redistributes income in favour of a low-saving sector and it discourages
the flow of rural labour to urban jobs.
 9

is not expanded, increased employment will cause the price of food to

rise, squeezing the real incomes of labourers back nearly to the previous
level, reducing the incentive to work, placing upward pressures on wages,
and reducing employment". 7

To summarize, the "agriculture- and employment-led strategy"

that Professor Mellor has finally settled on has three essential interact-
ing elements. Given the constraints on the available land area, the
proposed strategy hinges on "land-augmenting" technological change
designed to increase both output and employment because the
production techniques it throws up would tend to be less capital-
intensive than those found in the non-agricultural sector. Accelerated
growth in rural employment due to appropriate technological change
would stimulate the demand for non-agricultural output. And, finally,
the overall structure of demand for goods and services would be
orientated towards more labour-intensive activities to contain the
undue rise in capital-intensity and to maximize employment generation.
In his model this is assured partly through the nature of technological
change in agriculture, the dominant sector, and partly through the
linkages between agriculture and the rest of the economy.

For Hamlet, the play itself, I now call upon Professor John W.
Mellor. I also take this opportunity to congratulate Professor Mellor on
finally completing his long march (or shall we say Yatra?) from India to
Pakistan, via Washington!

7John W. Mellor. "Agriculture on the Road to Industrialization". Ch. 2 in J. P. Lewis and

Kallab (1986). Development Strategies Reconsidered. Overseas Development Council, p. 77.
 Lecture I
AGRICULTURAL GROWTH
AND EMPLOYMENT
 Lecture I*

AGRICULTURAL GROWTH AND EMPLOYMENT

Professor Naqvi, Dr Chaudhry and distinguished guests:

The growth record in Pakistan has been admirable, particularly
compared to other countries at roughly the same level of per capita
income. But, more important to the theme of my lectures, the growth
of agriculture has played an important role not only in its direct contri-
bution to overall growth, but in its indirect effects. It is those indirect
effects on both overall growth and particularly on employment that I
will emphasise in my lecture today.
I begin with a basic idea about agricultural and employment growth:
if you get agriculture growing rapidly and if you have employment grow-
ing rapidly, you have done the basic job of economic growth and develop-
ment. If those two elements in the process are moving well, the bulk of
the population is participating in growth. That is basically what develop-
ment is all about.
Conversely, in countries achieving growth largely or solely through
the non-agricultural sector and hence largely with very low employment
growth rates, both overall rates of growth and participation in growth are
low. Such countries may look quite successful in terms of the appearance
of modernization, but that appearance is deceptive by the appropriate
development measures of growth and participation. I would like to deal
with a number of what may seem to be simple and well known points—
but ones so fundamental and yet so often ignored that it is useful to
discuss them systematically.
T h i s and the following lecture are based on a series of lectures delivered at the Pakistan
Institute of Development Economics, Islamabad, Pakistan in December 1986. The author
appreciates the assistance of Frank Z. Riely and Sohail J. Malik for their substantial work on
these lectures.
14

While emphasizing the fundamental nature of the agricultural sector

in growth, we want to be very careful not to jump to particularly impor-
tant wrong conclusions about the long-term position of agriculture. The
reason for emphasizing agriculture is not that we want it to remain the
dominant sector of the economy, but precisely because emphasis on
agriculture can move the process of transformation of the economy away
from agriculture more rapidly than any other initial emphasis.
Development is basically concerned with changing consumption
patterns such that the agricultural commodities, particularly food com-
modities, rapidly decline in relative importance in consumption. People
want to consume much more than food in their consumption patterns —
more housing, clothing, and a whole range of modern goods and services.
Thus, with development, agriculture must decline in relative importance
in the economy, And, we also note that we cannot absorb more than a
small proportion of the growing population in agriculture. Agriculture
will not be able to productively employ even the large number of
people already working in the sector at very low levels of productivity.
The structure of employment has to change rapidly towards a high pro-
portion of the population in the non-agricultural sector.
So when we talk about the relationship between agriculture and
employment growth in overall growth, what we are concerned about is
the initial role of agriculture in a process of transformation. Now that
is very confusing to a lot of people. Many people think that if the
objective of development is to transform the economy towards the
non-agricultural sector, it seems rather strange that one would start by
emphasizing agriculture. I will, of course, deal with a number of reasons
why that movement is necessary. But let me just provide one rather
normal number to you to drive home this point about the economic
transformation.
From the employment point of view, we would have to consider it
very fortunate indeed if the elasticity of employment in agriculture with
respect to growth in agriculture was as high as 0.6. In other words, if for
each one percent of growth in the agricultural sector you can get 0.6 per-
cent growth in agricultural employment, that would be a very high
 15

number. Indeed, with the increase in modernization of agriculture, we

find many situations in which that employment elasticity is as low as 0.2
or 0.3. If you think in terms of normal ceilings to agricultural growth
being in the 4 and 6 percent range, you can see that it is virtually impos-
sible for agriculture to productively absorb even the full growth of
population in a developing country. With a 6 percent rate of agricultural
growth and an elasticity of 0.6 percent, direct agricultural employment
could grow at a rate of 3.6 percent, but these conditions are not likely to
be obtained anywhere over a period of time. Thus, agricultural growth
alone certainly cannot provide a high level of productivity for all of the
existing population in agriculture.
We should keep one other point about development in mind in this
respect: what we are pointing towards is getting up into the 6, 7, or 8
percent rates of overall growth in the economy. There is no way that
agriculture alone can provide such rates of growth. It can contribute
only through relatively rapid growth on its own and then through
stimulation of other sectors which must then grow at a faster rate than
agriculture.
I will briefly discuss three points with respect to agriculture and
employment relationships: first, the relationship with respect to wage
goods; second, the relationship with respect to the structure of demand
in the society; and, third, the direct relationship with poverty.
I start with the wage goods argument. Basically, in a developing
country with a major agricultural sector and with a relatively low-income
labouring class, you cannot increase employment without rapid growth
in the domestic production of agricultural commodities. Not even trade
can save the economy from the problems which are presented by failure
in agriculture. I will dwell on each of those points sequentially,
Let us start with a simple one which we all understand. The marginal
propensity to spend on food of low-income labouring class people is very
high — on the order of 60 to perhaps as high as 80 percent. This means
that if you increase employment in a low-income developing country,
you inevitably increase the demand for agricultural commodities, and
16

foodgrains in particular, by the extent of 60 to 80 percent of the incre-

mental wage bill. In the early plans of the Soviet Union and the second
5-year plan in India, there was a view that you could increase employ-
ment by marshalling the underemployed labour in the economy with
their existing level of food consumption and use them to produce capital
goods. I think we are all clear now that that simply is not possible.
If you marshal underemployed labour in the agricultural sector for
growth in other sectors, you have to induce them to provide that labour
through an increase in the total wage bill. That increase in the wage bill
will be largely spent on agricultural commodities. Now, what happens if
you increase employment at a substantial pace and do not increase the
supply of wage goods or, in other words, if you do not increase agricul-
tural production? Obviously, what you get are very powerful infla-
tionary forces. If you increase the wage bill, that increase will be spent
largely on food. If the supply of food is not increased, those additional
expenditures will naturally increase the price of food. Since demand for
food is quite price inelastic, even small increases in the wage bill will tend
to give substantial increases in food prices.
Following a neoclassical argument, we can see how that will choke
off the growth of employment. Rising food prices, in order to keep
equilibrium with respect to the labour force, will force a rise in the wage-
rate of labour relative to what labour produces in the form of non-agricul-
tural commodities. That will in effect make labour relatively more
expensive than capital. The economy will, in a neoclassical context,
move gradually into substitution of capital for labour, reducing the
demand for labour. There will be two subsequent effects.
Obviously, a poverty effect follows a reduction in the demand for
labour: there is a reduction in opportunities for increases in the real
income of the labouring class. There is also a growth effect. The eco-
nomic growth rate will be reduced because you are moving your economy
away from the utilization of labour which is an abundant resource
towards the utilization of capital which is ascarce resource.That is clearly
a sub-optimal solution.
 17

I make a small technical comment in this respect. The way to look

at the whole question of wage goods in labour mobilization in a develop-
ing economy is in the context of a two-market situation. The labour
market is, in effect, the product of the labour market per se and the food
market. The supply of labour is highly-elastic; its demand depends on a
whole range of variables including the pace of capital formation. But the
labour market also is a function of the wage goods (food) market, with
its own supply and demand. Final equilibrium is an equilibrium between
these two markets — the labour market and the food market.

Thus, in a country like Pakistan, one faces a highly elastic supply of

labour per se and may, a point I will cover in a moment, face an inelastic
supply of food. If the supply of food is inelastic and we look at the
equilibrium between the labour market and the food market, we then
find the inelasticity of the food market enforcing on overall inelasticity
in the labour market. That is something which is very important to keep
in mind and to which we will return.

I have been running through a more than one century-old neo-

classical explanation of why you cannot increase employment faster
than the growth in the basic supply of wage goods. The presentation is
in a closed economy context. I will give a trade modification to that in a
moment. But first I must point out that very few countries operate in a
neoclassical way. Instead of the rising price of wage goods pushing up
the price of labour with respect to the output from labour and so on,
what normally happens is that governments respond to the rapidly rising
wage goods bill (food prices) because these inflationary forces pose
serious economic problems and, not least of all, political problems. The
government will then normally institute an anti-inflationary policy either
through monetary or fiscal measures.

The only way those measures can succeed, which will always be
glossed over by the political system, is by constraining the growth of
employment. That will be done by a tight fiscal policy (cutting back
government expenditures and the employment growing from government
18

expenditures), or a tight monetary policy doing what it always does first —

constraining the supply of working capital. Firms that are labour-inten-
sive tend to be materials-intensive also and hence are particularly
vulnerable to any reduction in working capital.
Thus, a tight monetary policy will constrain expenditure on employ-
ment by private firms and businesses and even farms. An anti-inflationary
policy, in this context, has to be an anti-food consumption policy and,
therefore, is an anti-employment policy. Of course, it is not govern-
ment's preferred choice to reduce employment, but through the pres-
sures on them to relieve inflationary forces, they have to move on that
front. Obviously, if inflation is rising from some source other than
increased employment, then the anti-inflationary forces need not work
through employment. But clearly if the source of inflation is rising food
prices, then the government must operate on the employment front.
Now, what about the possibility of dealing with the wage goods
problem by imports? We know that, in a sense, that is possible because
countries like Singapore and Hong Kong have managed to increase
employment very rapidly without a vigorous agricultural sector. For all
practical purposes, they do not even have an agricultural sector.
We must understand however that in a large country in which you
have a large agricultural sector and a large underemployed labour force —
neither of which applies to the city states like Hong Kong or Singapore —
if you move employment at a pace more rapidly than the domestic
production of wage goods and try to meet the resulting gap with
imports, you very shortly find the import magnitudes so large that you
gradually have an impact on the real exchange rates.
You quickly, in a matter of two, three, four years, see imports of
agricultural commodities, wage goods as we are calling them here,
moving to a level which pushes up the aggregate amount of imports.
That will cause a trade and balance-of-payments imbalance which finally
affects the real exchange rate. That will then push up the price of food.
That holds even though the international price is stable and even though
you have a very minuscule effect on total trade in agricultural commodi-
ties. The domestic price effect is caused purely by the exchange rate
 19

effect from rapidly increasing food imports. You obtain a real exchange
rate that has the effect of raising real food prices and, therefore, the real
price of labour. Some counter-measures are likely to be taken, either
through neoclassical forces working through the market or, more likely,
through government actions to restrain food imports. In the latter case,
the domestic price rises directly in response to reduced imports or
through anti-inflationary fiscal or monetary policies of the type
previously discussed. Either way, employment is squeezed.

We have seen these forces very clearly in African countries in the

last decade. There you have had rapid growth of employment basically
stimulated by massive foreign assistance which is driving up demand for
home-goods. Countries try to keep food prices down in that context by
moving heavily into the import market. Imports of food grow very
rapidly. That eventually affects the real exchange rate and therefore
pushes up the domestic price of food.

The World Bank and various other institutions have been berating
Africans for not doing something about raising their real food prices,
never noticing that the real food prices in most African countries have
been rising rapidly, essentially through more or less neoclassical forces of
the type which I have just outlined. Thus, we see potential for a substan-
tial wage goods problem in developing countries if they try to increase
employment rapidly.

Now, let us turn the argument around. What if, in fact, the agricul-
tural sector is moving at a reasonably rapid rate but the economy is not
experiencing sufficiently rapid growth of employment? What policies are
needed to accelerate growth in employment? What is the role of agricul-
ture in that context?
Accelerating growth in employment in a developing country is
basically a dual problem. The first element of the problem is expanding
the savings and investment rates. Development in the final analysis is
substantially a matter of increasing capital intensity. In fact, if you
define capital broadly so that it includes human capital, including
20

expenditures on the development of institutions such as research in agri-

culture and in other sectors, then the whole process of development is a
process of increased savings, increased investment and, gradually,
increased capital intensity. So if we want a rapid rate of growth in
employment, eventually at least, we have to move to higher saving rates.
At least in the long run, this is a serious problem for Pakistan.
Pakistan has an unusually low savings rate even compared to countries
achieving a considerably slower growth rate. Of course, with such a
vigorous small- and medium-scale sector in Pakistan, it is likely that the
savings and investment figures are both understated somewhat, simply
because a lot of savings and investment is occurring in sectors in which it
is difficult to enumerate and estimate in national statistics. But even
with an adjustment for such under-reporting, it is probably correct that
Pakistan's savings rate is on the low side and, therefore, a source of
concern.
But, there is a second aspect to the whole question of providing
capital to increase employment. That is the capital spreading problem,
It is typical in developing countries to have a high proportion of the
nation's capital concentrated in creating employment for an extremely
small proportion of the total population — a concentration of capital
in a few large-scale, highly capital-intensive industries — thereby leaving a
small amount of capital to be spread extraordinarily thinly over the rest
of the labour force.
I want to emphasize that the capital-labour ratio in production is
the quantity of capital divided by the quantity of labour. So it is in-
correct to talk pejoratively about developing countries following capital-
intensive strategies of development. The problem is not that the strategy
is capital-intensive. The problem is that the strategy is bimodal — the
increments to investment are divided very unequally and part is invested
in very capital-intensive processes and part in labour-intensive processes.
The serious problem in developing countries is that commonly a
very large part of capital is concentrated in a very few capital-intensive
industries, therefore, leaving a very small part spread very thinly for the
 21

rest. In fact, one can argue that in a number of developing countries,

there may be declining capital intensity for the bulk of the labour force
in those countries. This may well be the case in India, it is almost certain-
ly the case in the Philippines, it probably has been historically the case in
China for a considerable period of time.
In these circumstances, there is so much concentration of capital
in the capital-intensive industries that the amount of capital left over is
not sufficient to absorb even the population growth in the rest of the
economy, let alone allow any gradual increase in capital intensity. That
is the antithesis of economic growth and development. We know very
clearly from the work of J. R. Hicks that it is an absolutely suboptimal
situation. Even though Hicks did not emphasize the problems of develop-
ing countries, he did observe that dualism in investment patterns resulted
in much less employment growth than might have been the cases.
We must realize that the problem of capital spreading is not an easy
problem to solve. We know there are a number of industries in which the
most capital-intensive processes, ones that use a huge amount of capital
per worker, are the lowest-cost processes even if labour is virtually free.
Perhaps the best example is fertilizer production. If you are to
produce fertilizer, no matter how cheap your labour is, the low-cost
process is going to be an extremely large-scale plant with an extremely
capital-intensive process. We very recently had a controlled experiment
on this in the People's Republic of China where they tried to produce
fertilizer on a small-scale basis. They, of course, had extremely
low-priced labour. Nevertheless, they ended up with a cost of producing
nitrogen that is on the order of several times higher than nitrogen pro-
duced in large scale, capital-intensive plants built in China itself. In
other words, they had a controlled experiment that showed very clearly
that the lowest cost technology even in low labour cost countries is in
the highly capital-intensive processes. Therefore, you have a very diffi-
cult problem if you find, as we do, that modernizing agriculture requires
rapid growth in use of commercial fertilizers. How do you handle that
situation? Trade provides the answer, another issue to which we will
shortly return.
22

Another example of an innately capital-intensive industry is electric

power generation. We find that generating power is done much more
cheaply through capital-intensive processes, no matter how cheap labour
is. And we find, for example, that probably the single most important
input into many small-scale industries in developing countries is cheap
electric power. We find all sorts of very labour-intensive industries still
needing electric power if they are to compete with other industries. And
we know of no way of producing electric power except through capital-
intensive processes. We also find that, for all practical purposes, electric-
ity cannot be imported. Thus, the question of capital spreading is not
one that can be solved entirely by choice of technique. Some capital-
intensive goods must be produced domestically. Development cannot
have simple, immutable rules.
Fortunately, we also know that for a large number of goods and
services, there is a wide range of techniques, such that if you have low-
labour costs, the optimal technique is a very labour-intensive technique.
Thus, constraining capital intensity is difficult but not impossible. If we
want to have rapid growth of employment, we have to structure the
economy in such a way that emphasizes production of those goods and
services which can be produced economically through labour-intensive
technologies.
There are two principal means of structuring an economy towards
commodities and outputs which can be produced through labour-
intensive techniques. One is through trade — import the capital-intensive
goods and services and export labour-intensive goods and services. We
now have ascendent in development economics, a concept of export-led
growth. I want to emphasize some problems with export-led growth
before returning to discuss a more modest but nevertheless important
role for trade in a high-employment strategy of growth.
South Korea epitomizes trade-led growth. South Korea initially
neglected its agriculture, emphasizing a highly expansionary policy in
manufacturing. The international market was the primary source of
demand for that rapidly growing industrial output. Because agriculture
was initially stagnant, trade necessarily provided the market for increased
 23

output. Subsequently, Korean agriculture has been pulled up by the

demand growing from the successful industry, not the other way around.
We can see from the Korean example that two conditions are necessary,
if growth is to be led by exports.
First, there must be a generally expansionary global trade environ-
ment, which we have had over the last few decades. It is important at
present to be concerned as to whether we will continue to have such
rapid growth in international trade in the future. Second, you need very
large capital inflows. The large capital requirements are necessary to
achieve rapid overall growth primarily from exports. Thus, countries that
have followed a trade-led growth pattern tend not to sustain the
necessary growth in the capital stock entirely from their domestic savings
rates. And again, South Korea is a prime example of tremendous capital
inflows. Both the rate of export growth and capital inflow achieved by
South Korea is possible for a small country which has a very special
relationship with large, wealthy countries. Obviously, South Korea's
strategic placement in the context of geopolitics has been favourable
from that point of view. Not all countries can have such a favoured
position.
We will shortly return to the trade issue and indicate its very
important but somewhat subsidiary role in a development strategy that
has an important emphasis on agriculture and employment. But first,
let us turn to a partial alternative to trade for structuring an economy in
an employment-oriented direction. That is to accelerate growth in the
agricultural sector and use agricultural growth as a means of structuring
demand in favour of a high employment content. We must first under-
stand the process of agriculture development.
The growth of the agricultural sector is basically a process of
technological change: It is a process of introducing new technologies,
which greatly increase factor productivity in the agricultural sector
through high yielding crop varieties — such as the wheat and rice varie-
ties which have been so important in Pakistan for two decades and the
cotton varieties which have been so important in the last half decade or
so in Pakistan. These all represent major increases in factor productivity
24

in the agricultural sector and hence a major net addition to national

income.
Now the question we raise when we make a major addition to
national income in the agricultural sector through technological change
is how that increment to national income is to be expended. First of all,
you are putting a large increase in income into the hands of agriculturists.
We know that they will spend at least two-thirds to three-quarters of that
income on consumer goods, even if they have a very high marginal
propensity to save and invest. Hence, the first impact of major growth
from improvements in technology, in addition to national income
through agricultural growth, is a big increase in consumption expenditure.

We know that throughout Asia, peasant farmers, the typical farmers

who are producing the increased agricultural output, spend a minimum
of 40 percent of those increments to income on locally-produced non-
agricultural goods and services. Those goods and services, and we should
note the importance of the service aspect, have very high employment
content. These are goods and services for which there is a wide range of
choices of technique and the optimal technique turns out in developing
countries to be very employment-intensive.

We also find on the order of 20 percent of increments to income

spent on agricultural commodities which have a very high employment
content and a relatively low land input. These include particularly
fruits, vegetables, and livestock commodities. Because the marginal
propensity to spend on these commodities is high, and the base of
consumption is significant, the total demand generated for these com-
modities by increased income is immense. They use a tremendous
amount of labour in their production.

In Pakistan, we could see this particularly clearly in the rapid

growth in milk production, but we also see this in the vegetable sector
and, to some extent, in the fruit sector. Now, these are not the flashy
elements of development like steel mills and petrochemical plants, but
they represent a basis for significant additions to national income. They
 25

have a genuinely high employment content and represent a major contri-

bution of agricultural growth to a desirable structure of the economy.

We should note again that development should be seen as a partici-

patory process; that development which only involves a very small
proportion of the economy and a very small proportion of people is not
really development as most of us envision it. The processes I am describ-
ing, in which 40 percent of incremental expenditure for non-agricultural
production is mobilized in rural regions and in the larger market towns,
marshalling people in fruit, vegetable, and livestock commodity produc-
tion, are processes of commercialization bringing a large proportion of
the population into the modernization process. You are not bringing
them in as labourers in large-scale steel mills or petrochemical plants,
you are bringing many of them into a process where they are beginning
to think about buying and selling and manufacturing on a small scale,
converting raw materials into output. You are getting a very large pro-
portion of the population beginning to think in production terms.
That is a major contribution to development.

We had a lot of pro-industrialization talk in the 1950s and early

1960s that argued for, emphasized, industrialization over agriculture
because industrialization opened people's minds and brought them into a
commercial process. I am saying that you get a much better effect from
that point of view through an initial emphasis on agriculture, thereby
bringing in very broad participation in relatively small-scale industries.

Now I want to make two related asides. What I have done so far is
talk about the role of agriculture in the production of wage goods and
the role of agriculture in structuring demand in a more labour-intensive
way. My first aside concerns the relation between poverty reduction
and an agriculture- and employment-oriented strategy of growth. They
are one and the same. Increased food supplies and increased income from
employment are the basic elements of poverty reduction. Recent analysis
at the International Food Policy Research Institute, using the extra-
ordinarily effective and useful sets of statistics compiled in India on rural
poverty — on the proportion of the population falling below the poverty
26

line — shed light on this relation. These data measure changes in poverty
over a substantial period of time.
Development strategies in India have had a very strong orientation
toward large-scale, capital-intensive, heavy industry. That has resulted in
slow growth in employment and, hence, has resulted in rather little
downward trend in absolute poverty. That, in turn, has made it essential,
in order to achieve political stability, to give emphasis to specific anti-
poverty programmes.
Study of change in the incidence of poverty in rural India over the
last few decades demonstrates several relations of importance to this
discussion. First, there has been a mild downward trend in the
underlying level of poverty in response to specific programmes. Second,
there have been very wide fluctuations in the incidence of poverty: using
a specific poverty measure based on basic calorie requirements, the fluc-
tuations were from below 40 to above 60 percent of the rural popula-
tion. That means 20 percent of the rural population moving up and
down across the poverty line over time.
And, those movements tend to be not sharp fluctuations from one
year to another, but sequences of years in which the poverty line is
rising and sequences of years in which it is declining. That provides
an opportunity to pin down rather accurately what are the forces at
work in causing those fluctuations. These forces are probably quite
common across developing countries, including Pakistan.
What are the primary forces at work? The most important are the
level of per capita food production and the level of food prices. When
the level of per capita food production is rising, the level of poverty is
declining. That relationship is very clear and for good reason. When per
capita food production is rising, both the direct and the indirect effects
of rising per capita food production cause increased employment.
Employment is a critical determinant of the level of absolute poverty in
rural areas throughout Asia.
We are able to statistically disentangle the level of food prices from
food production and find that prices are also very important. When food
 27

prices rise, poverty also rises. Poverty declines, in turn, when food prices
fall. The level of food production and food prices are, of course, closely
related. We are able, however, with reasonably good statistical techniques,
to separate them moderately well.
The question one asks oneself, from the poverty point-of-view, is
how can one have rising food production and declining food prices?
Are they not antithetical to each other? Do we or do we not need rising
food prices in order to provide an incentive to farmers to increase food
production? The answer is no. Of course, there is a way out of that
problem and that is through technological change.
Incentives can be provided to farmers to increase food production
at the same time food prices are declining if the cost of production for
farmers is reduced. And we can reduce the cost of production with
high yielding crop varieties and the associated technical changes. It is
now possible to absorb much lower food prices than in the past and
still have rural prosperity because the cost of production, not per acre of
course, but the cost of production per unit of output, has declined signif-
icantly with the green revolution.
In India, judging from trends over time, I indicated three forces in
declining real poverty. The first is food production per capita, the
second food prices, and the third, marking a downward trend in poverty,
is specific poverty abatement policies.
What sort of public policies bring the development process directly
to the rural labouring class and the poorest rural people? One must, of
course, emphasize the importance of special employment-oriented
schemes. Such programmes, of themselves, have been quite effective in
rural India: guaranteed employment schemes, special loan programmes
for small and even landless farmers to get into dairy farming and other
labour-intensive enterprises, credit schemes, and so on.
If it had not been for the overbalancing effects on the food price
and the food production front, India would have had a declining trend
of rural poverty because of these special programmes. Poverty abatement
28

policies are unlikely to show an actual decline in poverty if agriculture

is doing badly. In Pakistan, with a much more successful record on the
food production front and, to some extent, on the food price front,
such special programmes could be quite effective in poverty reduction.
The same points about poverty relationships stated above can be
corroborated by reference to cross-country comparisons. Through this
we can bring out the second major aside to which I referred above — that
is, that success in agriculture in developing countries tends to bring
increased food imports. What is the normal relationship in the develop-
ment process between growth in the agricultural sector, and, in
particular, foodgrain production growth and the rate of growth of
employment? Is the normal situation for food production to grow more
rapidly than employment so that one has downward pressure on food
prices or is the normal situation for employment to grow more rapidly
than food production with an upward pressure on food prices? The
direction of pressure on food prices indicates the direction of pressures
on trade.
To the surprise of many people who are depressed about the prob-
lems of dealing with employment in developing countries, the normal
situation in developing countries is for employment growth to move
more rapidly than food production and, therefore, to place upward
pressure on domestic food prices and, hence, to foster increasing
imports. To make that point clear, let me cite some extraordinarily
Striking numbers, A study at the International Food Policy Research
Institute analyzed the 28 developing countries with the highest growth
rates in what we term basic food staples production over a 20-year
period. In terms of Pakistan, that basically means foodgrain production,
so I will express the results in terms of foodgrains.
The average growth rate in foodgrains production for these 28
success stories was four percent a year. Those same countries, in that
20-year period studied, increased their foodgrain imports by 365
percent! In other words, the countries that were most successful in
increasing foodgrain production also increased their foodgrain imports.
The 365 percent increase overdramatizes the examples because they
 29

started from a small base of foodgrain imports. But the absolute numbers
from those countries are also impressive. They increased their foodgrain
imports from roughly four million tons to something over 12 million
tons in that 20-year period. They changed from being negligible
importers of foodgrains to becoming a significant element on the global
food market.
We know that if we do a closed economy model of agriculture-
driven growth, food prices will decline. In such a model, the dynamic
element is growth in foodgrains production. If we assume that employ-
ment grows maximally, consistent with the wage goods constraint, the
terms of trade will turn modestly against the agricultural sector. Thus,
it should be expected that in a development pattern led entirely by
agriculture, there should be rapid growth in employment but not quite
sufficiently rapid to maintain the terms of trade for food as they were
at the beginning of the period. There will be a deterioration in real
agricultural prices.
Given that, how do we explain the situation for the 28 fast-growth
agricultural countries? The explanation is that, in addition to the effect
of agricultural growth, some autonomous growth occurs in other sectors.
After all, even in low-income developing countries, there is initially a
non-agricultural sector of significant proportions. If there is growth
created endogenously in that sector as well, added to the growth in the
agricultural sector, the result is overall demand for food growing more
rapidly than the supply of food and, thus, pressure either for increased
imports or for increased prices.
In this context, the common question is how can those countries
afford to pay for increased imports of food. Let me be very clear on
two points in that respect. First, we are only talking about a small
proportion of the incremental demand being met from imports, so that
there is not a significant real exchange rate effect from that growth. And,
second, I want to emphasize that economies that experience rapid
growth in domestic agricultural production, relaxing the wage goods
constraint in that way, and that have rapid growth of employment are
facilitating their natural comparative advantage to export relatively
30

labour-intensive goods. Those countries do very well on international

markets. Thus, they have a relatively high rate of growth of exports
to finance substantial imports, including supplementary imports of
basic food staples.

In this context, let us speculate with respect to Pakistan, The agri-

cultural resources in Pakistan are sufficiently favourable, compared to
the general situation of the world, so one would probably not expect
to see major food imports into Pakistan in the context of a high agricul-
tural growth rate and high growth rate of employment. There are a few
developing countries that are sufficiently rich in natural resources for
agricultural production that they may even have very high rates of
growth in employment and still move increasingly on to the foodgrain
export market. The two major cereal exporters among the developing
countries are Thailand and Argentina. Those two countries alone re-
present 80 percent of net cereals exports from all the developing coun-
tries that are net exporters. There are probably one or two more coun-
tries, such as Burma, that could be in that situation if they had sensible
domestic policy.

Pakistan, I suspect, may well end up falling in a neutral position on

this. You have an extremely favourable agricultural resource base and
should be able to achieve a very high rate of growth in agricultural
output. But you also have a tremendous scope for increase in employ-
ment in the economy and, hence, effective demand. Perhaps it is reason-
able to expect those two forces to about balance out. In any case,
Pakistan's good agricultural resources, if properly developed, offer an
excellent opportunity to effectively pursue a high employment strategy
of growth.

I want to make two policy-oriented remarks at this point — one

about trade and the other about public investment. Going back'to the
trade issue, capital spreading is, of course, very important in a high
employment policy. I think that this leads to a position on trade which is
a little different from the usual one of the trade economists and the
export-led, growth-oriented economists.
 31

We are discussing here a development strategy in which effective

demand for growth in the non-agricultural sector comes substantially
from increased incomes in agriculture which, in turn, arise from the cost
savings of technological improvement. There is, however, a need to
restrain growth in capital intensity. We know that many capital-inten-
sively produced commodities are necessary to a high employment
strategy — fertilizers and pesticides are essential to agriculture; steel is
essential to the various metal working industries; plastics are important;
probably synthetic fibers are of some importance; and so on. A high
employment strategy with a capital constraint requires turning to
imports to meet the needs for the bulk of such commodities.

I would have a very simple rule to follow with respect to what

capital-intensive goods to produce domestically and which to import:
produce domestically those capital-intensive goods and services which
cannot be imported, the number one example of which is electric power.
Put enough capital resources into those commodities to ensure a balance
of supply and demand at global price relationships.
In the case of electric power, that means massive investments in
that sector. As demonstrated all too frequently among developing
countries, Pakistan has been underinvesting in the electric power sector.
The only occasional power shedding in Karachi or Islamabad does not
compare to the substantial power shedding in rural market towns and in
the agricultural areas. That is extraordinarily costly in terms of employ-
ment. Electric power is a small proportion of costs of labour-intensive
industries, but unreliable power raises their costs very substantially.
Not investing in the importable capital-intensive goods and services
sectors raises very important issues with respect to essential commodities.
There are concerns about the reliability of imported inputs for
agriculture and labour-intensive industry. That reliability must be insured
through appropriate exchange rates and other trade policies. I do not
want for a moment to pretend these are easy decisions. After all, I do
not think governments make bad decisions where the right decisions are
easy to make. The wrong decisions are always justified by a very power-
ful argument which has a good deal of merit.
32

To summarize, trade is very important to an agriculture and

employment-oriented strategy, but it is not the leading edge of develbp-
ment. The leading edge is the agricultural sector. We will return later to
the needs of agriculture if it is to grow rapidly.
The second issue I want to raise about policy for an agricultural-led,
high employment strategy relates to the trade issue but only indirectly.
That is the level and composition of public sector investment.
An agricultural-led, high employment strategy has to be broadly
diffused geographically. It, by definition, has to reach a high proportion
of the population. That reinforces the natural tendencies in the strategy
to broad participation by all income classes. But much more important-
ly, the requisite broad geographical spread in turn requires a massive
investment in rural infrastructure.
We take it for granted that in an urban-oriented, capital-intensive,
large-scale industrial strategy there has to be tremendous investment in
the infrastructure of large cities. Reliable power for large cities, good
roads, lack of traffic bottlenecks, good telephone and communications
and so on. We may still not do as good a job as we should in the major
centres but we know those are essential. But in an agricultural-led
strategy, emphasizing the development of small- and medium-scale
industries in the rural areas, you need the same kind of infrastructure.
Let me emphasize that the rural industries need electric power if
they are to achieve cost reduction. They also need good telephone
communication because they are very much concerned with markets and
trading in raw materials. Those raw materials and markets will not be
entirely in the rural areas. There has to be communication with the
larger world. For these small-scale firms, the prices at which they buy
and sell, the speed with which inputs come to them to meet their rapidly
fluctuating production needs, depends very much on good communica-
tion. And you will find that, if those entrepreneures cannot have good
communications in a rural town, they will locate in a major city and have
a smaller employment content in their output. Thus, massive investment
in the rural infrastructure is necessary to the agriculture- and employ-
ment-led strategy.
 33

We underrate how deficient those rural infrastructures are. I would

be fairly certain that, if you did a study in the Punjab of Pakistan, you
would find that probably one quarter to one third of the farming area of
the villages is not fully integrated into a highly commercialized process
of modern agricultural production because they simply do not have the
adequate infrastructure and infrastructure investment to support that.

Of course, the poorer the infrastructure, the less we see the area;
so it is understandable that casual observations have a strong bias to
understate those needs. All of us have a high opportunity cost of our
labour and time. We are not going to take the time to go into the remote
rural areas. We understate the extent to which, even in the productive
agriculture areas, there are villages which are isolated due to underinvest-
ment in infrastructure.

I want to make one final comment on infrastructure. Infrastructure

starts with what we might properly term hard infrastructure: the roads,
the electrification, the telephone systems, and so on. But those lead
immediately to what is productive and that is the soft infrastructure:
the trained people who bring themselves to the market towns to make
use of this hard infrastructure; credit institutions and people with a
higher education who run those credit institutions, providing credit to the
farmers and the small industries; bus services and the people that are
needed to run them; and medical services which are needed to look after
those people. Who will locate in the market towns which do not have
some kind of a reasonable medical facilities, which do not have a cinema
in the town and so on?

Those people are not going to locate in such places unless they have
good soft infrastructure of institutions. And you cannot have a good
soft infrastructure unless you have a good hard infrastructure. So, what
I want to drive home is that, where agriculture is not moving adequately,
where it is not having a stimulating effect on growth and driving a very
vigorous small- and medium-scale industrial sector, that is substantially
because of the inhibitions coming from inadequate infrastructure
investment.
34
To summarize the public policies that favour the kind of develop-
ment strategy we are addressing, I come back to the need for a very
thoughtful expansion of trade policy and a very thoughtful and expan-
sionary investment policy in infrastructure. I would suggest that we look
back at countries that have been successful in this respect and see that, if
the essentials of development are to be provided, there are very few
resources and very little time required for governments to provide once
these principal requirements are met. Meeting those goals, however,
requires a considerable re-ordering of priorities.

DISCUSSION
Dr S. K. Qureshi: Prof. Mellor, you indicated that the area that public
policy needs to attend to is the provision of rural infrastructure. You
also said that, by implication, technical change would lead to increased
productivity. One thought that immediately comes to mind is this: how
would this kind of policy be financed? The real life situation, in Pakistan
at least, is that agriculture has been squeezed in many different ways.
Even if the physical capacity to generate more finances exists in a tech-
nical sense, unless this is tapped properly, we will be resorting to infla-
tionary financing. Moreover, improper government responses may lead
to distortions and the growth process may not go very far. That is one
point.
With regard to the other case you made concerning poverty allevia-
tion, I agree with you that providing employment to the rural poor
solves about 80 percent of the problem. But then I would say that there
is a basic problem in the asset distribution that exists in Pakistan, if we
follow the kind of agriculture strategy that you pleaded for, what would
happen is that we will have more employment and also more income for
the rural poor. But, in the same vein, these technical innovations will be
increasing returns to land. As the process of development goes on, the
landlords will be earning a large part of this increase. So, unless there is a
policy on asset redistribution accompanied by substantial institutional
reform, the policy is likely to fail.
There is a need to think about whether to just give the poor more
jobs or to make decisions to provide some kind of asset redistribution
 35

as well as better access to other institutional facilities. Then again, I am

not sure of the price policy implications of the kind of strategy you
advocate. There is this real issue of urban vis-a-vis rural policies and then
within.rural areas there is the problem of shifting between crops, dairy
and livestock. Moreover, due to agricultural growth, in the next 10 to 15
years there will be lots of indirect demand for manufactured goods.
There will thus be a problem of the sequencing of price policy. Therefore,
I think just keeping this kind of policy indefinitely will also create
problems. I would really like you to throw some light on this issue.

My final point is that, I would like you to touch on the issue of

physical capacity and on the political economy type questions concern-
ing a switch to a different kind of policy altogether. You have given us a
very good description in a technical economics sense as to what this new
strategy is and how the different pieces fit together. However, the
political economy problems exist and class interests in Pakistan are
strong. There will be many issues to sort out, such as how we will go
about breaking this class structure and bringing about the consensus
required so that this new strategy can be put into effect. Thank you.

Prof. John W. Mellor: This is an extremely interesting set of comments

and questions that raise quite basic issues. Let me start with some
thoughts on the financing side.

Getting agriculture moving, which is central to the strategy we are

delineating, requires considerable public financing. Agricultural research
is key to the whole process. In western developed countries, the private
sector is doing much more than it did in earlier stages of development.
This includes a lot of agricultural research and much of the agricultural
extension work on input distribution. Unfortunately, this often leads to
unrealistic expectations as to what the private sector can do in develop-
ing countries. At earlier stages of development, it may do some valuable
work on hybrids, but is unrealistic to expect the private sector to do the
bulk of agricultural research. You still need a large public sector research
system. I am not even optimistic that the private sector will promote
fertilizer in areas where farmers have not been using it. After all, we are
36

talking about market development which is likely to be too expensive for

private sector firms.
For agricultural growth to get moving, there has to be immense
public investment in infrastructure as well, including expansion of
electrical power generation by easily 15 to 20 percent per year. A 10
percent rate of growth in electric power is simply not adequate to
support high growth rates over a long period of time. This means trernen-
dous difficulty for governments in raising the quantity of resources that
are necessary. In my opinion, a considerable amount of resources for
rural infrastructure has to be raised in the rural areas themselves. That
implies that there has to be development of local governmental institu-
tions. People in rural areas have to get together to help themselves to
raise resources in whatever way they may feel is most suitable in order to
increase expenditures at the local level. But, I think we see very few
examples in the world of rural people who are willing to put up with
high rates of taxation by a central government, especially when there is a
great deal of uncertainty as to whether or not any of that will ever come
back to them. So, the whole local government issue really cannot be
separated from the issue of an agricultural, employment-oriented
strategy of growth. We all know that is a very difficult issue because it
raises very basic issues about the whole political system in a country.
We are talking about a strategy which should be very appealing to
the left because it is oriented towards producing basic consumption
goods for the poor and it is oriented to their basic way of making a
living.. And the left, of course, is supposed to be concerned particularly
with mitigating the problems of the poor. But the left is usually not
very eager to see the development of rural local government because they
recognize, what I think is true all over the world, that such a government
will be dominated by the more well-to-do agricultural interests. In effect,
though, that is necessary because it is those interests which are particu-
larly concerned with developing the infrastructure and that will have to
pay the taxes to finance it. So, we find a tension between the concern
for redistributive policies towards the poorest people in rural areas — a
set of policies which have to come from central governments not from
local governments — and a need to raise local resources for investment
 37

purposes. I think it is important for scholars to face up to the genuine

nature of those tensions and not try to brush them aside. There are real
problems of conflict in society and conflicts even from the point of view
of an equity- and poverty-oriented strategy. As I keep reminding you,
what I am talking about is a strategy oriented towards poor people
because they are producing the food which they consume — and they
are the marginal consumer of food — and because it increases their
employment.
Asset distribution enters into a poverty alleviation strategy in
several ways. An asset distribution with large concentrations of land,
the owners of which have an interest in continuing a feudal system of
management, is antithetical to the development strategy I am talking
about. The owners do not want rural people to have more education and
rising employment and incomes because they fear rural people will
become a political force that will threaten their position. Asset distribu-
tion, particularly of land, can be looked at from the point of view of its
maximum effect in increasing production. Simply dividing the land
among the agricultural population fairly evenly would then be the
optimal strategy, We find no economies of scale beyond the family
labour force in agriculture. Thus, a very broad distribution of land would
be the simplest way to maximize growth in agriculture. Obviously,
however, such a distribution is likely to be politically impossible.
A fair amount of skewness in the distribution of land creates prob-
lems for the strategy I am talking about. If the system is feudalist, this
strategy will not go anywhere. However, the strategy may be adapted to
situations involving less skewedness in land distribution than in feudalis-
tic systems. This would be based on the consumption patterns of the
larger landowners, We know from a wide range of studies that the rela-
tively large peasant farmers have consumption patterns that are skewed
to a very substantial extent to locally produced, non-agricultural goods
and services. In Pakistan, these farmers are often termed kulaks and
operate 20 to 50 acres or more. Such farms generate the effective de-
mand for an increase in employment in other rural sectors. That is a
viable land distribution system from the point of view of the strategy I
am discussing. It may not be optimal — in terms of a maximum increase
38

in agricultural production — but it is more likely to be politically

feasible.
Let me just comment on another private sector issue concerning the
accumulation of capital for creation of small- and medium-scale private
industries and expansion of the labour-intensive part of agriculture. This
can be taken care of fairly well through natural market processes. These
will result in the prices of goods and services demanded by the prosper-
ing agriculturalists rising relative to agricultural prices and thereby
increasing profits of suppliers, part of which will be reinvested. We know
that when their profits are good, small- and medium-scale industrialists
tend to reinvest at a very high rate in their own firms. Since we are talk-
ing here about relatively rural, market town-oriented activities which are
labour-intensive, you can count on market processes to be quite . effec-
tive. In that case, the terms of trade will not move against the agricul-
tural sector.
Although market processes may provide most of the capital needs
of a development strategy for rural, small- and medium-scale industries,
governments need to examine their credit needs more carefully. We
know that the main credit requirements are for working capital rather
than fixed capital. This, of course, is the most difficult kind of credit
to provide. However, we have developed fairly effective methods of
providing this kind of credit for agriculture. I believe we can also deal
with special problems of small- and medium-scale nonfarm sectors.
At this point, I would like to digress with some speculative
comments on the relation of education to the rate of growth of employ^
ment. We are beginning to do some research on this at IFPRI. I believe
that the rate of growth of demand for educated people is highly elastic
with respect to the overall employment growth rate. In other words,
the more you accelerate the growth rate, the more you are going to
accelerate the demand for educated people. Consequently, public
expenditures for education can quickly become a sizeable addition to the
requirements of a growth strategy.
The bulk of the employees in small- and medium- scale industries in
rural areas have at least primary and frequently secondary education.
 39

From what I know of the Pakistan scene, I suspect that eventually you
will find the lack of education in rural areas, mass education, an inhibit-
ing factor to development. Perhaps much sooner than you might think.
I recognize that this is a very delicate subject, but let me make a few
observations. We find that in developed countries, the educational level
of the mother is a far more important determinant of the educational
level of children than the education level of men or the father. This leads
me to suggest that you probably need to be concerned about the implica-
tions of an educational structure which leaves a high proportion of rural
women without much education. This clearly has implications in terms
of demand for education by the next generation. I realize that it is
dangerous to generalize from one culture to another, and I want to be
very cautious in saying that the relationship between mother's education
and that of her children in other countries will be true for Pakistan.
But at least you should be looking at that very seriously from this point
of view. Of course, this has immense income distribution implications.
Restricted access to education is probably more deleterious to the poor
in the long run than restricted access to land.

On the prices issue, speaking purely in the context of long-term

growth, there are also other reasons why these policies are important.
Once you get a high rate of growth in the agricultural sector, there is
a simple trade-off between lower prices and higher employment. At a
given rate of growth of agricultural output, the faster the rate of growth
of employment, the higher agricultural prices will be. That is because of
the immense increase in effective demand for food resulting from higher
employment of the labouring classes. Conversely, if employment does
not move rapidly with agricultural growth, low-income people will
benefit substantially from declining agricultural prices. In each case,
poor people benefit. They either get higher employment or lower prices
for food. Higher employment, obviously, is the preferred route because
it stimulates growth in GNP and a higher living standard for low-income
people.

Dr Faiz Mohammad: Let me first join the earlier commentator by

complimenting Professor Mellor on giving such a thought-provoking
40

lecture. Your central thesis appears to present not just a strategy of agri-
cultural growth but a strategy of economic development. In that
context, the main emphasis that appears to come out of your lecture is
that agriculture should play a leading role in this strategy, I think there
cannot be two opinions about agriculture playing an important role in a
country like Pakistan, However, when it comes to giving a leading role
to a particular sector, then I think a number of questions arise and a
number of problems need to be resolved. As students of development
economics we all know that this type of strategy has been suggested in
the past in the idea of balanced and unbalanced growth and so on.
Looking at this particular strategy of development, the first question
that comes to mind is what are the objectives of this strategy. Do we
want to transform agriculture under the concept of the new international
economic order which considers that industrialization can take place
only if sufficient surplus has been generated in the agricultural sector, as
is evident from the history of other countries? Is the objective of this
development strategy to transform the society as it is? Are we looking at
the socioeconomic transformation of the society, as, of course, should be
the objective of the development strategy of any country like Pakistan?
Or are we simply looking at making agriculture a properly growing sector?
The second question which comes to mind is where are we right
now? Does the strategy which you are proposing imply a really rapid and
major shift in the agricultural sector? Moreover, how reproductive does
this change have to be? At what pace do we have to develop agriculture?
And if we have to neglect other sectors, what has to be the pace of that
neglect? Do we start from a clean slate? If we do then, perhaps, the
requirements for this strategy will be different. Currently, we are placed
in a very difficult economic situation where we have to find avenues for
financing heavy international debts. For this we have been striving to
generate more exportable commodities. What is going to happen to this
pressure on the economy if we go for a major shift in the agricultural
sector?
Prof. John W. Mellor: I think you are quite right that we should get the
objectives of development out into the open. As I see it, the objective of
development is to bring all people into processes that increase their
 41

freedom of choice. For very poor people that means not only raising
their incomes, but also bringing them into productive processes where
they can make better use of their minds in facing expanding choices.
This, of course, involves formal education. Therefore, I prefer develop-
ment that emphasizes agriculture and small- and medium-scale sector
industrialization because it involves many more people.
Pakistan is following the development strategy I am talking about
to a degree greater than most developing countries. Pakistan's agricul-
tural sector has a very successful record. You have been one of the
fastest growing countries in basic food staple production. In my view,
your overall growth in GNP simply could not have been achieved with an
alternative strategy. There is a vigorous market-town economy in the
Punjab and you have had broad participation in other small- and medium-
scale sectors. I am emphasizing your achievement because I believe clear
thinking people will accept the broad strategy that you generally have
been following.
It obviously makes no sense for the capital-short countries of the
Third World to be net-repayers of debt. We have to get out of the mind
set that these debts ought to be repaid in the near future. A capital-
short country should be building high-growth rates on their rich labour,
and, I would argue, rich agricultural resources. These high growth rates
can finance an ever-increasing amount of debt which over time may
actually decrease as the percentage of the GNP. We have a very unfor-
tunate situation in the world at the present time, but I hope we will get
beyond it shortly. I was very encouraged by the comment of Barber
Conable, the new President of the World Bank, that we have to get the
debt crisis behind us so the World Bank can get on with its real business —
development. He also observed that the World Bank is misnamed; it is
not a bank, but a development institution. I welcome the return of this
approach after a four to five year hiatus.

Mr Shaukat Kazmi: Thank you, Mr Chairman. Professor Mellor, I think

you have been dealing mostly with short-term problems and I say this
because I am dealing with the prices side of the question. Your strategy
is basea on comparative advantage where you transfer resources to
42

sectors or sub-sectors where you can produce the most. But in the inter-
national environment where most of agriculture is subsidized heavily, the
development of some of the sectors of developing nations is severely
inhibited. Take the case of the dairy industry in Pakistan. We are import-
ing large quantities of milk powder which is heavily subsidized and
cheaply available. Because of this, it is not possible for Pakistan, in the
short term, to develop its dairy industries and compete with imported
milk,
Secondly, the Pakistan government follows the policy of what you
call support prices so that agricultural prices may not hurt the poor
farmers. This has advantages, but in the long run it can lead to the shift-
ing of land from one crop to another which maybe more productive at
that particular time. This is something of a disadvantage. Lastly, I think
you were mentioning mostly neoclassical type models and I may be
wrong in this, but in Pakistan's case, I think that a classical model is
more applicable as far as the land-owing class is concerned. This class is
not consuming manufactured goods produced in Pakistan but relies
mostly on imported goods. This has an adverse impact on our balance of
payments problems.
Prof. John W. Mellor: The strategy I have delineated has a good deal in
common with the current neoclassical emphasis on the private sector and
trade orientation to free the economy for small- and medium-scale
entrepreneurs. Once you have a vigorous private sector with substantial
public sector support in infrastructure and education, trade issues will
take care of themselves moderately well. Let us not understate the size
of the markets in developed countries for relatively labour-intensive
goods and services. They are not all textiles. In the case of Pakistan,
there are potentials for fruit and vegetables and livestock commodity
exports not only to Western Europe and North America but also to the
Middle East, where your geographical location gives you a comparative
advantage.
I understand the pessimism of lot of people about the trade
environment in developed countries these days. But do not forget that
there is a great deal of trade among these countries in labour-intensive
 43

agricultural commodities, such as processed fruits and vegetables and

flowers. It is very important to developing countries to do everything
they can to assure that the GATT rules are enforced, opening trade with
developed and developing countries. That is something which should be
possible to accomplish in the GATT negotiations. There are a lot of
opportunities to displace some developed countries in this huge market —
for example, processed vegetable exports from Italy. A number of
developing countries have succeeded quite well in finding niches in this
trade environment. Even the depressed textile trade may offer
opportunities. A niche that seems small to a developed country could be
large to Pakistan.
This question of subsidization of agriculture in developed countries
is difficult. The major impact of those subsidies has been to reduce
world prices of cereals below what they would otherwise be. That is
basically a good thing for developing countries which are, in general, net
importers of cereals. I think Pakistan has enough potential to reduce the
cost of production so that you can probably carry on with cereals prices
at the present level or only somewhat higher. I personally think that
cereal prices have overshot at the bottom. My view was reinforced when
the World Bank in July reduced its projected 1995 rice price by over 30
percent from what it projected a few months earlier. When the World
Bank makes radical changes in their projected prices, it is almost always
wrong. I assume they are wrong this time. That gives me some confi-
dence that we have overshot on the low side! I have been agitating for
the Bank to give up this fancy modelling which is so subjective, and
simply use moving averages to project future prices. But I have n o f h a d
any success as yet.
A somewhat low level of cereal prices is probably favourable for the
development of labour-surplus countries. The dairy subsidies and the
meat subsidies are a more difficult problem. But, the European Com-
munity may not be subsidizing its. dairy industry as heavily as has been
assumed. Much of that subsidy compensates for high support prices of
dairy feeds.
India has taken large quantities of cheap surplus dairy products
from Europe in particular. These have been sold in India's markets and
44

the proceeds used to develop the indigenous dahy production and

marketing system. This might be a useful approach for Pakistan.
However, one thing Pakistan should not do is to allow trade to kill an
industry in which it obviously has an immense comparative advantage.
Since dairying is labour intensive, it is especially suitable for develop-
ment on a small-scale basis. I would expect over the long-run Pakistan
will shift a large area out of wheat and into high quality roughage pro-
duction, particularly berseem and lucerne. Nothing should be done to
interfere with that process.
Just a final brief comment on consumption patterns, it is my under-
standing that even, though the Punjab has a fairly skewed distribution of
income, you do have a reasonably good consumption pattern from the
point of view of the distribution of income. I do not know the situation
in Sind that well, it may be that distribution is too skewed to have
favourable impacts on consumption. However, some orientation of
consumption towards imports of consumption goods may be good. We
should always look upon import displacement strategies as dynamic
strategies. One should not look at a static level of consumption and then
talk about development of local industries to produce some of those
goods locally. We should be looking at it as a dynamic process in which
today we displace certain imports because we have a comparative advant-
age in producing them and then tomorrow import different goods and
later displace them.
An IFPRI study of the consumption patterns in Bangladesh found
that the richer farmers have very high elasticities of demand for imported
consumer goods but very low marginal propensities to spend on them.
The high elasticities are built on a very low base of initial consumption.
And we see a tendency for a dynamic processes. The richer rural people
import small quantities of consumer goods. Once the market is develop-
ed, some of those goods are displaced because local producers have a
comparative advantage in producing them. So we should not be entirely
negative about the imported goods in terms of market development and
eventual displacement.
Mr Akmal Siddique: It had been a long cherished desire to listen to you
Prof. Mellor and I must thank the PIDE for providing this opportunity.
 45

Thank you very much. Mine is more of a comment than a question. I am

really concerned about the heavy subsidies to agriculture given by the
United States, the EC countries and Japan, if I remember the figures
correctly, last year the U.S. gave away about 30 billion dollars, the EEC
about 25 million dollars and Japan about 15 billion dollars, to their
farmers. Does it really leave any room for the farmers in developing
countries to'compete in international trade? Starting from the late 1970s
after the oil embargo and into the 1980s where we have seen a lot of
protectionism in the U.S. and a lot of heavy subsidies, there has been less
economics and more politics in the decision-making process. I wonder if
we have to go back to the initial name of our subject, i.e. political
economy, sometime very soon now. Would you like to comment on
that? Thank you very much.
Prof. John W. Mellor: I am sure that economics and politics have more in
common than is often assumed to be the case. After all, both economists
and politicians are concerned about increases in human welfare and in
improving its distribution. I think the conflict between what economists
say and what politicians do is less a matter of different objectives than
it is ignorance of each other's point of view. Economists need to devote
more effort to analyzing political problems and assisting policy-makers
to assess the probable effects of alternative policies. Economists also can
serve an important social function by calling attention to differences in
the objectives pf particular political groups and those of the masses in a
society.
Subsidies in developed countries fluctuate considerably over time
and are now extremely high by historical standards. Periods of high
subsidy are also periods of rapid rates of adjustment in the agricultural
sector. This indicates that in developed countries, where there is virtually
no increase in demand for agricultural commodities, the benefits of
technological change in agriculture have to be realized almost entirely by
withdrawing resources from agriculture or by exports. The developed
countries have been rapidly withdrawing resources from their agricultural
sectors. There are, though, questions of how much, at what pace, and at
what cost in human deprivation should be tolerated. Although Western
European countries and the United States are concerned about the high
46

pace with which resources have been withdrawn from agriculture, the
important question is just how to reduce it. This question raises difficult
tradeoffs for those countries.
The large exports of cereals being made available by developed
countries is beneficial to developing countries which are able to increase
growth in employment more rapidly than in food production. These
countries are increasing imports of cereals. Conversely, developed
country exports are harmful to countries like Argentina and Thailand
and would be for Burma if that country had reasonable domestic
policies. It is not clear whether they are good or bad for Pakistan. So
far, you have been able to generate growth in demand for food more or
less commensurate with your agricultural growth capacity. Consequent-
ly, the cereals strategy of developed countries has not been inimical to
you.
My impression is that Pakistan should be concerned less about
exports of cereals from the developed countries and their subsidies and
devote much more attention to access to their fruit, vegetable and
livestock markets. That is where you want to fight the battle on trade.
In general, in the United States, those commodities have been left pretty
much to the free market and you do have some opportunities to sell
there. In Europe, there has been a tendency to protect those sectors.
So, there is probably an opportunity to fight a very limited battle in
the GATT negotiations, probably in alliance with the United States. You
once had access to those markets, a fact that gives you some advantage.
There also may be some points on which you can align yourself with
Australia and Canada.
I hope what I have just said will not be construed to mean that I
like or accept an international economic order in which rich countries
dominate world trade negotiations while developing countries are lucky
if they can have any influence at all. However, given that deplorable
situation, you need to pick your areas of influence on trade very care-
fully. As far as agriculture is concetned, I have suggested that you
concentrate on the fruit/vegetable/livestock sector. You also want to
play a role on anti-dumping. Dumping by the rich countries into the
 47

Middle East is deleterious to Pakistan where you have particularly good

access to the market. You need to agitate against it and get as much
support as you can.
Dr Abdul Salam: I just have one very brief comment on the excellent
lecture by Professor Mellor. The subsidization of cereals by the U.S.,
EC, and other developed countries has some serious implications for
countries like Pakistan, India, and Bangladesh. It reduces the incentive to
farmers to develop these sectors. Secondly, the advice that we in this
part of the world get is, free your markets and subsidize your farmers.
But what we see happening in our own backyards is exactly the opposite
of that. Thank you.
Prof. John W. Mellor: It must be frustrating to developing countries that
developed countries give them so much advice that they themselves do
not tollow. Unfortunately, one of the advantages of being a rich country
is that you can do a lot more preaching than a poor country. It is one of
the unfortunate realities of the world.
Development of low-income countries is absolutely crucial to long-
run growth in prosperity in developed countries. I deplore that we in the
developed countries follow so many short-run policies that are inimical
to the developing countries and are not in anybody's long-term interest.
I would repeat that I think world cereal prices have overshot the market
on the low side. Therefore, it makes a certain amount of sense for a
developing country not to let its domestic prices (assuming a correct
exchange rate) drop all the way to the present world level. And develop-
ing countries have been, in general, fairly successful at keeping their
domestic price fluctuations smaller and smoother than international
fluctuations. This is probably a time to protect your domestic prices
somewhat.
I should emphasize that the development strategy I am talking
aboui is certainly facilitated by a correct exchange rate. An overvalued
currency that protects the industrial sector has a significant anti-agricul-
ture effect. A country like Pakistan should watch the exchange rate
very carefully and make sure it is not overvalued.
48
I am a strong proponent of using average real prices as a way of
predicting future prices. Modelling exercises just are not sufficiently
developed at present to improve on past averages. If real world prices
have not recovered substantially in three to four years, you will have to
adjust downward. You are fortunate in Pakistan that you have many
opportunities to reduce the cost of production in the agricultural sector,
not only by breakthroughs in agricultural technology but by increased
sophistication in the use of existing technologies.
Over the longer run, Pakistan may be able to export some cereals.
This could create a difficult situation for Pakistan if prices stay low. I
do not think this is going to happen, but if it does you may need to
restructure your agriculture somewhat more rapidly than otherwise. On a
more optimistic note, I think I am correct in saying that your largest
cereal export is a specialty product — high quality rice which brings a
premium in world markets. Hopefully, your research system will reduce
the cost of production of this high quality rice so that you can take even
greater advantage of this opportunity.
 CONCLUDING COMMENTS
by

Professor Syed Nawab Haider Naqvi

We have just heard a very refreshing and stimulating lecture. A
number of important issues have been raised by Professor Mellor in a
very short time. These certainly will have excited everyone's imagination
just as much as they have excited mine. However, I would like to add a
note of caution. Prof. Mellor has through his gift for lucid exposition of
extremely complicated issues created the illusion of an inherent simplicity
of the issues involved.
Like all illusions, this one also can be very deceptive. Wliat Prof.
Mellor, in effect, is asking us to do is to shed a lot of the traditional
wisdom about economic development. As is well known, economic
development is ultimately a process of 'structural transformation' that
takes you from agriculture to industry. The industrial sector is cast in the
role of the 'engine of growth' in this process. By contrast, the agricultural
sector, a mere milch-cow, is used to sustain the industrial sector by provid-
ing cheap labour—drawn up at an unchanging real wage from the swamp of
"unlimited supplies", to use Arthur Lewis's oft-repeated phrase. The
share of agriculture, which is seen as a sustainer and not as an initiator
of overall growth, in total value-added, would decline; and so would the
proportion of the labour force employed in agriculture. On both these
counts, the industrial sector would gain what the agriculture sector was
condemned to lose—condemned by the very logic of 'structural transfor-
mation'.

This is a pursuasive story, and one which is widely accepted, but as

Prof. Mellor has pointed out, some very important aspects of the growth
50

process are missing from the plot: for example, what happens to employ-
ment in the rural sector, to the rural real wage, to the availability of
wage goods, and to the prices of wage goods? One also finds amiss in
traditional wisdom the subsidiary role assigned to the largest sector o f the
economy—the agricultural sector, that is—in the growth process. But,
above all, the central issue of p,overty, especially rural poverty, is left
undecided in the hope that the "trickle down" effect will take care
of the problem. But to miss all this is to miss an awful lot because,
if reducing poverty is the aim of economic development, a rising level
of employment — and hence of real wage of the (rural) poor — is among
the most essential means to achieve this aim. And somewhere in this
chain of events must also appear the level of supplies of wage goods (the
agricultural commodities), and the prices at which these supplies are
made available.

Prof. Mellor has chosen, unlike the modest lady who conceals more
than she reveals, to be somewhat 'immodest' by revealing what tradi-
tional wisdom usually keeps covered up. !He achieves this intellectual
'striptease' by making a high rate of agricultural growth and employment-
creation the necessary condition of a 'successful' story of economic
growth—whereby 'success' is directly related to the alleviation of mass
poverty. But note this. No claim is made for agricultural growth to
directly generate enough overall growth or employment. It would not.
Neither is it asserted that the share of agriculture in GDP would not
decline. It would. What Prof. Mellor does is to emphasize the role of
agriculture as an initiator — and not just a sustainer — of the growth
process. Prof. Mellor introduces technological change, food production,
and food prices, as vital elements of his model. Technological change—
i.e., the introduction of high-yielding varieties of seeds and improved
agronomic practices, etc. — tends to reduce the cost of production of
food. When this happens, it becomes possible to increase food output at
the same time as food prices are declining. With the growth in wage
goods (food) production playing a dynamic role, agricultural growth
will directly create employment. This will happen because of the relative-
ly labour-intensive nature of technological change in the agricultural
sector, which, in turn, permits the 'right' kind of "capital-spreading".
 51

At' this stage, three growth-propelling forces are simultaneously

at work. First, a higher (rural) employment—by modifying the structure
of effective demand and raising its overall level—will stimulate the
growth of the agricultural and non-agricultural sectors of the economy.
Second, a higher rate of growth of wage-goods production will increase
the supply of goods and services for which the demand has already been
created. Third, a higher (wage goods) production, helped by appropriate
technological change, will raise the real income of the (rural) poor by
lowering the prices of wage goods. These three forces work together to
accelerate agricultural growth, to raise employment, to increase the
supply of wage goods, and to stimulate effective demand—initially in the
agricultural sector and then in the non-agricultural sector. And these
growth-propelling forces are expected to be strong enough to reduce
poverty, precisely because of the large 'weight' of the agricultural sector.

To inject some empirical content into his thesis, Prof. Mellor uses
his model to explain why the growth rate is higher in Pakistan than in
other countries—like India. While a low rate of savings remains the
Achille's heel of Pakistan's economy, its growth record can be explained
partly by the fact that capital is probably "spread" better here than
in India. His model would predict Pakistan's economy growing at a
faster overall rate because it has been relatively more successful in
increasing food production at reasonable prices, and in generating a
higher rate of employment. All this could only lead Pakistan, as it
actually did, to achieve greater success in reducing poverty (especially
rural poverty—and that, too, at a lower rate of savings) than did India.
This is an interesting hypothesis about Pakistan's consistently superior
growth performance, a phenomenon which most observers find some-
what paradoxical.
I have presented here just the bare bones of Prof. Mellor's growth
model to make sure that his essential message is not lost. But the bare-
bones picture is no substitute for the fleshy, real-life picture which Prof.
Mellor just presented to us in his lecture. I am sure that the audience has
52

enjoyed seeing this picture at least as much as I have done. A vivid proof
of this assertion of mine is the lively question-and-answer session in
which we all participated enthusiastically, and which I had to cut short
somewhat prematurely to meet the binding time-constraint.

On this happy note, I conclude a most stimulating and fruitful

session. Thank you.
 Lecture II
RESEARCH NEEDS FOR AN
AGRICULTURAL AND EMPLOYMENT
GROWTH STRATEGY
 Lecture II

RESEARCH NEEDS FOR AN AGRICULTURAL

AND EMPLOYMENT GROWTH STRATEGY

Prof. Naqvi, Dr Chaudhry, distinguished guests:

My topic in this lecture is the research needs for an agriculture and
employment strategy of growth. What do we not know that is important
to the pursuit of such a strategy? Research deals with the area of the
unknown. Policy deals with synthesizing from the known (even if it is
wrongly known) but is itself continuously pushing forward from the
known. Thus, policy and research must always go together if progress is
to be made. Of course, policy-makers may depreciate research because it
seems not related to the world, as they must see it and deal with it,
because they have difficulty comprehending the language of researchers,
and because they fear that future research will make these present
decisions seem wrong and even foolish — as may the real world make
theories themselves, at times, seem foolish.

For our present purpose of exploring the impact of knowledge

needs on research, we need to divide the subject into elements that
derive from the elements of the strategy. Let us renew the argument
from that point of view.
The basic engine of growth in this strategy is technological change
in the agricultural sector bringing about decreases in the cost of produc-
tion per unit of output or, more technically, increases in output per
unit of input. Such technological change encompasses high yielding crop
varieties, improved agronomic practice and so on. And then, because we
56

are dealing with a very large sector, through that decrease in the cost of
agricultural production and the increase in factor productivity, a major
increase occurs in national income. That increase in national income
falls into the hands of the farming classes, the small farmers and the
peasant farmers, whose expenditure stimulates growth and increased
national income in other sectors of the economy.
The impact on other sectors of the economy works most important-
ly through expenditures on consumption goods and services. Of the
increment to income, perhaps 20 to 30 percent is expended for capital
investment in agriculture, leaving 70 to 80 percent for increased con-
sumption expenditure. At that point, we are talking about a somewhat
Keynesian phenomenon in which growth in expenditure stimulates
growth in sectors of the economy where there are underemployed
resources, particularly including labour; thereby mobilizing those re-
sources in relatively labour-intensive production of goods and, particu-
larly, of services in the rural sector.
That process certainly includes major market towns, thereby includ-
ing urban concentrations of at least modest significance. When I allude
to a Keynesian phenomenon, I am referring to the increase in effective
demand stimulating production processes which use underemployed
resources particularly labour. But, it is a nort-Keynesian phenomenon in
the sense that it cannot be accomplished simply with fiscal policy. The
reason those sectors cannot be stimulated with fiscal policy or monetary
policy is because the mobilization of labour requires an increased supply
of the wage goods on which the increased labour force spends its money.
A key underemployed resource, labour, requires for its mobilization
another resource, food, that is already being utilized fully.
To further recapitulate what is in fact a fairly complex argument:
the increased demand from the increased real income of technological
change brings about increased employment. Labour is, in one sense, an
underemployed resource and, in that sense, the strategy outlined has
Keynesian elements. However, that labour will spend its incremental
income largely on food and agricultural commodities; if that food and
the agricultural commodites are not available, increased demand creates
 57

inflationary forces. The non-Keynesian element of the strategy is that

real goods and services must lie behind that increased employment. Of
course, that part of the circle is closed by the increase in the agricultural
production with which we started. Technological change, through the
increase in incomes, increases effective demand; but, in the process, it
has also increased the physical supply of food and other agricultural
commodities that are the real resources necessary to back the increased
employment. So we have a closed circle. It is not a perfectly closed
circle. It is not a precise commodity balance between the increased
supply of food, the increased employment of labour, and the increased
consumption of the non-agricultural goods and services.
Now, the issue that I want to deal with in the lecture, from a
research point of view, is: how does one go about facilitating those
processes? How does one go about facilitating, in particular, these very
powerful linkages between the agricultural and the non-agricultural sector?
I would like, rather briefly, to run over a whole series of research ques-
tions. I would like, in a sense, to put them on the table and to open
them up for your own thought. I will direct the presentation of research
issues into four component parts: the consumption patterns; the produc-
tion systems in the rural areas; infrastructure; and the agricultural pro-
duction processes themselves.
I will start with the consumption patterns. Research is required to
identify the consumption patterns of the class of people in the rural
areas whose incomes are most substantially increased by improved
agricultural technology. In a sense, that is a very easy research question.
We already have large numbers of consumer surveys available. We should
analyze them, classify them in an appropriate manner and draw conclu-
sion as to what the consumption patterns are and what impact they will
have on the non-agricultural sector.
Unfortunately, frequently, perhaps always, existing consumer
budget data are not adequate for the particular tasks I have in mind. I
am concerned specifically with who is receiving the increased income
from improved technology and the expenditure patterns for that incre-
ment to income to those people. Here we need to look particularly at
58

the increased income of the peasant farming class, the small farmer, the
kulak as they are sometimes pejoratively called. What is their income
class? How are they spending that income?
In the case of landlord-tenant systems, one obviously has to be con-
cerned with the increased incomes of the tenants, as well as those of the
landowners. How the added income divides between these groups is
itself a complex matter, relating to tenancy rules, land supply and
demand for labour and land, as well as customary practices. Neither neo-
classical economics nor theories of exploitation will assure the answer to
this question. It is an empirical issue.
Thus, we need a breakdown of expenditure patterns or consumption
expenditures according to income and social class. Then, we need to
look at a rather detailed breakdown of the consumption patterns of
these people especially with respect to non-agricultural goods and services.
We find here that our consumption surveys tend to provide detail
only on those elements which are dominant for the population as a
whole. They do not often shed light on the non-agricultural goods and
services which are important for the income groups experiencing the
initial major increase in benefits from the green revolution or, more
generally, from improved agricultural technologies. For example, the
breakdown on consumer durables in most consumption surveys is quite
inadequate for understanding what policies are needed to facilitate
growth in supply of those goods. The breakdown for services, in general,
is inadequate for understanding the major opportunities and needs for
that sector. Even the education and the transportation categories that
do appear in most consumer surveys are not detailed enough to illuminate
the needs for meeting the demands implicit in these expenditures.
We need to know, in particular, to what extent these expenditure
patterns are oriented towards locally-produced goods and services, to
what extent are they oriented towards goods produced in more distant
parts of the same nation and to what extent are they imported from
other countries. Further, we need to know the capital intensity of their
production. These data tell us much about the policies needed to obtain
 59
maximum national growth and employment multipliers from the initial
stimulus of agricultural growth.
Thus, the need is for considerable detail beyond that normally
contained in consumer surveys. We must remind ourselves why we want
that information — it is so that we can know in some detail what sectors
of the economy are to be stimulated and, particularly, what role govern-
ment must play in providing that stimulus.

For example, an important question is whether agricultural growth,

because of the present land-tenure system, largely benefits wealthy
people who are importing Mercedes Benz cars? Are we stimulating the
economy through people who have modest incomes, who may be
importing things from other, distant, parts of the country but not from
overseas? Or, are we dealing with people who are spending largely on the
local economy and stimulating employment of relatively low-income
people; people who already have available to them the bulk of the social
overhead capital needed to expand production?

As I indicated in the previous lecture, studies at IFPRI have found

that, for small farmers, about 40 percent of incremental expenditure is
on locally produced non-agricultural goods and services. The service
sector is a substantial proportion of that total. That figure comes
as a surprise to many people since the tendency is to think that the incre-
mental expenditure of the peasant farmers involved in the green
revolution tends to have a much higher proportion going outside of the
local economy. We find also that the expenditure patterns are towards
goods and services that one generally thought of as not being very
important to growth and certainly not part of modernization. Locally-
made, even crude, furniture is an example. Various household services
are also important. And we find that, in general, locally produced goods
and services tend to be produced by labour-intensive processes.

This is the type of information needed if we are to understand the

public policy needs necessary to encourage those multipliers. We can say
very clearly that the larger the multipliers on the local economy, the
60

more favourable the GNP effect will be, the more favourable the em-
ployment impact will be, and hence, the more favourable will be the
distribution impact. What one would most particularly like to see from
these expenditure multipliers from rural people, as their incomes rise due
to increases in agricultural production, is a stimulus to the local landless
class. Thus, we need to understand what kinds of restrictions there may
be to expanding production of those goods and services, and what kind
of restrictions there may be to participation by the poor.
From our studies of rural infrastructure in Bangladesh, we find that,
where the rural infrastructure is favourable, wage rates for the landless
labour class are about 12 percent higher than in areas that are similar but
lacking good infrastructure. This is important evidence of the role of
infrastructure in facilitating large local. employment multipliers from
agricultural growth, an issue to which we will return shortly.
That 12 percent higher real wage rate tells us some very important
things about the development process. We know from other studies that
markets in rural Bangladesh are working quite well. Thus, we know that
this higher rural wage in areas of good infrastructure is not due to tradi-
tional market imperfections. The difference does not lie with people in
poor infrastructure areas not knowing about jobs in areas where there is
good infrastructure. We also know that migration occurs quite easily
with low frictions. So there must be some very sound economic reasons
why people are willing to stay in an area with poorer infrastructure and
work for a wage rate that is less than is available in areas not very far
away, where there is good infrastructure. Those better jobs are within
walking distance of one or two hours.
Why then do we find such wage differentials? We do not know for
sure and, thus, that should be one of the priorities for further research.
But, I would speculate that the reason lies with the social overhead
required for a labour force. In the area with the lower wage rate, there
is a labour force which already has housing and at least, minimal public
services. If labourers move towards the better infrastructure where there
is a higher wage rate, they have to provide housing for themselves in the
new location. They probably require other social overhead expenditure
as well.
 61

Thus, we observe an equilibrium that requires an additional wage

rate to make it worthwhile for them to migrate to the somewhat higher
wage rate area, What that tells us is that there is a social investment in
the place where there is poor infrastructure which helps keep them in
that area. If you put in the infrastructure so that they can be mobilized
where that social overhead expenditure has already been made, then
society can take advantage of this relatively low productivity labour
and mobilize it to higher productivity without a commensurate increase
in cost to society. That is, in effect, a return to the infrastructure invest-
ment. We need to understand this in the context of consumption
expenditures and the stimulus from those expenditures. We will view the
same phenomena from a different point of view later.
From knowing what the consumption patterns are and, therefore,
what types of activities will be stimulated by these rural linkages, we
must move to understand the processes by which those goods and services
will be produced. To what extent can they be produced in the market
towns or even in the villages of rural areas? V/hat are the capital-labour
ratios in those activities? Which of those activities have a long-term
future, and which are the dying industries?
The latter, dying industries, are the ones which, once effective
infrastrucutrc is in place, succumb to competition from outside. The
dynamic ones will gradually increase their capital intensity, increase their
productivity and become competitive firms not only locally but perhaps
on a wider scale as well. We, therefore, need to know what their
characteristics are in terms of their capital-labour ratios, technology
requirements, needs for educated people and capacity to improve them-
selves over time. In particular, we need to know to what extent these
firms draw upon the services which are normally thought of as being
provided by the public sector. To what extent is the demand for those
services going to increase? In other words, what public services have to
be rendered in order to encourage the competitiveness of the more
dynamic of those industries so that they can compete with the outside
world?
We need an inventory of the activities that are already in the market
towns, and what kinds of needs they are fulfilling. We find that when we
62

do studies of the non-agricultural sector, we tend to concentrate on what

are the overtly modern activities in the major cities, paying little atten-
tion to those activities which are now encompassed in rural areas and
which, in a country like Pakistan, constitute well over half of manufactur-
ing employment. Such a high figure comes as a surprise to most people,
but we can document it in country after country. We are talking about a
sector of substantial proportions.
The most important need of dynamic rural industries is a reliable,
well-maintained road infrastructure. Thus, we need to document to
what extent these firms need roads, how they make use of them, and
how they must be developed to be most effective. The second most
important infrastructure element is a reliable supply of electricity. We
need to document more fully how such firms use electricity and to what
extent they would be able to increase their productivity and become
more competitive if reliable electricity was provided to them. And,
unfortunately, we need to know more of the cost to small firms of the
unreliability in electricity supply. In other words, if we are serious about
the whole issue of electrification, we need to know and to marshall our
evidence to show what the effect of electricity or the lack of it will be on
productivity. To do that, we need to look in detail at the production
economics of the small firms which respond to the rapidly rising incomes
of rural people.
Third in importance to the, small, dynamic rural sector is good
telephone service. Of course, in developing countries where the telephone
is not reliable in the large cities, one may find it humorous to talk of
reliable telephones in the villages and the market towns! But it is not at
all humorous to the small entrepreneur. We are dealing with small
industries which must buy raw materials in distant places and which
hope eventually to be producing enough to sell to more distant markets.
These are small firms that are labour intensive, that are mobilizing local
capital resources. To compete, however, they have to be plugged into
the larger economy both for buying and selling. In order to do that,
they need to be in communication outside of their market towns and
villages and to do so quickly and efficiently. They need to know what is
happening to price behaviour, to input behaviour, raw material supplies
and so on.
 63

And we must recognize that in developing countries, in general,

markets are not working as well as in developed countries. For that
reason, it is particularly important for manufacturers to have a close feel
of what is happening to the market in which they deal, both from an
input point of view and an output point of view. In developing countries,
profits of small firms are still determined as much or more by their trad-
ing acumen as their production efficiency. So, in some respects, rapid
communication is even more important in small industries in developing
countries then in developed countries precisely because the markets are
fairly imperfect and, therefore, the profitability of the firm is strongly
influenced by how quickly it responds to rapidly shifting market
conditions.
As we look at the development of the small industries in market
towns and rural areas, we find a history of stimulation by growth in local
demand, the beginnings of modernization and then movement out into
larger markets. They cannot make that progress unless there are good
communications systems.
We have so far emphasized the low capital intensity of small rural
firms as a desirable feature. But we must remark that the development
process is one of gradual capital intensification. Thus, through the
development process, one should gradually increase the amount of
capital that is combined with labour in the production process. It is, of
course, common to indulge prematurely in capital-intensive processes,
creating a bimodalism in capital investment through building large-scale,
highly capital-intensive factories with much of the available capital,
thereby leaving little for any increase of capital intensity for the rest of
the economy.
In criticizing such a misallocation, we want to be very careful not to
misunderstand the total process of intensification. What we are criticiz-
ing in the capital-intensive firm is the fact that it is mobilizing a high
proportion of the country's capital, but applying it to only a small
proportion of the labour force. Those labourers make a large jump in
capital intensity, starving all the rest of the labour force of capital.
Ideally, efforts should try to spread the capital more thinly and then to
gradually upgrade the capital intensity.
64
In the market towns of rural Pakistan, firms that start out with very
labour-intensive processes, using very little capital, gradually increase
that capital intensity as time goes on by gradually upgrading the quality
of their machinery. For example, metal working firms may initially use
inexpensive machine tools which break down frequently and that, are',
therefore, very labour using. Gradually, the owner will increase the
quality of the machine tools. Concurrently, they must gradually upgrade
the quality of the labour force, representing a necessary investment in
human capital. Thus, we are dealing with an element of the non-agricul-
tural sector which is very large initially, but which starts with very low
productivity resources, with very low capital intensity resources, and
which has the capacity to increase that capital intensity gradually as the
economy develops. And we need, as I say, to understand what thosie
processes are, and how the investment process can help provide the
necessary public services in a manner most helpful to those firms.
The final element of examining, describing and understanding the
existing production system in the small towns and villages is to look at
the nature of their capital needs and the way in which credit programmes
can be of assistance to them. We know some important items about
these firms. We know that their fixed capital requirements tend to be
fairly small per worker and in total. We also know that, compared to the
larger scale firms in the society, these firms tend to have very large work-
ing capital requirements. That is, of course, logical when you stop to
think about it. These are firms which are, first of all, employing a lot of
labour relative to their fixed capital requirements. Labour obviously
requires working capital. Someone has to finance the labour force while
the production process is working its way through. In addition, firms
which are labour-intensive are almost always also material-intensive.
They are not only using a lot of labour, but they are processing quite a
lot of raw materials. That also requires financing.
Thus, a critical bottleneck for these small firms is usually working
capital finance. That is the part of finance which public sector credit
programmes are, generally speaking, least able to meet. They are normal-
ly set up to lend for fixed assets with the fixed assets pledged against the
loan providing security. It is a much trickier business moving into lend-
ing to firms that are using mostly working capital. In a sense, not only
 65

may working capital disappear if such firms do not prosper, but the
borrower also may disappear! They are not tied to a fixed capital
requirement. So this is a very difficult problem for the lender.
We also note from the experience of developed countries, where
these small firms also represent a very large proportion of the manufac-
turing output, that the mortality rate for such firms is quite high. This,
too, is a very difficult problem with respect to financing. On the one
hand, one must encourage these small firms because they are the back-
bone of industrial growth, particularly in early stages of development.
We know that they have substantial working capital requirements. We
know that it is difficult to provide working capital and to get security.
And, we know that there is going to be a fairly high failure rate. In fact,
you do not want to stand in the way of that high failure rate because
you do want natural selection to set in to choose the more able
entrepreneurs.

In those difficult circumstances, the public sector lender is apt to

ignore the problem, allowing the ones who are efficient to generate a fair
amount of capital internally as the basis for their gradual expansion and
forcing the rest to look after themselves with respect to working capital.
However, if you are trying to achieve a 6.5 to 7.5 percent growth rate in
the economy, you probably cannot afford to ignore a potentially dynamic
area and simply let it move at its own speed. I am arguing here that we
do need substantial research with respect to the capital requirements of
the small firms in the market towns. We need to use that research to
find the means by which we may be of assistance to them through institu-
tional credit programmes.

In analyzing the credit needs of small rural firms, we must be pre-

pared to admit that we are on the wrong track. It may be that we simply
cannot do anything in institutional credit for these firms simply because
the failure rate is so high, the risks are so high and, therefore, the poten-
tial losses to institutional credit systems may be excessibly high. But, it
certainly is something we should be looking into if we want to encourage
these types of enterprises.
66

The third matter I want to discuss briefly is infrastructure. I have

already alluded to it in the earlier contexts, so we can cover it quickly.
The discussion will distinguish, on the one hand, between hard infra-
structure — the physical elements like roads — and, on the other hand,
the soft infrastructure of the institutions that directly facilitate produc-
tivity — such as those for credit or education.
We do need to know what is the relationship between the various
elements of hard infrastructure. What is it that determines how success-
ful a road will be in stimulating the whole range of economic activities
discussed above? If you are to have a return to the road, does electrifica-
tion have to be provided concurrently? Does the telephone have to
come more or less with the road, at least in the market towns? Those are
very important issues. We would hope that the answer is that they do
not all have to come at once.
However, if the complementarities are high, then we have a very
difficult political problem of having to concentrate a whole set of activi-
ties in a limited number of areas while we are providing sufficient capital
to spread out the effort to other areas. And, obviously, the political
system pushes you towards spreading these kinds of infrastructure invest-
ments very thinly. If we discover that there is a high degree of comple-
mentarity among the various component parts, then we have a difficult
political problem to face.
I am afraid that what we will discover through research on these
issues is that there is a high degree of complementarity among elements
of infrastructure and, therefore, there are very hard political decisions to
be made about the sequencing of regions for infrastructure investment.
You have to do a fairly full job in certain areas to get a return, implying
that you move through the sequence of regions much more slowly than
otherwise would be the case. Some obvious political problems can arise
from that set of circumstances.
Beyond the relationship among elements of hard infrastructure, the
roads, the electrification, the telephones, and so on, we must also analyze
the relationship of what I refer to as the soft infrastructure or the institu-
tions which come along with the hard infrastructure. What is the order
 67

in which we need to develop institutions? What is the minimum number

of them, in terms of complementarity, for achieving major development
activities? We could even ask questions about the income distribution
implications of various institutions.
Interestingly enough, of the whole range of public institutions, the
one that is most frequently used by low-income people is the post office.
Therefore, if you are concerned with seeing that public institutions have
a favourable effect on low-income people, a post office has to be very
high on your list of priorities. I must admit that I do not know why this
is the case. The data we have on this is largely on the frequency of use.
I suspect that low-income people have remittances from outside and that
they have a number of reasons for needing to communicate with the out-
side world. And so this becomes an important institution for them. I
think that this is a very interesting issue because we have strong political
and moral pressure to see to it that the development process has a broad
distribution and sometimes we find surprises in the institutions which
are important to low-income people. We need more studies to find out
what institutions matter to whom.
It is useful to push the equity issue further. I go back to my
favourite infrastructure element, the telephone. We have studies in India
which are quite interesting in terms of the benefits which a village
telephone gives to very low-income people. In a little study in Gujarat
looking at these issues, we find that the lowest income people in an
isolated village are absolutely at the mercy of one or two wealthy people
in the village if they suddenly need transport. If there is an extreme
illness in the family, for example, where there is a need for quick trans-
portation out of the village, they are completely at the mercy of those
one or two families. That obviously can lead to a very exploitative
situation.
What a telephone does to the poor people is suddenly give them
access to wider alternatives to meet their emergency needs. One can
argue that it is a very important element in broadening poor peoples'
range of choices and, thus, an important means of reducing the exploita-
tion of very poor people.
68
Now, to go back to the main argument on growth, there are a
tremendous number of institutions involved in the development of the
market towns and involved in the health and growth of the small indus-
tries of those towns. There are so many such institutions that we need
to have some sense of priority for policy as to which ones we are going
to be provided and under what circumstances. Again, we have the very
critical issue of the complementarities amongst these elements.
Of course, as we look at priorities for rural development, we need
to remember that when we are looking at large-scale industrialization in
the major cities such as Karachi and Lahore, we take all these infrastruc-
ture elements for granted. We just assume that there is a critical infra-
structure, that there has to be good road transport, that there have to be
telephones, and that there has to be electrification. We assume a rather
large set of public sector institutions that will naturally be provided in
those centres.
We do not have to study the needs of large-scale industries in the
major metropolitan centres and their relative priorities. They are natu-
rally all looked after. I want to make a major point about this. If we are
serious about broad-based regional development, taking advantage of
agricultural growth to stimulate non-agricultural activities, then we have
to be serious about providing the institutions and the hard infrastructure
which is available in the urban areas. But, we have to recognize that the
demand for these is so immense that priorities must be established. We
have to recognize that a scarcity of resources prevents us from doing
everything at once. Thus, in making informed decisions, there is a very
major need for analysis of these problems.
Frankly, I am underrating or, in a sense, understating the importance
of a well-operating political process. Countries do develop. Progress
does occur without the kinds of studies I am talking about. Why is that?
One reason, of course, is that it is amazing how much inefficiency we can
stand in the world and still progress. The other reason is that there are
political processes and politicians. Local politicians know what is
happening in their constituencies and they know what small firms need.
They talk to people in the same way that we do with systematic research.
 69

Thus, the political process begins to generate some priorities in providing

services in a way that is probably not all that inefficient. Research
should be able to increase the efficiency of those processes somewhat, or
perhaps, serve as a substitute for poorly operating political systems.
The normal political process will have a number of distortions
because of the biases of an individual politician, biases both in the way
the political system works and biases in the constituency that is behind a
particular politician. Random factors are important too, such as when
an area happens to have a particularly effective politician. The kind of
research and analysis I am talking about can increase the efficiency of
those processes a.t least marginally, but enough, I would think, to justify
the fairly modest expenditure on such research.
The last area of research I want to discuss concerns agricultural pro-
duction itself. Here, obviously, I do not want to go into full detail
because we are discussing a very broad set of processes — the very pro-
cesses of growth in the agricultural sector. Let us remember, however,
that the driving engine that we are talking about for agriculture is the
increase in national income in the hands of a cultivator class. We need to
be doing a full range of research to see to it that those processes move
ahead efficiently and rapidly. I would like to raise a small number of
special issues, however, with respect to research on agricultural produc-
tion growth which are relevant to the processes I am talking about and
their multiplier influences.
The most difficult research problem is the complicated set of
regional issues in agricultural production growth. We are talking about a
growth process which is driven by technological change in agriculture
and that then has very powerful multiplier influences on the rest of the
economy, That process depends on what is feasible with respect to agri-
cultural technology. Some regions are going to be fortunate and have
technology created which gives them a tremendous boost in their income
and swings these multiplier forces into effect. But, some regions will not
be so fortunate.
Some of the regions which are not going to move are left out simply
because we did not recognize what their capabilities were, and so did not
70

do the right biological and physical science research. We must try to

anticipate and correct those omissions. But some regions are not going
to move because the resource base which they have, in terms of what we
know of science and technology, is simply not going to respond to even
th6 best improved technology that can be developed for those circum-
stances. Thus, we can differentiate three types of region-based situa-
tions. The first is the dynamic case of a region that is moving; the
second is the case of a region that is not moving, but could be; and the
third is the case of a region that is not moving and probably cannot. We
need to differentiate those cases in order to allocate our agricultural
research resources effectively and to move properly with the infrastruc-
ture investment. These are especially vital issues.
Note that the whole structure of development discussed in these
lectures represents factors which reinforce each other in exacerbating
regional income disparities. And recognize that we are talking about
incireases in regional income disparities because of the differential impact
of what happens in agriculture itself; and further, that those disparities
are also exacerbated by the very powerful multipliers that arise from
agricultural growth.
It is an economic problem, in a sense, that we do not want to waste
our investment in infrastructure, in research and in all the other elements
of such growth by putting them into the areas where the returns will be
very poor. Thus, one of the major research tasks, particularly with
respect to infrastructure investment, is trying to sort out where there is
to be a large return to these investments and where there is not going to
be a return. In some regions, agriculture will be a powerful engine of
growth while other regions will not respond because of physical resource
deficiencies.
If we only looked at overall growth rates, we would stop here and
map the country in a way that would direct investment to the higher-
return regions. Obviously, however, we also have very complex political
processes at work. We have to recognize that this kind of growth strategy
creates a political problem of regional disparities. Hence, we also have to
give some thought to whether we are to modify the concentration of
 71

investments in areas that can respond to new technology. If we are not

going to make the kind of investments to give accelerated productive
growth in the backward regions, what should we be doing in those
regions? That, of course, is a very difficult and knotty issue. It is, again,
one on which we need to do a great deal of research..
We have to face facts that there are regions which are not going to
move very well. We have also to face the fact that there are also human
beings in those regions and consider a humanitarian point of view. It is
likely that the political problems may suggest responses somewhat
different from those suggested by the humanitarian problems.
In general, we have been quite unsuccessful in figuring out how to
deal with the problems of regions in developing countries which cannot
respond to improved technology. We usually solve that problem by out-
migration. The younger, more vigorous people from the low-potential
areas simply leave. That results in the horrendous problem of a remain-
ing population that has had its better educated and more vigorous people
drained out. The whole problem in a sense represents a downward spiral.
I do not want for a moment to minimize the extent of these
regional problems. I simply want to bring to your attention that in
countries that spend vast sums of money and do care about the problems
in those kinds of areas, we have not come up with very much in the way
of solutions. I also want to be very careful not to give you the impres-
sion that these are necessarily undesirable development processes because
they give regional disparities. Do not forget that the alternative strate-
gies which are oriented towards the large-scale, capital-intensive
industries create extreme regional disparities in that it is only large cities
that move with that kind of strategy, leaving practically all of the
countryside out of the development process. I am talking now about a
strategy which brings a major portion of the countryside into the process.
In looking at the areas which are unlikely to move with modern
agricultural technology, but which have a potential, we have some very
interesting research issues. The first of these research issues brings us
back to the infrastructure questions. We continually see the initial
impact of agricultural technology, the multiplier effects, as very weak in
72
the areas that have poor infrastructure. Again, in the case of Bangladesh,
even where areas matched in every respect except for infrastructure, the
good infrastructure areas use 92 percent more fertilizer per hectare of
land than the poor infrastructure areas. Fertilizer is a major carrier of
new technology in agriculture and, therefore, those poor infrastructure
areas are not benefiting from the initial impact of technology or its
effects. Thus, investment should be made in areas with good physical
potentials but lacking infrastructure. Developing countries have large
areas falling in that category.
We also need to look at our agricultural research systems from the
point of view of the extent to which they can succeed and cannot succeed
in particular areas. And there we have to be very careful not to fool our-
selves. You can always find a plant breeder or a soil scientist who will
claim miracles are possible in any particular area. The issue is whether or
not they can really deliver. So, we need to look at other parts of the
world with similar resources and see whether they have been succeeding
where the institutional and trained manpower environment may be
somewhat more favourable.
I would like to add to this regional question a very important growth
dynamic. In the circumstances of a low-income country, the bulk of the
agriculture — practically all of it — is devoted to basic food staples. In
the case of Pakistan, most is devoted to the foodgrain commodities. As
incomes rise, given the very high income elasticities of demand for a wide
range of agricultural commodities, the structure of consumption of agri-
cultural commodities changes very rapidly. In particular, the demand for
fruits, vegetables, and livestock commodities grows rapidly.
The optimal physical condition for producing fruits, vegetables, and
livestock commodities may at least be somewhat different to what is
optimal for the basic foodgrain commodities. Thus, it may be that rapidly
changing demand structures open up possibilities for development of
some regions which otherwise might have been thought of as fairly back-
ward and having poor prospects. We do need to look very much at the
dynamics of demand and see clearly where there is going to be an increase
that might be met from a region which is initially disadvantaged given
 73

the old demand structures. That again calls for expansion and the
development of the agricultural research system to meet the compleit
new needs of those regions.
I must now emphasize a point about human capital. The kind of
development strategy I am discussing, with agriculture as the leading
edge providing strong multiplier forces on other sectors of the economy,
is a trained personnel-intensive development strategy. The heavy indus-
try kind of strategy, the capital-intensive development strategy, uses
significantly fewer trained people. First of all, it makes much less
employment generally, but it makes proportionally even less employment
for trained people.
For example, how many highly-trained people are necessary to run a
steel mill as compared to basic labourers? We find that proportion to be
small in a good deal of large-scale industry. That may be contrary to
some of the conventional wisdom, but common sense will tell you that
when you move into agriculture, where you have to develop a very
complex institutional structure of research and so on to support it, you
are obviously talking about a tremendous increase in the demand for
educated people. This is especially true when you note the small-scale
industries where the proportion of entrepreneurs to workers is quite high.
I make that comment in the context particularly of the need for many
institutions to support agriculture.
In Pakistan, we see tremendous efforts in developing the Agricul-
tural Research Council and all the work that goes on under that. It has
been an exemplary development, but it obviously needs considerable
further development to move into the highly modern world of high yield
foodgrain production. Further, that system must broaden itself into the
very wide range of commodities which come out of agriculture as
incomes rise and as the high-income elasticities for many commodities
begin to exert themselves.
Thus, we do need much more of research in the whole manpower
area to figure out what the increased demands will be, where they are go-
ing to be and how the higher educational system has to be structured to
74

meet those needs. I use research to illustrate the tremendous needs for
trained people for a modern agriculture, but the types of points I make
can be replicated for many other areas as well. And remember that
expansion of investment in human capital is not only a means to a
development end but it is an important part of the end itself. How mar-
velous and fortuitous!
The topic of this lecture has been research needs. I am sure that
readers have been a little surprised by my research agenda. Coming from
an economist, it probably sounds fairly pedestrian — a whole range of
studies that involve fairly simple-minded surveys of what is happening
around small-scale industries and market towns, looking at consumption
patterns, which we have always looked at, in fairly straightforward ways
and a number of manpower studies. But, I would like to make the point
that in a development strategy that provides high growth rates and has a
high degree of dynamism, there is a tremendous burden on government
to try to adjust to the dynamics.
Thus, a tremendous amount of analysis is needed in order to
support government in making these critical decisions. That analysis
may seem fairly pedestrian on the surface, but research methodology
need not be restricted to straightforward, old-fashioned economic tools.
There are ways of using sophisticated statistical and econometric tech-
niques in doing what I am suggesting. Such tools are, however, frosting
on the cake, not the cake itself. We are talking about the multiplication
of a large number of studies that have to be replicated over a fairly wide
area in order to give us rather precise information for good policy
determination.
I will make a general closing comment. We have many disbelievers
about the development strategy set forth here. From that point of view,
getting out and doing some social accounting matrices in rural areas, as
we have been doing at the International Food Policy Research Institute
and as has been done elsewhere, can be quite convincing. For that, you
collect the data describing the total economic system of the regions of
interest. You feed into those results the changes in agricultural produc-
tivity that are feasible, that are being put into effect now, and then
 75

measure those multipliers on the rest of the economy. Again, the

ultimate results can be very impressive. Thus, we may need some of
those highly-sophisticated social accounting types of studies in order to
convince the nonbelievers. But, I hope we can bring the nonbelievers
along fairly easily and not put a lot of resources into that kind of effort;
and hence get on with policy-oriented research which is necessary to help
governments to move vigorously with the strategy. Thank you.

DISCUSSION
Mr Inayatullah: I have a rather unconventional set of questions on
research. What is the social utility of knowledge being produced by our
research institutions? Because we are increasingly concerned with what is
produced in the country in physical terms and what reaches the common
man, does our research actually reach the common man? Does it enable
him to act effectively and protect his interests? Secondly, most of our
dealings in any conference like this are with the professional researchers
and the civil servants who are mostly employees of the government.
Obviously, the government is not very neutral in its objectives. It has its
own interests and, as a result, the institutions and the research agenda
seek to legitimize the power of the ruling group and do not necessarily
promote the interests of the common man. Basically, the research agenda
becomes biased in favour of whoever is the controller of the resources.

My next comment relates to the whole relationship of jintellectual

centres and the intellectual periphery. As developing countries, we are
the periphery of intellectual centres of the West and, thus, have unequal
terms of trade. What we produce in terms of research and the problems
we tend to investigate are sometimes beneficial to our planners and
sometimes probably to the common man as well, but are considerably
bent towards validating the theories being produced in the universities
and intellectual centres of the West. So the whole question is, what is the
possibility of developing research agendas which benefit the common
man, in which the common man also participates and is empowered to
act effectively?
Prof. John W. Mellor: From an equity point of view, I feel comfortable
with an employment-oriented agenda. If the common man everywhere in
76

the world, and particularly in developing countries, is going to have more

control of his environment, his government, and his consumption, he
has to raise his income. And the way incomes of the mass of the people
get raised is through greater and increasingly productive employment.
Some people are under the delusion that all wealthy people in
developing countries work hard while most poor people are sitting
around idle. That is what lies behind the surplus labour theory. But we
all know that poor people are working extremely hard, but unproduc-
tively because there is no allocation of capital, resources, and infra-
structure to facilitate a gradual increase in their productivity.
So far, I have been talking about a development strategy that is
somewhat common man-oriented, but I have not discussed redistribu-
tion of assets and wealth towards the poorer elements in society. There
are two reasons for this. First, such a redistribution is not really going
to }ielp the common man very much unless he is part of the dynamic of a
growth-oriented strategy of development. I strongly doubt that redistri-
bution is necessary to accomplish this in most parts of Asia and Africa.
However, where you have a feudal agricultural system, you have to do
something to break its back in order to get the agricultural technology
dynamics I am talking about. Land reform is vital in such cases.
The second reason I have avoided the issue is that it seems to me
that the political systems in much of the Third World really are not
oriented to bringing about major redistributions in the foreseeable
future. So our efforts will be better spent on doing what we can for the
common man within the context of the broad political and distributions
systems now in effect. I think I am also motivated by the fact that as a
part of an international organization I would like to think of myself as a
world person. Redistribution is a very difficult internal political issue
best dealt with in national research agendas. But, we must not forget that
feudal land tenure systems will virtually block a dynamic, agricultural-
based growth strategy.
I should close my discussion on these issues by pointing out two
things: (1) I have avoided what I consider to be purely national issues and
 77

have stressed those for which more technological solutions are promising.
And, (2) I want to be absolutely clear that I am talking about research
that relates to a broad development strategy, not the total research
agenda for either agriculture or the general economy. There are a lot of
other issues that are not part of my agenda.
Mr Akmal Siddique: Thank you very much, Professor Mellor for another
excellent lecture this morning. I have questions and comments on two
basic areas. The first is regarding the telecommunication facilities we are
talking about — telephone facilities and the like in developing countries—
and the second is regarding small farms in developing countries.
Regarding telephone facilities, I would like to share a small personal
observation. Everybody knows that telephone facilities are very bad in
big towns like Islamabad. The public decision-making in a country like
Pakistan does not really involve proper economic sense. If I want to
make a call to a railway station, I cannot get my call through because
of faulty facilities so I have to pick up my motorbike and get onto the
road. I spend two or three liters worth of gas, my time and its opportu-
nity costs while I am on the road. The road is congested and the proba-
bility of accidents is high. The social and economic costs of this effort
add up. if I had a good telephone facility I could have made a 50 paisa
telephone call and received the information right in my house. So this
is one aspect that public decision-makers should take into consideration.
They should look at the economic cost of not having a proper telephone
facility in the country.
Secondly, I would like to comment on small firm businesses. As I
understand it, you have advocated small firm business in Third World
countries and doing away with capital-intensive projects in a country like
Pakistan. Well, my question is what about economies of scale? Moreover,
while literacy levels are very low in a country like Pakistan, entrepreneur
skills are also very low. What do you suggest under circumstances like
this one?
Prof. John W. Mellor: Infrastructure is a serious matter in rural areas and
its development will require vast resources. I would not for a minute
78

suggest that the strategy I am talking about has no resource requirements.

Decisions have to be made to do certain things and not do others.
Current studies on resource productivity for small firms are quite
impressive. In general, we are finding that these small firms are using
resources quite efficiently and productively. In fact, one can make the
case that it is the large-scale firms which are misallocating resources in
developing countries. So I do not have any problems of efficiency. The
small firms also increase their efficiency substantially over time. Those
that stay in the business tend to increase their capital intensity step-by-
step as their productivity and resources increase. Taken collectively,
these firms have a genuine cumulative compound rate of growth.
Small firms, the backbone of an employment strategy, require
educated people which means an expansion of the education system. The
lack of entrepreneurs and the lack of education are closely associated
problems of development. Thus, the development strategy set forth is
particularly demanding on educational institutions and entrepreneurship.
That is good in its own right, but also requires massive investment in
education. In Pakistan, the proportion of your GNP devoted to educa-
tion is rather small even by the standards of countries with the same per
capita income level. That would be a major bottleneck in what I am
talking about and you need to do something about it.
As you know, I have had a much more intensive and longer term
experience in India, so I find it easier to use that country as an example
when discussing these issues. The striking change in India over the last
20 years has been in the tremendous increase in the numbers of people
who clearly have entrepreneurial capabilities to develop small-scale
industries, as distinct from trading capabilities. It is these vast numbers
of entrepreneurs which have produced real growth in the vigorous parts
of India. I have not travelled extensively in the Punjab of Pakistan, but
I am sure that I would find something similar there. From decade to
decade, there is almost certain to be a great deal more entrepreneurship
in those towns. What I find exciting about growth led by agricultural
demand is that it is widely dispersed in a large number of centres and,
therefore, provides opportunities to tap a broad range of talent. There
 79

may be a lack of entrepreneurs in Pakistan, but not a lack of latent

entrepreneurship. There are plenty of people who have the potential.
The question is what opportunities are being created for them, and what
is the educational system doing to prepare them. That is where some
action is needed. If anybody is a nonbeliever on these issues, we need
some research on it!
Dr S. K. Qureshi: Professor Mellor, I was intrigued by your classification
of three kinds of regions when discussing the regional ramifications of
the strategy that you have been talking about. Now, you classify regions
as ones that are moving, ones that can move and those that cannot move.
My feeling is that, in reality, this classification is probably not so air-
tight. Moreover, in any country this classification would probably be a
function of the capability ot the agricultural research system.
I would like to present two examples from Pakistan that highlight
gaps within our research system that constrain our ability to change the
prospects for the different regions that you have spoken of. When we
were designing the Tarbela Dam, there were studies that showed that
if the pace of deforestation were reduced, the length of the dam will
increase. And if the length of the dam goes up you can keep on generat-
ing more electricity and the water would be better supplied in larger
quantities to the Punjab. These studies emphasized interrelatedness and
the need to consider these linkages. The results of these studies were not
utilized. Moreover, further research has not really been done that is both
region-specific and considers also the interrelationship between different
aspects.
We have been talking about technological breakthrough and of the
agricultural strategy for generating incomes and employment. The
biggest problems of agricultural growth in Pakistan are due to irrigation
design. We have problems of waterlogging and salinity. These issues again
require considerably more research. What we have done is to sink tube-
wells and pump the water. But what happened was that the salinity level
of the soil increased, which again requires more irrigation. And, there are
also provincial dimensions to our problems; we have sweet water in
Punjab and sour water underground in Sind. So what I am really driving
80

at is that there are in different regions tremendous possibilities for rele-

vant kind of research and that these are distinct and yet very interrelated.
And Pakistan's experiences have shown that we need to do more research
on efficient public policy so that we realize these possibilities.
Prof. John W. Mellor: It is important to rapidly expand the technical
agricultural research system. You do not have nearly enough trained
people to do even a small fraction of the agricultural research that is
needed. And, when you do have them, you still will have a complex
institutional problem of how to organize and mobilize them. You cannot
run them from one big organization.
Precisely because of the shortage of trained researchers, you have a
very difficult problem of making short-term decisions about the alloca-
tion of agricultural research resources. And I have no question that the
optimum allocation of those resources from the point of view of growth is
going to exacerbate regional disparities. I should emphasize that regional
'divisions may be quite small. I am not talking of Punjab versus Sind, but
of smaller places within larger regions.
I also would like to emphasize the point I made about the dynamics
of demand. The salvation of traditionally backward areas which have
little prospect of responding to certain types of research is that they may
have great prospects for producing things for which there is a new and
rapidly rising demand.
Because infrastructure is critical to the success of agricultural
research and expensive, tough decisions have to be made on where it is
to be developed. Generally, response to the agricultural technology is
going to be better where production is already fairly high. Simply put,
response to technology tends to be percentage increases. Consequently,
the absolute increase is greatest in areas where absolute production is
already highest. These areas also tend to have higher population densities
which will give higher per capita returns on infrastructure investment
than areas with a sparse population. Since the more productive areas
with the higher population intensity already have somewhat better
infrastructure, they will give better responses to technology and to more
infrastructure investment. Thus, regional disparities will be increased.
 81

The problem of exacerbating regional differences is probably

worse than I implied. We should not gloss over it. At least in the short-
to intermediate-term, we are talking about difficult economic and
political decisions that call for a good deal of research. We need to know
to what extent differential returns to technology and investment in
better-off areas exceed those in poorer areas. Are the differences large
enough to justify major political risks in going ahead there? Will invest-
ment in more productive areas generate enough income so that much
more can be spent in other areas later? Or, are the differences fairly
marginal and therefore not worth the risks?
Dr F. U. Siddiqui: Thank you, Prof. Mellor, for simplifying a rather
complex topic in today's lecture. I would just like to make one comment
on the simplified, agenda for research pertaining to the agricultural
growth and the employment growth strategy that you highlighted and
explained yesterday. I was quite surprised that in a country like Pakistan,
considerable research activity has been going on. This was a pleasant
surprise to me because I have been away for a number of years. The
point I would like to make relates to the application of this research.
I think the economist's propensity to keep looking further in developing
more sophisticated models is very important. However, I would suggest
that there should be greater use of the existing research which has not
been coordinated enough and lies scattered in so many different areas.
Efforts should be made to use this research and to optimize and
economize on the research resources that are always short anywhere and
even more so in a developing country.
The second thing which the economists should be concerned with,
in order to utilize the research resources productively, is to communicate
their results effectively to the policy-makers in the first place and then
hopefully down to the users like the farmers in rural areas. Thank you.
Prof. John W. Mellor: IFPRI is very much concerned with research on
complex issues of concern to policy-makers. We try to relate our research
to the people who are making policy. But, policy-makers are very elusive.
It is hard to find anybody who admits to making any policy, I have come
to the conclusion that economics research has to be replicated and re-
peated over and over again in different environments to have an impact! A
82

study done in one place is not convincing and is likely to be taken as

anecdotal. In the U.S., economic research has a tremendous impact
because it is done in many different places at different times and is
gradually fed to policy-makers by people in whom they have confidence.
I think one cannot come to Pakistan without being impressed by the
quality of work that is being done. It needs broadening and replication.

Admiral (Retd.) M. Fazil Janjua: First, I would like to compliment Prof.

Mellor for a brilliant lecture. I found your lecture intellectually stimu-
lating. I am sorry I missed the lecture you gave at the Institute yesterday.
I would also like to express my thanks to Prof. Naqvi and the P1DE
for the honour they did me by inviting me here to listen to this
morning's lecture. I have known Prof. Mellor for quite some time and we
have discussed many issues in an office environment, but I had not had
the pleasure of listening to Prof. Mellor lecture. I have particularly
enjoyed this lecture since the theories and theses he has presented
confirm my own observations in this area. For the eocnomic develop-
ment of a country, the resources that are available should be utilized for
the good of the people. That is obviously the best way of development. I
am not an economist. I have some experience in the management of
resources, both men and material, and I have some experience in plan-
ning and in using the knowledge which social scientists and biological
scientists generate in making policies for development. The most apt
approach to development is the integrated approach because agriculture
covers all regions and because it relies on the development of land, water,
and human and climatic resources. Obviously, it is the easiest and best
method for development, especially now when we are modernizing agri-
culture through technological change.

Agriculture can flourish if there is a development in sectors such as

fertilizer. We made very good use of our resource of natural gas in the
manufacture of urea. However, our urea requirement still exceeds pro-
duction. So there is a greater stimulus for adding some more fertilizer
factories. For this we need equipment and materials to insure that many
other activities will be generated; We have an advantage in our manufac-
tured goods sector in those sub-sectors where the raw material is
 83

produced internally. And therefore, your emphasis on development

based on industry where the raw materials and resources are indigenous
is vefy apt.
I am impressed by the fact, and I am very glad that this galaxy of
economists are listening, that you have emphasized that the development
of agriculture is a complex task. I have been in some of the highest
decision-making forums of the country where the development of agri-
culture was generally simplified. I remember one forestry specialist
sitting next to me at a meeting where we were discussing what the
problems of forestry in Pakistan were. He was insisting that by simply
importing some good quality seeds we can have forests all over. I wish it
were more widely realized that even the development of forestry
includes, among other things, a determination of what trees we should
import the seeds for, and what species of trees which could do well
under the conditions of our alpine climates in the North and desert
climates in the South. Therefore, the selection of the forest is not an
easy matter. Then, we have got to raise the seed into seedling and have to
have suitable forestry officers to identify the spots to grow them and to
educate on proper cultural practices.
I cannot resist the temptation of mentioning a lecture I heard on
television in 1983-84, during a drought. In this lecture some social
scientists was saying: "Why don't we have a variety that can do without
water?" I wish it was possible. It is not. There are certain limits even to
the biological sciences. There is a minimum amount of water that would
be required. There will be some drought resistant varieties but you just
cannot simplify the matter and assume that biological scientists can
come up with varieties that require no water at all.
The other thing which I think is very important is that this know-
ledge which the institutions abroad and particularly the international
institutions like the one that Professor Mellor heads is most useful in our
country only if there is a national institution capable enough to take
over and build it up. In other words, international knowledge is useful
to us if there is a national system for research which can then adopt this
knowledge to our conditions and give it the right priorities. This
84

knowledge will not be itself produce the results which we are trying to
achieve, to improve prosperity and have the spread effects and improve
the quality of life for the people. This requires institutional development
at the local level.
The third point I would like to emphasize is that in a developing
country, the demand for resources is enormous. Unfortunately, the
availability is far less. Therefore, the social scientist's contribution to
using the limited resources to optimum advantage is of paramount
importance to us. It is here that the research effort is required. What is
best for improving the quality of life of the people of Pakistan should be
borne in mind. This is the other important aspect. We want to see that
the fruits of increased agricultural production are supportive. With
increased production, we want to see that the poorest do not become
poorer through increased cost of foodgrains. Therefore, the subsidy that
the government gives should really go only to the most deserving person.
Not everybody in the urban areas should be entitled to that subsidy.
I am glad Professor Mellor has mentioned the need to develop know-
ledge. I assure you that if knowledge exists it will eventually be utilized.
In an environment where the resources are limited, the social scientists
and especially the economists have a crucial role in assuring that there is
no waste of scarce resources. We need to develop the capacity here
within our research systems so that we can benefit from the advice and
the guidelines derived in international research. I want to thank you
Prof. Naqvi for this opportunity and thank you, Professor Mellor.
Prof. John W. Mellor: Well, I'd just like to make a brief comment. First
of all, thank you for those very kind remarks. They obviously have
caught the essence of what I am trying to say. I think one of the great
problem with economists is sometimes we are afraid that if we state
things too clearly it will seem so simple-minded that we might not
command sufficient respect. I sometimes take that risk, sometimes
failing in it. I have had a long association with you with respect to
Pakistan and I admire very much the work that you were doing in the
ministry here. And I think we see a lot of the benefits of that around at
this time, so it is a great privilege to have you in the audience here.
Thank you.
 85

FURTHER READING
These lectures are based on a long chain of work, starting with
William Petty, Adam Smith, and, to some extent, Thomas Robert
Malthus. A more recent impetus is derived from Colin Clark and,
perhaps most of all, from W. Arthur Lewis and his celebrated paper on
development with "unlimited supplies of labour". In picking up this
thread, I owe much to my long time associate Bruce Johnston, as we
each took the early ideas and elaborated on them to culminate in a full
strategy of economic development which plays to the. comparative
advantage of developing countries in fostering a technologically improv-
ing agriculture and deriving from that a labour using broadly participatory
strategy of economic development.
I list below several references that elaborate on my own work, a few
that show the thrust of Bruce Johnston's special contributions and one
reference to T. H. Lee, now President of Taiwan, who worked with me at
Cornell and earlier with Professor Ishikawa. T.H. Lee elaborates the
optimal role of agriculture in development with extraordinarily detailed,
historical, social accounting data from Taiwan. Two of the readings are
co-authored with my wife Uma Lele who contributed much to those two
seminal pieces and through endless discussion in these areas of mutual
interest. The references are arranged in chronological order according to
publication date.

REFERENCES
"The Role of Agriculture in Economic Development". With Bruce F.
Johnston. The American Economic Review. Vol. 51, No. 4. Septem-
ber 1961. pp. 566-593.
"The Use and Productivity of Farm Family Labor in Early States of
Agricultural Development". Journal of Farm Economics. Vol. 45, No.
3. August 1963. pp. 517-534.
The Economics of Agricultural Development. Ithaca, New York: Cornell
University Press. 1966.
86

"Toward a Theory of Agricultural Development". Agricultural Develop-

ment and Economic Growth. Edited by Herman M. Southworth and
Bruce F. Johnston. Ithaca, New York: Cornell University Press. 1967.
pp. 21-61.
"The Functions of Agricultural Prices in Economic Development".
Indian Journal of Agricultural Economics. Vol. 13, No. 1. Jan-Mar
f968. pp. 23-38.
Lee, T. H. Intersectoral Capital Flows in the Economic Development of
Taiwan, 1895-1960. Ithaca, New York: Cornell University Press. 1971.
"Growth Linkages of the New Foodgrain Technologies". With Uma J.
Lele. Indian Journal of Agricultural Economics. Vol. 28, No. 1.
Jan-Mar 1973. pp. 35—55.
"Accelerated Growth in Agricultural Production and the Intersectoral
Transfer of Resources". Economic Development and Cultural Change.
Vol. 22, No. 1. October 1973. pp. 1 - 1 6 .
Johnston, Bruce F., and Kilby, Peter. Agriculture and Structural Trans-
formation: Economic Strategies in Late-Developing Countries. New
York: Oxford University Press. 1975.
"The Interaction of Growth Strategy, Agriculture, and Foreign Trade:
The Case of India". With Uma Lele. In Trade, Agriculture, and
Development. Edited by George S. Tolley and Peter A. Zadrozny.
Cambridge, MA: Ballinger Publishing Company. 1975. pp. 93—115.
The New Economics of Growth — A strategy for India and the Develop-
ing World. A Twentieth Century Fund Study. Ithaca, New York:
Cornell University Press. 1976.
"Food Price Policy and Income Distribution in Low-Income Countries".
Economic Development and Cultural Change. Vol. 27, No. 1. October
1978. pp. 1 - 2 6 .
 87

"Technological Change, Distributive Bias, and Labor Transfer in a Two-

Sector Economy". With Uma Lele. Oxford Economic Papers, Vol. 33,
No. 3. November 1981.
"The World f o o d Equation: Interrelations Among Development,
Employment, and Food Consumption". With Bruce F. Johnston!
Journal of Economic Literature. Vol 22. June 1984. pp. 531—574.
Reprinted in Economic Impact. No. 50, 1985/2.

Mellor, John W., and Gunvant M. Desai (eds.). Agricultural Change and
Rural Poverty: Variations on a Theme by Dharm Narain. Baltimore,
MD: The Johns Hopkins University Press. 1985.
"Agriculture on the Road to Industrialization". In Development Strate-
gies Reconsidered. Edited by John P. Lewis and Valeriana Kallab.
U.S. Third World Policy Perspectives Mo. 5. New Brunswick, NJ:
Transaction Books for the Overseas Development Council, 1986. pp.
67-89.
Mellor, John W., and Ahmed, Raisuddin. Agricultural Price Policy for
Developing Countries. Baltimore, MD: The Johns Hopkins University
Press. 1988.
 CONCLUDING
REMARKS
by
Professor Syed Nawab Haider Naqvi
 CONCLUDING REMARKS

by
Professor Syed Nawab Haider Naqvi

As Chairman,! carry the responsibility of saying a few words at the

very end. Perhaps there is no need for this, considering the lucidity of
Prof. Mellor's lecture and the great simplicity with which he presented
his ideas, which are otherwise quite complex.
Prof. Mellor has convinced us in these two days that, like love,
agriculture is a many-splendoured thing. I especially use the word 'love'
because a lot of the classic love stories, at least in Pakistan, originated
from the rural areas. We have the moving stories of devoted love such as
Sohni-Mahiwal, Sassi-Pannu, etc.—all of them ending in tragedy! Listen-
ing to Prof. Mellor, and his repeated emphasis on the need for adequate
rural infrastructure—especially telephones, roads and bridges—prompted
me to think that Sohni would not have died by drowning if only she
could have talked to her suitor, Mahiwal, on telephone to arrange a
rendezvous and a ride together; and if both could have made good their
escape by road, instead of her having to float alone on an earthen pitcher
across the turbulent Chenab! Indeed, Prof. Mellor even provides
empirical evidence which suggests that, with better infrastructure,
these innocent love-birds would not only have been saved from an
avertable tragic ending, but also that they could have lived happily ever
after with more money in their pockets! This is because wages tend to
be (12 percent) higher in those rural areas where infrastructure facilities
are better.
90

We heard today, and yesterday, the plausible thesis that agricultural

growth is a better initiator of overall growth than is industry, because in
it technological change, food output, food prices, and employment of
labour (and capital) play a powerful expansionary role. I need not repeat
his thesis, having summarized the essential elements in my concluding
comments yesterday; but, inspired now by today's lecture, let me make
a few more remarks.
First, Prof. Mellor has taught us in these last two days that if econom-
ic growth really has to contribute to the alleviation of poverty, it can
do so most effectively by raising the income of the poor and the level
of food output. To achieve these aims, a higher level of food output
must be supplied at a lower price for the simple reason that a higher
price of food is poverty-increasing. This is a very important point because
most policy prescriptions to ensure higher agricultural growth argue for
a higher, rather than a lower, price of food. The novelty of Prof. Mellor's
thesis is that it takes into account the direct and indirect effects of
lower food prices on agricultural output by recognizing explicitly the
general equilibrium relationship between the labour market and the food
market. Policy-makers can avoid reaping the bitter harvests of ill-founded
policies, based simply on raising the price of food to stimulate output.
Secondly, economists and policy-makers will do well to
remember that if you want to embark on a programme of poverty
reduction, it can be done most effectively in the context of a fast-grow-
ing agriculture. Indeed, a high rate of agricultural growth is a necessary
condition for reducing rural poverty. But for the fruits of this growth to
be transferred to the common man, it is essential that employment and
real wages rise at a fast enough rate. However, this will not come about
by the growth of the agricultural sector alone. It is, therefore, essential
to maximize the indirect effects of the increments in national income-
caused by agricultural growth—on the non-agricultural sector. For this
to happen, the structure of effective demand must be changed in such a
way as to ensure a high level of consumption expenditure on non-agricul-
tural wage goods. But appropriate changes in the structure of effective
demand can be induced only by a judicious combination of market and
non-market forces. To leave such a crucial matter entirely to the devices
of the Invisible Hand would be, at best, naive.
 91

Thirdly, we should note the importance of the phenomenon of

technological change and its nature. It is an historical 'fact' that 3/4ths
of economic growth through the centuries has come about because of
technological progress. The need for technological progress is felt most
compellingly in the agriculture sector where, due to the limited size of
land, the 'extensive margin' cannot be fruitfully explored. Indeed, the
many dire predictions made by some economists about the acute failure
of foodgrain output to meet the needs of a sharply rising population
have been proved wrong mainly because of the powerful output-raising
effects of technological change in the agricultural sector—e.g., the
adoption of the high-yielding variety seeds. Prof. Mellor also employs
the phenomenon of output-raising technological change to remove a
major worry about his model—namely, how to produce higher levels
of foodgrain output at falling food prices. Policy-makers would do well
to grasp the importance of this phenomenon while framing policies
about agriculture.
I would also like to clarify a couple of points.
First, the fact that the agricultural sector must play the role of an
initiator in a regime of high economic growth and employment to
reduce rural poverty does not mean that the industrial and the services
sectors should be relegated to a secondary role. Far from that. Prof.
Mellor makes it clear that, in the process of structural transformation,
the share of the agricultural sector in total GDP must decline secularly;
implying that the non-agricultural sectors must grow at a faster rate than
agriculture. The share of the total labour force employed in agriculture
must also decline; again implying that the employment-generating
capacity of the non-agricultural sectors must rise at a faster rate than
that of agriculture. Indeed, Prof. Mellor has explicitly emphasized that
the agricultural sector by itself cannot generate the employment and
growth required to reduce poverty substantially in a short period of
time. Accordingly, he emphasizes the crucial importance of the indirect
effects of agricultural growth and employment on the non-agricultural
sectors of the economy.
Secondly, the nature of the policy prescription that flows from Prof.
Mellor's model should be clearly understood. He tells us that the tradi-
tional policy of treating industry as an "engine of growth" has not borne
92

fruit; and that it would have been better if this role had been assigned to
agriculture instead. But since such an 'error' has already been committed
in almost all the developing countries, how can we implement Prof.
Mellor's recommendation to assign agriculture the initiating role in
achieving high rates of growth of output and employment? Prof. Mellor's
message is the following: now that the growth process has already been
initiated by industry, nothing can be done to rewrite history; let us then
cut our losses by not neglecting agriculture as has been done in the past.
Agricultural growth should be accelerated; but all this does not mean
that agriculture would henceforth grow at a faster rate than the rest of
the economy. Prof. Mellor would rule out such a back-to-agriculture
strategy. I wish to emphasize this point in order to avoid any misunder-
standing on this issue.
Prof. Mellor has also presented today a whole agenda of research
highlighting the need for investigating the consumption patterns, the
production processes in rural areas, infrastructure, the distribution
mechanism, and the overall development process. It promises to be a
highly creative research programme which will help us to a better under-
standing of the mystique of agricultural growth and employment genera-
tion, and the many ways through which the initial growth impulses
originating in the agriculture sector spread to the rest of the economy.
This research agenda should also form an excellent basis of intellectual
collaboration between the PIDE and the IFPRI.

I would now like to thank Prof. Mellor for giving us two very
enlightening lectures. It is on such occasions that we realize that time
flies. I am extremely grateful to the academics and policy-makers, too,
who have attended these lectures in such large numbers. They raised
penetrating questions, which prompted Prof. Mellor to shed more light
on his ideas. We should also compliment the management of Holiday Inn
for making extremely good arrangements for this Seminar.
On this happy note, I declare the session closed.
BIOGRAPHICAL SKETCH
of
Prof. John W. Mellor
 95

Appendix
BIOGRAPHICAL SKETCH
OF
PROFESSOR JOHN W. MELLOR

Date of Birth: December 28, 1928

Education: Cornell University 1950 - 1954
B.Sc., Cornell University 1950
M.Sc., Cornell University 1951
Ph.D., Cornell University 1954
Diploma in Agric. Econ., Oxford University 1952
Experience: 1952—54 Lecturer, Department of Agricultural
Economics, Cornell University
1954—58 Assistant Professor, Department of Agri-
cultural Economics, Cornell LTniversity
1958 65 Associate Professor, Department of Agri-
cultural Economics and Department of
Asian Studies, Cornell University
1961—66 Associate Director, Center for Interna-
tional Studies, Cornell University
1964—65 Acting Director, Center for International
Studies, Cornell University
1965—77 Professor, Department of Agricultural
Economics, and Asian Studies, Cornell
University
1973—77 Director, Program on Comparative Eco-
nomic Development, Cornell University
1976—77 (On leave beginning February 1976)'
1976—77 Chief Economist, and Associate Assistant
Administrator for Policy Development
96

and Analysis, Agency for International

Development, Washington, D.C.
1977— Director, International Food Policy
Research Institute, Washington, D.C.

Professional
affiliations: Director, Chair, or Member of Project, Commissions, or
Groups:
Member, Senior Expert Group on Rural Credit, Reserve
Bank of India, 1987
Chairman, Directors of the International Agricultural
Research Centers, 1987
Member, Council for Agricultural Science and Tech-
nology (CAST) task force on the project, "The Long-
Term Viability of U.S. Agriculture". 1986.
Director, Research Project (AID and Cornell University),
Analysis of Direct and Indirect Effects of Technological
Change in Agriculture, 1974-75
Chairman, Mekong Development Panel, Southeast Asia
Development Advisory Group of the Asia Society, 1974
Director of Research, 20th Century Fund Project on
India, 1970-72
Director, Research Project (AID and Cornell University),
Agricultural Prices in Economic Development: Their
Role, Function, and Operation, 1966—70
Representative for Cornell University on the 10-member
Interuniversity Committee for Study Fellowships in
International Development, 1962—67
 97

Director of various Cornell University research projects

in India, Pakistan, Nepal, Thailand, Indonesia, Bangla-
desh, Philippines, Taiwan and Chile
Member,
Editorial
Boards: International Journal of Development Planning Litera-
ture, 1986 _
Environment, 1984-
Pakistan Development Review, 1984-
Human Organization, 1965—70
Journal of Farm Economics, 1961—64
Board of
Directors: Member, Board of Directors, Overseas Development
Council, 1977-
Member, Executive Committee, International Voluntary
Services, Washington, 1965-75
Member, Board of Directors, International Voluntary
Services, Washington, 1962—75
Member, also Chairman, Board of Custodians (investment
committee), Telluride Association (education trust
fund, assets circa $5 million), 1952-59
Visiting
Professor: Visiting Professor, American University, Beirut,Lebanon,
Summer 1968
Rockefeller Foundation Visiting Professor, Indian Agri-
cultural Research Institute, New Delhi, India, 1964-65
98
CECA Visiting Professor, Balwant Rajput College, Agra,
India, 1959-60 (18 months)
Honors and
awards:
General: Recipient of the 1987 Presidential End Hunger Award,
October 15, 1987
Recipient of the 1987 Outstanding Alumni Award,
Cornell University, Ithaca, New York. October 9, 1987
The first social scientist awarded the 1985 Wihuri
International Prize — given by the Wihuri Foundation
for International Prizes in Helsinki, Finland in October
1985, in recognition of "Constructive work which has
remarkably promoted and developed the securing of
nutrient supply for mankind"
Listed in Who's Who in Economics, A Biographical Dic-
tionary of Major Economists: 1700—1981. Edited by
Mark Blaug (Cambridge: The MIT Press, 1981)
Fellow, American Agricultural Economics Association,
1980
Fellow, American Academy of Arts and Sciences, 1977
Social Science Research Fellow, Cornell University,
1953-54
Fulbright Fellow, Oxford, 1951-52
Publication: 1986 Winner of Award for Publication of Enduring
Quality by the American Agricultural Economics Asso-
ciation for his paper co-authored with Bruce F. Johnston,
"The Role of Agriculture in Economic Development",
 99

which appeared in The American Economic Review,

September 1961
1978 Winner of Awards for Publication of Enduring
Quality by the American Agricultural Economics Asso-
ciation for the books. The Economics of Agricultural
Development. Ithaca: Cornell University Press, 1966
1968 Winner of Award for Best Published Research
1967 by the, American Agricultural Economics Associa-
tion for the Chapter, "Towards a Theory of Agricultural
Development", In Herman M. Southworth and Bruce F.
Johnston, (eds.) Agricultural Development and Eco-
nomic Growth, pp. 21-61. Ithaca: Cornell University
Press, 1967.
100

Publications
of
Professor John W. Mellor
A. Books — Author
The Economics of Agricultural Development. Ithaca, New York: Cornell
University Press. 1966.

Developing Rural India: Plan and Practice with Thomas F. Weaver,

Uma J. Lele and Sheldon R. Simon. Ithaca, New York: Cornell Uni-
versity Press. 1968.

The New Economics of Growth — A Strategy for India and the Develop-
ing World. A Twentieth Century Fund Study. Ithaca, New York:
Cornell University Press. 1976.

B. Books - Editor

India: A Rising Middle Power. Boulder, Colorado: Westview Press. 1979.

Agricultural Change and Rural Poverty: Variations on a Theme by

Dharm Narain. Edited with Gunvant M. Desai. Baltimore, MD:The
Johns Hopkins University Press. 1985.

Accelerating Food Production Growth in Sub-Saharan Africa. Edited

with Christopher L. Delgado and Malcolm J. Blackie. Baltimore,MD:
The Johns Hopkins University Press. 1987.

Agricultural Price Policy for Developing Countries. Edited with Raisuddin

Ahmed. Baltimore, MD: The Johns Hopkins University Press. 1987.
 101

C. Encyclopedia Articles
"Farm Mangement". With J. R. Raeburn. Encyclopedia Britannica. Vol.
10, No. 1. 1965.
"Agriculture in Developing Countries". International Encyclopedia of
the Social Sciences. 1969.
D. Journal Articles
"British Postwar Policy Towards Farm Mechanization". Journal of
Farm Economics. Vol. 36, No. 1. February 1954. pp. 98—107.
"The Average and Marginal Product of Farm Labor in Underdeveloped
Economies". With Robert D. Stevens. Journal of Farm Economics.
Vol 38, No. 3. August 1956. pp. 780-791.
"Grain Feeding Related to Milk-Feed Price Ratios". With Conrad B.
Strauss. Journal of Farm Economics. Vol 41, No. 4. November
1959. pp. 805-808.
"The Nature of Agriculture's Contributions to Economic Development".
With Bruce. F. Johston. Food Research Institute Studies. Vol. 1,
No. 3. November 1960. pp. 335-336.
"The Role of Agriculture in Economic Development". With Bruce F.
Johnston. The American Economic Review. Vol. 51, No. 4,
September 1961. pp. 566—593.
"Increasing Agricultural Production in Early Stages of Development".
The Indian Journal of Agricultural Economics. Vol 17, No. 2. April-
June 1962. pp. 29-46.
"The Process of Agricultural Development in Low-Income countries".
Journal of Farm Economics. Vol. 44, No. 3. August 1962. pp.
700-716.
102

"The Use and Productivity of Farm Family Labor in Early States of

Agricultural Development". Journal of Farm Economics. Vol. 45,
No. 3. August 1963. pp. 517-534.
"The Contrasting Response of Rice to Nitrogen: India and the United
States". With Robert W. Herdt. Journal of Farm Economics. Vol. 44,
No. 1. February 1964. pp. 150-160.
"The Effect of Growth in Demand for Milk on the Demand for Concen-
trate Feeds, India, 1951-1976". With Bruno de Ponteves. Indian
Journal of Agricultural Economics. Vol. 19, Nos. 3 & 4. July-
December 1964. pp. 131—146.
"Alternative Estimates of the Trend in Indian Foodgrains Production
During the First Two Plans". With Uma J. Lele. Economic Develop-
ment and Cultural Change. Vol. 13, No. 2. January 1965. pp.
217-232.
"Production Problems and Issues in Agricultural Development". Journal
of Farm Economics. Vol. 48, No. 5. December 1966.
"Science and Technology in Agricultural Development". Science Report.
New Delhi. Vol. 4. Nos. 1 - 2 . Jan-Feb 1967. pp. 241-248.
"Change in Relative Prices of Agricultural Commodities, India, 1952-53
to 1964-65". With Ashok Dar. Agricultural Situation in India.
January 1968.
"The Functions of Agricultural Prices in Economic Development".
Indian Journal of Agricultural Economics. Vol. 13, No. 1. Jan-Mar
1968. pp. 23-38.
"Determinants and Development Implications of Foodgrains Prices in
India, 1948-1964". With Ashok Dar, American Journal of Agri-
cultural Economics. Vol. 50, No. 4. November 1968. pp. 962-975.
"Farm Management Extension in a Modernizing Agriculture". Nether-
lands Journal of Agricultural Science. Vol. 16, No. 4. 1968., pp.
275-279.
 103

"Production Economics in the Modernization of Traditional Agriculture".

The Australian Journal of Agricultural Economics. Vol. 13, No. 1.
1969. pp. 25-34.
"Changing Basis of Demand for Fertilizer in Indian Agriculture". With
Gunvant Desai.{Economic and Political Weekly. Vol. 4, No. 39.
September 1969. pp. A175-A188.
"Agricultural Price Policy in the Context of Economic Development".
The American Journal of Agricultural Economics. Proceeding Issue.
Vol. 51, No. 5. December 1969. pp. 1413-1420.
"Government's Role in the Green Revolution". War on Hunger. Vol 4,
No. 1. January 1970. pp. 12-16.
"The Basis for Agricultural Price Policy". War on Hunger. Vol. 4, No. 10.
October 1970. pp 4 - 9 .
"Dilemma of State Tube Wells". With T.V. Moorti. Economic and
Political Weekly. Vol. 6, No. 13. March 1971. pp. A37-A45.
"New Seed Varieties and the Small Farm". With M. Schluter. Economic
and Political Weekly. Vol. 7, No. 13. March 25, 1972. pp. A31-A38.
"Jobs, Poverty, and the'Green Revolution ".With Uma J. Lele. Interna-
tional Affairs. Vol. 7, No. 13. January 1972. pp. 20-32.
"Growth Linkages of the New Foodgrain Techologies". With Uma J.
Lele. Indian Journal of Agricultural Ecnomics. Vol 28, No. 1. Jan-
Mar 1973. pp. 35-55.
"Accelerated Growth in Agricultural Production and the Intersectoral
Transfer of Resources". Economic Development and Cultural Change.
Vol. 22, No. 1. October 1973. pp. 1 - 1 6 ,
"Food Aid and Long-Run World Food-Population Balances". The
Columbia Journal of World Business. Vol. 10, No. 3. Fall 1975. pp.
29-36.
104

"The Landed and the Landless - The Poverty Connection". CERES.

Vol. II, No. 1. January-February 1978. pp. 4 2 - 4 6 .
"Food Price Policy and Income Distribution in Low-Income Countries".
Economic Development and Cultural Change. Vol. 27, No. 1.
October 1978. pp. 1 - 2 6 .
"Lessons from Experience". Economic Impact. No. 3.1978/3. pp. 25—27.
"Real Test is Commitment to Development". Development. Vol. 21,
No. 3. March 1979. pp. 38-40.

"World Food Strategy for the 1980s - Context, Objectives, and

Approach". Entwicklung + Landlicher Raum. 13. Jahrgang/Heft
6/79. November—December 1979. pp. 8—9.
"Agriculture in Growth: Changing Research and Data Needs for Effective
Policy". Prepared for the Panse Memorial Lecture by the Indian
Society of Agricultural Statistics held at New Delhi in February 13*
1980. Journal of the Indian Society of Agricultural Statistics. Vol.
32, No. 1. April 1980.
"Food Aid and Nutrition". American Journal of Agricultural Economics.
Vol. 62, No. 5. December 1980.
"Technological Change, Distributive Bias, and Labor Transfer in a Two-
Sector Economy". With Uma Lele. Oxford Economic Papers. Vol.33,
No. 3. November 1981.'
"Third World Development: Food, Employment, and Growth Inter-
actions". American Journal of Agricultural Economics. Vol. 64, No.
2. May 1982.
"Food Prospects for the Developing Countries". American Economic
Review. Vol 73, No. 2. May 1983.
"Feeding the Underdeveloped World" With Richard H. Adams, Jr.
Chemical and Engineering News. Vol. 62. April 1984.
 105

"The World Food Equation: Interrelations Among Development,

Employment, and Food Consumption". With Bruce F. Johnston.
Journal of Economic Literature. Vol. 22. June 1984. pp. 531—574.
Reprinted in Economics Impact (No. 50, 1985/2).
"Entwicklungspolitische Forschung zur Verbesserung der Ernaehrungslage
der Armen-Forschungsstrategien des International Food Policy
Research Institute (IFPRI)". With Joachim von Braun. DSE/A TSAF -
Bericht - Ernaehrung am Tropo'schen und Subtropischen Standort.
October 1984.
"The Food Situation in Developing Countries: Two Decades in Review".
With Leonardo A. Paulino. Food Policy. Vol. 9, No. 4. November
1984.
"A Structural View of Policy Issues in African Agricultural Development".
With Christopher L. Delgado. American Journal of Agricultural
Economics. Vol. 6b, No. 5. December 1984.
"Food Aid: Reflections on a Decade of Action". Food and Nutrition.
Vol. 10, No. 1. 1984.
"Food Production Needs in a Consumption Perspective". With Leonardo
Paulino. Global Aspects of Food Production: Natural Resources
and the Environmental Series. Vol. 20. 1986. pp. 1—24.
"The New Political Economy of Food and Agricultural Development".
With Richard H. Admas, Jr. Food Policy. Vol 11, No. 4. Novem-
ber 1986. pp. 289-297.
"Famine — Causes, Prevention, and Relief". With Sarah Gavian. Science.
Vol. 235. January 30, 1987. pp. 539-545.
"Links Between Technology, Agricultural Development, Economic
Growth, and Trade Creation". Building On Success: Agricultural
Research, Technology, and Policy for Development. ACIAR Tech-
nical Report No. 7. Australia. 1987. pp. 19-24.
106
"Food and Development: The Critical Nexus Between Developing and
Developed Countries". Presented at the Nomisma International
Conference on the Agro-Technological System Towards 2000,
Bologna, Italy, September 18-20, 1986. Economic Impact. Vol. 61.
1987. pp. 8 - 1 4 .

"Food Policy, Food Aid, and Structural Adjustment Programme: The

Context of Agricultural Development". Food Policy. Vol. 13,
No. 1. February 1988. pp. 10-17.

E. Chapters in Books and Conference Proceedings

"Increasing Agricultural Production in Early Stages of Economic Devel-
opment—Relationships, Problems, and Prospects. In E.O. Heady (ed.),
Food, A Stool in International Development. Ames: Iowa State
University Press. 1962.

"Professional Training in Agriculture for Foreign Students — Role,

Problems, and Improvements". In Irwin T. Sanders ( e d P r o f e s s i o n a l
Education of Students from Other Lands. New York: Council on
Social Work Education, Inc. 1963. pp. 210—235.

"Toward a Theory of Agricultural Development". In Herman M. South-

worth and Bruce F. Johnston (eds.), Agricultural Development and
Economic Growth. Ithaca, N.Y.: Cornell University Press. 1967. pp.
21-61.

"Growth of the Market and the Pace of Agricultural Development in

Low-income Countries". Reprinted in M. S. Moyer and R. E.
Vosburgh (eds.), Marketing for Tomorrow— Today. Prepared for the
American Marketing Association National Conference held at
Toronto, Canada in June 22, 1967. American^ Marketing Associa-
tion. 1967. pp. 244-245.
 107

"Agricultural Production and Input Markets in South Asian Small-Holder

Agriculture". In Kurt R. Anschel, Russel H. Brannon and Eldon D.
Smith (eds.), Agricultural Cooperatives and Markets in Developing
Countries. New York: Frederick A. Praeger Publishers. 1969. pp.
107-119.
"The subsistence Farmer in Traditional Economies". In Clifton R.
Wharton, . Jr. (ed.) ^Subsistence Agriculture and Economic Develop-
ment. Chicago: Aldine Publishing Company. 1969. pp. 209—227.

"The Role of Agriculture in Economic Development". With Bruce F.

Johnston. In Karl A. Fox and D. Gale Johnson (eds.), A.E.A. Read-
ing in the Economics of Agriculture. Vol. XIII. Homewood, Illinois:
Richard D. Irwin, Inc., 1969. pp. 359-386. AEA Economic Review.
Vol. 51, No. 4, September 1961. In Metin Berk, Fikret Gorun and
Selim Ilkin (eds.), Iktisadi Kalkinma: Secme Yazilar. Yayin Publica-
tion No. 6. Anakra: Faculty of Administrative Sciences, Middle
East Technical University. 1966.

"Major Determinants of the Productivity of Labor". Proceedings of the

Thirteenth International Conference of Agricultural Economists.
London: Oxford University Press. 1969. pp. 241-248.
"Expanding Domestic Markets for Food". In Kenneth L. Turk (ed.),
Some Issues Emerging from Recent Breakthroughs in Food Produc-
tion. Ithaca, New York: New York State College of Agriculture,
Cornell University. 1971. pp. 135-148.
"Nutrition and Economic Growth". In Alan Berg, Nevin S. Scrimshaw,
and David L. Call (eds.), Nutrition, National Development, and
Planning. Cambridge, Massachusetts: The MIT Press. 1972. pp.
70-74.
"Models of Economic Growth and Land-Augmenting Technological
Change in Foodgrain Production". In Nurul Islam (ed.), Agricultural
Policy in Developing Countries. London: The MacMillan Press,
Ltd. 1974. pp. 3 - 3 0 .
108

"An Employment-Oriented Strategy of Development". In Raymond E.

Dumet and Lawrence J. Brainard (eds.), Problems of Rural Develop-
ment—Case Studies and Multi-Disciplinary Perspectives. Leiden,
Holland: E.J. Brill Press. 1975. pp. 131-139.
"Technology to Increase Food Supply". Report of a Seminar on World
Hunger — Approaches; to Engineering Actions. Washington, D.C.:
National Academy of Sciences. 1975. pp. 15—25.
"The Interaction of Growth Strategy, Agriculture, and Foreign Trade:
The Case of India". With Uma Lele. In George S. Tolley and Peter A.
Zadrozny (eds.), Trade, Agriculture, and Development. Cambridge,
MA: Ballinger Publishing Company. 1975. pp. 93-115.
"Nutrition and Agricultural Policy". In Beverly Winikoff (ed.), Nutrition
and National Policy. Cambridge, MA: MIT Press. 1978. pp.
461-468.
"New Directions in Aid and Development and Their Implications for
American Labor". In Ward Morehouse (ed.), American Labor in a
Changing World Economy. New York: Praeger Publishers. 1978. pp.
291-304.
"Ending Poverty and Hunger: The Relationship between Strategies for
Increased Food Production and Policies for Redistribution". In
Louis L. Knowles (ed.), 7o End Hunger. New York: National Council
of the Churches of Christ in the USA. 1983. pp. 39-50.
"The Global Food Situation and the Choice of Development Strategy".
In Kenneth C„ Nobe and Rajan K. Sampath (eds.), Issues in Third
World Development. Boulder, Colorado: Westview Press, Inc. 1983.
pp. 393-403.
"The Utilization of Food Aid for Equitable Growth". Presented at the
World Food Programme — Government of the Netherlands Seminar
on Food Aid, The Hague, Netherlands, October 3—5, 1983. Report
of the World Food Programme Government of the Netherlands
 109
Seminar on Food Aid. Rome, Italy: World Food Programme/
Government of the Netherlands Publication.1983.
"The Changing Role of Developing Nations in Agricultural Trade", U.S.
Agriculture and Third World Economic Development: Critical
Interdependency. Proceedings of a Meeting of the Food and Agricul-
ture Committee of the National Planning Association, Washington,
D.C. April 3, 1984. Washington, D.C.: National Planning Associa-
tion. February 1987.
"Opportunities in the International Economy for Meeting the Food
Requirements of the Developing Countries". Presented at the Utah
State University Conference on the Political Economy of Food,
Logan, Utah, May 2 - 4 , 1985. In W. Ladd Hollist and F. LaMond
Tullis (eds.), International Political Economy Yearbook. Vol. 3.
Boulder, Colorado: Lynne Rienner Publishers, Inc. 1987. In IFPRI
Reprint No. 118.
"Requisites to Global Food Security: Challenges to Developed and
Developing Nations". New Dimensions in Food Security. Summary
Report, 1985 World Food Production Conference. Mundelein,
Illinois: International Minerals and Chemical Corporation. 1986.
"Dealing with the Uncertainty of Growing Food Imbalances: Interna-
tional Structures and National Policies". Agriculture in a Turbulent
World Economy. Proceedings of the Nineteenth International
Conference of Agricultural Economists, Malaga, Spain, August 25 —
September 5, 1985. England: Gower Publishing Company Limited.
1986.
"Food Production, Food Supply, and Nutritional Status". Nutrition
Issues in Developing Countries for the 1980s and 1990s. Proceedings
of a Symposium held on December 9, 1985. Washington, D.C.:
National Academy Press. 1986.
"Food Aid for Food Security and Economic Development". In Edward
Clay and John Shaw (eds.), Poverty, Development, and Food.
110
Presented for Festchrift in honour of Hans W. Singer, December 12—
14,1985. England: The Macmillan Press, Ltd. 1987. pp. 173-191.
"Agriculture on the Road to Industrialization". In John P. Lewis and
Valeriana Kallab (eds.), Development Strategies Reconsidered.
U.S. Third World Policy Perspectives No.5. New Brunswick, N.J.:
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67-89.
"Prediction and Prevention of Famine". Federations Proceedings.
Vol. 45, No. 10. Federation of American Societies for Experimental
Biology. September 1986.

"International Development Policy: What's Best for American Farmers"?

Reshaping World Agricultural Policies. Proceedings of the 1987
Luther T. Pickrel Agricultural Policy Seminar. 1987. pp.10—11.
"Food Production, Consumption, and Development Strategy". In
Robert E.B. Lucas and Gustav F. Papanek (eds.), The Indian Econo-
my: Recent Development and Future Prospects. Boulder, Col:
Westview Press in cooperation with the Center for Asian Develop-
ment Studies. 1988. (Prepared for the Conference on the Indian
Economy: Successes, Current Policies, and External Links, held in
Boston, Massachusetts, October 4—7, 1986)

F. Conference Papers and Lectures (unpublished)

"Village-Level Research". Presented at the CECA Conference on Agri-
cultural Economics in Southeast Asia, University of Malaya, Kuala
Lumpur, May 8—14, 1960. (Reprinted in the CECA reprint series)
"The Role of Agricultural Economics in Agricultural Development of
Low-Income Countries". Conference on Training of Asian Graduate
Students in Agricultural Economics, Sponsored by the Council of
Economic and Cultural Affairs, Inc., New York City, April 7—9,
1961. pp. 1 - 2 2 .
 Ill

"Growth of the Market and the Pace of Agricultural Development in

Low-Income Countries". Reprinted in M. S. Moyer and R, E.
Vosburgh (eds.), Marketing for Tomorrow — Today. 1967. pp.
242—245. Presented at the American Marketing Association National
Conference by the American Marketing Association. Toronto,
Canada. June 22, 1967.
"Agricultural Price Policy in the Context of Development". Presented at
the International Seminar on Fiscal Incentives to Promote Agricul-
tural Development. Istanbul, Turkey. November 1968.
"National Planning: The Relation Between Agriculture and Economic
Development in the Context of Population Growth". Presented at
the Senator Frank Carlson Symposium on World Population and
Food Supply. Manhattan, Kansas. December 1968.
"The Green Revolution—New Potentials for Development". Paper
delivered at the Cornell Convocation. Boston, Massachusetts. March
1969.
"The Role of Government and the New Agricultural Technologies".
Presented at the USAID Spring Review. Washington, D.C.. May
13-15, 1969.
"Policies for Broadening the Desirable Income Effects of Rapid Growth
in Agricultural Production". Presented at the Symposium on Science
and Foreign Affairs — The Green Revolution, United States House of
Representatives Sub-Committee on National Security Policy and
Scientific Development. Washington, D.C.. December 5, 1969.
"Accelerated Technological Change in Agriculture and Its Relation to
Environment". Presented to the Conference on Economic Develop-
ment and Environmental Problems. Williams College, Williamstown,
Massachusetts. September 18-19, 1970.
"The Agricultural Marketing System and Price Stabilization Policies".
Presented to the First Asian Conference on Agricultural Credit and
Cooperatives, Manila, Philippines, December 9, 1970.
112
"Modernizing Agriculture and Theories of Economic Growth". Presneted
at the Conference on Agriculture in Development Theory. Bellagio,
Italy. May 23-29, 1973.
"Economic and Social Implications and Choices Related to Change in
Agricultural Technology". Presented at the Second International
Seminar on Change in Agriculture. Reading, England, September
9 - 1 9 , 1974.
"Relating Research Resource Allocation to Multiple Goals". Presented
to the Conference on Resource Allocation and Productivity in Inter-
national Agricultural Research. Airlie House, Virginia. January 26—29,
1975.
"Science and Technology for Agriculture — The Systems, the Context,
and the Determinants of Public Policy". Presented to the Confer-
ence on Science and Technology Policy in the Developing Nations
with Special Reference to the Industrial and Agricultural Sectors.
Cornell University. March, 5, 1975.
"Foreign Economic Assistance and the Choice of Development Strategy".
Presented at the Pugwash Conference on Science and World Affairs.
Madras, India, January 1976.
"Agricultural Price Policy and Income Distribution in Low-Income
Nations". Presented at the Colloquium on Agricultural Price Policy,
Cornell University. February 25-27, 1976.
"Mobilization Resources of Agricultural Growth — Strategy and Institu-
tions". With Uma Lele. Presented at a World Bank/ADC Seminar
on Institutional Innovational Reform: The Ladejinsky Legacy.
Kyoto, Japan. October 10-12, 1977.
"Basic Human Needs — A Development Perspective". Presented at the
Plenary Session of the International Development Conference,
Washington, D.C., February 8, 1978.
 113

"Third World Development and the Demand for Agricultural Exports—

The Role of the United States". Presented at a Federal Reserve Bank
Symposium, Kansas City, Missouri, May 18-19, 1978. (Published in
Symposium proceedings.)
"The University as a Source of Appropriate Technology for Agriculture —
Comments on the United States Experience in the Context of
Developing Countries". Presented at the Seminar on the Relation-
ship of University Research in Science and Technological Develop-
ment sponsored by the Indo-U.S. Subcommission on Education and
Culutre, Srinagar, India, September 18—22, 1978.
"The New Rural-Based Development Strategy". Presented at the
UNITAR-EDI Seminar Washington, D.C., March 27, 1979.
"Elimination of Hunger — Comment on the Report of the Presidential
Commission on Hunger". Presented at the Plenary Session, New
York Symposium on the Report of the Presidential Commission on
Hunger. April 10, 1980.
"The World Food Problem and BIFAD -- The Need for Production and
Research". Presented to BIFAD. May 22, 1980.
"Food for Health, Development, and Peace". Presented at the Annual
Convention of Rotary International. Chicago, Illinois. June 4, 1980.
"Global Dynamics of the World Food Situation". Presented at Food
Security in a Hungry World. An International Food Policy Conference,
San Francisco, California. March 4—6, 1981. (Published in Confer-
ence Proceedings.)
"African Food Policy in a Global Context". Presented at a Spring
Symposium on Food Problems in Africa, University of Illinois,
Urbana-Champaign, Illinois, April 23, 1981,
"Growth in Third World Demand for Food and Implications for the
United States", Presented at the University of Florida, September
15, 1981.
114
"Labor Supply and Processes of Growth". Presented at Delhi University.
New Delhi, India, December 1981 in Honor of Dharm Narain.
"Overview to the Food Situation for Developing Countries to the Year
2000". With Leonardo A. Paulino. Prepared for the Rockefeller
Foundation's Conquest of Hunger Program Review Workshop. New
York, May 21, 1982.
"Agricultural Growth-- Structures and Patterns". Presented to the Inter-
national Association of Agricultural Economists, Plenary Session III,
Jakarta, Indonesia, August 24-September 2, 1982.

"Food and the Structure of Economic Growth: Its Relevance to North-

South Relations". Presented at the Symposium on the World Food
Problem and Japan. Japan FAO Association, Tokyo. October 16,
1982.

"Trends in Third World Fertilizer Consumption: Relation to National

Policies". Presented at the 8th Enlarged Council Meeting of the
International Fertilizer Industry Association. Geneva. December 1,
1982.

"Food and Agriculture in Planned Economics — The Case of India".

Presented at the Annual Meeting of the Allied Social Sciences
Association. New York. December 27—30, 1982.

"Meeting Basic Human Needs: The Interacting Roles of Growth and

Income Transfers". Presented at the Ohio Wesleyan Forum Series on
Third World Development—Challenge to Free Enterprise and Demo-
cracy, Delaware, Ohio, April 27, 1983.

"Food Price Policy in the Context of Growth with Equity". Precis of

Keynote Address Delivered at the Commonwealth Secretariat Consul-
tative Meeting on Food Pricing and Marketing Policy. London.
May-3-6, 1983.
 115

"Alternative Development Strategies and the Role and Structure of Agri-

culture". Presented at a Plenary Session of Meetings of the Rural
Sociological Society. Lexington, Kentucky. August 17—20, 1983.
"Agricultural Growth and Generation of Employment". Presented at
the 22nd Congreso Agrario Nacional de la Sociedad de Agricultores
de Colombia. Cali., Colombia, December 5—7, 1983.
Discussion of C. Peter Timmer's Paper "Private Decisions and Public
Policy: The Food Price Dilemma in Developing Countries". Presen-
ted at the 75th Harvard Business School World Food Policy Collo-
quium. Boston, Massachusetts. April 8—11, 1984.
"African Development Bank Lending for Agricultural Development in
Africa". Presented at a Symposium for the Board of Governors of
the African Development Bank, Tunis. May 10, 1984.
"Effective Food Aid for Effective Food Security". Presented at the
Symposium on World Food Security, Food and Agriculture Organi-
zation of the United Nations, Rome. September 3, 1984.
"The Changing World Food Situation-A CGIAR Perspective". Presen-
ted at International Centers' Week, World Bank. Washington, D.C..
November 7, 1984.
"Food Subsidies, Distribution, and Production Effects". Presented at
Workshop on Consumer-Oriented Food Subsidies, Chiang Mai, Thai-
land, November 13-15, 1984.
"Prediction and Prevention of Famine". Presented at the Federation of
American Societies for Experimental Biology (FASEB). Special
Symposium on Biomedical Aspects of World Famine, Anaheim,
California, April 21, 1985.
"Issues in World Agriculture—A U.S. Perspective". Presented at the
American Agricultural Economics Association Symposium on Agri-
cultural and Rural Areas Approaching the 21st Century: Challenges
for Agricultural Economics, Ames, Iowa, August 8, 1985.
116

"Overview: World Food Situation in Historical Perspective". Presented

at Purdue University, West Lafayette, IN. December 12, 1986.
"Food and Employment Interactions—Strategic Considerations". With
Richard Adams. Presented at Annual Meeting of American Asso-
ciation for the Advancement of Science (AAAS) . Philadelphia, PA.
May 27, 1986.
"General Employment Linkages Through Agricultural Growth — A Con-
ceptual Framework". Presented at the VI Latin American Meeting of
the Econometric Society. Cordoba, Argentina. July 22, 1986.
"Agricultural Development Assistance — Goals and Process". Statement
Prepared for Briefing on Responding to the Crisis in Foreign Aid.
Dirksen Senate Office Building, Washington, D.C. September 11,
1986.
"Policies for Increasing Food Staple Exports to Developing Countries".
Prepared for a Dialogue of Agricultural and Development Leaders
Sponsored by the Food and Agriculture Committee (FAC) of the
National Planning Association (NPA) Held at Winrock International
Institute for Agricultural Development. Arkansas. October 1—3,
1986.
"The Right to Food: Action to Address the Hunger Problem". Presen-
ted at the Conference on the Legal Faces of the Hunger Problem.
Howard University, Washington , D.C., October 17, 1986.
"The New Global Context for Agricultural Research—Implications for
Policy". Presented at International Centers' Week, Washington, D.C.
November 3 - 6 , 1986.
"United States Agriculture in the Global Context". Presented at Western
Michigan University, Kalamazoo, Michigan. November 19, 1986.
"Rural Employment Linkages Through Agricultural Growth—Concepts,
Issues, and Question". Presented at the Eighth IEA World Congress,
New Delhi, India, December 1—5, 1986.
 117

"Employment Growth and the Critical Role of Agriculture". Presented

at the International Conference on International Interdependence —
Global Underdevelopment". Held in Jaipur. Rajasthan, India.
December 8 - 1 0 , 1986.
"Agricultural Development in Developing Countries and U.S. Farm
Exports—Complementary or Conflicting". Presented at the American
Farm Bureau Federation Annual Meeting, Anaheim, California.
January 13, 1987.
"The Changing Roles of Multilateral and Bilateral Foreign Assistance".
With William A. Masters. Presented at the ICS/World Bank
Conference on Aid, Capital Flows and Development in Talloires,
France. September 13-17, 1987.
"Towards an Ethical Redistribution of Food and Agricultural Science".
Presented at the Colloquium. Sponsored by the General Foods and
the Smithsonian Institution. Washington, D.C. October 6, 1987.
G. Monographs and Mimeographed Research Publications
"Farming Decisions and Farming Environment in St. Lawrence Country
New York". With John H. Foster. Agricultural Economics
No. 1065. Department of Agricultural Economics, Cornell University.
August 1957.
"Variation in St. Lawrecne Country Agriculture by Land-Class Groups,
1955". With John H. Foster. Agricultural Economics No.1093.
Department of Agricultural Economics, Cornell University. February
1958.
"Part-Time Farming, St. Lawrence Country, New York". With Ichiro
Takahashi.. Agricultural Economics Research No. 4. Department of
Agricultural Economics, Cornell University. September 1958.
"Grain Feeding Related to Milk-Feed Ratios, Four Areas of New York,
1957". With Conrad B. Strauss. Agricultural Economics Research
118
No. 14. Department of Agricultural Economics, Cornell University.
February 1959.

"Farm Business Analysis of 30 Farms, Midhakur, Agra District, U.P.,

1959-60". With T.V. Moorti. Research Bulletin No. 1. The Balwant
Vidyapeeth, Bichpuri (Agra). April 1960.

"Estimates of Change and Causes of Change in Foodgrains Produc-

tion: India, 1949-50 to 1960-61". With Uma J. Lele. Cornell Inter-
national Agricultural Development Bulletin No. 2. August 1964.

"Estimates and Projections of Milk Production and Use of Concentrate

Feeds: India, 1951 — 1976". With Bruno de Ponteves. Cornell Inter-
national Agricultural Development Bulletin No. 6. December 1964.

"Notes on Foodgrains Prices, India, 1967-68 to 1968-69". Cornell

University-USAID Technological Change in Agriculture Project
Occasional Paper No. 2. October 1967.

"Note on Agricultural Price Policy — 1968 Indian Wheat Price Support".

Cornell University-USAID Technological Change in Agriculture
Project Occasional Paper No. 5. January 1968.
"Opportunities and Problems Associated with Wheat Production, Market-
ing, and Pricing in the Kathmandu Valley". Cornell University-
USAID Technological Change in Agriculture Project Occasional
Paper No. 9. April 1968.
"Wheat Production and Utilization as a Leading Edge for Development
in the Kathmandu Valley". Cornell University-USAID Technological
Change in Agriculture Project Occasional Paper No. 10. April 1968.

"Agricultural Prices in Economic Development — Their Role, Function,

and Operation". Cornell University-USAID Technological Change in
Agriculture Project Occasional Paper No. 39. June 1970.
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"Developing Science and Technology Systems — Experience and Lessons

from Agriculture". Cornell University-USAID Technological Change
in Agriculture Project Occasional Paper No. 63. May 1973.
"Modernizing Agriculture, Employment, and Economic Growth: A
Simulation Model". Cornell University-USAID Technological Change
in Agriculture Project Occasional Paper No. 75. May 1974.

"Simulating a Developing Economy with Modernizing Agricultural

Sector: Implications for Employment and Economic Growth".
With Mohinder S. Mudahar. Cornell University-USAID Technologi-
cal Change in Agriculture Project Occasional Paper No. 76. June
1974.
"Population, Resources, and Jobs — A Summary Statement". Cornell
University-USAID Technological Change in Agriculture Project
Occasional Paper No. 77. July 1974.

"The Impact of New Agricultural Technology on Employment and

Income Distribution — Concepts and Policy". Cornell University-
USAID Technological Change in Agriculture Project Occasional
Paper No. 81. May 1975.
"Recent Testimony to Congressional Committees on World Food Prob-
lems and Food Aid". Cornell University-USAID Technological
Change in Agriculture Project Occasional Paper No. 82. July 1975.
"Estimates of Foodgrain Production and Marketings from Input Esti-
mates, India, 1949-50 to 1973-73 and Projections to 1983-84".
With Uma J. Lele, Debra Biamonte, and Arthur Goldsmith. Cornell
University-USAID Technological Change in Agriculture Project
Occasional Paper No. 83. September 1975.
"Performance of Private Trade and Cooperatives". Cornell University-
USAID Technological Change in Agriculture Project Occasional
Paper No. 87. December 1975.
120

"Agricultural Issues and Trends in Asia and the Near East: Reflections
for the Next Decade". Paper Prepared for the USAID Asia and Near
East Bureau Senior Agricultural Development Officers Conference
held in Bangkok. February 1987.
H. Notes, Comments and Reviews
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Financial Records". Journal of Farm Economics, Vol, 34, No. 1.
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"Outlets Used by New York Farmers for Sale of Eggs and Poultry".
Farm Economics No. 184., March 1952. pp. 4,836—4,838.
"Atomic Energy Applications with Reference to Underdeveloped Areas"
(review article). Journal of Farm Economics. Vol. 39, No. 4. Novem-
ber 1957. pp. 1 040-1042.
"The Land Changes and the Land Endures". With Howard E. Conklin.
Land, the Yearbook of Agriculture. United States Department of
Agriculture. 1958. pp. 104-108.

"Grain Feeding of Dairy Cows in Relation to Milk-Feed Price Ratios".

With Conrad B. Strauss. Farm Economics. No. 214. March 1959.
pp. 5,753- 5,755.
"Part-Time Farming in St. Lawrence Country". With Ichiro Takahashi.
Farm Economics. No. 214. March 1959. pp. 5,755—5,757.
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1959-60". With T.V. Moorti. Journal of Agriculture. Agra, India.
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"New York State Agriculture: Position and Problems". With G. W.
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"Part-Time Farming, Does it Pay"? Food Farming. Spring 1962. p. 22.

"Development in Low-Income Countries — Agriculture's Role is Critical".
Challenge — The Magazine of Economic Affairs. Vol. 10, No. 5.
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Review of Jan Tinbergen. Shaping the World Economy: Suggestions for
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February 1964.
"The Objectives and Means of Agricultural Development in Latin
America". Statement to the United States House of Representatives
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Inter-American Development Bank's Role in Agricultural Develop-
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Review of George Blyn. Agricultural Trends in India, 1891—1947: Out-
put Availability, and Productivity. Philadelphia: University of
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Review of Ralph W. Cummings, Jr. Pricing Efficiency in the Indian Wheat
Market. New Delhi: Impex India. 1967. Journal of Asian Studies.
Vol. 27, No. 3. May 1968.
Review of Gilbert Etienne. Studies in Indian Agriculture — The Art of
the Possible. Translated from the French by Megan Mothersole.
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Economic Development and Cultural Change. July 1969.
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Report for East Pakistan Land and Water Development as Related to
Agriculture. A Report of an Ad Hoc Panel of the Board on Science
and Technology for Intersectoral Development of the National
Academy of Sciences. National Research Council. January 1971.
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"Programming United States Food Aid to Meet Humanitarian and

Developmental Objectives". With Barbara Huddleston. Written at
the request of Lester Gordon for Brookings Institution's Assessment
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Review of Gustav Rains et al. (eds.). Comparative Development Perspec-

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"Population, Food, and Employment". Testimony to the United States

House of Representatives Select Committee on Population, Ninety-
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"World Food and Nutrition Problems". Statement to the Committee
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"World Food Prospects and the United States". Testimony before the
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"Long-Term Development in Sub-Saharan Africa". Testimony before the

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 125

Ismael, Julius Emanuel. "Some Aspects of the Rice Distribution Controls

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126

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 127

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