ABSTRACT
University, Texas; Professor A. A. Walters, University of Birmingham; and Drs. Tom Weisskopf and Vahid Nowshirvani of M .I.T. Dr. Now-shirvani suggests an additional objection to marginal-valuc-product-equali-sation as a privately optimising policy: the inappropriateness of point-input point-output assumptions for agricultures where one borrows, to buy seed and fertilisers, four to six months before the harvest is sold. In this period interest of 10-15 per cent of the value of the loan can mount up.This article is in part based on observations in a Maharashtra village, Kavathe, Khandala Peta, in Satara District, Maharashtra, India. Kavathe is a non-irrigated village (on 90 per cent of land) but has enough moisture to permit double-cropping on slighdy over half the plots. Almost all heads of households own land, and cultivate about four acres each, split on average into eight or nine plots. Soil quality is poor because — despite nitrogen deficiency — inadequate, seasonally concentrated rainfall limits fertiliser use. The population is about 800, some 70 per cent of Maratha caste, though the influence of caste on the agricultural economy is small. The village has a primary school, is a mile from the nearest doctor, and has a daily bus service to Poona (three hours* run) outside the monsoon season. Agricultural and animal-husbandry officers from P eta headquarters visit the village yearly, but have time only to distribute fertiliser and inoculate cattle — not to give advice or help.My research in Kavathe, designed to isolate the effect on farming efficiency of physical and attitudinal variations among cultivators, was supported by the U. K. Ministry of Overseas Development and by the University of Sussex. Substantial research assistance was given by the Gokhale Institute of Politics and Economics, Poona. None of the persons or institutions mentioned is responsible for the views expressed, or for any errors.2 F.A.O., The S ta te o f Food and Agriculture 1966, Rome, 1966, p. 17.3 All page references in the text are to T. W. Schultz, Transform ing T raditional A grictdture (paperback edition), Yale, 1964 (hereafter T T E ). Schultz’s chief sources are Sol Tax, Penny C apitalism , Chicago, 1953, and D. Hopper’s work in Senapur, summarised in D. Hopper, ‘Allocation Efficiency in Traditional Indian Agriculture’, J n l. Farm Econ., Vol. 47, No. 3, 1966, pp. 611-624.4 T h e refutation is convincing. It is usually unclear whether the ‘zero marginal product’ is of man-hours or of workers. If man-hours are meant, then either people are putting in their last, most tired hours of work for nothing in the burning tropical sun, or (which has to be shown, but never is) the reduction of man-hours will produce exactly offsetting increases in the intensity or efficiency of those still worked. If workers are meant, then either the ‘removed’ marginal workers have been working for nothing within their families, or employers have paid them to produce nothing, or the mere fact of their removal will cause those who stay in the village to work longer, harder or better. None of these possibilities makes sense. Moreover, the urbanising peasant, usually a literate male aged 18-30, withdraws the best (not average, let alone marginal and barely employed) units of labour-input.5 Shown by J. L. Joy in a paper to the Honolulu Conference on the transformation of traditional agriculture (not yet published).6 See note 27 below.7 A paradigm still found in the best contemporary textbooks: Samuelson, Economics: an Introductory A nalysis, 6th Ed., McGraw-Hill, 1964, pp. 399, 476; Lipsey, Introduction to Positive Economics, Weidenfeld and Nicolson, 1964, p. 55.8 Even as early as 1811, 65 per cent of the U.K’s families were principally employed outside agriculture (B. R. Mitchell and P. Deane, A bstract o f B ritish H istorical S ta tistics, Cambridge, 1962, p. 60). The proportion in India, both in 1951 and in 1961, was only 30 per cent (Census data). The adult literacy rate in India in 1961 was under 25 per cent; in the U.K. as
