mpetitl n a conflict i~_ Asi n a ·cul ural

r ,soce na _g,- m,ent::

ISSUES, OPTIONS, AND ANAlYTl'CAL PARADIGMS ft1it~d by P.l. Pingel!i and 1 Ft Paris

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Suggested Citation:

Pingali PL, Paris TR (1996) Competition andconflict ill ASIan agricultural resource managment. issues, options, and analytical paradigms. IRRl Discussio n Paper Series No. II. International Rice Research Institute, P.O. Box 933, Manila, Philippines, 370 p,

ISBN 971-22..0080-9 ISSN 01.17-8180


Competition and conflict in Asian agricultural resources management:

Issues, options, and analyfica/paradigms

Edited by P.L. Pingali and lR. Paris




P.O. Box 933,1099 Manila,. Philippines





Acronyms Introduction



Workshop participants Workshop organization Synthesis of papers presented

Summary of working group discussions List of participants

Riding on a "New Wave" of Agricultural R&D: Challenge and Opportunities for Social Scientists in Agricultural Systems Research in Asia

1 1 1 1 2 4 6


GeJia T. Castillo

Increasing Competition for Land and Water Resources:

A Global Perspective

Gershon Feder and Andrew Keck


Agricultural Commercialization and Farmer Product ChoicesThe case of diversification out of rice


Prabhu L. Pingali

Impact of Economic Development on Resources Allocation in Indonesia: Sustaining Agricultural Development

Effendi Pasandaran and Bambang Sayaka


Economic Modernization and Impact of Agricultural Output and Input Markets in Korea

Jung Keun Park


Implications of Modernization on the Agricultural Resource Base in Thailand


Nipon Poapongsakom

Economic Modernization, Market Responses, and Rural Welfare in the Philippines


Arsenio M. Balisacan


Economic Modernization and Impact of Agricultural Input and Output Markets: The case of Vietnam

Nguyen Tri Khiem

Resurgence of Rural Land Markets in the Red River Delta, Vietnam: Policy Implications

Do Kim Chung and Karl E. Weber

Migration, Gender Roles and Technological Change Benchaphun Shinawatra

Do Agricultural Technologies Help or Hurt Poor Farm Women?

Thelma R. Paris and Prabhu L .. Pingali

Social Science Research and Plant Breeding: Initiatives for the Future with Special Reference to Rice Biotechnology

Radha Ranganathan and John Bennett

The Role of Modeling in the Quest for Sustainable Farming Systems Sushil Pandey and J. Brian Hardaker

Agricultural Modernization and the Dilemmas of Low-Input Sustainable Agricultural Systems

Agnes C. Rola

Participatory Resource Management in the Context of GrowthInducing, Self-Empowering Poverty Alleviation









Ana Doris Capistrano

Co-operation and Conflict Management in Community Forestry Systems:

An Alternative Research Methodology in Social Management of Resources 321

Anan Ganjanapan

Participatory Irrigation Management: The Costs and Benefits of Working Together


Naresh C. Pradhan and Prabhu L. Pingali Irrigation Participation and Local Self-Determination


Urivan Tan-Kirn-Yong



Asia today is facing unprecedented changes in the agricultural sector. Rapid urbanization and growing incomes in the NICs are leading to increased competition for agricultural resources. At the same time, changing food habits and diets are leading to a shift in the demand structure of agricultural goods and hence the movement towards diversification. Increased commercialization of agriculture and the rising opportunity cost of labor lead to permanent changes in household labor allocation and gender roles.

However, the paradigm for agricultural system/farming systems research has not adjusted to these broader changes in economic systems. Research methods continue to emphasize subsistence systems and lack an understanding of the implications of market transformations. There is an urgent need for social scientists and biological scientists to understand the emerging trends and to incorporate them in research, design, priority setting and technology evaluation. This volume presents the proceedings of a workshop that addressed some of the above concerns and research needs.

The workshop on Competition and Conflict in Asian Agricultural Resource Management: Issues, Options, Analytical Paradigms was held from 2-4 November, 1994 in Chiang Mai, Thailand. This workshop was jointly sponsored by the International Rice Research Institute and Chiang Mai University, Thailand.

The workshop proceedings provides global as well as country level data on the growing scarcity and competition for agricultural resources, land, water and labor (including gender roles) across the countries of East and Southeast Asia. Current and emerging scarcities in resources are documented for Korea, ThaiJand, Indonesia, Philippines and Vietnam. It also discusses in detail the transformation of the labor market, commercialization of agricultural systems such as communaJ forests, fisheries and water management systems. These changes ought to be understood by the research, policy, and donor community. Country papers and

case studies presented in this book display a variety of social science methods in farming systems/agricultural systems research in terms of their ability to strategically address the impact of emerging trends of the research agenda and j n technology design, priority setting and technology evaluation. These methods range from comparative descriptive data to the use of econometric and simulation models and participatory approaches.

We would like to thank Dr. Benchapun Shinawatra of the Multiple Cropping Center of Chiang Mai University for hosting and organizing the conference and Dr. John Graham of the International Development Research Center Singapore Regional Office, for providing financial support.

Prabhu Pingali and Thelma Paris





Agency for Agricultural Research and Development (Indonesia) Asian Development Bank

Agricultural Systems Research

Bank of Korea

Bangladesh Rural Advancement Committee Center for Agrosocioeconomic Research Central Bureau of Statistics

Coarse Grains, Pulses, Roats and Tubers Centre Consultative Group on International Agricultural Research Export Processing Zones

Economic and Social Commission in Asia and the Pacific Food and Agriculture Organization

Fish Farmers Group (Bangladesh; Grameen Bank) Family Income and Expenditure Survey

Farmer Managed Irrigation System

Farming Systems Research

General Agreement on Tariffs and Trade Gross Domestic Product

Global Environment Facility Government Managed Irrigation System Gross National Product

High Yielding Varieties .

Household Responsible Contract System (Vietnam) International Development Research Centre

International Food Policy Research Institute International Institute for Environment and Development International Irrigation Management Institute

Integrated Pest Management

Intellectual Property Rights

International Rice Research Institute

International Service for National Agricultural Research (The N etherl ands)

J oysagor Fish Farm

Less Developed Countries Labor Force Survey Leasehold Operation

Low Input Sustainable Agriculture Lower Vaca River Irrigation System Multi-National Corporation Mathematical Programming

Modern Varieties

National Agricultural Research Systems National EConomic Social Development Board Non-Government Organizations . Non-Industrialized Countries

National Statistical Office

Operation Land Transfer

Participatory Reaction Research

Product Based Contract System (Vietnam) Peoples' Irrigation Organizations (Thailand) Peoples' Irrigation System (Thailand)








Royal Irrigation Department (Thailand) Rural Rapid Appraisal

Southeast Asian Program for Potato Research and Development

Soybean Yield Gap· -

Thailand Development Research Institute

Thailand Economic Information

Training and Visit

United Nations Conference on Environment and Development United Nations Development Programme - World Bank Urban Development Policy Framework

United Nations Environment Programme (Global Resources Data Base, Kenya)

Upper Talavera River Irrigation System Work Based. Contract System (Vietnam) World Resources Institute




Asia today is facing unprecedented changes in the agricultural sector. Rapid urbanization and. growing incomes in the NICs are leading to increased competition for agricultural resources. At the same time changing food habits and diets are leading to a shift in the demand structure of agricultural goods and hence the movement towards diversification. Increasing commercialization of agriculture and the rising opportunity cost of labor is leading to permanent changes in household labor allocation and gender

roles. . -

However, the paradigm for agricultural system/farming systems research has not adjusted to these broader changes in economic systems. Research methods continue to emphasize subsistence systems and lack an understanding of the implications of market transformations. There is .an urgent need for social scientists to understand the emerging trends and to incorporate them in research design, priority setting and

tech nology eva! uation.

The objectives of the workshop were:

1. to understand the factors that lead to the anticipated shift from subsistence production systems to commercially oriented agricultural enterprises with emphasis on the changing agricultural product mix.

2. to understand the implications of modernization in the non-agricultural sector on the agricultural resource base with specific attention to be given to land, water and labor resources (including gender roles);

3. to assess existing social science methods in farming systems/ agricultural systems research in terms of their ability to strategically address the impact of emerging trends on the research agenda and technology design and;

4. to initiate a dialogue to strengthen social science inputs in technology research

Workshop participants

The workshop participants included social scientists and biological scientists from several regional NARS and funding organizations. The countries represented were:

Indonesia, Philippines, Thailand, Korea, Vietnam, Nepal, and Laos. There were two representatives from the World Bank, USA and Ford Foundation, Dhaka, Bangladesh (See list of participants on pages 6-9).

Workshop organization

The workshop was organized under 5 sessions: Session 1- Strategic Assessment of Agricultural Systems Research; Session II - Modernization, Migration, Labor Use and Resource Management; Session III - Economic Modernization and Impact of Agricultural Output and Input Markets; Session IV- Technology, Sustainability and Social Sciences and Vv Participatory Resource Managemen t ~ Will Farmers Con tin ue to have an Incentive to Participate? Within these sessions, 19 papers were presented. Two


working groups discussed and identified issues and methods for further study on two major topics: a) commercialization and diversification and b) community resource management systems

Synthesis of papers presented

Strategic Assessment of Agricultural Systems Research Growing resource scarcity and competition

Global as well as country level data were presented on the growing scarcity for agricultural resources across the countries of East and Southeast Asia. Current and emerging scarcities in land, water and labor resources were documented for Korea, Thailand, Indonesia, Philippines and Vietnam. The scarcity of land and water resources were attributed to:

• High levels of population growth and to increased competition for these resources from the rapidly expanding non-agricultural sector.

• Diversion of agricultural lands to residential and industrial use especially in the high potential irrigated environments - these are the areas with the best developed infrastructure, roads, power, water and local government structures.

• Withdrawal of high potential agricultural lands from food production imposes serious costs in terms of sustaining food supplies. Food supplies can be sustained, with a shrinking land resource base, only if continued high levels of research investments are made for generating the quantum leaps in productivity.

The impact of agricultural system changes on agricultural product mixes,

subsistence-commercial orientation, use of traditional-modern technologies, mix of land and labor institutional arrangements and other institutional changes as they affect human welfare need to be understood.

Transformation of the labor market

Asian countries are increasingly being characterized as people abundant but labor scarce agricultural economies. The puzzling nature of this phenomemon, which is occuring across the countries but to different degrees, was presented at the workshop, The puzzle itself can be explained by the rapidly rising opportunity costs of farm labor due to rising employment opportunities in the non-agricultural sector.

The following issues were highlighted for further research:

• The extent and magnitude of migration by country and by production environment needs to be assessed. Specific attention ought to given to agriculture-environment-rural-urban connections and linkages ..

• Characterization of the composition of the labor force remaining in agriculture by gender and age and the dynamics of the migration process itself need further in-depth studies

• The implications of migration, rising wage rates and increasing shift to labor saving technologies on technology priorities and technology design, specifically


in terms of the impact on the labor force, specifically women should be well understood.

Structural transformation and the commercialization of agricultural systems

There were several lively debates during the workshop on the implications of structural transformation for the organization of agricultural production. .

• Specific attention was paid to the structure and organization of commercial agricultural systems and the steps involved in the movement from subsistence to commercial systems.

• Implications of increased commercialization trends on specialization and diversification were discussed. An apparent paradox emerges with increased commercialization - there is a concurrent increase in regional diversification and farm household level specialization. Farm household specialization comes about because of increased knowledge and management intensity of commercial systems, for example poultry production, commercial vegetable production, etc. "The ultimate bottleneck for increasing agricultural productivity is the ability of farmers to effectively manage highly knowledge intensive production systems". While there was general acceptance that the trends were towards increased commercialization, there was also recognition that subsistence systems co-exist in much of East and Southeast Asia and that the latter systems are dominant especially in the less favorable production environments.

Community management systems under stress

Rapid population growth and the resulting growth in land scarcity as well as increasing commercialization of agricultural systems is leading to the breakdown of traditional community management systems, such as, comm.unal forests, fisheries and water management systems. The dynamic nature of community resource systems ought to be understood by the research, policy and donor community and attempts to view these systems as static entities ought to be avoided. Case studies presented at the workshop highlighted the following issues with respect to the transitions in community resource management:

• changes in organizational structures and resource allocation and access rules;

Ii declining incentives for individual participation in community resource management, especially with growing wage rates and increasing opportunity costs of labor;

• alternative organizational structures that have and can achieve the objective of sustainable and equitable resource management while minimizing the transactions costs.


Social science methods

Country papers and case studies presented at the workshop displayed a variety of social science research methods, from comparative descriptive data to the use of econometric and simulation models. Vision and strategic thinking were also quite evident, especially in the global issues papers and the country papers. While methodological debates were avoided, further examination of the following issues is warranted:

• a re-assessment of farming systems research paradigms and tools is needed in the face of rapid transition from subsistence to commercial agricultural systems;

• an understanding of the trade-off between the scientific desire for increased rigor and the need for increased relevance of scientific effort;

• improved integration of diagnostic and farm survey data collection techniques; and

• greater appreciation of the mutual compatibility between parametric and nonparametric statistical techniques, including the effective use of descriptive data.

Summary of working group discussions

Working Group 1: Commercialization and Diversification

Identified research issues

1. Characterizing agricultural systems in terms of the process/dynamics of commercialization and diversification

• Conceptual work needs to be done in understanding the characteristics of commercial systems relative to subsistence systems and the distinct stages in the transition to commercialization.

• The implications of commercialization on farm product choices needs to be understood.

• The conditions under which subsistence systems can co-exist with commercial production systems need to be identified.

2. Research and policy issues in relation to the impact of economic growth 00 the productivity and sustainability of agricultural systems

• We need a better understanding of the dynamics of commercialization, especially in terms of the impact on vulnerable groups and the identification of safety nets for protecting them.

• What is the impact of economic growth and commercialization on the agricultural resource base and on the age and sex distribution of labor?

• Does commercialization lead to increased environmental costs on the agricultural resource base?


• What are the policy interventions that can assist in the transition to commercial production systems?

3. Social science methods needed to address the impact of emerging trends on the research agenda and technology design (including equity concerns)

• Ex-ante and ex-post analysis of technology for commercialized systems, with emphasis on social, equity, gender and environmental impacts ..

• Inter-disciplinary methods, among the social sciences, including farmer participatory techniques, for understanding the evolution of agricultural systems.

• Improved data collection and analytical procedures for quantifying the long term consequences of intensive commercial agriculture on the biophysical and the human resource base.

Working Group 2: Community Resource Management Systems

Identified research issues

1. Existing knowledge about the process of transformation of community-managed resource systems in the face of rapid economic growth, technological change, and changing relative factor prices and incentives.

2. Alternative/evolving community based. resource management systems which are beginning to or are likely to develop as traditional systems become less viable.

3. Key research and policy issues in community management of the agricultural resource base?

4. Priority areas for research and methodology development to address the issues of community-based resource system transformation.


Social Science Methods in Agricultural Systems Research:

Coping with Increasing Resource Competition in Asia 2-4 November 1994

Chiang Mai, Thailand


Dr. Doris Capistrano

The Ford Foundation Bangladesh P .. O .. Box 98

Rarnna, Dhaka 1000



Dr. Cynthia Bantilan

International Crops Research Institute for the Semi-Arid Tropics Patancheru, Andhra Pradesh 502 324


Dr. Delima Azahari

Minister for Food and Agriculture Pasar Minggu, Ragunan Road Jakarta

Dr. A.M. Fagi

Central Research Institute for Food Crops Jalan Merdeka 99

Bog or

Dr. Effendi Paseodaran Head

Center for Agroeconomic Research Jalan Yani 70



Dr. Jung-Keun Park

Department of Agricultural Economics Chonbuk National University

Chonj u, Chonlabuk - Do 560-756



Mr. Kon Chansina Director

Department of Agriculture and Extension Vientiane, Lao PDR


Dr. Gelia Castillo

Department of Agricultural Education and Rural Studies

University of the Philippines

at Los Banos

College, Laguna

Dr. Arturo Gomez Agronomy Department University of the Philippines

at Los Banos College, Laguna

Dr .. Agnes Rola

Center for Policy and Development Studies University of the Philippines

at Los Banos College, Laguna


Dr. Anan Ganjanapan

Department of Sociology and Anthropology Chiang Mai University

Chiang Mai 50200

Dr. Tongroj Onchan Faculty of Economics Kasetsart Uni versi ty Kasetsart

Dr. Aran Patanothai Khon Kaen University Khan Kaen 40002

Dr .. Jamaree Pitackwong

Department of Sociology and Anthropology Chiang Mai University

Chiang Mai 50200


Dr. Nipon Poapongsakorn

Agricultural and Rural Development Program Thailand Development Research Institute Rajapark Bldg., 163 Asoke Road

Bangkok 10110

Dr. Suriya Samutakup

Institute of Agricultural Sciences Suranaree University

Nakorn Ratchaseema

Dr. Benchapun Shinawatra Faculty of Social Sciences Chiang Mai University Chiang Mai 50200

Dr. Songsak Sriboonchit Multiple Cropping Center Chiang Mai University Chiang Mai

Ms. Nongluck Supanchaimat Faculty of Agriculture

Khon Kaen University

Khon Kaen 40002

Dr. Sukesinee Supathera Institute of Agricultural Sciences Suranaree University

Nakorn Ratchaseerna

Ms. Luxmi Yorachai Multiple Cropping Center Chiang Mai University Chiang Mai

Dr. Chayan Watanaputi Social Research Institute Chiang Mai University Chiang Mai

Dr. Aree Wiboonpongse Multiple Cropping Center Chiang Mai University Chiang Mai

Dr. Uraiwan Tan Kim Yong

Department of Sociology and Anthropology Faculty of Social Sciences

Chiang Mai University

Chiang Mai 50200



Dr. Gershon Feder

Agricultural and Rural Development Department World Bank, 1818 H St., N.W.

Washington, D.C. 20433




Dr. Nguyen Tri Khiem Faculty of Economics Can Tho University Can Tho

Dr. Vo- Tong Xuan

Mekong Delta Farming Systems Research & Development Centre University of Can Tho

Can Tho

Dr. John Graham

Regional Office for Southeast and East Asia International Development Research Centre Tanglin P.O. Box 101

Singapore 9124

Dr. V. Balasubramanian

International Program Management Office

Dr. Sushil Pandey Social Sciences Di vision

Ms .. Thelma Paris

Asian Rice Farming Systems Network

Mr. Naresh Pradhan

Social Sciences Division

Dr. Prabhu Pingali Social Sciences Division

Dr. Radha Ranganathan Social Sciences Division


RIDING ON A "NEW WAVE" OF AGRICULTURAL R&D: Challenge and Opportunities for Social Scientists in Agricultural Systems Research in Asia

Gelia T. Castillo Professor Emeritus

University a/the Philippines ar Los Banos

One virtue in having been born much ahead is that it is possible to look backward in order to contemplate what is forward. It is easier to write about "post-green revolution blues", if one were not a part of the green revolution. It seems so profound to expound on the ecological economic, and health merits of Integrated Pest Management (IPM) if one were not a party to the movement that promoted preventive spraying on a calendar frequency. It is great to believe in systems and not in reductionism if one had not been a bearer of "miracles" of one technology or another. Curiously, there are not many "1 told you so's" perhaps because there are not many left to tell it to. But perhaps even more important is that the messages in what might have been in the "I told you so's" are not likely to be as we had been told then. A revisit of All in. a Grain a/Rice, for example, shows that the issues then are not exactly the same as those confronting us now (1). It is also a peculiarity of the human experience that 20/20 hindsight provides better insight than the untested, even if exciting, images of foresight. On a lighter vein, who would have predicted that Farming Systems Research (FSR) would be reincarnated as Agricultural Systems Research (ASR) after FSR lost its luster? Now, sustainable agriculture has the makings of the new religion.

Two to three decades ago, agricultural research was relatively simple and single-minded in its pursuit of increased productivity. The first Asian Agricultural Survey Team organized by Asian Development Bank (ADB) in 1968 was unanimous in the view that the only valid route, the single strategy rural development is a movement toward a farming based on the application of the latest in science and technology. It is "intolerant" of development strategies that call for a judicious mixing of some aspects of modern sciences with the so-called realities of traditional wisdom and methods (2). A synopsis of the agricultural research agenda at that time could be outlined as follows:

Plant breeders bred their "miracles" in high yielding varieties (HYVs); others conducted experiment station studies on water management, fertilizers, pesticides, herbicides, direct seeding, power tillers, table threshers, and dryers while still others, designed credit schemes to enable farmers to purchase all of the above and respond to extension strategies preferably T and V (Training and Visit) for transfer of technology.

The ideal type farmer-innovator-role-model was one who used all of these inputs and managed to repay his loans (gender, then, had not been invented). A laggard was one who was late in heeding the call to adopt and the traditional farmer was one who persisted with his traditions and was left behind. Others, were by-passed, as green revolution critics put it.

Much of the social science research during that period, whether by economists, anthropologists and sociologists revolved around the general theme of: constraints to, and consequences of the introduction, diffusion, and adoption of new agricultural technologies. The focus was on single commodities; rice, wheat, corn etc. FSR came later. There were few distracting complications like biodiversity, ecology, sustainability, farmer participation, user perspective, gender; intergenerationaI equity,


IPM, Intellectual Property Rights (IPR), farmers' rights, indigenous knowledge, General Agreement on Tariff and Trade (GAIT), Greens etc. As a matter of fact, what was called "green" then and what is regarded as preferred "green" now are two different Greens.

As we approach the dawn of the 21st century, let me introduce some raw concepts that social scientists in Agricultural Systems Research might consider in defining the substance, the methods, and the organizing framework for the research process itself as we explore the new wave of Agricultural R&D. There is no claim to being futuristic and strategic, only a little bit of nostalgia about sifting past and present realities in search of contents for the future. The following are some scenarios that come to mind not in an ex-ante flash of genius but in an ex-post reflection on ideas to discard, discount and/or distill:

A. Rural-urban interactions and agricultural systems connections;

B. Subsistence farming and agricultural commercialization - an unobtrusive non-dichotomy;

C. Diversification and diversities;

D. Changing institutions and changing agricultural systems;

E. Communication, diffusion, adoption and impact of ideas and tech no togies;

F. Managing plant genetic resources for our common future; and

G. New research paradigms.


For several decades, rural-urban classifications of population seem to have sufficed and we occupied ourselves with either rural or urban development. In the process we often criticized economic and social development policies as being urban-biased and often against agriculture and the rural sector .. However, higher incidence of poverty in rural than in urban areas had made rural poverty (often located in agriculture groups) a continuing concern. A recent revisit of rural development has led us to a number of observations relevant to this workshop (3):

1. While we define what is urban we do not define what is rural. It is a residual category - that which is not urban. is rural. The criteria for defining urban areas include: population density; infrastructure (network of streets wither at parallel or right angle orientation); and regardless of population density, at least six establishments (commercial, manufacturing recreation andlor personal services) and at least three of the following: town hall, church or chapel with religious service at least once a month; a public plaza, park or cemetery; a market place where trading activities are carried on at least once a week and a public building like a school, hospital, health center or library .. Given these criteria for urban areas and the thrust of rural development programs which aim precisely to acquire these elements and to encourage non-farm sources of


income (another urban criterion) success in rural development automatically leads to urban classification, as pointed out by Balisacan (4). In other words, the end goal of rural development seems to be urban development. There is a process called urbanization. but not ruralizarion. Does this mean that the ideal state of affairs is 'urbanhood'? When rural development succeeds, the highperforming rural areas automatically become urban as per definition. This looks like a no-win situtation for rural development; it is regarded as just a route to urban development.

Bahr and Metins estimate that the proportion of increase in urban population resulting from migration (including reclassification is around 43 % in developing countries (5).

2. The traditional migration routes monitored by demographers are: rural-urban; urban-rural; or urban-urban. However, within the rural sector there are more significant routes to watch such as upland to lowland; lowland to upland; to coastal; to mountains; to wastelands etc.

De los Angeles for example, found that important relationships between upland and coastal ecosystems exist that require coordinated management of these resources. Coastal resources continue to be receivers of surplus labor thereby resulting in population stress. In the uplands there is evidence of considerable increase in agricultural cultivation of lands above 18% slope (6). Cruz et al esti mates upland population increasing at a rate of 2.3 % per annum during 1980-90. Between 1980 and 1985 alone, a total of 2.5 million migrants are estimated to have left the lowland rural and urban areas for the uplands (7).

In other words, migration from one resource base to another and changing patterns of natural resource use require an ecosystem framework. Even household studies have shown ecosystem differences in women's roles. Agriculture and health research have now adopted such paradigms to improve "goodness of fit" between problem definition and proposed solution. Although health and specific diseases co-exist with certain aspects of agriculture and forestry, whether ecologically or seasonally the health-agriculture-environment research communities have yet to productively interact.

3. Rural-urban are no longer the separate worlds we define them to be in the 1950s, 1960s and 1970s, such as rural sociology and urban sociology were separate fields of study. Rural-urban interactions are evident in such trends as: (a) farming affecting more!Xamfijes as a partial than as a main source of income; (b) even in typicalrice-dependent villages, rice income is less than 50%; (c) the role of remittances in the life of the rural household has increased considerabJy; (d) migration to urban areas (particularly female migration) contributes to the rural household's income, part of which is invested in farming; and (e) improved food production benefits the urban poor through lower prices. Conversion of farm land into industrial and residential purposes impacts on both rural and urban areas. On the other hand, urban agriculture has become an important survival strategy for urban dwellers, especially lowincome ones. A recent issue of International Development Research Centre (IDRC) Reports estimated that; 'globally, about 200 million urban dwellers are now urban farmers, providing food and income to about 700 million people'. Incidentally, about half of these urban farmers are women (8).


4. The interactions and connections between rural-urban, poverty and agriculture must be continuously and creatively elaborated upon because urbanization, urban problems, and environment appear to be getting the lion's share of the world's attention with agriculture receding into the background with receding support. An illustration of this is evident from the Dutch National Advisory Council for Development Cooperation which includes the following statements in their advice:

"The Council considers that the situation of many groups of urban poor is often more helpless than that of the rural poor, however difficult comparisons may be. In rural areas the poor live in networks of family relationships and economic ties which are familiar and stable, although some economic ties change and can have a damaging impact such as the impact of the Green Revolution. "

The Council has already pointed out that attempts to prevent urban poverty by increasing prosperity in rural areas is a strategy that cannot succeed (9).

Obviously the many studies which International Food Policy Research Institute (lFPRI), IRRI and others have done on the positive gains from agricultural growth and from rural infrastructure have either not reached the Advisory Councilor they lack credibility. At any rate, rural poverty and urban poverty do not seem to be such discrete phenomena.

5.. Regarding agriculture, Lundgren points out the tendency to treat "natural resources as external to agriculture", hence many organizations have, as a result, different programs for agriculture and natural resources. The reality, he asserts, is that: "the most intensive, widespread important and potentially (and actually) most destructive form of natural resources management, and without any comparison in developing countries, is agriculture and related activities."

The more correct statement, he concludes is that:

"Nature is made up of natural resources and the most important form of natural resources management is agriculture (10)".

Intal and Quintos' report on a recently concluded Environment and Natural Resource Accounting Project in the Philippines reveals that: the major sources of environmental damage and pollution are the government, household, forestry and agricultural sectors and not the industrial sector as is commonly believed .. The highest estimated pollution abatement cost per unit of output are forestry (22 %); poultry (6.2 %); livestock (2.5 %); agricultural crops production (3.6%); and mining (1.5 to 2.8%); and manufacturing industries (less than 0.5%). The large abatement costs in agricultural crops represent the cost of shifts in farming systems to minimize soil erosion.

The high "pollution/environmental damage intensities" of agricultural crops, livestock and poultry is somewhat mitigated by the widely dispersed nature of production and their locational focus in the countryside rather than in the den sel y popu lated urban areas. Small-seal e and dispersed ( say , backyard) livestock/poultry raisers may not pose serious environmental damge; they may even benefit the surrounding environment with manure-fertilizer .. Nevertheless, given the fragility of the Philippine agro-ecological system, the country needs to


shift to less erosive crops and/or to invest to soil erosion preventive technologies (11).

6. Rural communities have a natural resource base, much of which is agriculturally-managed. If environmental degration is associated with rural poverty and higher levels of out-migration, then it stands to reason that the productive and sustainable management of natural resources should be the central concern of rural development and indicators to this effect must be developed. Productivity and income growth can be misleading indicators particularly if they have been achieved through "mining" rather than "husbanding" of the resources.

A sustained, renewed and productive natural resource base will not automatically qualify a community for urban status. Instead, such qualities should be the essence of ruraJity in rural development. In this regard, community-based resource management has been advocated as one way to go, but much, much more needs to be learned to operationalize the concept. If eventually, through the rehabilitation of the countryside, rural life gets defined as the 'good life', then maybe, just maybe, the rural exodus might be mitigated. At the moment, this is wishful thinking, perhaps more wish than thinking.



The Von Braun and Kennedy Food Policy Statement on Agricultural Commercialization, Economic Development, and Nutrition sounds like a typical twohanded economist's assessment: "Subsistence production: a sign of market failure: but commercialization cannot be left to the market. (12)" In another IFPRI Report referring to the same work, the title of the news item says: "Agricultural Commercialization alleviates poverty and improves nutrition." In reading such a seductive title, one must look for the fine print which enumerates the conditions or policy issues which have been found to be especially important in order to maximize the benefits of agricultural commercialization while minimizing the damage. One of these is: "Technological change in subsistence crops should be promoted along with commercial crop production for household food security in risky food - market areas." The others are women and smallest farm households effectively integrated into commercialization schemes; attention to land tenure problems; adequate rural financial systems; community health and sanitation (13).

Precisely because markets are not perfect and the above conditions are not yet met, farm households have their own food security measures even when they are involved in commercial crops. There are many, many studies which show that it is neither susbsistence production nor agricultural commercialization alone which determines the household well-being but both of them in opportunistic combination with non-farm sources. This is in fact, what farmers do. The Von Braun et al studies themselves illustrate this phenomenon. In the Philippine case, switch from com to sugar production in Bukidnon did not result in the extent of hunger and malnutrition which had been observed in Negros province (the traditional sugarcane producing area) despite the sugar crisis which hit at that time. One difference between Bukidnon and Negros is that in the former: Virtually every sugar landowner and tenant household produced some corn even if primarily for home consumption such that "no income from corn" categories were virtually non-existent. A surprising number of laborer


households had small plots of land which they either owned or cultivated as tenants (14).

In Northwestern Rwanda where potato production using modem technology had played an important role in agricultural commercialization, non-agricultural off-farm employment and home production activities also made important contributions to the economy. Despite the increase in commercialization much of the agriculture in the area was still subsistence-oriented. Even in land-rich farm households, subsistence orientation remained remarkably high. Children in households with the highest subsistence orientation were dearly the best-nourished, as shown by anthropomatric indicators. In the least subsistence-oriented households, 28% of children were stunted, in the most susbsistence-oriented households 12 %. Income from non-agricultural sources amounted to 58% and as much as 80% for those with smallest landholdings (15).

Duhaylunsod, in her analysis of four communities' response to agricultural commercialization concludes that: "Communities which have maintained their system of subsistence production are more likely to endure the whims associated with the penetration of the capitalist market (16)." In another paper, she says that in insuring their subsistence livelihood, the household could negotiate to some extent the terms of their participation in the cash economy (17).

In recent field visits to Taf.lac, Philippines, Sri Lanka, and Thailand, post-rice sw:eet potato is the cash crop anq/rice,)~s mai~ly for subsis.tence b~t new varieties are being planted. In other words, PrsGu'Crng mainly for subsistence IS not synonymous to remaining traditional in technology. Incidentally, because rice is such a basic subsistence crop in Asia, pay-off from investments in rice R&D efforts accrue to poor farmer-producer-consumers and urban consumers. As Panayatou observed in Thailand with respect to rice:

" Only· 30- 50 % of total popu lation is marketed. Fi fty percent of padd y farmers sell less than 10% of their production and many of them are net purchasers of rice (18). "

All these tell us that subsi stence prod uction, corn mercialization of agriculture and non-farm sources of income do not necessarily come in linear progression but rather in a mixture or in a simultaneity of existence of three livelihood strategies.

Therefore, the Von Braun and Kennedy suggestion that "subsistence farming must be phrased out in low-income countries" make us ask: What is our vision of agricultural commercialization? Is it Western-style or Japanese style and all that these imply? As Intal and Quintos point out: "We have to adjust to the new trade and

en viron men t prad igm." But before th is, we must un derstand the na tu re of market transformations from: pre-harvest sales because of credit tie up; distress sales; surplus production for sale; and market-driven production. The markets also range from direct sales from the household; sales to 10caJ, metropolitan, or export markets directly or through traders. If subsistence production is phrased out, is the concept of food security passe' or does it all become a matter of cash?

But contrary to the statement in the background material for this workshop, our research methods tend to emphasize commercialized agriculture not subsistence systems. Symptomatic of the poverty of methodology and imagination along this line is illustrated by the reason cited for not calculating rates of return on a small holder agriculture project:


"Costs and benefits cannot be identified relative to appraisal expectation in any meaningful way. As the project did not involve commercial entities except for smallholder operations, an overall financial analysis of the project was not carried out."

But the most fascinating evidence of conceptual and methodological inability to deal with the problem of subsistence production lies in the following statements of a consultant:

"The South Pacific Developing Member Countries still have a strong subsistence agriculture base. (They do not suffer from severe food shortages.) The problem of estimating the level and more particularly at producers' prices present measurement difficulties. It is suggested here that while the level of non-monetary production represents an important aspect of the welfare of a country, it does not provide an indication of the level of development. In fact, the continued importance of non-monetary agriculture could be seen as an indication of non-development: i .. e. of continued reliance on a traditional way of life rather than the creation of industria} and commercial development. It is therefore suggested that although highJy relevant to considerations of the wen-being of the people, it is not relevant to development (19)."

One can only say that if people's well-being is not relevant to development, then what is?


Before agricultural communities became Linked with the market, they practiced very diversified farming because they had to meet their own needs in a self-sufficient manner. Diversification in this sense was dictated by subsistence requirements. It can also occur as a matter of ecological adjustment; compliance with fiat such as government policy; or diversification can be a voluntary response to market opportunities and therefore it is a matter of choice. Ironically, there seems to be more system diversity in less favorable growing environments. An illustration of this system diversity in adversity comes from the Soybean Yield Gap (SYGAP) project of the CGPRT (Course Grains, Pulses, Roats and Tubers) Centre in Boger, Indonesian:

"In the traditional rainfed soybean site in Indonesia, the risk management strategy of the farmer was expressed in great variability in cropping patterns during different seasons. In season 2, when the rainy season is wen established and risk of drought is minimal, only seven different crop combinations were recorded. Season 1 is the beginning of the rainy season; the distribution of rainfall is uncertain; and climate risks are more important than Season 2. Twenty-five different crop combinations were recorded. Season 3, the dry season when risk of drought is highest, there were 42 different crop combinations."

In upland, rainfed lowland, and other disadvantaged agroecological conditions, secondary crops perform primary functions and contribute to system diversity. From. a review of more than two dozen studies done by the CGPRT Centre in the Asia-Pacific Region, the following emerged regarding the role of secondary crops:

• The important potential from the" Asian dragons" is not all that positive because of limitations on domestic demand and keener trade competition within and outside the region.


• Maize, although a secondary crop, is a staple for millions of rural people in maize - growing belts. However, a majority of them consume a mixture of rice and corn and not com alone. In practically all cropping patterns, whether in irrigated, rainfed or in the uplands, maize is one of the components.

• Whether for coarse grains, soybeans, pulses, cassava or sweet potato, a majority of farmers use their own seeds or planting materials from previous harvest,

most of which are local varieties.

• Markets for secondary crops seem to be sufficiently competitive based on prices obtained considering relatively small volumes of disposable produce in unfavorable growing areas, Even small soybean, maize or cassava producers are linked with markets and agro-industrial processors but quality of the product is a problem. Prices paid for produce do not reflect differences in quality.

• Contrary to the common notion about their subsistence character, secondary crops are more cash crops than rice. Even the upland economy is integrated with the market but rice is usually set aside for consumption ..

• Pulses which are an important part of the diet in Nepal and Bangladesh show declining area, production, and productivity and have been treated really as secondary crops in disadvantaged environments. These crops are also culturally interesting because they have acquired differential social status (such as certain ones being food only for laborers); well-differentiated niches in the agroecology, and special preferences by different groups of people.

• The complexities of crop combinations; cropping calendars; and agroecological heterogeneities make comparative advantage analysis for secondary crops less advantageous.

• Even if secondary crops perform primary functions usually in unfavorable environments, the primacy of rice remains. It is still the preferred staple and the dominant "reference crop" in the food systems (20) ..

In much of Asia where natural disasters and even man-made ones such a tribal and civil wars are a fact of life, what role does agricultural system diversity including subsistence production play? In Nepal, for example where culture, religion, and ethnicity are woven into the farming systems in different ecosystems and considering the character of its agroecology, is it possible to phase out subsistence production in favor of agricultural commercialization without doing damage to the wen-being of the Nepalese?

What happens when crop diversification is contemplated for irrigated lowland areas which tend to be intensively and continuously rice-cultivated and therefore, stability is threatened? Intal and Valera's case studies of crop diversification (growing crops other than rice) indicate that the following conditions are conducive to its adoption:

• insufficient irrigation for rice in the dry season;

• low levels of income from other sources;

• the farmer has seen other farmers reap profits from the crop;


• there is no better alternative;

• the families' rice consumption requirement for the year are met by their wet season rice crop and other sources of income;

• the crop is perceived as technically and economically feasible, in terms of market, credit, and labor;

• the farmer j s convinced that the crop will yield high returns and not just marginally higher returns than rice as farmers tend to have higher minimum profitability requirements for diversified crops.

The persistence of crop diversification during the dry season is strongly related to a trend of positive net returns punctuated by occasional "jackpots" (21).

These case studies show the security-orientation even of irrigated rice farmers.

Rice, rice and rice is a secure pattern for them .. Diversifying out of rice has too many "ifs. "

From the above and many other studies of agricultural systems, heterogeneities are evident in agro-ecological conditions; agricultural product mixes; production systems; subsistence-commercial orientation; use of traditional-modern technologies; product quality; seasonalities and maturities of different crop combinations and even a mix of land and labor institutional arrangements. How does one make sense out of all these complexities? In order to avoid the same criticism of FSR as lacking in analysis of system-level interactions, outputs and impact, agricultural systems research must be able to assess the system's (not the individual commodity) sustainability, productivity, (including competition and complementarity of different components) and ability to meet the multiple objectives of the farm household.

Trebuil and Boonchoo propose a typology of agricultural production systems based on the different types of functioning observed, which correspond to as many kinds of farmers' socioeconomic objectives and management strategies (22).

Perhaps we can learn from biological scientists such as the characterization of rice cropping practices and multiple pest systems done by Savary et al. Their aim was to (1) characterize patterns of cropping practices, including pest management practices in farmers' fields; (2) characterize types of pest profiles; (3) link the two to yield variation; and (4) produce a simplified and encompassing view that facilitates interpretation. They analyze patterns, profiles, clusters, and correspondence (23).

Anyway, with modeling and other analytical tools, there must be ways to deal with complex systems where both quantitative and qualitative (biophysical and socioeconomic) data are included for agricultural systems at different levels from farm, community, landscape, or region.


If the green revolution had its moment, nowadays, the vocabulary has turned "agriculture fatigue" or green revolution "blues". But without data over time, it would not have been possible to say that:


"Yields from irrigated fields that have continually supported 2-3 rice crops a year have declined by as much as 40% over the past 25 years. This yield decline occurs in both high and low-input systems both on and off the lRRI farm (24)."

We can only wish that we had systematically monitored over the same period the state of institutional arrangements with respect to land, labor, credit, markets, and household food security in the same areas where the productivity decline has taken place. The issues of today li ke sustai nability, resource com peti ti on, natural resource degradation, genetic erosion, population pressure, impoverishment, urbanization, empowerment, and agricultural commercialization all require some sense of history which would indicate what the situation was in the past. Otherwise, it would be impossible to identify magnitude, nature, and direction of change. If the biological scientists have long-term experiments, social scientists must have analogous ways of capturing institutional changes. Can we find connections between agricultural system changes and institutional changes? In the early years of the green revolution there were vigorous attempts to establish the impact of new rice technology and land tenure, labor relations, credit etc; but agricultural systems are much more complicated. However, it must be part of the routine of characterizing ecosystems to anlyze land tenure, labor, food security, gender roles and market relations in each ecosystem. There are infinite variations and changes in land tenure from share tenancy, leasehold, rent, borrow, mortgage, owner-operatorship, plantation, and contract growing. Different crops and different parcels of land in different seasons often have different tenurial schemes,

Even trees have tenure or trees are used to established rights over land. Patterns of labor utilization are also changing. In lowland irrigated areas, exchange labor has practically gone while in the uplands it is still practiced. But the phenomenon of people plenty but labor short remains a puzzle. Despite population growth, at the farm or community level, labor shortage is often cited as a constraint in farm activities. There are pJaces where farm labor has to be paid in advance in order to ensure availability. Without attention to institutions in agricultural systems, we are likely to forget their human welfare objectives.

Easily the most significant institutional change in Asia is China's shift to a new way of organizing for agricultural production by shifting from the production team to the household responsibility system. This institutional change which has resulted in the remarkable growth in agricultural productivity started in Anhui Province in 1978 when output quotas were given to individual households. By the end of 1983 about 97.7% of production teams or 94.2 % of households in China operated under the household responsibility system. To illustrate the growth in productivity in Chuxian County that used the new system grain output increased by 35.7% ,. Justin Yifu Lin explained that:

"Failure of the production is not due to its socialist nature but because of the difficulties in supervising agricultural work. Meanwhile the prevalence of the household responsibility system over all the other variants of responsibility systems occur because in the household responsibility system, the supervision is solved from its root (25),"

In terms of large-scale and big institutional change relevant to agricultural systems, perhaps nothing compares with what has taken place in China and in other countries like Vietnam, Cambodia, Myanmar, Laos, Bhutan, etc, who are in different degrees and stages of involvement in the market economy and in the outside world, in generaL On the other issue of gender, nothing can be more fascinating than to find out what has happened to women in this massive and far-reaching institutional change: On the other hand, the case of Malaysia is interesting because of the policy to import food


where it is more economic to do so. One wonders whether subsistence production has disappeared from the countryside and household food security is found in cash.

But to return to the importance of history particularly as it informs usthat agricultural commercialization is not new, over a 20-year period from 1970-1989, the content of Philippine exports changed considerably .. Traditional crops exported such as coconut, sugar, forest products, mineral products, fruits and vegetables, abaca and tobacco declined from 915 in 1970 to 27.2 % of total exports in 1989 (26).

Equally important is the historical perspective in tracing the impact of population increase on patterns of natural resource use and the corresponding changes in the institutions which govern the management of these resources. Even the beneficiaries from resource use change. OUf social science research in agricultural systems must always try to include a historical dimension in our analysis ..

More directly related to the issue of sustainability is the assumption that security of tenure on the use of the land leads to adoption of productivity-increasing and conservation-enhancing measures. Regarding the former, green revolution studies have shown that new technologies were adopted regardless of tenure status and farm size .. However, the empirical evidence linking security of tenure with adoption of sustainability-enhancing practices is still pretty thin and needs more research .. There are also new concepts such as, stewardship, community-based resource management and other participatory approaches to sustainable development which require documentation of process and results.

On the other hand, powerful arguments come from Hernando de Soto, a Peruvian advocate for formalization of property rights through titling who argues as follows:

"The fact that most peoples' property in the Third World is informal means that they have no access to credit. Informality also means that the incentives legal security provides are missing. We have determined that in Peru, investment in property tends to increase ninefold when squatters obtain formalized title to their homes. And in Costa Rica it has been demonstrated that farmers who are formally titled have much higher incomes that those who are not."

Formalized property rights also bring peace and order .. When poor people have confidence that land is formally theirs, their respect for other people's land increases. The Viet Cong yesterday in Vietnam and the Shining Path today in Peru made gains among informal peasants by settling boundary disputes and protecting them from abusive expropriation. Formal title gives the poor of the Amazon Basin legal alternatives to selling coca leaves to drug traffickers. Moreover, as long as the farmers who grow coca remain informal, the government is not able to locate them, identify them, or reach a legally enforceable crop substitute agreement with them.

When formal title is not there to provide security of tenure, planning borizons are shorter and thus the incentives to protect land, water and other resources are absent. Informal ownership introduces a bias against intensive development of existing land and in favor of expansion onto Virgin land (27).



In the 1960's and 70's diffusion - adoption studies were the standard fare of researchers in rural sociology and communication. Training and Visit or T and V was almost the universal approach to technology transfer. As pointed out earlier, things were much simpler then. Technologies were discrete pieces; simple; easily identifiable; meant for widespread adoption such as new crop varieties; fertilizers; pesticides; herbicides, seedbed preparation etc. The extension worker plus mass media were the technology bearers.

With the emergence of concepts like sustainability, biodiversity, ecology, integrated nutrient management instead of just fertilizer, integrated pest management instead of simply spraying; the reality of agro-ecological diversity and the locationspecificity of technology; the technology transfer model was challenged and diffusionadoption stuclies went out of style. Innovativeness in this type of research ran out of steam until research on IPM at the farmer level started almost 15 years ago at IRRL We regard that IPM work as a major breakthrough in terms of technology development and communication because it is different from previous technologies which were prescriptive recipes. The adoption of IPM requires decision-making at different stages of process. But this in itself posed a problem, as Goodell et al observed: "Filipino farmers found IPM too intellectually complex as it involved pest identification, varietal identification, threshold determination, dosage and volume calculations and choice of chemicals (28)."

Precisely because of this complexity and the slowness in adoption of IPM, more research was done on: human and social constraints to the implementation of IPM programs (29), pest management practices of farmers (30), pesticides, rice productivity and farmer's health (31), insecticide use (32), communication and strategies etc (33). At the same time, pesticides ~ related policies were also addressed through the involvement of program implementors and policy - niakers. As Peter Kenmore put it:

"IPM policy was built on ecological science underlying agronomic principles and fulfilled through an empowering participatory approach to motivating people for action. :

The latest development in this very exciting undertaking is the Rice IPM Network's Workshop on Message design for a campaign to encourage farmers' participation in experimenting with stopping early insecticide spraying in Vietnam. The vocabulary in use reflects the underlying philosophy of the approach as revealed in: farmer participatory research; farmer experiments; lateral learning; social marketing; experimental learning by doing; social mobilization; face-to-face training; farmers' field school; etc (34). But more than all these, the no early spray message is an excellent example of high science-low tech. Behind this simple message is a great deal of science on insect and pest behavior; plant behavior; and human behavior. It would not have been possible to come to this "distillation" without a rich empirical base.

What is awaited now is monitoring of adoption and assessment of impact.

Positive results will have implications for the development of other messages for something like: participatory cultivar deployment etc. Is the participatory approach applicable to learning about biodiversity, ecology, sustainability etc? Can we arrive at well-researched "distillations" about these concepts? If we start with what farmers know and practice with respect to these ideas, it might show us the way.


On a more general note regarding adopt jon and impact, one of the weaknesses of agricultural systems research is the inability to "capture impact" in a less costly way. We have to learn to do it because in an era of declining support for agricultural R&D, the operative word IS impact. We notice, however, that in ternation al agricultural research centers seem to be much better at it than national research systems. Perhaps they religiously monitor the events such that attribution of impact to source is possible.

Since ideas and technologies for agricultural systems promise to be more knowledge, management, and organization-intensive, we should be investing more talent and imagination in designing learning systems to build up farmer capability. In this creative effort, we can multiply the creative capacity by making women equal partners and contribute substantially to the democratization of knowledge. If what P. L. Pingali says is true that: "If farmers farm smarter, yields go up incrementally," will providing women an equal opportunity to "farm smart" add to the incremental yield of the farm household? This is an empircal question (not an advocacy statement) which should be put to a test.


Our common future, earth summit 1992 and agenda 21 highlight our interdependence and the globality of our planet. Plant genetic resources (PGR) started as the common heritage of mankind, then it became a common concern of mankind. Now it is a matter of national sovereignty. Nevertheless, of all the common heritage of mankind, PGR seems to be most universal, most tangible, amenable to collection and unlike hills, mountains, oceans, rivers and plains, PGR is moveable. It can be removed from its center of origin; transferred and used elsewhere, and even patented for the exclusive profit of someone remotely connected with where it came from. Intellectual Property Rights, Plant Breeders I Rights and even the nobility of Farmers I Rights are a challenge to the concept of common heritage of mankind, particularly because many countries are rich in genetic diversity and indigenous local knowledge regarding a wide range of plants many of which are little known and underutilized. All these have appreciated in value as threats to their continuing existence have been recognized.

Worede and Mekbib argue that the dynamics of traditional cropping systems should be understood before they are replaced with modern agriculture. They cite the following practices in a center of diversity:

"In Nothern Ethiopia, particularly in the drought-prone areas, wheat and barley are grown in particular mixtures. In favorable years, farmers will get yields of both crops, and in poor years, they will mainly reap barley. The mixture of landrace populations consists of genetic lines, which complement each other. They are all adapted to the region in which they have evolved, but differ in the mechanism through which they express traits such as drought or pest resistance. The mixtures of both crops are kept together for the coming planting season, but during consumption the two are used separately for different food preparations."

In the Gonder area of northwestern Ethiopia, farmers plant more than six crops together in their backyards including maize, faba bean, sweet sorghum (used for chewing the stalk-like sugarcane and for chicken feed), cabbage, tomato, potato, pumpkin, and bottle gourd. Most of these backyard activities are the responsibility of women. Tn the southern and central part of the country, the farmers focus more on perennial crops. A highly diversified range of crops and trees used for fencing


materials are planted. These crops mature at different periods making maximum use of scarce land and labor resources, minimizing weeding problems and maintaining soil fertility. "

The authors likewise describe the exchange of seeds and planting materials among farmers. Through networks, exchange in local markets, and interregional exchange, farmers know where to locate new supplies of seeds when traditional land races become degraded (35)..

For this and other reasons, IPR, Plant Breeders' Rights and even Farmers' Right will be inimical to these established traditions which have provided the continuing supply of seeds on a shared, reciprocal and exchange basis .. PGR might be the last of our common heritage which is still being shared - but perhaps not for long if present inclinations are pursued. On the other band, as long as the farmers in farmers' rights remain anonymous, the chances that they will benefit from whatever is expected are probably slim. The claimants to IPR have a name, either individual or corporate. They also have lawyers.

The Crucible Project argues that:

"In the absence of a convincing global morality, strong national policies are imperative (36). "

As social scientists we should lead in: developing the ethics; understanding the politics; assessing the economic and other benefits from the free flow of PGR;. and comprehending the dynamics of crop diversity at the farm level (37). These four tasks are likely to be pioneering work. Much, much more needs to be done to elucidate on the value of genetic diversity for agricultural systems, Even more urgent is to find a way out of the possible schizophrenia between the defined success of a few crop varieties spread over vast areas of farm land and the expressed desirability of greater genetic diversity.


Due to the checkered performance of the conventional commodity-oriented experiment station centered research, the results of which flow downward for trial and eventual recommendation to farmers via the extension systems, several innovative agricultural R & D approaches have emerged such as:

• Agro-ecosystem analysis

• Rapid rural appraisal

• Farmer-back-to farmer model

• Diagnosis and design methodology

• Household and gender analysis

•• User's perspective with agricultural research and development (UPWARD)

• Farming systems research/extension


• On-farm research with farmer participation

• Participatory rural appraisal

In general, these approaches can be characterized as: diagnostic; reponsive to local knowledge; participatory; agro-ecologically-based; systems-oriented; sensitive to diversities and user and use-specific.

Ashby and Sperling identify key characteristics of participatory research and development: "it is client driven; requires decentralized. technology development; devolves to farmers the major responsibility for adaptive testing and requires institutions and .individuals to become accountable for the relevance and quality of technology on offer (38),"

The application of participatory and diagnostic approaches can contribute to the:

• definition of an agro-ecologically and socioeconomically responsive research

agenda to find solutions to identified problems;

• formulation of policies which address specific issues derived from the diagnosis;

• evaluation andlor development of more adoptable technologies; and

• design of relevant training programs and extension strategies .

. Although there are many encouraging reports on the implementation of these approaches, many of them do not go beyond analysis and diagnosis. Quite a bit has been published about the organization and conduct of the participatory research process and its merits but stop short of impact hence the "value-added" from the diagnostic phase and the participation component is largely a matter of justifiable faith rather than systematic evidence .. We also wonder how much of the life of the participatory research is coterminous with the life of a specifc research project? As a matter of fact, even its practitioners recognize its limitations. As Ashby and Sperling acknowledge:

"The expectation that agricultural research can be reoriented to deliver innovation appropriate to the needs of diverse client groups by participatory R&D

alone is unrealistic (39), u •

. For more recent developments on the subject, there are two participatory R&D innovations worth watching for imaginative implementation and potential for making a real difference. One of them is the Rice IPM Network's campaign for farmer participation in experimenting with stopping early insecticide spraying in Vietnam discussed earlier in this paper. The second one is the Southeast Asian Program for Potato Research and Development (SAPPRAD) farmer participatory evaluation and development of sweet potato varieties based on the concept of an agro-ecology and usespecific scheme for variety development. Such a scheme is SAPPRAD's response to diverse agro-ecological settings, cropping systems, uses and preferences for the crop. This new scheme which regards fanners as partners is also a mechanism by which improved varieties can be introduced quickly into farmers' fields. Variations of this scheme which are being implemented in Thailand, Indonesia, Sri Lanka, and the Philippines are producing very exciting reactions from farmers because they are presented with a wide range of choices from improved, imported, introduced and local varieties .. They actively particpate in the evaluation of these varieties. The farmers' privilege of choosing the best from among the varieties planted in their fields was


clearly a welcome event, with some of them exhibiting some reluctance to share what appears to be most promising. Another significant by-product of this scheme is that farmers themselves are stimulated to conduct their own variety trials. This may be one way of increasing varietal diversity at the local level where usually only one or two are planted for commercial purpose (40).

One significant feature of the participatory approach is the important role of indigenous/local knowledge/farmer practice. SAFFRAD has methodically documented potato and sweet potato practices in six countries and found that all these technologies learned from farmers were based on sound scientific principles hence a reinforced belief that farmers are indispensable partners in R&D. While farmers' practices are usually location-specific, the ideas behind them can have universal application, hence, in the future, SAPPRAD believes that genes and ideas, (the building blocks of agricultural technology) and not technologypackages will be moved across geographical and other barriers (41). This is certainly quite a 'future to contemplate where genes and ideas can freely flow.

The conduct of research, participatory style, usually requires what a Brazilian research group appropriately calls partnerization (42). This means partnership with individual farmers; with farmer groups and local organizations; with extension staff; with NGOs; partnership between national research institutions; local research groups, and developed country research centers; and partnership between international agricultural research centers and National Agricultural Research Systems (NARS). At the moment, the Consultative Group on International Agricultural Research (CGIAR) is actively promoting research partnership with the NARS but the nature and purpose of the partnership is still a matter for interactive dialogue.

Other modalities for conducting social science research on agricultural systems include:

• research, safari style;

• commissioned research;

• collaboration between research entrepreneur and hired data-gatherers;

• senior-researcher-directed research carried out by students and junior associates; and

• research with shared vision in the true spirit of collaboration.

This paragon of a collaborative research mechanism has been proposed by the Rice-Wheat Technical Committee responsible for a Collaborative Research Initiative for Sustaining Rice-Wheat Cropping Systems in the Indo-Gangetic Region, Islamabad, Pakistan, April 6-10,1994. The mechnism focused on:

"Foster vision by enabling researchers from different institutions, backgrounds, and disciplines to perceive the complex of rice-theat problems in a similar way, with a shared sense of what must be done and equivalent sense of the comparative advantage of each participant in the common research process. "

We hope this vision can be funded and operationalized so that we can believe that ideal-type research collaborations are not made in heaven.


Although the so-called transaction costs are high, the new-wave agricultural systems research will I ikel y call for in terdisci plinarity . Hopefully, the transaction costs will go down as the promise of the research goes up. On the operational side, there are different types and degrees of interdisciplinarity depending upon what researchers want to get out of it. The practice of interdisciplinarity includes:

• conceptual interdisciplinarity

• m u 1 ti -eomponen t interdiscip linarity

• consultative interdisciplinarity

• hypothesis testing interdisciplinarity

• interactive, focused problem-solving interdisciplinarity

• action-research-in-action interdisciplinarity, and even

• hybridized interdisciplinarity

In these new research paradigms, we would like to see a deliberate place for research synthesis - "State of the art" analysis, Because no one study, unless truly spectacular, can provide definitive answers to a research question, it is necessary to bring together in an analytical synthesis the results of several studies on a specific issue ... For example, what do we know about the patterns of communication and adoption of pest control practices? Unfortunately, this type of work is unglamorous and is not regarded as original research. Robert Reich argues, however, that "Synthesis is as important as discovery (43)."

Furthermore, in a creative synthesis, a new Gestalt often emerges - that is, a configuration on "Structures or patterns that make up all experiences and have specific properties which can neither be derived from the elements of the whole nor considered simply as the sum of these elements" (Webster 1966). Simply put, in a synthesis, two plus two can make more than four.

At this point and in spite of all the innovative concepts which have emerged, there should be no illusions about cheap and easy ways ahead. Peter Hazell, for example, calls for new research paradigms because the current ones win not be able to serve as adequate models for future research efforts .. He likewise suggests the need for new modalities for achieving impact from research. "Success" he suggests, "will depend on the development of stronger linkages between agricultural researchers and other agents of change, including local governments, farmers, community leaders, NGOs; national policy makers and donors. The research community has little experience developing these kinds of linkages (44)."


Much of the content of international development dialogues and national development plans to have shifted away from agriculture, the rural poor and rural development into environment, urbanization,and the urban poor. The impression we have is that:

• food and agriculture have lost their human significance;


• rural poverty has become urban poverty;

• rural development has gone out of style; and

• the state of our environment (natural resource) is external to agriculture.

In the meantime, support for agricultural research has receded while environment and urban development have acquired the "more favored status."

Given this state of affairs, the challenge to social scientists in agricultural systems research consists of at least six tasks:

1 To underscore the agriculture-environment-rural-urban connections in ways that would elaborate on their integral linkages rather than their political

"separa tedness ":

2" To treat sub sistence-co m m ercial agricul ture; traditional-modern technology; rnonoculture-diversification not as dichotomies or opposite poles in a linear progression but as phenomena which often co-exist in opportunistic combinations with non-farm livelihood strategies;

3. To recognize diversities in agricultural systems while trying to find patterns, clusters, and commonalities which underlie the apparent "uniqueness" in every system;

4.. To identify and understand institutional changes and their implications for human welfare as agricultural systems change;

5. To participate in the creative development of communication strategies which would enable diffusion and adoption of ideas and technologies. to happen and for impact to be realized; and

6. To provide the empirical base for the ethic of plant genetic resources as the common heritage of mankind.

There is nothing simple or easy about agricultural systems research in the future. We are through doing the easy tasks. One thing is certain, however" It will be more demanding of the human intellect and the human spirit. The requirement of rigor and relevance will be of a higher order. Rigor is what makes science, scientific. It requires expertise .. Relevance is what gives science a human purpose. This is more than expertise. It requires wisdom, As one astute Asian policy-maker said: "The trouble with researchers is they tend to substitute research for wisdom."

The sources of wisdom are many and science is only one of them. This is where participation and partnerization may have their special contribution to agricultural systems research"

Because social scientists are social scientists, we must lead in the search for humanity in agricultural systems beyond productivity, commercialization and sustainability, What happens to human dignity; self esteem; perception oflife's chances and life's choices; social networks and social conflict management; the ethic of sharing and conern for others? Income and what it buys is the quantity of life but

human dignity is the essence of quality of life. .



I. Castillo G T (1975 and 1982) All in a Grain of Rice: A Review of Philippine Studies on the Social and Economic Implications of the New Rice Technology) SEARCA, 1975, Second Printing 1982 ..

2.. Asian Development Bank (1968) Asian Agricultural Survey VoL I, Regional Report Manila.

3. Castillo G T (1993) Rural Development Reconsidered: Some Emerging Niches for Population Studies, Paper prepared for Plenary Session I of the XXIInd General Conference of the International Union for the Scientific Study of Population, Montreal, Canada, 23 August to I September 1993.

4. Balisacan A (1993) Rural Development in the Phi lippines: Patterns, Constraints and Responses (Paper presented at the Symposium on Structures and Reforms for Rural Development in the Philippines, AIT Hotel, Quezon City, 17 March 1993). ..

5.. Bahr J, Mertins G (1993) Urbanization in Latin America, Applied Geography and Development, Vol. 4, pp 89-109.

6. delos Angeles M S (1994) Sustaining Resource Use in Upland and Coastal Communities, (paper presented during the Symposium in honor of Dr. Gelia T. Castillo) on September 27~28, 1994, Philippine Social Science Center, sponsored by the Philippine Institute for Social Studies.

7. Cruz M S, Meyer C A, Repetto R, Woodward R (1992) Population Growth, Poverty and Environmental Stress: Frontier Migration in the Philippines and Costa Rica, World Resources Institute, Washington DC.

8. Mougeot L Overview: Urban Food Self-Reliance: Significance and Prospects, IDRC Reports, Vol. 21, No.3,. pp 2-5.

9. National Advisory Council for Development Cooperation (1994) Recommendation on Development Cooperation and Combatting Urban Poverty, Ministry of Foreign Affairs, The Hague, Netherlands, March 1994, No. 103, p. 3.

10. Lundgren B (1993) Sustainable Management of Natura] Resources, (Report prepared for SIDA) Stockholm, Sweden, 27 May 1993.

11. Intal P J r, Quintos P (1994) Adjusting to the New Trade and Environment Paradigm: The Case of the Philippines, (Paper presented during the Symposium in honor of Dr. Gelia T. Castillo) on September 27-28, 1994 at the Philippine Social Science Center, Quezon City, sponsored by the Philippine Institute for Development Studies.

12. Von Braun J, Kennedy E (1994) Agricultural Commercialization, Economic Development and Nutrition, Food Policy Statement, International Food Policy Research Institute, No. 19, August 1994.

13. IFPRI Report (1994) Vol. 16, No.2, June 1994.


14. Bouis HE, Haddad L J (1987) A Case Study of Commercialization of Agriculture in the Southern Philippines: The Production Consumption, and Nutrition Effects of a Switch from Corn to Sugar Production in Bukidnon, IFPRI in collaboration with Research Institute for Mindanao Culture, Xavier University, Cagayan de Oro City, Draft final report to USAID Project OTR OOOOG-55-3513, January 1987.

15. Von Braun J, de Haen H, Blanken J (1991) Commercialization of Agriculture under Population Pressure: Effects on Production, Consumption and Nutrition in Rwanda, IFPRI Abstract, Research Report 85, January 1991, International Food Policy Research Institute.

16. Duhaylungsod L (1994) Systems of Subsistence and Simple Reproduction in the Philippines: Differential Transformations of an Enduring Mode of Production (Inaugural Professional Lecture as PNB Professional Chairholder in Rural Sociology) September 6, 1994, UPLB, College, Laguna, Philippines.

17. Duhaylungsod L (1988) Confrontaion with Commoditization in a Philippine Upland Village, PhD Thesis, University of Queensland, Australia, December 1988.

18. Panayotou T (1987) Food Price Policy in Thailand (Paper presented at the Conference on Comparative Food Price Policy in Asia sponsored by the Food Research Institute, Stanford University, IRRI and Rockefeller Brothers Fund, Jan uary 26-27,. 1987, College ,. Lag una ,. Phil ippi nes ..

19. Hodgkinson P (1986) Consultant, Economic Office, ADB Report No.8, Study of GNP measurement issues in the South Pacific Developing Member Countries Part II Factors affecting inter-country comparability of per capita GNP, Asian Development Bank, October 1986.

20. Castillo G T, Shenoi P V, Partohardjono S (1991) Report of the Review Team on CGPRT/ESCAP, Bogor, Indonesia, November 1991.

21. Gonzales-IntaI A M, Valera J (1986) Successful Crop Diversification in Irrigated Rice lands: Six Case Studies. Final Report Submitted to the International Irrigation Management Institute, November 1986.

22. Trebuil G, Boonchoo P The Role of the Typology of Agricultural Production Systems Research and Extension, Thai-French Farming Systems Research Project, Faculty of Natural Resources, Prince of Songlda University, Haad Yai, Thailand.

23. Savary S, Elazigui F A, Moody K, Litsinger J A, Teng P S Characterization of Rice Cropping Practices and Multiple Pest Systems, IRRI.

24. IRRI Hotline, Can we keep it up? IRRI-NARS Scientists Investigate Yield Decline, IRRI, Vol. 2, No.6, Mid-June 1992.

25. Lin J Y (1986) "The Household Responsibility System in China's Agricultural Reform: A Theoretical and Empirical Study" (Paper No.9 Conference on Why Does Overcrowded Resource Poor East Asia Succeed - Lesson for the LDCS?) Vanderbilt University, October 17-19, 1986).


26. Lamberto M B etal (1990) Balanced Regional Development Study (Commissioned by the Asian Development Bank) Philippine Institute for Development Studies, May 1990 p .. 28 ..

27. Instituto Libertad y Democracia Property Formal iza tion: The PROFORM Solution, Lima, Peru.

28. Goodell G F, Litsinger L A, Kenmore P E (1980) Evaluating integrated pest management technology through interdisciplinary research at the farmer level; Conference on Future Trends of Integrated Pest Management, International Organization for Biological Control of Noxious Animals and Plants, Bellagio, Italy, 30 May - 4 June 1980.

29.- Escalada M M, Heong K L (1992) Human and Social Constraints to the Implementation of IPM Programmes (Presented at the 15th Session of the FAO/UNEP Panel of Experts on Integrated Pest Control, 31 August - 4 September 1992, FAG, Rome.

30. Heong K L, Escalada M M, Lazaro A A (1992) Pest Management Practices of Rice Farmers in Leyte, Philippines, IRRI, Los Banos, Laguna, August 1992.

31. Rola A,. Pingali P L (1993) Pesticides, Rice Productivity, and Farmers Health:

An Economic Assessment, IRRI,Los Banos, Laguna.

32. Heong K L, Escalada M M, Vo Mai (1994) An Analysis of Insecticide Use in Rice: Case Studies in the Philippines and Vietnam, In Press, International Journal of Pest Management.

33. Escalada M M, Heong K L (1993) Communication and Implementation of change in Crop Protection and Sustainable Agriculture, Wiley, Chichester (elBA Foundation Symposium 177) 1993, pp 191-207 ..

34. Rapusas H R, Dedolph C, Escalada M M, Heong K L (1994) Workshop Report, Message Design for a Campaign to Encourage Farmers Participation in Experimenting With Stopping Early Insecticide Spraying in Vietnam, Rice IPM Network, 25-28 May 1994, Ho Chi Minh City, Vietnam.

35. Worebe M, Mekbib (undated) Linking Genetic Resource Conservation to Farmers in Ethiopia (Typescript manuscript).

36. The Crucible Group, People, Plants, and Patents: The Impact of Intellectual Property of Biodiversity Trade and Rural Society, International Development Research Centre, Ottawa, Canada 1994, p 2.

37. Bello M R (undated) The Dynamics of Crop Diversity: A Conceptual Framework at the Farmer Level, Centro de Ecologia, Universidad Nacional Autonoma de Mexico, Mexico,

38. Ashby J, Sperling L (1992) Institutionalizing Participatory, Client-Driven Research and Technology Development in Agriculture, Paper presented at the meeting of CGIAR Social Scientists, 17-20 August 1992, ISNAR, The Hague

Netherlands. -

39. Ibid


40. Rasco E T JI (1994) Coordinator's Report 1993-1994, Southeast Asian Program for Potato Research and Development, Los Banos, Laguna, Philippines.

41. Ibid

42. Muchagata M G, de Reynal, Veiga I P (1994) Building a Dialogue Between Researchers and Small Farmers: the Tocantins Agro-Ecology Centre in Brazil, onr Network Paper 50, July 1994, pp 41-50.

43. Reich R (1992) (Political Economist Kennedy School of Government, Harvard University), Time Magazine, November 23, 1992, P 30.

44. Hazell P B R (1994) Commentary: Rainfed Versus Irrigated Areas-Emerging Policy Issues for Agricultural Research, IFPRI Report Vol. 16, No .. 2, June 1994.


Increasing Competition for Land and Water Resources: A Global Perspective

Gershon Feder and Andrew Keck Agricultural and Rural Development Department World Bank, Washington,. D. C.

The twentieth century has witnessed enormous changes in human numbers and activities on planet earth. Advances in health and in science improved the well being of people in many regions of the world, and engendered a rapid increase in population, Thus, while between 1800 and 1900, global population has increased from about 850 million to 1.8 billion, between 1900 and 1995, world population more than tripled to 5.76 billion. With the expansion in numbers and in activities, the use of the planet's natural resources has expanded dramatically.

Obviously, the total supply of natural resources is much less variable than population numbers in the last century, but to the extent that the total supply is large relative to the volume of people and their activities, the sense of scarcity is limited, Nonetheless, at the national level, because of political boundaries and limitations on cross-country migration, scarcities have been more pronounced in some areas than in others. The level of technology is' also an important factor in defining the degree of scarcity, as technological change enables a higher level of output or services from a given quantity of natural resources.

The extent of change in the use of resources in the present century is best de~on ~trated by the g.rowth in. wi t hd ra w~ of fresh water r:J0u tees for human activities:

Whilein 1 900 total withd fa wal s wereesti mated at 579 krn- , by 1990 they have reached 4,130 km3, more than a seven-fold increase (Gleick 1993), As population has increased by a smaller factor during the same period, these numbers indicate that the change in the nature of human activities (e.g .. change in consumption patterns) is an important factor in determining the demand for natural resources.

As we are moving into the next century, the process of rapid growth is continuing, hence, there is much interest in the implications for the basic natural resources utilized by mankind, namely, land and water. In the present paper we adopt a 30-year horizon (to the year 2025) to review the global outlook in terms of demand for resources by the various sectors of human activity, as well as the processes affecting global supply. While the context is global, specific references to Asia are included at various points, as these may be of particular interest to an Asian audience.

Conceptually, the demand-supply terminology utilized in the discussion is hampered by the absence of an. explicit incorporation of price effects. Income effects are referred to in the discussion of the evolution of demand, but with a long-term horizon such as that adopted in the present paper, income changes are in reality determined simultaneously with resource utilization .. The approach of the paper is to highlight the likely evolution in demands as if prices were to remain constant, and as if income growth were exogenous, and thus provide an indication of the pressures which are likely to operate. The orders of magnitude. emerging from this discussion are intended to provide an illustration of the extent of competition for resources that is likely to prevail in the next generation.

The plan of the paper is as follows: the next section reviews some global trends in population and income, which are the key long-term factors affecting the overall


demand for natural resources. This is followed by sections on land and water, where each discussion considers supply, demand, and policy aspects. The last section derives general conclusions.


In this section, we review several global processes which are bound to affect the demand for, and supply of, land and water resources .. For the purpose of the present discussion, these processes are treated as exogenous, although, within the long-term perspective taken in this paper, many aspects of these developments can be influenced by policies and investments. These issues, covering.population and income growth, are discussed below.

Population dynamics

Over the next 30 years, the world I s total population is projected to grow from the current 5.76 billion to 8.47 billion". This 47% increase is concentrated mostly in the developing countries, whose population is expected to grow from 4.5 billion to 7.1 billion. An examination of the composition of population indicates that the world's population will become increasingly urban (from 43% urban in 1990, to 61 % in 2025).. The change is even more marked within developing countries, whose urban population amounted to 34% of their total population in 1990, and will grow to 57% in 2025 (see Table 1). In absolute terms, Less Developed Countries' (LDC) urban population will have increased by 3 billion between 1990 and 2025. The urbanization in Asia (excluding Japan) will be the fastest, as its urban population will almost triple, from 879 million in 1990 to 2 .. 6 billion in 2025. This is not a new trend. In the past 75 years, the developing world's urban population grew 20-fold,. from 100 million in 1920 to about 2 billion in 1995. Rural population has approximately doubled in the same period (UN 1991).

This enormous growth in population will increase directly and indirectly the demands for natural resources. Human survival will require increased food production, which translates into demand for land and irrigation water. Similarly, the increased demand for energy and consume.r goods will be reflected in demand for water and space for non-agricultural productive activities. The direct demand for water for human consumption (i.e., for drinking and sanitary needs) will increase as well. The demand for space for habitat (and the shift to urban forms of activities) is likely to affect the composition of land use.

On the resource supply side, the growth in population will have an impact on the quality of land and water resources through the increased pollution generated by human domestic and production activities.

Projections by the UN, 1993. A reoent World Bank study (1994) projects population in 2025 at 8. I billion.


Changes in income

The long-term perspective adopted in this paper makes it quite plausible to expect a significant growth in the per capita income of developing countries. This growth will have an impact on consumption patterns, implying an increased competition for resources among sectors as well as an increase in overall demand .. For example, the demand for environmental amenities (such as parklands) becomes significant at higher levels of incomes, implying that land which would otherwise be available for agriculture or human habitat is increasingly demanded for other uses. Similarly, the patterns and levels of water utilization, as well as the composition of food consumption, change with higher levels of income in ways which are reflected in increased sectoral demands for resources, even if population remains constant.

The world's per capita Gross National Product (GNP) grew by 1.2% per annum between 1980-1992. In the same period, Asian economies grew much faster than the world average: East Asian and Pacific economies had a 6.1 % annual growth rate per capita, while South Asian economies grew by 3.0% annually. If, for the purposes of the presentation, we assume that Asia will experience in the next 30 years similar growth rates, then per capita income levels will be about $4,365 in East-Asia and $750 in South-Asia by the year 2025. If, however, South-Asia grows at the rate of 3.4% (projected by the World Bank for this region in the period 1992-2002), then per capita GNP will reach $845 in 2025. Countries which are currently at income ranges of $3,000-$4,450 have on average less than 10% of their Gross Domestic Product (GDP) in agriculture. Countries an income range of $680-$1,000 have on average less than 24 % of their GNP in agriculture. Agriculture is a major user of basic natural resources globally and, while its share in GDP declines, its absolute size is an important factor in the demand for resouces. Thus, the change in production structure implies also a shift in resource use across sectors. We will discuss this subject in greater detail in the sections dealing with land and water resources.


Total and sectoral land use

Of the global land area of approximately 13 billion hectares, 3.36 billion ha. are estimated to have potential for crop production. Of this, 2.7 billion are in less developed countries. The land actually under cultivation is 1,48 billion ha, of which 883 million ha. are in developing countries (see Table 3). Asia has 537 million ha, of potentially cultivable land, of which 404 million are currently under production .. Of the 1,888 million hectares which are cultivable but not currently used, the majority are in developing countries (1813 million), mostly in Latin America (869 million) and Africa (796 million). These two continents account for 90% of the world's unused cultivable land. At least 42% of this reserve is currently under forest cover .. Asia has about 135 million hectares of unused cultivable land, as compared to the 404 minion currently used, mostly in East/South East Asia (72%). The percentage of potentially arable land is debatable, however, as it entails important assumptions about technological capacity and the economic and environmental costs of land conversion.

In addition, the land figures are aggregates of different quality categories. If we use the category of the sub-humid zone as the reference, then the total land figure should be scaled down to abou t three- quarters of the gross figure, i. e., the 1,888 million hectares


not yet cultivated are equivalent to only 1,378 million hectares of land at the production potential of the sub-h umid zone (Crosson, 1994).

Of the totaIcul ti vated cropland, irrigated areas cover 254 million ha. or 17 % (Crosson and Anderson 1992).2 Of that total, 86 million are in developed countries while 168 million are in developing countries. Asia alone accounts for over 90% of irrigated land in developing countries (62% of total).

Considerable data gaps make it difficult to isolate the land under urban and nonagricultural uses. However, for 17 developed countries in Europe and North America, built-up areas accounted on average for 5 % of total land area with values ranging from less than 1 % to nearly 16%. In developing countries (excluding China) FAOestimates that human settlements and infrastructure cover 94.1 million hectares, of which 51 million ha.are on land that would have been suitable for agricultural production. This

j s eq uivalen t to 1.4 % 0 f total land. In the relati vel y land-scarce cou n tries of Sou th Asia, human settlements and infrastructure are believed to cover approximately 17 million hectares of land which could have been used for agricultural production.

While the aggregate figures would seem to suggest that there is a considerable reserve of land for agricultural expansion, it has been pointed out (Crosson and Anderson, 1992) that this impression is quite misleading for several reason s:

(1) The average quality of the land already under cultivation is higher than that wh ich is not yet cultivated. Thus, only 17 % of the land not yet cultivated is of high productive potential, as compared to 27% of land already under cultivation. On the other hand, 50% of the land not yet cultivated is of low quality) as compared to 40% of the land already under cultivation (Crosson and Anderson, 1992, p. 17).

(2) The seemingly vast reserves of potential cropland in Africa and South America are not easy to incorporate into production .. Most of the potentially cultivable land in South America is currently under forest cover, is located far from domestic and foreign markets, and is not well connected by road, rail, and air links. The establishment of such links will require heavyinfrastructure investment of relatively Jarger magnitudes, compared to currently cultivated land which tends to be closer to markets. In Africa, the transport constraint is even more limiting than in South America. This is probably reflected in part in the fact that African fanners received, on average, only 30-50% of the prices paid by final users for their agricultural products, while Asian farmers received on average 75-85 % (Ahmed, 1987).

(3) Much of the reserve cropland can be brought into production only by clearing land which is now under forests. These forests have some direct economic uses if left as forests, but these have so far been dominated by the potential agricultural uses, as evident from the rapid rate of deforestation. More relevant is theenvironmental value of forests, which is not priced by the market, but which needs to be considered by policy makers at national and international levels. These environmental uses include the role of forests as a habitat facilitating biodiversity, and the prevention of greenhouse effects and global warming which can come about with large scale deforestation, There


Other sources estimate irrigated area as 235 million ha. (e.g., Postel, 1993).


are already significant pressures from various international circles on governments in South America and Africa to curtail and control the process of deforestation, and these pressures will probably be enhanced in the future.

(4) In Africa, many of the reserve areas which are potentially cultivable are in regions where tsetse flies restrict the scope fOJ human settlement, due to the inability to maintain livestock. Because livestock is closely linked to African rural livelihood (as source of draft power, milk, and meat), the potential for agricultural expansion is more limited than that which is perceived. The costs of tsetse eradication are a factor in considering the economic merits of incorporating parts of Africa's land reserves into agricultural production ..

Aside from these factors, which limit the extent of land which can realistically and economically be considered as available for agricultural or other uses, there are processes of degradation and desertification which limit further the future availability of land.

Land Quality Problems

Land degradation

Land degradation broadly refers to the processes through which land loses productivity. This phenomenon typically is localized in nature. Four possible categories of soil degradation are water erosion, wind erosion, chemical degradation (loss of nutrients, salinization, urban-industrial pollution, and acidification), and physical degradation (compaction, waterlogging, and subsidence of organic soils). Many forms of degradation are induced by human activities, (e.g. irrigation) and to some extent can be affected by appropriate policies, Because so much of the degradation is caused by human activities, the process is dynamic and is correlated with population and economic expansion. Degradation does not imply simply removal ofland from productive use. Land degradation assumes various degrees of severity ranging from light or moderate to strong and extreme (Oldeman, Hakkeling, and Sombroek 1991). Light degradation leads to reduced agricultural productivity although full productivity can be regained with management changes. More severe levels of land degradation imply that agricultural productivity is increasingly affected. At its extreme, land is no longer reclaimable at the farm level and biotic functions are largely destroyed. Although major engineering works can sometimes be used to restore the land's

prod uctiv i ty, in so me instances Ian dis w hoi I y lost toagricu 1 tural prod uction and is beyond restoration. At a global level, 38% of land is lightly degraded, 46% is moderately degraded, 15 % is strongly degraded, and 0.5 % is extremely degraded .. The sources of erosion are estimated as 56% due to water erosion, 28% due to wind erosion, 12% due to chemical degradation, and 4% due to physical degradation.

Evidence suggests that the yield effects of a given amount of erosion appear to be greater on tropical soils than on temperate-zone soils. Fertilizer can compensate for part or all of erosion-induced losses of yield on some tropical soils though not on others. Also, the importance of erosion-induced losses of soil productivity must take account of possible compensating gains in areas of deposition ..


A distinct form of degradation takes place on irrigated lands, due to the build-up of salinity and waterlogging. Dregne and Chou (1992) suggest that 30% of the 145 million irrigated hectares in dry areas are moderately to severely degraded by salinization and waterlogging. Postel (1992) has a lower estimate, as she indicates that about 10% of irrigated land worldwide (about 25 million ha.) suffer from yield loss due to salinity.

The quantitative relationship between degradation and land productivity is a subject where knowledge is quite imperfect. While some detailed studies have been conducted in the U.S., the evidence from developing countries is sparse and mostly anecdotal. A study in Mali (Bishop and Allen, 1989) suggests that the productivity consequences of land degradation can be significant (4 % of gross agricultural product), and thus deserve attention and remedial policies. Other studies suggest that in some areas the effects of degradation are marginal, and are partially compensated by gains in other areas where soil is wind-carried or water-carried.

Dese rufication

As a type of land degradation, desertification is somewhat more regional in scope. While the appropriate definition of desertification is at times passionately debated, most share the emphasis on the long-term loss of Jand productivity. Unlike other forms of land degradation, desertification is confined to certain agro-ecological zones. The 1992 United Conference on Environment and Development (UNCED) led to the following definition accepted into the Agenda 21: desertification is "land degradation in arid, semi-arid and dry sub-humid areas resulting from various factors, including climatic variations and human activities" (International Development Research Centre (lORC) 1994).

Desertification is estimated to affect 73 % of rangelands, 47% of rain fed croplands and 30% of irrigated areas within arid, semi-arid and dry sub-humid lands, for a total global affected area of more than 3.6 billion hectares (IDRC 1994). The drylands of the world total 6.15 billion hectares. This number, as defined by United Nations Environmental Programs (UNEP), is significantly greater than the global cultivated area as defined by Food and Agriculture Organization (FAO) and the World Bank, as it includes rangelands. In Asia, drylands cover 1.95 billion hectares, or 32 % of the world total. In absolute terms, Asia has the largest land area affected by desertification. Still, desertification is considered to be most severe in Africa and in particular in the Sahel.

Changes in definitions and assessment methodologies complicate efforts to estimate rates of desertification and land degradation. A UN 1977 assessment of desertification estimated that 5.25 million hectares of arid and semi-arid land were degraded annually, with a concomitant loss in annual productivity amounting to US$26 billion. Recent analysis presents more conservative soil loss figures. According to a UNEP 1991 report, approximately I to 1.3 million hectares of irrigated land are lost every year, mostly due to salinization and within the world's drylands. The study also estimates that globally, 7 to 8.million hectares of cropland are degraded annually, mainly via erosion and urbanization (UNEP 1991). As agricultural lands are lost, the area is regained by conversion of the better rangelands to agricultural uses. UNEP has estimated that between 4.5 to 5.8 million hectares of dryland rangelands are converted annually through such processes, not including sand encroachment and urbanization. However, UNEP admits to as much as a 10% standard error and more conservatively


assumes that between 1984 and 1991 the situation in irrigated lands and rangelands did not change appreciably but remained unsatisfactory with a tendency towards worsening.

Factors Influencing the Demand for Land

Recent trends

Globally, the area under crops increased less than 2% between 1979-81 and 1989-91 (World Resources Institute (WRI) 1994). Area under permanent pasture land increased by 2.4% during the same period while forest and woodland cover decreased by 7.8% .. Other land uses increased by 55% during the to-year period (Table 5). The increase in cropped area was accompanied by an increase of 14% in global consumption of wheat, rice and coarse grains (1,463 to 1,668 million tons).

In Asia, crop 1 and increased 1.3 %, perm anen t pasture increased 9 .. 5 %, forest and woodland decreased 4.9% and other land uses decreased 4.6%. The following five Asian countries experienced a decline in cropland during the same lO-year period:

Singapore (87%), China (4%), Japan (5.8%), Rep. of Korea (4%), and Viet Nam (2.9%).

Demand for Landfor Urbanization and Non-agricultural Uses

As already mentioned, the rapid growth of LDC urban populations can be expected to remove some land from agricultural or other uses to meet urban demands .. FAO estimates that by 2010 human settlements and infrastructure in LDCs (excluding China) will occupy some 4 % of land with agricultural potential as compared to 3 % at present (i.e., increasing from 94 million ha. to 127.6 million l1a . .)

A different (and much higher) estimate can be derived using parameters suggested by Crosson and Anderson (1992). They assume that land for urban uses amounts to .05 ha per urban person. Using this parameter, and noting that urban population in LDCs is expected to increase from 1.4 billion in 1990 to 4.0 billion in 2025, the implication is that abou t 130 million ha of additional land will need to be converted for urban activities by 2025. This amounts to about 7.1 % of the cultivable land not yet in production in LDCs. In Asia. the competition for land will be much more acute. The projection method used above would imply that about 84 million ha of additional land will need to be converted to urban uses in Asia (excluding Japan) between 1990 and 2025, or about 62 % of the unused cultivable land (assuming no reserve land in China).

Obviously not aJl the expansion in land for urban uses will take place on cultivable land, but, given the historical tendency of urban concentrations to develop close to agricultural production areas (Dillman and Cousins, 1982), most of the urban expansion will compete directly with agricultural uses. An important factor amplifying the impact of competition for land from urban users is the observed tendency of urban expansion to be concentrated on land with higher-than-average agricultural quality.

For example, it was observed. that in Canada, between 1981-86,.59% of urban land expansion took place on prime agricultural land (FAO 1994). Similarly, it has been observed for En gland that " built-over land .... is more than half the area of I first -class' land available for agriculture" (Muford, 1956, p. 394). A study by Vining et al. (1977) makes a similar observation for the USA. Their results indicate that 27% of


land within a 50-mile radius of large urban centers is of high agricultural quality, as compared to a national average of 18 .. 1 %.. They also noted that the rate of conversion from agricultural to urban uses in the US between 1967 and 1975 was three times faster in prime agricultural land as compared to non-prime land. Studies of land conversion in Asia cited by Bhadra and Brandao (1993, pp. 28-34) indicated that urban expansion around large Asian cities almost invariably involved removal of land from agricultural production, often irrigated high-productivity land.

The Demand for Agricultural Land

Population growth necessarily leads to an increased demand for agricultural products for food. Increased incomes will lead to a higher level of per-capita calorie intake. Furthermore, the high income elasticity of livestock products results in an increasing share of such products in the diet of LDCs population in the coming years. This implies that the demand for grain for animal feed will increase faster than that of grains for direct human consumption. In both Asia and Africa, the percentage of grain fed to livestock as a percentage of total grain consumption increased between 1972 and 1992 (FAO 1993). In Africa it increased from 5 to 16% while in Asia it increased from 9 to 16%. The absolute number of cattle increased 4% globally but the rise was 8% in Africa, 11 % in Asia and 12 % in South America (WRI data). As the amount of grain needed to provide a given caloric input through livestock products is higher (by a factor of 2 or more) than that used in direct human consumption of grains, the shift in consumption towards an increased share of livestock products implies an even greater demand for grains (albeit different types of grains), and thus an even larger demand for agricultural land than that which would prevail with the current food composition.

FAO estimates that the per capita calorie per day intake will have increased by some 6% between 1990 and 2010. In developing countries, the increase will be sharper, about 10.5%, which is close to the projection for South-Asia .. In East-Asia the increase in calori c intake is expected to be the highest -- 17.7 % . Accardi n g to FA 0 projections, this, as well as the increase in demands for other agricultural products, translates to a 1.8% increase in agricultural consumption per year in the period 1990- 2010 for the world as a whole, while the increase for developing countries is projected at 2.8 % per annum.

Longer term estimates of grain consumption growth are provided by Crosson and Anderson (1992). As grain production claims close to half of aU cultivated areas, these projections are a good indicator of the total claims on land resources emanating from agriculture. Based on the methodology of Crosson and Anderson, grain consumption in LDCs is expected to grow by 2.38% per annum between 1995 and 2025, i.e., it will double Over the projection period. For the world as a whole, grain consumption is expected to grow by about 1.6% per annum, implying a 61 % growth over the 30-year period (Table 6), We will use this as an estimate for the growth in demand for all agricultural products over the period.

The estimated increase in demand of about 61 % over the next 30 years implies, given the increase in population of about 47% over the same period, a growth of about .4% per year in per capita grain demand. This is compatible with the annual growth of .28% in caloric intake projected by FAO until 2010, as an increasing share of the calories are expected to be provided by livestock products, which are intensive in grain. The implication of these projections of demand for land are not straightforward: technological change (as well as increased non-land input use) will allow an increase in agricultural production without a matching increase in the land input. Similarly,


increases in irrigated land and improvement in water management allow increases in multiple cropping, thus saving on the fixed land input.

It is estimated that potentially irrigable land (not currently under irrigation) is 137.5 million ha (Table 7) worldwide, mostly in LDCs (1105 million ha . .). Of this, more than half is in Asia (69.4 million) ... Irrigated land is more productive than rainfed land, allowing multiple cropping and wider utilization of high yield varieties. Irrigated land comprises only 17 % of cultivated land, but it provides 34 % of the world's agricultural output. While tbe potentially available irrigable land seems significant, the ability to actually bring this land under irrigation is constrained by economic and environmental factors. The limited availability of water will be discussed in the next section. Other factors which limit the expansion of irrigation are the increased economic and environmental cost of next generation irrigation projects as compared to the past. The World Bank (1993) points out that in many cases the cost of such projects in future years will be two or three times higher than that of past projects, because many of the more suitable sites for dams have already been utilized, and future infrastructure will need to be located in areas which are more fragile, or where large numbers of people will be adversely affected. Indeed, the rate of expansion of irrigated land has been slowing down, from 4.1 % per year in the sixties, to 3.5 % per year in the seventies, to 2.1 % per year in the eighties. Crosson and Anderson (1992) note that "although present estimates suggest rather considerable potential for additional irrigation .... much of this might prove illusory" (p. 53).

Increased yields could substitute significantly for the demand for land expansion. Consider, for example, the growth in yields of cereals, which amounted to 2.2% per year in the twenty years between 1970-1990. FAO estimates a 1.4% annual cereal yield increase between 1990-2010. If yields were to increase by .8% per year in the period 2010-2025, and if we assume that the yield increases for cereals apply to other agricultural products as wen, then agricultural output will grow by some 38.8% between 1995 and 2025 .. Through yield increases alone, an expansion of the cultivated land area of 16 % will be required if the increased demand for agricultural products is assumed to be 61 % as estimated above". This translates to about 236 million hectares of rainfed crop land, If 15 million hectares of new irrigated land could be brought under cultivation (i.e., a total increase of irrigated area of about 6% over the next 30 years), then only 213 million hectares of new cultivated land will be necessary to accom moda te the increase in food demand. 4 If yiel din creases in the period 2010-2025 will be modest, say, only .6% per annum, then the increase in cultivated area between 1995-2025 will have to be 19.5%, i.e., 287 million 11 a .. of rainfed land. On the other hand, if yields increase by 1 % annually between 2010-2025, then only a 12.6% increase in cultivated area will be required, i.e. about 186 million hectares of rainfed crop land. These simulations imply that every .1 % of yield increase in the period 2010-2025 "substitutes" for about 25 million hectares of rainfed cropland. This provides some appreciation of the importance of investment in agricultural technology research. Given the long gestation lag of technology research, investment decisions taken in the next few years will affect the rate of yield increase after 2010.

3 Calculatedasa solution to the equation Q I =Ao(l +a)30 Yo (1 + b)30 where QJ is output in

2025,. Ao is cultivated area in 1995, a is the rate of area growth, Yo is yield in 1995, and b is the rate of

yield4 growt~. . '. . .

lrngated land IS more productive than ram fed land by a factor of 2.51, as can be deduced from the fact that irrigated land is presently 17 % of total cultivated land, but it produces 34 % of total output.


Demand for Landfor Environmental Purposes

As incomes grow, the demand for land to be set aside for recreational purposes, nature reserves,an d biod i versity, will increase. S orne of these demand s cross national boundaries, as some areas are viewed by many as a global asset, storing biodiversity and regulating climatic change (e.g .. ,. the Amazon rainforest). Already, some 385 million hectares are declared "protected", of which 200 million are agriculturally cultivable (FAO, 1994). While this amounts to only 11 % of the not-yet-cultivated land with agricultural potential in the world, it is a significant component in some areas.

For example, in East-Asia protected land is 21 % of the reserve of cultivable land. No estimates are available on the possible global demand for land for environmental uses in future years, but such demand is likely to increase.

Economk and Policy Issues Related to Land

As demands for various land uses are expected to increase significantly, it is important to examine the operation of land markets so as to determine whether it is likely that existing procedures and markets will aJIocate land efficiently. The analysis, however, cannotbe separated from an analysis of the commodities market, as land markets are significantly affected by spill-over effects from these markets (e.g., the high price of land in Japan reflects in part the high protection and subsidization of agriculture). Such an analysis is, however, beyond the scope of this paper.,. and we therefore confine our comments to selected structural and policy issues related directly to land markets.

The first observation is that in many developing countries land markets are presently subject to various government interventions which reduce efficiency, although some are motivated by equity objectives (Binswanger et al., 1994). These interventions include limitations on sales and rentals, ceilings on land holdings, prohibitions on private ownership, and differential tax policies for land under different uses. The latter intervention is often motivated by the desire to help certain income groups which are associated with specific land uses (e.g., exemption from tax on agricultural land because farmers are perceived to be poorer), but its implication is a direct incentive to put land under certain uses which may not be the most efficient from an economic perspective ..

Zoning rules are another form of direct intervention in the allocation of land to different activities. While some zoning rules are designed to achieve environmental and health objectives (e .. g .. , prohibition of certain industrial activities in residential areas), other interventions are intended to achieve a resource allocation which reflects non-economic objectives. For example, objectives of food self-sufficiency motivate some governments to assign some lands to agricultural use (or to food production) only, even if the value of these lands in other uses is much higher (Bhadra and Brandao, 1993). The issue is not straightforward, because of the interlinkage between land markets and other markets. For example, if agriculture is taxed through overvaJued exchange rates or other forms of taxation (relative to the non-agricultural sector), unregulated land markets would tend to convert more land to urban/industrial uses than is socially desirable. A careful evaluation of the implications of the various interventions in land-scarce economies is thus warranted.

/ Land markets in many countries are also affected by the inadequate legal and administrative infrastructure to accord and record tenure security .. The extent of land transactions is negatively affected by the lack of a well organized and efficient land records system, whereby buyers can be assured of the legitimacy of transactions, and


owners can be secure from challenges to their ownership (Feder et al., 1988, Feder and Feeny, 1991). The desirable administrative apparatus to facilitate the workings of the market involves also an efficient court system and an enforcement capacity, as well as a banking system capable of financing land purchases. These ingredients are still missing in many countries (e.g., former Soviet Union), or are sti.ll inadequate.

Land tenure security is of importance not only for expanding land market activities, but also for reducing the extent of land degradation. Pingali (1989) cites various instances and studies in Africa and Asia demonstrating that secure and enforceable property rights provide incentives to invest in protection and enhancement of resource productivity. As noted by Pingali, "successful examples of erosion control investments are generally associated with secure long-term rights to land". By enacting policies to improve tenure security, governments can reduce the extent of land degradation, and thereby increase the effective supply ofland for the coming generations.

Environmental uses of land are typically public goods, and the expression of demand for land for such uses is undertaken by collective action, either through the initiative of non-profit NGOs or by governments themselves. Because there is no market value to most of these land services, it is difficult to determine the desirable amount of land which should be allocated for them. Nonetheless, the opportunity cost can be established in terms of the economic value foregone, and thus societies can set aside lands for environmental uses which suit their preferences, provided that the decision making process is not unduly dominated by specific interest groups (e.g., Jogging companies, urban developers). There is still a measure of non-optimality involved, because some land resources entail international externalities (e.g. biodiversity) which are not fully taken into consideration by national decision-makers. This market failure has been recognized by the international community, and the Global Environment Facility (GEF) provides subsidies funded by the world's population as a whole for (among other things) preserving the environmental services of specific areas.

The extent to which governments will undertake various land policy reforms over the next 30 years is of course not predictable, although the general trend is certainly towards greater liberalization as well as stricter regulation to account for environmental effects.


Global supplies, uses and scarcity

The glcbal renewable supply of freshwater amounts to only 0.3% of the world's total fresh water supply, or approximately 41 thousand cubic kilometers. The remaining freshwater supply is considered unavailable because it is locked in glaciers and permanent snow cover, or held in groundwater aquifers whose recharge rates are often measured in millenia. The hydrologic cycle provides for precipitation which replenishes the various sources of freshwater. Furthermore, natural processes can purify polluted water for eventual human consumption. However, water's selfrenewing properties can be compromised by certain uses, thereby reducing the available water resource.


Present global water usage totals 3,240 cubic kilometers annually. This represents a more than 3:5-fold increase in human use of water over the past three centuries with increases of 4-8% annually in recent decades (WRI1992). Table 8 presents the most recent figures on global and regional freshwater resources and the volumes of water use by sector. Available water resources vary widely across continents .. The total available water resource is greatest in South America and in Asia and is the least in Oceania and Europe. However, per capita available water resources are smallest in Asia and Europe and the greatest in Oceania, followed by South America,

In absolute terms, annual water withdrawals are by far the greatest in Asia at 1,531 km3, whereas North/Central America and the former USSR have the greatest per capita water withdrawals. Of the three main developing country regions, Asia, South America and Africa, Asia's per capita water withdrawals are highest. Agriculture accounts for 69 % of the global annual water withdrawals. Its share of withdrawals is higher, 80%, in developing countries (World Bank 1993). In Asia agriculture consumes 86% of total annual water withdrawals.

The regional data in table 8 mask significant disparities in water distribution and availability at the country level. Increasing populations are gradually decreasing available resources per capita. As a result, a growing number of countries are experiencing water stress and water scarcity. By a common convention, water-scarce countries are de~med as those whose national water resources amount to less than 1,000 cubic rf!eters (m ) per c~pita. Countries ar3 considered wfter stres.sed whe!l.national percapita water suppl y 1S between 1, OOOm and 1,.700 m per capl ta (Gleick 1993; Engelman and LeRoy 1993) .. Table 9 ranks 13 Asian countries in order of their annual renewable fresh water available per person in 1990. The table includes 1955 figures as well as an estimate for per capita water in the year 2025 based upon United Nations medium population growth projections. Asian countries not shown in the table have presently per capita water resources greater than 20,000 cubic meters.

Table 9 demonstrates the growing problem of water scarcity and stress.

Several Asian countries, including Korea, China, India anoPakistan, are expected to reach near stress levels by 2025 which can only increase the difficulties of coping with periodic droughts. In other parts of the world, notably the Middle East/North Africa, water stress is already a situation that affects economic and social activities. The principal supply and demand factors which will be reflected in sectoral demand and competition for water are discussed below.

Supply side effects

The future effective supply of freshwater is likely to be negatively impacted by two broad phenomena: pollution and increasing costs of abstraction .. However, some increases in water supply can be expected as a result of desalination and water recycling practices.

Pollution refers to various water quality problems arising from contaminants produced by municipal, industrial and agricultural activities (Nash 1993). Perhaps the most common water quality problems stem from untreated household wastewater. Developing countries release more than 95 % of urban sewage untreated into surface waters and about 60% of all domestically used water returns to rivers as wastewater (WRI 1992). The levels of human waste disposal into water have become hazardous in places where population growth has overtaxed the ability of water to naturally recycle


those wastes (Nash 1993) and contributes to the continued prevalence of waterborne diseases. Contaminated water is not only unfit for direct human use, but in many instances it cannot be utilized in irrigation and other non-domestic uses.

Industrial processes also cause deterioration of the quality of water supplies via ~ndust~al effluents and as a res.ult. of chemical spills an~~ccidents. It is anticlf~ted that industrial waste water levels Will Increase from 640 km III 1992 to 1,000 km III the year 2000 (WRI 1992). The problems are likely to be more severe in developing countries where environmental controls are less comprehensive. Where industries indiscriminantly release their processing by-products into rivers, lakes and streams,

they effectively reduce the water supply for human consumption and unduly harm other water-based organisms. Some major industrial processes which produce watercontaminating chemicals 'include pesticides, dyes, pharmaceuticals, fertilizers, and organic chemicals. Even more traditional food processing industries (such as coffee production) generate large amounts of water-diluted wastes.

A third major source of water pollution stems from agricultural production.

About 25 % of agricultural water is returned to streams as wastewater (WRI 1992). Agricultural chemicals can leach into groundwater and surfacewater supplies. Unfortunately, it is impossible to state how much water is affected by agricultural activities and there is typically inadequate monitoring in developing countries to accurately calculate the impact of agricultural fertilizers and pesticides on water quality. The slow recharge and velocity of groundwater also implies a significant delay between agricultural practices and observable water contamination. It is clear, however, that pesticide and fertilizer lise is increasing around the world, that the rate of increase is highest in developing countries, and that many developing countries continue to use numerous highly hazardous chemicals for agriculture which have been banned in the developed countries (Nash 1993).

Agriculture also contributes to problems of sedimentation, siltation and eutrophication. Siltation and sedimentation are influenced by various processes including deforestation which increases soil erosion and consequently water turbidity as weIl as nutrient deposition in waters. The increased erosion and sedimentation in turn skew the chemical balance of lakes often leading to abnormally rapid eutrophication because of inadequate dissolved oxygen content. Poor maintenance and construction of irrigation system can also lead to siltation of the canals. The siltation of reservoirs reduces their storage capacity, and hence, the effective supply of water for human use declines.

The manipulation of the available water supply for human use is also affected by increasing costs of water abstraction. Postel (1993) points out that in the heyday of irrigation expansion, the best possible sites were naturally selected first for development. Now, development of less suitable land entails increasingly complex and expensive irrigation schemes. For example, the costs of large-scale canal projects in India doubled between 1950 and 1980 (Postel 1993). In Jordan, the average cost per cubic meter went up from $.41 (when groundwater was utilized) to $1.33 (surface water), and the next project will bring the cost to $1.50. In several regions of China (cited in World Bank, 1993), the costs of water supply will double or triple by the year 2000. Similarly, in Peru, the next water supply projects for thecapital Lima will involve a doubling of water provision costs.

Desalination of seawater is one technology for increasing the supply of water.

Global desalination capacity exceeded 13 . .2 million m3 in 1989, with close to 60% of total capacity concentrated in four countries; Saud.i Arabia, the United States, Kuwait


and the United Arab Emirates. Although desalination may be necessary for severely water scarce countries, desalinated water costs three to four times more than conventional sources (WRI 1992).

Desalination technologies require massive amounts of energy to generate fre3h water. Today, desalinated water in the Middle East costs between $1 and $8 per m depending upon the technology. The high costs and energy requirements of desalination make it economically viable in very few countries at present. It is impossible to predict the future potential water supply from desalination plants whose limits are dictated by the amount of energy required to purify salt water and by the costs of that energy. Major technical advances in energy requirements are needed if desalination is to ever become a general option.

Water supply is also effectively increased when it is recycled. Water reuse and recycling technologies have been used in irrigation systems to improve their efficiency (Postel 1993), as well as in municipal treatment facilities to make water suitable for use in agriculture and industry. The importance of water recycling is likely to increase in many countries as the demand for water resources most certainly continues to expand.

Another source of additional water which is getting increased attention as scarcity and competition are enhanced is the elimination of waste which is due to inefficient management and maintenance, especially in irrigation systems. In urban water supply systems, significant quantities of water are lost through seepage due to poorly maintaned delivery systems. In irrigation systems, a World BankiUNDP report asserts that much water is wasted in transmission losses and because of inadequate, unreliable and untimely water deliveries. Rosegrant and Svendsen (1994) note however, that while many components of irrigation systems are inefficient (i.e .. , deliver a small proportion of the potentially available water to the field), basin systems as a whole are more efficient because the water not used in one component is available to other components. As an example, Rosegrant and Svendsen (1994) cite Egypt, where the inefficiency of some components in the Nile system is as low as 30%, while the efficiency of the system as a whole is about 70% ..

The principal water demand issues are discussed below ..

Demand side effects

The demand for freshwater is driven principally by population growth and economic development. These factors, in turn, increase demands for water in all sectors including domestic use, industry and energy, irrigation and environmental services. Given an expected concentration of population growth in developing countries, particularly in urban areas, and the likely growth in their incomes over the longer term, it follows that much of the growing demands for water resources will occur in developing countries,

Domestic water use

The United Nations designated the 1980s as the International Drinking Water Supply and Sanitation Decade.The population in developing countries with water supply services increased from 1.5biHion in 1980 to 2.7 billion in 1990, or a total coverage of 68 % of the population. The number with sanitation services reached 51 % of people in developing countries In 1990, up 12 percentages from the proportion covered in 1980.


The percentage of South-East Asia's population with water supply services increased from 38% in 1980 to 68% in 1990. The percentage with sanitation services increased over the same period from 17 % to 23 % (United Nations Development Program (UNOP) 1993), Rural sanitation coverage in South-East Asia in 1990 is the lowest of any region reported, at only 12 % of the population, The quantity of water used for domestic purposes increased by 130% between 1970 and 1990, reflecting in part the increase in population connected to water services (Gleick, 1993).

The continuing increase in urban populations, combined with improvements in real income will increase both the number of people demanding water services and the amount of water used per person. For example, per capita water use in the United States is approximately 700 liters per day compared with only 29 liters in Senegal (Engelman and LeRoy 1993). We estimated a simple domestic water use function using national level data from 100 countries to test the hypothesis that domestic water use is related to GNP per capita, and to the share of urban population. The regression parameters are reported in Figure 1.

As expected, the estimates confirm a significant positive impact of per capita incomes and the extent of urbanization on domestic water use. We will utilize the estimated parameters in some simulations of expected demands.


Irrigated agriculture is the largest user of water worldwide. Irrigated area worldwide nearly doubled in the first half of the 20th century and it has more than doubled again since 1950 to reach 254 million hectares by 1990. The FAD estimates that between mid-1960's and the mid-1980's, the expansion of irrigation accounted for over onehalf of the increase in global food production. Although the growth rate has slowed considerably since the 19705, it is anticipated that by the year 2000 water withdrawals for irrigation will increase by about 21 % relative to 1990 (WRI 1992). The previous section pointed out that there is an estimated additional 137 million hectares worldwide which have potential for irrigation, close to half of this is in East Asia, These figures represent the maximum potential area available for irrigation. However, given the increasing costs of bringing less suitable land under irrigation, and the high cost of new water projects, it is unlikely that much of this area can be irrigated in an economically and environmentally viable manner.

It is estimated (on the basis of Gleick 1993,. p. 20) t~t 1 million hectares of irrigated associated with the withdrawal of 10.55 km of water. An expansion of the world's irrigated areas by 10 milli~n hectares would thus imply an increase in withdrawals for agriculture by 105.5 km , equivalent to over a third of the total quantity used for domestic consumption in 1990 .

Industry and Energy Demand/or Wafer

Population and income growth imply a larger demand for water by industries. By the year 2000 globalindustrial water withdrawals will increase an estimated 32 % (relative to 1990) to 1,280 cubic kilometers annually (Gleick 1993). Growth in energy output in developing countries is considered a particularly important source of demand for water. Energy consumption in developing countries almost tripled from 1970 to 1992 and future energy demand is expected to triple between 1985 and 2025 (WRJ 1992). As energy use increases, water needed to cool energy-producing processes will also


increase. In the United States, power plant cooling claimed nearly half of all water withdrawn for human use in 1990 (Gleick 1993). Fortunately, most of the water withdrawn for energy cooling is not consumed (only 3% in the U.S.) and can potentially be returned to rivers and lakes. However, cooling waters returned to rivers and lakes are often at a much higher temperature than the water initially withdrawn. This can have potentially negative ecological impacts. Any increase in the use of closed systems to avoid thermal pollution will also lead to increases in consumptive water use.

The extent of growth in water demand for energy is typified by hydroelectric facilities. As of 1990, Asia and Latin America harnessed around 10% of their hydropower potential, and Africa only 5% (U.S. Department of Energy 1992 in Gleick 1993). During the 1980s, hydroelectric production increased 50% in Asia and more than doubled in parts of Latin America and China. Any future growth of hydropower in developing countries implies the creation of additional reservoirs. These reservoirs are a primary source of evaporative water losses which reduce the amount of water available for other downstream users. At t~ Aswan High Dam on the Nile, annual evaporative losses are equal to about 14 km of water, or 11 % of rese~oir capacity (M. Shahin 1985 in Gleick 1993). It is estimated that in 1990, 170 km of water was 10s3by evaporation from reservoirs, and by the year 2000, this loss will reach 220

km . This is equivalent to the quantity needed to irrigate about 21 million hectares.

We estimated a per capita industrial water use function from the same 100 countries used in estimating domestic water use. The hypothesis is that industrial water use is positively related to GNP per capita and to the share of urban population. The regression results are presented in Figure 2.

As in the case of the estimate for domestic water use, the results confirm the hypotheses that industrial water use is positively related to per-capita GNP and to urbanization. The elasticities of industrial water use with respect to both explanatory variables are higher than those for domestic use, suggesting that the growth in the use of water for industry will be faster.

Using the parameters for the equations estimated for domestic and industrial water use, and given projections of changes in per-capita GNP, population, and the share of urban population, we made estimates of the change in water use in Asia between 1995 and 2025. For East Asia, domestic water use is projected to grow by 339% (i.e., more than quadruple), while industrial water use will grow by 535% (more than six-foldr". South Asia domestic and industrial water use will grow by 304 % and 331 %, respective! y6. Taken in the aggregate, these figures would not seem to be a source of alarm, as for Asia as a whole, less than 20% of total available water resources are used at present, and of that, only a small fraction (less than 15 %) is used for industry and domestic services. But for many countries in drier regions, such as the middle-east and North Africa, the growth in domestic and industrial use will eventually imply a decline in the absolute amount used by agriculture. In Asia, the aggregate figures mask the growing competition for water that growth in income and population

is engendering in several countries. Consider, ~r example, the republic of Korea, with total renewable water resources of about 66 krn , of which about 42 % are used an~ally. Cur~ent domestic, i_fdustrial and agricultural withdrawals are (annually 5.3 km , 10.0 km ,and 12.7 km ,respectively. Assuming an annual growth rate of 5.5%

5 The calculation assumes a 6.1 % annual per-capita GNP growth, and utilizes U.N. sources for

proj'(ftions of population growth and urban population shares.

The calculation assumes a 3.4% annual per-capita GNP growth.


for GNP per capita over the next 30 years, noting a projected increase in the share of urban population from 77.6% in 1995 to 89.4% in 2025, and a projected population growth of 21 % over the period, we can utilize the parameters of the equ~ion estimated earlier ~ infer that in 2025, domestic an~industrial use will be 12 . .26km and

4-6.8km ,respectively, leaving only 7km (a reduction of 45%) for agricultural and other uses. Obviously, this projection does not take account of the impact of price changes and the possibility of reuse of industrial and domestic discharge water by agriculture. Nonetheless, this illustrates the extent of competition for renewable water resources.


Another demand on water resources stems from an array of environmental services, instream economic activities such as fishing, and various recreational uses. Water bodies not only harbor innumerable and diverse species (12% of global living animal species), they also provide valuable environmental functions including nutrient cycling and sediment deposition. Anthropogenic impacts on freshwater systems and wetlands are still poorly understood. The relative wealth of North American and European countries appears to have created a much higher demand for these environmental services. Increases in income in developing countries will likely lead to similar changes in the level of water ecosystem protection. Similar trends are expected in demand for water for recreational purposes. As country incomes increase, the demand will grow for fishing, rafting, and other forms of in-stream uses.

Economic and Policy Issues Related to Water

Water has a number of characteristics affecting its "production'{ and delivery for users in ways which create market failures. These market failures, as well as consideration of political economy and, often, misguided notions on the best ways to contravene the market failures, have induced governments since ancient times to intervene heavily in both the production and delivery of water services. In many cases the intervention entails complete government control (whether at the local-municipal or provincialnational level) of segments of the water sector, such as irrigation or domestic water .' supply. These interventions have frequently resulted in government failures.

Because water moves through an intricate hydrological cycle of rainfall, absorption, runoff, and evapotranspiration, water activities are highly interdependent. This results in numerous externalities (mostly negative) from various uses of surface and groundwater. For example, the decision by one user regarding water withdrawal does not consider the implications to other water users in the basin. Obviously, externalities imply that market forces would not lead to an optimal outcome of water allocation among users.

Many of the investments related to water production are very large, entailing a large fixed cost, while the average cost per unit of water delivered is declining (e.g. dams). Similarly, the supply of water (whether for agricultural or non-agricultural uses) often requires a dedicated delivery system (e.g., piped water or a canal system) such that no other goods can be delivered through the system. Investments in such

7 We use the term "production" to describe the various Steps needed to make water suitable for specific uses, e.g., storage through dams, pumping from underground aquifers, desalinization. or treatment of wastewater to facilitate reuse.


delivery systems entail a heavy fixed cost which is irrecoverable, because they cannot be converted to other uses. Thus, both production and delivery systems often exhibit economies-of-scale, whether at a national or local level, giving rise to natural monopolies.

As is well known, natural monopolies, such as large dams, main canal networks, and large urban sewerage and water supply systems, have a tendency to charge more, and produce less, for their services than what would be observed under competitive conditions. Furthermore, because entry costs can be extremely high, the threat of entry of would-be-competitors, i.e., the level of conte stability of the service, can be minor and the incentives for innovation and dynamic efficiency are diminished.

A key factor in many governments' rationalization of direct control of water services' production and delivery is the perceived prevalence of public good

characteri sties. In real i ty, water services vary can siderabl yin their ch aracteristics, and thus a more detailed analysis of their private and public good aspects is required. For the purpose of this analysis, the extent of rivalry (or subtractability) and excludability (i.e. the ability to condition service delivery on payment) needs to be examined. The discussion in World Bank (1993) suggests that while there are some aspects of water management which have publi.c good characteristics (thus requiring collective action), there are many others which can be contracted out in part, so that the actual . management of the service can be done by the private sector.

One issue which seriously affects the efficiency of water use is the difficulty of monitoring the volume of use. If the volume of utilization cannot be determined, price signals do not affect the marginal use levels creatinga likely efficiency loss. While devices to monitor the volume of use can be installed, the cost may be high relative to the gain in efficiency.

The cost of monitoring use often can be reduced when community action substitutes for expensive technology or for costly exclusion by a centralized water service entity. The reason is that local organizations have the capacity to monitor use at low cost as well as apply peer pressure (using the intricate web of social ties within a small community) to enforce agreed levels of use or payment. The low costs are due to the fact that such monitoring and enforcement can be done by members of the

com m unity on part- ti rn e basis, or while performing other prod ucti ve acti vi ties (e. g. , tending fields). However, organizing for community action entails a different type of transaction cost, and the incentive to undertake this cost depends on its magnitude relative to the aggregate gains In efficiency due to community control and enforcement.

The cost of public action is also a relevant concept in analyzing the consequences of another attribute of water. By its very nature, water transactions among different users seeking to adjust their initial endowments often require the coLlaboration of other users. If a large user (e.g .. a municipality) wishes to purchase water from many smallholders of rights, the negotiations are much more efficient if the smallholders are organized and thus the transaction can be concluded in a bargaining process between two parties only. If the cost of organization is high (e.g. due to lack of tradition of collective action, or due to significant heterogeneity of small users), transactions that would have been otherwise beneficial to society (and to each agent) are foregone .. In some cases, governments can reduce organization costs by establishing

the legal framework which provides legitimacy and regulatory oversight, thus increasing the trust of potential members of the organization. In other cases, the benefits of organization are sufficiently large compared to the cost, so that spontaneous organizations emerge even in the absence of a formal legal framework.


Market activities in water, at a local level, have been observed throughout human history (e.g., farmers with wells on their land selling water to other farmers). However, the physical, economic, social, and legal characteristics of water affect the degree of competition as well as the performance of water markets. The definition and measurement of property rights in water are problematic, because of the mobility of water (e.g., seepage, inflow, evaporation). Furthermore, the bulkiness of water and its high storage costs increase the costs of transactions involving water. These, and other sources of costs reviewed in preceding paragraphs, add up to a transaction cost which may be quite significant compared to the value of water, particularly in low value uses, and these may constrain the functions of the market (Spulber and Sabbaghi, 1994, p. 71).

Because of the impediments to markets, transactions costs, and the various other forms of market failures and social or political concerns related to water, governments have traditionally tended to manage directly many aspects of water resources production and service delivery. It is thus likely that much of the reallocation of water across uses in the coming decades will be done not through market forces, but through government interventions. However, the performance of government or other public entities in producing and delivering water services has been characterized by static inefficiency as well as misallocation overtime. These problems have been particularly acute in developing countries, but they are present in many developed countries as

well. The problems encountered in water services include:

• Misallocatedproject investments: water production or distribution infrastructure has often been premature (i.e .. , investments could have been deferred while demand management is exercised, or where maintenance could be improved) and excessive, resulting in unusable excess capacity. Demands for service of varying quality and affordability are unmet even when users are willing and able to pay. Investments in specific subsectors are based on a narrow analysis of water demands and productivity within the specific subsector (e.g., irrigation), and thus may neglect the implications to other water using sectors.

• Overextended Government Agencies: The heavy reliance on government agencies to develop, operate, and maintain water systems has often stretched too thin the government's already limited implementation capacity. The result has been a vicious cycle of unreliable projects that produce services that do not meet consumers' needs and for which they are unwil1ing to pay. The absence of financial di scipli ne and accountability for performance--along with political interference in decisions about allocations and pricing=are reflected in a litany of problems: inefficient operations, inadequate maintenance, financial losses, and unreliable service delivery.

• Neglect of water Quality and environmental concerns: While it could have been expected that with the dominance of public sector control over water resources environmental and health externalities would be minimized, this is not what has actually taken place in many developing countries. In many countries, water supplies are of poor quality and are often unsafe for human consumption.

In part, the problems observed can be traced to domestic political factors. For example, a policy of pricing of water by public entities well below its economic value


(a prevalent phenomenon throughout the world) is undertaken for political expediency, as it is much more popular to expand supply through infrastructure development rather than constrain demand through higher charges. The practice is more common with respect to irrigation water, but domestic water supplies are also underpriced through subsidies or due to ineffective fee collection. The low price of water,especiaUy in agriculture, leads to gross misallocations, the adoption of water-intensive crops in water-scarce areas, and the maintenance of an unjustified size of the agricultural sector.

Political interference is also responsible for excessive staffing of public water service organizations, senior appointments of unsuitable personnel, and preferential treatment of certain types of users even if economic logic would dictate different areas of concentration. The imposition of non-economic decision rules contributes to the impairment of financial viability. But financial unviability is also an endogenous outcome of the flawed incentives in publicly-managed institutions, as demonstrated convincingly by Zeckhauser and Horn (1989) and De Alessi (1 984} .. The pressures of competition, and the incentives for efficiency which they would engender, are absent under the typical public ownership set-up. The lack of incentives for economic efficiency is not compensated by accountability on achieving non-economic objectives of society (e.g., by achieving equity objectives).

Given the negative experiences with the way governments commonly intervened in water management, and the fact that market forces alone are bound to generate deficient solutions, different modes of interventions are necessary. Thus, greater selectivity needs to be exercised in the forms of interventions and greater reliance on the potential of incentives to bring about efficiency. Solutions should be cast within an appropriate legal, institutional and economic policy framework (e.g. appropriate pricing, decentralization, privatization or contracting out of some service functions, financial autonomy of public entities, facilitation of water markets). Movements in this direction are already observed in a number of countries because of increased competition for water resources. Thus, while government presence will still be prominent in the water sector in the coming generation, the efficiency of allocation can be improved if reforms are introduced.


The preceding discussion of trends in the supply and demand for land and water resources indicates that while the aggregate supply figures seem reassuring, the availability of resources at viable economic and environmental costs is much more limited. The situation is less pressing for some countries, but acute competition for limited resources in other countries is likely to lead to radical changes in the structure of production towards activities which are less intensive in land and/or water resources. For example, it is quite conceivable that in some water-scarce economies in drier geographical areas, the absolute size of agriculture (a heavy consumer of water for irrigation) will decline, to allow for the more (economically) rational use of water in the domestic and industrial sectors. Similarly, in densely populated countries with mushrooming urban populations, the demand for space will exert pressures. reducing the absolute size of those agricultural activities which require ample space (e .. g. pasture, grain production) .. Globally, the increased competition is likely to lead to a greater compatibility between production activities and national comparative advantage principles. More countries will have to rely more on trade to satisfy their demands for agricultural products, because the attainment of self-sufficiency objectives will entail much higher opportunity costs of land and water resources as compared to the present.


The outcomes of the latest GAIT negotiations facilitate the expansion of agricultural trade, and the increasing resource scarcities will provide incentives for further

liberalization of trade. .

Governments have an important role in managing their natural resources in the coming decades, because the resource markets are far from perfection. The economic cost of waste and misallocation due to inadequate policies will become much higher as the demands for these resources increase. Thus, inadequacies which may have been tolerated in the past (e .. g. subsidized water in agriculture) will become more difficult to justify economicaIly and politically, The discussion in this paper pointed out some of the elements which should be prominent on the policy agenda of many governments: removal of various artificial constraints on the operation of land markets, improvement. of tenure security, regulations to mitigate environmental externalities, reforming water managemenLinstitutipns to allow for better incentives, and pricing water to better" reflect scarcities. Investment in agricultural research, the source of much of the knowledge to underlie future yield improvement, is also an important policy issue, as much of the research is directly or indirectly funded by public budgets. As indicated earlier, small increases in yield growth rates substitute for large expansions in cultivated areas. Because some aspects of agricultural research have public good aspects which transcend national boundaries, the international research effort, primarily in the Consultative Group on International Agricultural Research (CGIAR) centers, has

an important role as well. .


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Table 1.

Population Statistics

Total Population (billions)

1995 2025

Developing Countries

4.52 1.24 5.76 3 . .28

7.07 1.40 8.47 4 .. 67

Developed countries


Asia (excluding Japan)

Urban. Share (%)

1990 2025
34 57
73 84
43 61
29 54 Source: U.N. Publications, 1993

Table 2.

Structure of Production


GNP per Share of
Capita Agriculture
(U.S.$, 1992) in GDP (%)
1975 1992
361 24 19
760 33 21
310 39 32
1,950 9 14
2,690 11 8
22,160 4 3 Sub-Saharan Africa"

East Asia and Pacific

South Asia

Middle East/North Africa

Latin America

Developed countries

Energy~s~ per capita .

1971 1992
225 258
271 593
100 209
411 1,109
641 923
4,407 5,101 a Excluding South Africa b Oil equivalents

Source: World Development Report, World Bank, 1994.


Table 3.

Land Potential and Utilization (in million ha)

Land with Ag.


Land used for Agriculture

Cultivable land not in Ag. use

Land with Ag. Potential used for human settlements

5.5. Africa 1008 212 796
Middle EastiN. Africa 92 77 15
East Asia" 309 213 96
South Asia 228 191 37
Latin America & Caribbean [059 190 869
Deve! op ing Cou otries 2696 883 L813
Developed Countries 668 593 75
World 3364 1476 L888 14.5







8 Assumes that China's cultivated area is 125 million ha. For lack of information, this area is assumed to be equal 10 area with agric. potential.

b Excludes China.

Source: • Agriculture: Towards 2010", FAO.

Table 4. Global status of desertification/land degradation in drylands of the world, by continents

Total agriculturally used drylands~-;:- _

Total million Degraded areab

Continent hectares millions ha percent


1,432.59 1,045.84 73.0
1,881.43 1,311.70 69.7
701.21 375.92 53.6
145.58 94.28 64.8
578.18 428.62 74.1
420.67 305.81 72.7
5,159.66 3,562.17 69.0 Africa



N. America

S. America


Source: FAO (1993)


Table s. Global trends in land area use
Land Area Domesticated Perce 01 cha !lg~ in land u se
(hectares) Land (1979·1991)
(percent)" Permanent Forest &
cropland pasture woodland other
Worldb 13.04 billion 31 L8 2.4 (7.8) 5.5
A fri ca 2.97 hillinn 36 5.0 0.9 (3.8) 0.9
As·· .< 1..' billion 47 1.3 9.5 (4.9) (4.6)
Europe. 0 .. 41 billion 47 (1.8) 3.1 0.9 4.6
NOM & Central 2.1 billion 30 (0.7) 1.0 0.3 (0.5)
South America 1.75 billion 3S 12.1 4.4 (5.1) 3.5
USSR (former) 2.2 billion 2:'i (1 .. 0) 1.1 (22.2) 40.7
Oceania 0.8 billion 51 9.9 (4.8) (0.1) 9.1 Domesticated land ;s permanent c ropland and pasture combined .. Does not in .. lude Antarctica

Not incl.uding former USSR countries

Source: WRl (1994)

Table 6.

Growth of Consumption (estimates). (index numbers)




Total Agriculture

LDC 100 151 N/A.
Developed Countries 100 107 N/A.
World 100 131 N/A ..
Asia 100 151 N/A.
LDCs 100 N/A. 210
Developed Co. 100 N/A. 113
World 100 N/A. 161 a Based on FAO projections

b Based on Crosson and Anderson (1992) estimate


Table 7.

Presently Irrigated Land and Land with Irrigation Potential.

Potential increase

Presently Potentially

irrigated irrigable

(tbousand hectares)

More-developed coun tries Less-developed countries

68,.000 186,000

11,025 7,560 3,465

16,235 7,035 9,200


18,315 140,065

Africa North Sub-Saharan

Latin America North and Central South

Asia Near East Far East

27,000 110,500

18,175 1,640 16,535

22,865 2,.865 20,000

69,.420 5,185


(percent) 40



22 477




44 28 46

Source: World BankJUNDP (1990, p .. 115)

Table 8. Human usage of renewable water resources

Annaal internal renewable water resou rces


Region TOla.1 per capita Total
(kmJ) (000 m3') (kml)
Africa 4,.184 6046 144
North/Cent. America 6,945 6.26 697
South America 10,377 34.96 133
Asia 10,485 3.37 1,531
Europe 2,321 4.66 359
Former USSR 4,384 15.22 353
Oceania 2,011 75.96 23
World 40,673 7.69 3,240
Source: Wo rld Resources Institute (1992). Annual Withdrawa!s

Percent of



Per cap~3 (m1

Sectoral Withdrawals (percent)

Domestic Industry Agrtcu I lure


244 7 :5 88
1,692 9 42 49
476 18 23 59
526 6 8 86
726 13 54 33
1,330 6 29 65
907 64 2 34
660 8 23 69 10






Table 9.

Changes in per capita water resources in 13 Asian countries ..


Per capita available water resources (m~

1955 1990 2025 .<----

South Korea China


Sri Lanka Afghanistan North Korea Thailand Pakistan. Japan Philippines Vietnam Nepal Mongolia

2,940 4,597 5.,277 4,930 5,137 7,386 7,865


6,091 13,507 11,746 19,596 29,413

1,452 2,427 2,464 2,498 3,020 3,077 3,274 3,962 4,428 5,173 5,638 8,686


1,253 1,818 1,496 1,738 1,091 2,010 2,477 1,803 4,306 3,072 3,215 4,244 5,454


Figure. L A domestic water use function=

Log (Domestic water use/capita) -

Log (GNPlcapita) + Log (Percent urban population)


Parameter Estimate="


-0 .. 8823 (-2.463)


0.4734 (9 . .500)


0.2023 (2.923)

F Value R-square Adj R-sq

74.250 0.6024 0.5943

>I< Number of observations equals 100. >1<>1< Figures in parentheses are t statistics.


Figure 2.

An industrial water use function*

Log (Industrial water use/capita) =

Log(GNP/capita) + Log (percent urban population)

Variable Estimate**
LOGGNP 0.7207
LOGURB 0.7605
F Value = 94.884
R-square = 0.6641
Adj R-sq = 0.6571 * Number of observations equals 100. ** Values in parentheses are t statistics.


Agricultural Commerclatlzation and Farmer Product Choices ~ The case of diversification out of rice

Prabhu L. Pingali

Agricultural Economist and Program Leader Irrigated Rice Program lnternational Rice Research Institute

The general trend, in East and Southeast Asia, towards the withdrawal of labor from the agricultural sector and the resulting increase in real agricultural wages' is leading to th e com mercia li zati on and d j vers j fi ca ti 0 n of rice syste m s. Wh i 1 e th e speed of the above structural transformation differs substantially across countries they are all moving in the same d irecti on . Ti m mer (1988) prov ides a co m p rehen si ve discussion on the process of structural change and commercialization of agriculture. Empirical evidence on commercialization trends is provided by: Dyck, et. al., 1993 for East Asia; Koppel,

et. al., 1988 for Southeast Asia; and Naylor, 1991, for Indonesia.

Increasing commercialization of agricultural systems leads to: greater market orientation of farm production; progressive substitution out of non-traded inputs in favor of purchased inputs; and the gradual decline of integrated farming systems and. their replacement by specialized enterprises for crop, livestock, poultry and aquaculture products .. It is crucial for governments, researchers and the donor community to understand the long term patterns of transformation and to make the process of change smoother for farmers and rural households,

This paper:

• describes the process of commercialization of rice systems in Asia and its implications for the choice of outputs produced and inputs used by farmers;

• identifies the agronomic and economic opportunities and constraints to diversification out of rice moncculture systems;

• documents farm level mechanisms for alleviating constraints to diversification;

and .

• provides a set of policy and research options for aiding farmers through the transformation.


Asian rice systems can be characterized as subsistence, semi-commercial and commercial systems (Table 1). I ncreasecl commercialization shifts farm households away from traditional self-sufficiency goals and towards profit and income oriented decision making, farm output is accordingly more responsive to market needs. At the same time, the share of agriculture in farm household income declines. Except for Japan, Korea and Taiwan, rice systems in Asian countries tend to be at varying stages within the commercialization spectrum (Table 2). The irrigated lowlands tend to be the


most market oriented while the upland shifting cultivation systems and the deep water environments tend to be the least.

The irrigated lowlands by their nature are inherently more market oriented because of their ability to generate a surplus and because of better transport infrastructure. Rice monoculture systems in the irrigated lowlands could be characterized as semi-commercial systems even in slow growing economies. A large share of the output is marketed and, compared to the other rice environments, a relatively larger share of the inputs are purchased. Increasing commercialization trends lead to both a seasonal diversification out of rice monoculture systems - to include nonrice crops in rotation with rice - and specialized enterprises for horticulture, aquaculture, poultry and hog production (Table 3). The opportunities and constraints to seasonal crop diversification are discussed in the next section of this chapter.

Specialized enterprises for high value horticultural products, hog production and aquaculture tend to be concentrated in the irrigated environments because of relatively more reliable and cheaper supply of water. Integrated rice farming systems that include one or more of the above products generally become infeasible at a commercial scale because of the unique management and infrastructural investments required to satisfy the growing market demand for quality products. For example, commercial crop production and high quality livestock production generally would not occur on the same farm.

Commercialization trends also could lead to cattle and small ruminant production in the rainfed lowlands - taking advantage of seasonal grazing lands - and intensive aquaculture systems in the deep water and tidal wetland environments (Table 3). Tn the deep water environments, the traditional flooded rice crop tends to be bypassed for a dry season irrigated rice crop using shallow pumps. Wet season rice will continue to be the dominant source of income for all three lowland environments (see next section).

The upland environments change dramatically in response to commercialization.

Upland areas with soils that are relatively less susceptible to erosion tend to move, with improved market infrastructure, from subsistence cereal and root crop production to a variety of commercial enterprises. These include horticulture, tree crops, dairy and cattle ranching. In Asia, commercial utilization of the uplands has generally resulted in the movement OLl t of 1I p land rice prod uction.

Increasing opportunity cost of family labor with the growth in off-farm employment opportunities lead to a substitution of non-traded for traded inputs (Table 4). Power, soil fertility maintenance, fodder for farm animals and household nutrition are the primary activities for which non-traded inputs are used in subsistence societies.

Choice of Power Sources: human and animal versus mechanical

Agricultural operations can be grouped according to the relative intensity with which they require power, or energy, in relation to the control functions of the human mind

or judgement (Pingali, et. al., 1987). Operations such as land preparation, transport, milling, grinding, and threshing are power intensive while weeding, sifting, winnowing, and fruit harvesting, for example, are control intensive operations. Animal power was traditionally used to power intensive operations while human power is still used for control intensive operations. One should expect, that as wage rates rise, animal powered technologies will increasingly give way to motor powered technologies. This


trend is clearly seen across Asia, especially with the advent of rental markets for machinery. The substitution of animal power with machines for power intensive operations is profi tab le even in countries wi th slower income growth. The persistence of animal draft power in these countries is not because motorized power, per energy unit, is more expensive but because of policies that impeded the growth of machines and the provision of rental markets, With increasing commercialization, mechanical and chemical technologies also will substitute for human labor for the more control intensive operations, such as weeding and harvesting ..

Chemical fertllizers vs farm yard manures

Intensification of land lise is only possible with nutrient replenishment to the soil to sustain its productivity, In subsistence societies soil nutrient supply is replenished by farm yard manures, Output growth in intensive, commercially oriented food production systems is not possible in the absence of chemical fertilizer lise, There are several reasons for this: I) the physical quantities of farm yard manure required for sustaining soil fertility would make it uneconomical relative to chemical fertilizers, because of the labor requirements for manure production, the feed requirements for maintaining the number of livestock required to meet manure requirements and the high cost of transporting it to the field; 2) on efficiency grounds, high bulk, low value materials - manure, agricultural by products and crop residues - do not repay labor-intensive management simply because they have such dilute concentrations of useful ingredients relative to chemical fertilizers (McIntire, Bourzat and Pingali, 1992); and 3) with falling fertilizer prices, relative to labor and with improved transport infrastructure, chemical fertilizers are the dominant choice for soil fertility maintenance ..

Studies comparing chemica! fertilizers and farm yard manures have shown that per unit of nutrients, the yield response to farm yard manures and chemical fertilizers is si mi lar. J n other words, manu re does not prod lice responses eli fferen t from fertilizers at equal concentrations when applied with similar methods and conditions. Moreover, the contention that manures have a cumulative effect and therefore can replace future fertilizer applications has also been found to be without an empirical basis (see

McIn tire, Bourzat and Pi ngali, 1992, for an assessment of the Ii teratu re). From a sustainabil i ty poi 111 of view there are other technological alternati ves that are cheaper than farm yard manure use. For high intensity production systems, further promotion of farm yard manure or any other organic based system for replenishing soil fertility would not be successful.

Emergence of fodder markets

The early attraction of combining crop and livestock activities within the same enterprise was the availability of cheap fodder for livestock, essentially crop residues from the farm, Stall feed i ng of cattle and small ruminan ts with crop residues was seen as a means of preventing the over grazing of marginal pasture lands, especially common access lands. This argument no longer holds due to tile emergence of commercial fodder production and lower transport costs. Livestock producers no longer need to grow their own fodder, stall feeding can be sustained on an economical basis wi th pli rchased fodder of higher q ual j ty. The type of diet provided for commercially produced I ivesrock has also changed, grain, root crop or oilseed based rather than straw based, in response to the demand for higher quality livestock products, With changes in fodder composition and quality, the perceived economies of home grown fodder no longer ex i S1.


Han (1992) documents the growth in the feed industry in Asia with increased commercialization of the livestock sector. By the early 1990s, a total of 101 million tons of compound feed was produced in the Asia-Pacific region. China and Japan are the largest feed producers in the region, 39 million tons and 29 million tons respectively. Feed production is mainly for swine, poultry and cattle. Commercial feed production is expected to grow across Asia as the demand for livestock products increases. In Korea, for example, commercial feed production increased from 100,000 tons in 1963 10 11.5 mi II i on tons in 1991, an increase of 115 ti meso Farm produced fodder will not be able to compete with commercially produced feeds as wages increase and transport costs become lower.

Milk and meat for home consumption

As economies grow, increasing opportunity cost offamily labor, and the increasing availability of commercially produced milk and meat, makes subsistence production of livestock products uneconomical. Rural societies are no longer remote self contained units that need to produce all of their food requirements. Food consumption studies across Asia have shown the increased rei i ance of farm househol ds on purchased food and thi s trend wi II be stronger as incomes grow (Table 5). r mproved transport and market in frastructu re makes subsistence food producti on non-viable in all but the remotest locations ..

Northeast Thailand provides a striking example of Changing food consumption patterns in rural areas. In the 19605, meat consumption was limited to special occasions such as festivals, perhaps once or twice a year. This pattern has changed, in favor of greater purchased meat consumption, with improved transport infrastructure and increased family income due to seasonal migration for urban employment (Va\yasevi and Winichagoon, 1992).

As economies grow, the returns to intensive subsistence production systems that require high levels of fami Iy labor are generally lower than exclusive reliance on purchased inputs. The benefits of integrated production systems also decline with the rise in the opportunity cost of ffmiLy labor and specialized crop, livestock or aquaculture enterprises emerge . Few Asian economies have an exclusively specialized productio.n ~yst7m today, ~ncl.av~s do exist and the trends are in favor of increased commercialization and specialization".


The last section look a broad and somewhat speculative sweep at the possible evolution of Asian rice systems. This section is narrower ill focus, it attempts to assess the

flexib iii ty of rice I an ds and rice farmers to respond to the com mercia] ization trends

"·Wt:- are now at the beginning of a second agricultural revolution which is inaugurating a new farming system based upon the special i zed production of mi lk , meat, eggs, vegetables and fruit", (Astor and Rowntree, 1946, writing about postwar agriculture in Europe).

2 In the provision of high volume, high quality livestock products small farm operations are

necessarily at a disadvantage. They wi II not be in a position to gain from the scale economies inherent in special ized large scale operations [or processing. transport and marketing of livestock products. Integrated farming systems wi II not have a cornparati ve advantage in a commercial food supply system geared Iowa rds II rban consu l11er~ (Pi n gal i, 1993).


through seasonal or permanent diversification out of rice rnonoculture systems. The potential for diversification out of rice production depends on both physical and economic factors. The feasibility and cost of substituting other crops vary across the five rice eco-systems: irrigated and rainfed lowlands, tidal and deepwater wetlands, and uplands .. Each of these systems also presents different rainy- and dry-season profiles and requires different levels of physical and human capital investment to switch from

rice 10 non rice crops and back. .

Do farmers have the flexibility to respond to changing relative prices and

reI a ti ve pro fi tab i I. i t Y i 11 t hei r crop ell oi ce dec i sian m aki ng? FI ex ib ility can be described in terms of the level of investments (both physical and human capital) required in switching from rice to non-rice crops and back. For instance, non-rice crops are grown year round in Indonesia in a Sorjan (ditch and dike) system which involves high levels of investments III drainage control. Flexibility is low because moving out of monoculture rice to upland crop production on elevated dikes or moving back into monoculture rice production involves high physical investments. Upland areas, however, can switch between rice and non-rice crops with minimum additional investments. Table 6, presents the flexibility of crop choice by ecosystems and


Wet season crop flexibility is extremely low in all but the upland environments, because the investment requirements for drainage are high and not easily reversible in the lowlands. Switch: ng between rice, maize and other crops is possible in the uplands because the fields are not bunded and do not require to be puddled before crop

establ ish men r.

During the dry season, crop choice is constrained by water availability and drainage. The irrigated lowlands have the most reliable water supply. These areas, depending all (he severity of the drainage constraint, have the highest flexibility in dry season crop choice. Switch ing from dry season rice to non-rice crop production will involve a certain amount of investment in temporary drai nage structures and in learning about non-rice technology, cultivation practices and irrigation water management. Onion farmers in the Upper Talavera River Irrigation System (UTRTS), Philippines, for example, construct multipurpose ditches and levees in the rice paddies for facilitating the drainage of excess water (Tabbal, et. al., 1990). Other examples of temporary drainage structures can be found for tile Philippines: in Moya (1990), A!agcan and Bhuiyan (1990) and Maglinao and Valdeavilla (1990); for Indonesia and Bangladesh in Miranda and Maglinao (1992). The amount of land modification required is related to soil texture, heavy soils require elaborate drainage structures while light sandy soils may not require any drainage structures at all, The returns to these investments are highest for rhe i rrigated lowlands wi t h moderate to well drai ned soils and hence, these areas will te n d to divers i ry 111 ore t han I h e or he r ecosys tern s as the reI ati ve p rofi tab il ity of non-rice crops improves.

Irrigated lowland soils can be classified into: well drained soils; moderately drained soils; and poorly drained soils. Flexibility of crop choice for each of these soils by season are presented ill Table 7. For the wet season only [he well drained soils have possibilities for non-rice crop production, investments in a bed and furrow system or a sorjan system are required for successfully growing non-rice crops. On the other hand, for tile dry season the tlexibility of crop choice in irrigated riceJands is high for all but the poorly drained soils. Only heavy textural waterlogging-prone irrigated rice soils have little option but to specialize in rice production. For this last category the amount of drainage investments [hal have to be made prior to growing non-rice crops is often prohibitive. Irrigated areas in South and Southeast Asia that have a long history


of dry season diversification have all limited their non-rice crop production to well drained soils while intensive rice production has continued concurrently on poorly drained soils.

The length of the period of irrigation water availability is also an important determinant of dry season diversi fication .. The large partially irrigated areas which cannot support a dry season rice crop have a natural advantage in diversifying into upland crops during the dry season. But crop choice may again be limited on heavy textured, poorly drained soils,i n which water control to avoid waterlogging or drought is difficult.

The progression to crop and income diversification has taken place smoothly in countries where product markets operate relatively freely. In Suphan Buri, Thailand, for instance, the adoption of non-rice enterprises was closely associated with recent rice price trends. Panel data for 146 households in Suphan Buri, Thailand indicate that between 1985 and 1988, 79 % households f rst adopted non-rice enterprises (Table 8).. Rice prices in Thailand were all a dec! i ning trend between 1980 and 1986, reaching

thei r lowest level cI u ri ng 1985/1986 ti me period. The 11011- rice enterprises adopted included: non-rice crops such as vegetables and fruit orchards; non-crop farm enterprises, SUCl1 as shrimp farming and livestock production; or non-farm activities, such as ru ral i nd ustries or II rban employmen t (Table 8). By 1987, 91 of the 146 households had adopted diversified farming systems. It is interesting to note that a third of these switched back to exclusive rice production in 1988 when rice prices went back LIp following the drought of 1987.

D iversi fication of S uphan Btl ri rice lands took two forms, dry season diversification and year round diversification. Dry season diversi fication was into vegetables and other seasonal crops, such as, maize and sweet potatoes, 39 % of the households adopted a dry season non-rice crop. Land investment requirements for establishing these crops is minimal and when the rice price improved in 1988 these lands quickly returned to rice production. Year round diversification was into sugarcane, shrimp and fish farming, and fruit orchards, 14%,3% and 4% of the households respecti vel y adopted these en terpri ses. I nvestment req uirernen ts for year round diversification out of rice are very high and would only be made if expectations of relative long term profitability is in favor of the particular non-rice enterprise. For fish and shrimp production, for instance, the initial investment costs are about 110,000 Baht per hectare (approximately 4400 U.S.$).

Input and labor requirements are also higher for non-rice enterprises, this includes both the dry season and the year round enterprises. Table 9, provides data on the relative input requirements and the profitability of rice and non-rice enterprises. Sriarunrungreauang (1989) using the above panel data for Thailand finds that if the rice price drops by 20 % dry season non-rice crops would be relatively more profitable than rice, but year round diversification would not be a profitable alternative to rice in the irrigated lowlands.

The opportunities for dry season diversification in the rainfed lowlands and the deep water areas islimited by water availability for post-rice crop production. In the humid and sub-humid zones rainfall level and distribution are such that a post-rice or a pre-rice crop in the rainfedIowlands is possible. Post-rice cropping of legumes (eg, mungbean), cereals (maize) or vegetable crops may be possible on late season rains and residual moisture. This practice has become much more feasible on that portion of rainfed ricelands which now produce earlier maturing rice cultivars, which are harvested before the onset of tile dry season. In the Cagayan Valley of the Northern


Philippines, the replacement of traditional rainfed rice varieties of six-month duration with early maturing modern varieties has lead to double cropping of rice in the lower elevations and the introduction of a pre-rice crop of mung beans on the upper elevations (Garrity, et. al., 1988). Pre-rice crops in the lower elevations are only possible on ridges to prevent water logging (Perniro and Garrity, 1988). The strategy of increasing cropping intensities in the rainfed lowlands will only be successful if modern rice varieties adapted to these problem hydrologies (i.e., drought prone, flood prone and drought and flood prone conditions) are available.

In rainfed environments where there is a sharp and prolonged dry season (especially the semi-arid zones) post-rice crops are not possible without supplementary irrigation. In the rainfed lowlands of South Asia, Northeast Thailand, Cambodia and Laos, dry season crops on residual moisture would not be possible even if traditional rice varieties were replaced by appropriate short duration modern varieties ... There is potential, markets permitting, for a short pre-rice crop followed by a short duration rice crop, suitable candidates are mung bean and green manure crops such as sesbania.

Where supplementary irrigation is available, as with pumps, opportunities exist for a dry season rice or non-rice crop .. In Nueva Ecija, Philippines, where there is a six-month dry season, the introduction of deep tube wells has lead to the adoption of maize followed by rnungbeans in the dry season a fter a rain fed wet season rice crop (Gines, et. al., 1988). It ought tobe emphasized that diversification occurred only on the upper paddies with light textured and easily drained soils (turod). The lower paddies, on the other hand, with heavy textured soils that are prone to waterlogging (Lungog), were used for cultivating a dry season rice crop. While two rice crops are also possible on the turod soils with the dry season crop being irrigated by pumps the private and social returns to a diversi fied cropping system dominate the rice-rice cropping system. This is so primarily because the costs of irrigation for rice are high and a significantly smaller area can be irrigated efficiently (Gines, et. al., 1988). Engelhardt (1984) reports for the semi-arid tropics of India, the emergence of a diversified cropping system with the introduction of deep welI pumps.. Rainfed rice in the wet season is followed by either groundnuts, sorghum and vegetables. In Bangladesh, approximately 60% of the dry season cultivated area is irrigated by tubewell sand pu mps (Hak i m, 1990). Much of til is area is plan ted to a rain fed wet season rice crop followed by an irrigated dry season non-rice crop, wheat, potatoes, gram and onions are popular alternatives to rice (Mondal, et. al, 1990; Islam, 1990).

Dry season d iversi ficarion i 11 the upland areas si mi Iarl y depends on the level and distribution of rainfal L In areas with a sufficient growing period, a post-rice crop can be grown. Mai ze, sweet potatoes, and vegetables a re com mon seq uential crops, In Northern Mindanao, Philippines, for instance, where the average annual rainfall of 2350 mm is evenly distributed over all eight-month period, double cropping of maize is practiced on a quarter of the upland area (Mandac, et. al, 1987). On the other hand, in Northern Laos, where the a verage an n ual rai n fall is 1400 m 111, di versi fication from one upland rice crop to two non-rice crops IS not feasible due to risk of drought stress for the secon d cro p (F uj i saka, 1990) . Fa r the lower rai n fall u plan d areas in much of the sub-humid and semi-arid zones, rice production is generally not profitable due to the risk of drought stress. Where irrigation is not available, wet season sorghum, millet and pulses such as pigeon pea and chick pea are commonly grown (see Walker and Ryan, 1990), for a descri ption of croppi ng patterns in Inc! i a's semi-arid tropics) ..

Diversi fication out of rice production in response to changes in the relative profitability between rice and non-rice crops would be most feasible in the dry season. The rice ecosystems in which it will be most profitable and feasible are the irrigated


lowlands, because of greater reliability of water supply and higher return to divers; fication investments.

Dlversif'icat ion Const raints

The profitability of diversification is constrained by both markets and physical infrastructure. If market access is good, output demand is relatively elastic and hence the returns to investments in land, technology, and time spent learning about new crops are relatively higher. Table 10 presents, for irrigated lowlands, the physical and market constraints to diversification.

In the dry season, in areas with good market access, the profitability of diversification will be high on well drained soils and moderate to Iowan poorly drained soils. In areas with poor market access the profitability of diversification on well drained soils will be moderate to low, depending on the nature of output demand. If demand is highly inelastic (due perhaps to the high cost of transporting the output to markets) then the profitability of diversification will be low. For poorly drained soils with poor market access the profitability of diversification will be very low.

Table I. I presents, for the uplands, the physical and market constraints to

d iversi fication. T f market access is good, the profi tabi I i ty of di versi fied field crop production on soi Is not highly susceptible to erosion is high. For soils susceptible to erosion, profitabil ity of field crop production is. determined by the level of erosion control i nvestmen IS req ui red. Where high levels of erosion control investments are required tree crops may be a more viable option than field crops, particularly after land degradation has been allowed to occur through field crop production. In upland areas with poor market access the returns to diversification out of subsistence rice production are limited in areas of either type of soil.

The relationsh ip between the flexibility of crop choice and erosion control investments becomes pronounced on the sloping uplands, which are extremely susceptible to soil erosion. There are various options for erosion control to maintain permanent cropping on these lands, ranging from grassy strips to stone wall terraces. Farmer's choice of erosion control strategy depends on population pressure on the land, on market access, and on the appropriate erosion control techniques available. Pingali (1990), Fujisaka and Garrity (1988) argue that farmer interest in erosion control measures is directly related to land values and market access and is conditional on suitable technologies being available to them.

Dominant crop and non-crop options by eco-system

Table 12 shows the dorn i nan t i ncorne generati ng acti vi ties for each season and environment. Empirical evidence on the sources of income by rice environments is provided .i n tables 13 and 14 for the Phi li ppi nes and Thai land. During the wet season rice will conti nue to be the dominant source of income in all but upland environments. Th is j s nOI to i m pI y that rice is not an i.111 portant source of income for the uplands, but rather to stress the fact that the uplands have always been very diversified.

In the i rrigated lowlands dry season rice will continue to be the major source of income. Areas with good market access and those near urban centers will increasingly divers: fy to non-rice crops and vegetable production. The dominant. dry season activity fa r the ra i n fed low 1 an d s an d t he deep water a reas will essen ti all y be non -crop activities,


off-farm employment, livestock production and cottage industries. There is scope for post-rice crops on residual moisture, or pre-rice crops during the early wet season. However, the share of total income from this activity would be relatively lower than from the other activities. Dry season cropping activities in the rainfed areas are limited because of technical problems related to timely and effective crop establishment, limited moisture (or excess moisture in some cases), and generally modest yields and high yield instabil ity. Oil-farm activities are often more dependable income sources, suggesting that dry season croppmg intensities will remain low even if technical problems in crop production are sol ved.

The above discussion leads to the conclusion that irrigated environments, while having an absolute advantage (relative 10 the other environments) in a rice-rice cropping pattern, may also have a comparative advantage in a ricel non-rice cropping pattern. The extent of comparative advantage for the irrigated lowlands in dry season diversification depends on the physical constraints and the market opportunities for non-rice crop production. On the other hand, during the wet season, the upland environments have both an absolute and a comparative advantage in non-rice crop production.


The dynamics of farmer land preferences

Within an irrigated micro-environment, lands with the greatest preference for rice production are heavy clay soils and lands that have the best access to irrigation water (lands ill the head section and padd ies c lose to irrigation canal s). Yields al most always decl ine from the head to the ta: I of the irrigation system (see Chambers, 1988 for a review of South Asian evidence, and Pingali ,et. 31., 1990 provide empirical evidence for Sout heast Asia). Table 15 su m marizes data from Sri Lanka on differences in rice yields and incomes by location along the head and tail reaches of an irrigation system. Incomes and net returns to labor decline more sharply than yields (Chambers, 1988) The unit cost of rice production would be the lowest on the head lands as compared to paddies in the rail section; those far from the irrigation canals and those with more sandy soils (See Pingali and Masicat, 1990 for evidence from Philippines and Wardana et. aI., 1990 for evidence from Indonesia). As long as the returns to rice production dominate all alternative crops within the system the demand tor and the price of the head lands wi II be higher than the othersi 11 the system.

As the relative returns to dry season non-rice crops rise, one observes an increase in preference for lands normally considered marginal to rice production. Within the irrigated lowlands, the following could be considered marginal to dry season rice production: upper paddies that are eli fficult to irrigate; well drained soils, sloping lands and stony gravelly land. AI! these lands would be more suitable for dry season non-rice crop production clue to good drainage characteristics. Investment requirements for drainage are lower on these lands as compared to: low lying paddies, heavy clay soils and land with better water access. Wardana,, 1990 document for Cikeusik Irrigation System in West Java, Indonesia, differences in yields and net returns for rice and non-rice crops (Table 16). They find the relative profitability of non-rice crops to increase on lands further away from the head of (he system, to a point where water scarci ty could be a problem. Pin gal i and Masicat (1990) documen t si milar cropping pattern choices for the Upper Talavera River Irrigation System (UTRlS) in the


Philippines, Two crops of rice are grown all tile upper portions of the system, while onion s, ch i II ies and vegetab les are com mall in the mid-section. Dry season crop choices at the tai I of the system are conditioned by reliability of water supply, where farmers have access to pumps, non-rice crops are grown.

The following generalization is possible: In the irrigated lowlands, when the dry season returns to non-rice crop production dominate the returns to rice production the demand for and the price of land wi til the least constrai nts to diversi fication out of rice will be the highest. Pingal i, et. al., 1989 examined the changing land preferences in the Upper Talavera River Irrigation System (UTRIS) in the Philippines. Over the 1983-88 period the UTRIS System has observed dramatic changes in the preferences for dry season cultivation land and consequently changes in land values. The UTRIS System consists of areas of heavy clay soils and sandy loam soils that are more suitable for dry season onion and vegetable production. In the last five years land preferences have switched from the heavy clay soils to the sandy loam soi Is.


The switch from rice mono-culture to diversified farming requires substantial start up investments plus operating expenses. This switch is generally not possible without long term and seasonal credit arrangements. Where diversification has occurred

successful: y 1 fanners have managed to acq II i re cred i L through private or public sources. In the UTRIS system, discussed above, themain alternative to dry season rice production is onions. The credit constraint to onion production has been alleviated by arrangements with onion traders who provide credit for the purchase of all the required inputs in exchange for the exclusive right 10 purchase all output at the market price at harvest. No interest is charged for this credit, but traders benefit from the substantial price increase between the harvest and post-harvestmonths that more than offsets the foregone interest charges and the storage costs. Similar <credit arrangements from merchants has been observed for vegetable and sugarcane production in Suphan Buri, Thai land. InS uphan Bu ri, longer term cred it is provided by the govern rnent and the agricu I tural cooperatives,

Does diversified cropping increase labor requirements? Yes, relative to rice the per hectare labor requirements for onions, vegetables and other high value crops are

su bstan ti a II y hi g 11 er. Labo r req II ire III en ts fa r p rev i d j 11 g tem para ry d rai nage structures is an essential activity immediately following rice harvest. Planting, weeding, harvesting and post-harvest operations are also extremely labor intensive for these crops. Recent research by International Irrigation Management Institute (HMI) in the Philippines estimated the mean labor demand for rice, rnungbean, onion and garlic as 85.7,68.7, 468.5 and 241.0 man days per hectare, respectively (Wijayaratna,.1990). Labor

req ui rements for non-rice crops arc h igher at the head of the system relative to the lower portions, this is presumably because of the greater need for drainage investments in the former (Ward ana, et. al.). Co mpari sons of labor requi rements for dry season rice versus non-rice crops can be found for tile Ph iii ppi nes, Indonesia and Bangladesh in Miranda and Maglinao (1992). Given the higher crop and drainage labor requirements non-rice crops on irrigated lands are grown on ex trernel y s mall plots, in general about a fourth of the paddy area.

Does diversified cropping aggravate labor peaks between the harvest of the rice crop and the planting of the non-rice crop? As discussed above, additional labor is


required for constructing temporary drainage structures; and additional labor or mechanical power is required for land preparation. The land preparation activity for non-rice crops following rice would require breaking the paddy hard pan (the compact soil surface caused by puddling paddy soils). If this hard pan is not broken, there would be problems wilh root penetration and hence the establishment of a non-rice crop (Zandstra, 1990). The power requirements for this soil modification is higher on heavy clay soils than on the lighter soils. Mechanization to an extent can alleviate this labor peak, however, the machine power required for upland crops is substantially greater than that required for puddling rice paddies. This incompatibility in machines can be overcome by contract hire operations, however, these would be profitable only when large areas are grown to non-rice crops. Expansion of non-rice crop area is constrained by among other things, the nature of the output market, the supply of labor, the prevalence of credit contracts, and farmers' aversion to production and price risks.

In addition to crop labor requirements, the supervision time required of the farmer is significantly higher: this may be the dominant labor constraint to high value non-rice crop production gi ven the hi gil I Y inelastic nature of management labor available in the farm household, while compared with hired labor augmented by seasonal migrants. In the Philippine UTRIS project, onion farmers overcame the supervision constraint by dividing their farms in half, cultivating cne part and renting other to a seasonal tenant fanner. Farmers with heavy clay soils often leased sandy loam soils for the dry season. Landowners provide half the purchased inputs and get 50% of the output.

Unlike the case of rice, price risks dominate production risks in non-rice crop production, and the systems seasonal tenancy arrangements are a method of eli ffusing the price risks associated with nonrice crop production. The means by which the smaller onion growers do this is to divide their farms into two, cultivate one part and give the other to a seasonal tenani who pays a fixed rent of peso 3000 per hectare plus water charges. This way the landowner gets a certain income from a part of his land and gambles on the remainder.

Collective action for water and land management.

In irrigated environments tbat have a diversified cropping pattern, collective action is needed: a) to ensure adequate water supply; b) to regulate timing of water supply; and c) to prevent excess water into the non-rice crops. In the Philippines collective action is achieved through the formation of irrigators associations (Pingal i, et. a1., 1988), in Indonesia through water users associations, in Bangladesh through the Fanner Cooperative Society (Hakim, 1990) and in India through the formation of water cooperatives (Chambers, 1988). These associations have similar objectives and face similar operational constraints. The main problem with organizing a viable association is that farmers at the head of the system clo not have as much of an incentive to join as farmers at the lower pans of tile system since they have a relatively better access to water. F(I nne rs (It the lower end 0 f the system fi nd that thei r access to water i 111 proves on I y margi nail y by j 0 ill i ng the assoc iat ion si nee the i ne fficienc y of water lise or water stealing by the head fanners continues. It is only the mid-section farmers that benefit from the formation of a water association. Consider once again, the case of the UTRIS system as reported by Pingali, et. al., (1989). Farmers in Lateral B are well organized in an irrigator's association, while farmers in Lateral A despite several attempts have failed to organize themselves. Why? Lateral A is located in the upper portions of the system and thus has adequate water supply during the dry season, moreover the entire lateral grows rice, hence the need for in season regulation of timing are minimal and


there is no problem of having too much water in the field. Farmers in Lateral B, on the other hand, grow exclusively non-rice crops (onions) during the dry season. The timing of water supply is different for onions than for rice and in-season regulation of timing of water supply is important Water flow has to be regulated to prevent excess water into the onion fields. Hence, the need for collective action in B and the success in organizi ng into an 1 rrigators association.

Collective action although desirable may not always be feasible. Consider for instance, the farmers at the tail end of Lateral B. These farmers organized themselves into an irrigators association but they found that this did not result in any increase in water allocation to their farms. There was not enough dry season water to service them. After two years these farmers stopped paying membership fees to the association and began depending exclusively on pumps for meeting their water needs.

Collective action for land management is equally important in uplands areas .. In the uplands, group action for making watershed level investments for erosion control are essential for developing long term sustainable cropping systems. Sloping land management systems in the Philippines and terraces in West Java are examples of such collective effort (see Fujisaka (1990); Soermarwoto and Soermarwoto (I984), respectively). In the irrigated lowlands, crop choice decision making requires collective consensus on crops to be grown at the system or the lateral level, without such a consensus the ability of farmers to influence the system management to change water allocation rules for non-rice crops will be limited.

Fi nail y, secu rity of land tenure is crucial for rnaki ng long term land investments req u i red fa r d i versi fi ca ti on from ri ce to non -rice crops an d no n - ri ce en terp ri ses, Formal1and ownership as characterized by the possession of titles also helps farmers in acquiring credit for making the necessary investments in the Jand. Evidence on land ownership and investment is provided for Thailand by Feder and Onchan (1987) and Chalamwong and Feder (1986).


The process of structural transformation is well underway across much of Asia, although the speed at wh i eh it is occurri ng varies by country. East Asia, wi th the exception of China, is nearing completion of the transformation process. Southeast Asia is rapidly transforming its agricultural systems, with Malaysia, Indonesia and Thailand taking the lead. South Asia continues to lag behind, although the macroeconomic liberalization policies initiated by these countries -especially India- in the early 1990s, could lead to a faster rate of transformation, Relatively larger populations and continuing rapid population growth rates will continue to dampen the speed of transformation in South Asia.

Government policy has a crucial role to play in ensuring that the transformation of the agricultural sector is smooth, Governments have a difficult task to perform, on the one hand, continued food security needs to be assured for populations that are growing in absolute terms, on the other hand, research and infrastructural investments need to be made for diversification out of the primary staples, The tendency of Governments to react to short term' crisis situations' may be counter productive in terms of meeting long term. goals of food security and income growth. "Ultimately the process of rural diversification must be consistent with the longer-run patterns of structu ral trans formation" (Ti rnmer, 1988),


Price pol icies and ill frastructural i nvestrnen ts playa crucial role in inducing farmers to move towards a commercial agricultural system. While historical protection of staple food prices has had signi fican I social benefits across Asian countries, there is a need to assess the extent of protection to be provided in the face of commercialization .. Given the thin international nee market, completely open rice market policies are not appropriate from a food security point of view .. On the other hand, continued high levels of protection keep rice farmer incomes low and the budgetary burden of government food stocks high. In the case of infrastructural investments, the emphasis ought to be on improving general transport and market infrastructure while allowing the private sector to invest in commodity specific processing, storage and marketing facilities. It is important that governments do not preempt private sector decisions by taking a "pick the winner" attitude towards diversificat ion.

Large seal e d i versi fication of c roppi ng systems necessari 1 y involves di veri si fied production in the irrigated lowlands, because of the importance of irrigation to overall ag ricu It II ral product i on. Man y observers 11 ave af g lied that ex is ti ng i rri gat i on systems constrain diversification because of the rigid design of infrastructure and inflexible water del i very systems (Schuh and Barghouti, 1988). It is argued that this in flexibility prevents appropriate allocation of water to non-rice crops, constraining farmers to rice rnonoculture (see Rosegrant and Yadav, 1993 for a detailed treatment on this set of issues). Based on these arguments: technology based solutions to diversification within irrigation systems are advocated, mainly capital investment in improved conveyance, diversion, and drainage systems. An alternative argument would be that the failure to diversify within irrigation systems is the result of incentive failures resulting from

cen t ra I i zed a 11 oca ti on of un - priced i rri ga ri a n water. Po li c i es til at establi sh markets j n tradeable water rights could establish incentives to economize 011 water and choose less water intensive crops (in the dry season), by inducing water users to consider the full opportunity Cost of water (Rosegrant and Yadav, 1993) ..

The research system in dealing with diversification trends ought to be careful in not moving from an almost exclusive focus all one set of commodities to another set of commodities. The focus of research ought to be to provide fanners the flexibility to make CTOP choice decisions and to be able to move relatively freely between crops. Substantial crop specific and system level research effort would be required to provide farmers the flexibility of crop choice. Crop specific research includes shorter duration culrivars, improved quality characteristics and greater tolerance to pest stresses. System level research Wall ld include, land management and tillage systems that a How for a rapid movement across crops, farm level water management systems that can accommodate a variety of crops within a season. Also important at the system level is the carryover effect of inputs and management practices across crops, for instance, the effect o~ high insecticide applications on dry season vegetables on the subsequent wet season nee crop.

The cornbi ned effect of in rensi fication in terms of prolonged water saturation, the build up and carryover across crops of pest populations, 'rapid depletion in soil micro-nutrients and changes in soil organic matter could lead to reduced productivity of rice rnonoculture systems over the long term .. Diversified systems, by providing a break in the monoculture system could lead to improved crop system health. A non rice crop in sequence with rice that allows the soil to dry out, and/or enhances soil nutrient supply or arrests pest build lip could improve the productivity of the subsequent rice crop. Diversification trends could, given the above positive effects, be compatible with the desire for a more sustainable paddy land use system.


It is important to remember that even with increased commercialization and diversification trends, rice will continue to be the most important staple food in Asia, in relative and absolute terms. Given growing populations and income induced demand

for increased rice consumption there continues to be a strong need to seek higher productivity levels for rice .. The need for increasing the productivity of rice is higher the greater the diversion of rice lands 10 non-rice pursuits.


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Mandac A M, Magbanua R D, Genesila M P (1987) Multiple Cropping System in Northern Mindanao, Philippines. In Philipp. J. Crop Sci., 1987. 12(2):71-85.

Miranda S M, Maglinao A R (eels.) (1992) Management arrangements for accommodating non-rice crops in rice-based irrigation systems .. Proceedings of the First Progress Review and Coordination Workshop of the Research Network on Foreign Management for Crop Diversification in Rice-Based Systems.

Q uezon City, Ph i j i pp i nes. 10-14 Decem ber 1 990.. Co J 0 III bo, Sri Lanka: IIM!.

Mondal M K et 31 (1990) Water Regimes and Crop Diversification. Paper prepared for the Workshop on Applied Research for Increasing Irrigation Effectiveness and Crop Production, a collaborative project of BRRr; BWDB, lIMI and IRRI.

Moya T B, Miranda S M (1989) Socio-Technical Issues in Diversifying Rice-Based Irrigation Systems. Proceedings of a National Workshop on Crop Diversification in Irrigated Agriculture in the Philippines. TIMI,. Sri Lanka ...

Naylor R (1991) The Rural Labor Market in Indonesia. In S. Pearson, W .. Falcon, P.

Heytene, E. Marke and R, Maylor (eds) Rice Policy in Indonesia. Ithaca, Cornell University Press ..


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Valyasevi A, Winichagoon P (1992) "Contribution of Animals to Meet Human Nutritional Needs in Rural Asia", In: Proceedings of the Sixth AAAP Animal Science Congress VoL I, Ed. P. Bunyavejchewin, S. Sangdid and K. Hangsanet, pp. 41-56, Kasetsart University, Bangkok, Thailand.

Walker T S, Ryan J G (1990) Against the Odds: Village and Household Economics in India's Semi-Arid Tropics.

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World Development Report (1993) "Investing in Health, World Development Indicators." Published for the World Bank, Oxford University Press.

Zandstra H G (1992) Technological considerations in crop diversification, In Shawki Barghouti, Lisa Garbux and Dina Urnaf (eds). World Bank Technical Paper no. 180., Washington, D.C: The World Bank.


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79 Table 2.

Stage of commercialization by country.

Country Subsistence Semi- Commercial
East Asia
Japan x
Korea x x
Taiwan x
China x x
S.E. Asia
Thailand x x
Malaysia x x
Indonesia x x
Philippines x x
Vietnam x x
Laos x
Cambodia x
Myanmar x
South Asia
India x x
Pakistan x x
Bangladesh x x 80

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Table 5.

Demand for ADB's DMC's year 2000 projected from trends between 1980 and 1987.

Item Per capita 1987 Growth rates Computed Percentage
kg/year %/annum income elasticity increased demand
of demand in 2000 over
1987 level
Beef and veal 0.74 3 .. 72 1.50 55.00
Buffalo 0.39 3.57 1.40 52.30
Mutton and Jamb 0..33 2.52 1.00 36.80
Goat meat. 0.44 2.62 1.00 36.40
Pork 8.13 6.08 2.40 103 .. 00
Poultry 1.85 3.93 1.60 58.80
Milk: cow 10.74 3.56 1.40 52.30
Milk: buffalo 12.45 1.50 0.60 19.60
Hen eggs 3.47 7.69 3.00 143.30 Sources: Taken from Camoens (1991), Appendix 9/ I, page 20 I. Origi nally derived from FAO Prod uc ti on Yearbooks, 1980-1 987.


Table 6.

Flexibility of crop choices by eco-systems and seasons.


Wet season

Dry season

Irrigated lowlands


Moderate to high (a) Low to moderate (b)

Rainfed lowlands


Deepwater and tidal wetland


Low to moderate



Moderate (b)

(a) This period includes the post-rice period (late wet season) or the pre-rice period (dry-wet trans! tion).

(b) Conditional on rainfall level and distribution.

Table 7.

Fully irrigated lowlands: flexibility of crop choice.

Well drained soils

Medium drainage

Poorly drained soils

Wet season

Moderate (a) High



Dry season



Low to moderate

(a) Conditional on rainfall levels and effective water control.

(b) Depending on the level of drainage investments.


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Table 9.

Relative input requirements and profitability of rice and non-rice enterprises, Thailand, 1988 (Baht/year),

Rice-rice Rice-veg. Sugarcane Prawn
Fertilizer (Billa) 2915 27174 995 627
Pesticide (B/ha) 964 19224 280
Other costs (B/ha) 294 17037 8389 18589
Feeds (B/ha) 42049
Sub-total 4173 63436 9664 61265
Labor (mdslha)
Family 42 595 17 90
Hired 41 445 60 2
Total 83 1040 77 92
Labor costs (Billa) 5739 71916 5325 6362
TOTAL COSTS (B/ha) 9912 135352 14989 67627
GROSS RETURNS (B/ha) 28427 160517 32399 104485
NET RETURNS (B/ha) 18515 25165 174to 36858 Source:

S rianrunrung reuang,. S., "The I 111 pact of Dedi ni ng Price Rice on Production, Allocation of Farm Resources and Income: A Case Study of Small Rice Farms in Amphoe Don Chedi and Amphoe U-Thong, Changwat, Suphan Buri, MS Thesis, Kasetsart University, Bangkok, Thailand,1989.


Table 10.

Market infrastructure vs, physical constraints as determinants of the profi tabil i ty of d i versi ficatron.

Irrigated lowlands: Dry season

Well drained soils

Poorly drained soils

Good market access


Moderate to low (a)

Poor market access

Moderate to low (b)

Very low

(a) Conditional on the level of investment requirements for drainage control.

(b) Conditional on input supply conditions.

Table 11.

Market infrastructure vs. physical constraints as determinants of the profitability of diversification.

Uplands: wet season


soil chemical (a) constraint and/or erosion hazard

Without major soil constraint

Good market access

High input di versi fled cropping systems or agrofores t ry systems

Diversified farming


cash croppi ng

Poor market access

Shifting cu! ti vation

Subsistence cropping systems

(a) includes highly acid soils with potentia! aluminum toxicity/P deficiency.


Table 12.

Dominant crop and non-crop option for sustaining incomes by environment.

Wet season

Dry season

Irrigated lowlands


Rice/non-rice crops

Rainfed lowlands


Off-farm employment

Deepwater and tidal wetlands


Off-farm employment


Diversified production systems


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I)() Table 15.

Difference in rice yields and incomes by farm location along the irrigation systems, Gambhiri Project, Sri Lanka.

Yield per bigha in kg

Net income Rs per 100 kg

Net income per ha

Thikaria (head reach) Minor

Rithola (tailreach) Minor

Tail: head ratio

622 350 0.56







Source: Chambers (1988), p. 23.

Table 16.

Costs and returns per hectare onion by section. Cikeusik Irrigation System, Cirebon, West Java, indonesia, 1988 DS 1.


farms Item


Mean yield per hectare (t/ha) Mean price of onion ($/kg) Total value of production ($/ha) Costs of production ($/ha)

Seeds Fertilizer Insecticide Labor

9.7 0 .. 16 1676

494 137 177

Hired labor Family labor

Other costs

556 414

150 1514 1928 162


Tala]. paid out costs of production ($/ha) Total variable costs of production ($/ha) Returns above paid out costs ($/ha) Gross margin ($/ha)



10.5 0.17 1822

421 134 231

468 215

76 1330 1545 492 277

Tail All

n=24 n=79

8.4 0.16 1332

301 86 143

423 239

168 1121

1360 211 (28)

9.5 0.16 1590

396 116 181

477 284


1304 1588 286


a U.S.$ - Rp 1800.

Source: Wardana, et al. (1983), Table 13.


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