"Economics of Share-Cropping in Haryana (India) Agriculture"--a Comment (Report‪)‬

Economic efficiency of agriculture in developing countries has been a matter of great interest among the development economists and has received considerable attention in the literature on agricultural development. The increasing access to electronic computers and availability of farm management data have provided further impetus to the empirical analysis and comparison of economic efficiency among well-defind farm groups and a rich body of literature on the subject appeared during the Sixties and Seventies [2; 3; 4; 6; 7; 8; 10; 11 ; 12; 13; 14 and 15 ]. "Economics of Share Cropping in Haryana (India) Agriculture" by F. S. Bagi, published in the Spring 1981 issue of this Review [1], is a recent contribution to the literature dealing with economic efficiency of agriculture. Analysing data from a survey of 119 farms from Haryana (India), the author concludes that technical efficiency of the share-cropping farms is lower and there is significant allocative inefficiency on share-cropping and owner-operated farms. The contribution, though analysing an important issue of Haryana agriculture, however, suffers from some serious methodological problems and faulty interpretation of some of the empirical results. The 119 survey farms on which Bagi's analysis is based, had the following irrigation pattern: 20 farms fully irrigated, 17 farms totally unirrigated and remaining 82 farms partly irrigated. It is not clear from the study how the sample farms were selected, what sampling procedure was followed in choosing these farms, and how closely the "Sample farm groups" represented the actual farming situation in Haryana. Therefore, one does not know whether the results can be generalised to Haryana situation or not. Moreover, the treatment of the farms which were partly irrigated is interesting. The author has treated irrigated and unirrigated parts of the same farm as two separate farms. The author justifies his treatment of 82 partly irrigated and unirrigated farms as two separate groups by arguing that information about output and inputs had been collected separately for the irrigated and unirrigated parts of the same farms. It is a well-known fact that farmers in developing countries seldom maintain detailed farm enterprise accounts. The fact that detailed enterprise information, separately for the irrigated and unirrigated parts of the farming business, was available reflects that this must be a very special group of farmers, highly educated and well versed in keeping detailed farm management accounts, who thus cannot be representative of the farmers at large. Even for such a special group, it would have been interesting to know about the treatment and apportionment of family and permanent hired labour, working livestock, capital equipment, farm implements and other such equipment between the irrigated and unirrigated parts of the farms as the farmers maintain these at the farm level and not separately for irrigated and unirrigated parts of the farm. These data are later used for estimating coefficients of production function to analyse the economic efficiency of various farm groups. As the estimated parameters of production function are sensitive to the values of these data, some explanation about the allocation of these factor inputs between the irrigated and unirrigated parts of the farming business was called for. In the absence of such information, it is not clear whether the differences in efficiency are the real differences or they can be atrributed to the allocation of inputs to various farms by the author. However the author has ignored these issues. In studying economic efficiency in general and the allocative efficiency in particular, where management plays crucial role, the treatment of the sub parts of a farm under same management as separate farms is debatable.