Size--Productivity Relationship in Pakistan's Agriculture in the Seventies (Issues IN AGRICULTURAL Development) (Report‪)‬

A large majority of the less developed countries, including Pakistan, suffer from low levels of productivity in agriculture. In view of the scarcity of farm land and the limitations of intensive margins of cultivation, the importance of raising these levels may not be underestimated in terms of a more judicious use of labour force, rapid growth of agricultural production and increased availability of funds for industrial development. Productivity gains favouring well-to-do farmers, however, may produce undesirable results such as deterioration of income inequalities, political instability and social unrest, and must be avoided as far as possible. It is in this context that the distribution of productivity gains among various size groups should be taken to be as important as the aggregate growth of farm productivity, if not more. In spite of the discontinuities at times, aggregate productivity in Pakistan's agriculture has been on the increase since the early Sixties. While the distribution of these gains is a controversial issue, it has implications for the fundamental size--productivity relationship. For example, it is a commonly accepted view that the productivity increases of the Sixties were largely concentrated in the hands of the large farmers because of their financial superiority for investing in key agricultural inputs and high-value cash crops and their advantageous position for benefiting from government programmes of input subsidies, price supports and institutional credit [7, p. 706; 8, p. 364; and 19, p. 196]. Arguing on these lines, Berry and Cline have statistically shown, although on the basis of comparisons of inherently incomparable data, that in Pakistan the large farmers have overtaken the traditionally more productive small farmers in productivity [2, pp. 90-125]. Mahmood and Nadeem [11, p. 186], however, deny the existence of a positive size--productivity relationship on the basis of the 1973 farm data and argue that the smallest and the largest farms have the highest productivity. By contrast, a recent study by one of the authors of this paper concluded that the rate of growth of the productivity of the small farmers was considerably greater than the corresponding rate for the large farmers throughout the Sixties, with the result that the traditional inverse relationship between farm size and farm productivity remained valid until the early Seventies [3, p. 179]. The study also suggested, albeit without citing supportive empirical evidence, that these trends in productivity were likely to continue into most of the Seventies.