Agriculture Reference
In-Depth Information
21 percent in India; total wheat production has increased from 12.6 million tons
in the 1960s to more than 68 million tons in 2000/01 in India, and from a mere
50,000 tons in the 1960s to 1.6 million tons in 2000/01 in Bangladesh.
These are remarkable successes, but price policy was not the only driving
force in achieving them. Arguably, price policy was a catalyst to the main force
of agricultural growth: rapid diffusion of new technology. Although technology
was the major force behind the success, one has to acknowledge that things
would probably have been different in the absence of price policies and com-
plementary investment in agriculture. In 1967, with first time large-scale adop-
tion of HYVs, India harvested 17 million tons of wheat, or 5 million tons more
than the previous best of 12 million tons. The challenge of managing such a big
harvest was greater than anybody had anticipated. Neither the farming com-
munity nor the government was equipped with adequate infrastructure to deal
with such a blessing of technology. Many schools in rural Punjab were closed
down to store the grain and, while students were on holidays, policymakers con-
fronted the hard work of dealing with the new situation. What would have hap-
pened in the absence of a policy to ensure a floor price? There is no counter-
factual to answer the question, but one can certainly imagine that prices would
have collapsed, farmers would have lost incentives, and technology diffusion
would have slowed down, if not stopped altogether.
DISASTER MITIGATION
. None of the countries in Asia has had a major
food security crisis since their adoption of integrated food and agricultural poli-
cies. For example, there has been no famines or major food security crises in
India since the great Bengal Famine of 1943—although there have been several
episodes of major droughts and other natural disasters. Similarly, despite being
hit by several devastating floods, Bangladesh has not had a famine or major
food security crisis since the country adopted integrated food and agricultural
policies after the 1974 famine. The most striking example is the 1998 flood in
Bangladesh, which did not have the devastating effect that many predicted.
These success stories, although people might argue to what extent they can be
attributed to price policies, are in sharp contrast to what many economists had
predicted in the 1960s. Forty years ago, many development experts were writ-
ing off Asia.
21
The region was termed a “development basket case.” “Famine
1975” (Paddock and Paddock 1967), “lifeboat ethics” (Hardin 1974), and “triage”
(Ehrlich 1971) were the labels commonly applied to the practices in the coun-
tries of the region. The progress has been remarkable; and we argue that the
price policies and the parastatals that implemented major components of these
policies do deserve some credit, if not all of it.
21. Ironically, they were betting on Africa.
