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CHAPTER FIVE:
GREEN REVOLUTION AND INCOME DISTRIBUTION

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 Introduction

 It is generally acknowledged that the development of

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traditional agriculture on LDCs follows a few distinct phases.
 Stage I we find ‘subsistence farming’ where farmers generally
produce for their own consumption. Here the main objective of

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production is to maximize chances of survival rather than
profit.
 Stage II we observe the growth of ‘mixed farming’. Here the
farmers produce partly for domestic consumption and partly
for the market. Such production for the market marks the
beginning of the process of commercialization of agriculture in
LDCs.

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 Cont..

 Third phase, agriculture is fully ‘commercialized’ where

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production mainly takes place for the market. The aim of profit
maximization.

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 While in some areas of LDCs still observe subsistence farming,
in many others a number of factors have led to the onset of
‘mixed’ and modern farming where the productivity,
particularly yield per acre, of some types of agricultural crops
has gone up sharply.
 Such an improvement in agriculture has been labelled the
‘Green Revolution’ (GR).

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THE NATURE OF THE GREEN REVOLUTION
 The GR can be explained by looking at the shift of the production
function of any agricultural crop or crops.

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 The phenomenon of the GR has indeed been observed by a
phenomenal growth of yields of some food grains in parts of
India, Pakistan, Thailand, parts of South and Central America and

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the Philippines during the late 1960s and 1970s.
 Some have argued that such a phenomenon is temporary and the
hope for alleviating poverty, malnutrition and famines in LDCs is
rather premature.
 Others have measured the trend lines of growth of some crops in
India and Pakistan and expressed doubts about a significant,
permanent shift in the production function (see Rudra 1978;
Mellor 1976).
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CONT..

 India is also beginning to export rice to the world market in recent

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years. Needless to say, such a transformation of agriculture in
LDCs makes a very important contribution to the overall rate of
economic growth, speeds up the process of structural change, aids

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nutrition, efficiency and productivity of labour and leads to the
general improvement of welfare.
 The GR has also facilitated the process of social modernization
(including the extension of rural education and the decline of high
birth and death rates in rural areas) by stimulating widespread
changes of attitudes among many farmers in LDCs.

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CONT..

 It is useful to note at this stage that there are at least three

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elements of a change in yield in agricultural crop per unit of land:
1. A change in the output mix

2. A change in cropping intensity

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3. A change in crop yield.
 The empirical evidence available so far seems to suggest that, in
underdeveloped agriculture, the differences in land productivity
are mainly due to differences in output mix and cropping intensity
rather than differences in crop yield (Berry and Cline 1979).

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CONT..

 Technical change in underdeveloped agriculture can be classified

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into two broad kinds:
I. Biological: usually refer to factors that raise land productivity.
Better seeds and use of organic fertilizers in the right doses at the

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right time are useful instances.
II. Mechanical innovation usually means the use of more machinery
like tractors and is frequently referred to as ‘tractorization’.
 When the GR comprises biological innovation, more jobs can be
created; if the GR implies tractorization, then the capital-labour
ratio rises and employment falls.
 At this stage it may be useful to summarize the nature of the GR
as follows.
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CONT..

1. The ‘miracle seeds’, i.e. the new wheat and rice varieties

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(sometimes referred to as the high yielding variety (HYV)) have
been adopted by farmers in some LDCs at high rates, especially
in those regions where they are technically and economically

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superior to local types.
2. Existing evidence tends to suggest that in most cases neither
tenure nor farm size has been considered as an important source
of differential rates of growth in agricultural productivity.
3. There is some evidence from many LDCs to confirm the
hypothesis that the introduction of the HYV technology has led
to a rise in the demand for farm labour.
4. The adoption of the HYV technology has widened the existing
disparity in income distribution in many instances. 8
CONT..
 Another important problem that has characterized the GR is an
increase in income differential between regions within the same

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country.
 The main reasons for the differential rates of growth in agriculture in
these countries have been the following:

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1. Differences in the availability of water and irrigation facilities

2. Different levels of fertilizer use at the right time and in the right
amount
3. A differential flow of information about the HYV seeds and other
complementary inputs
4. Differences in the availability of new varieties of seeds, fertilizer and
pesticides
5. Differences in the nature and attitude of farmers towards risks and
uncertainties.
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CAUSES OF THE GREEN REVOLUTION
1. The continuing high growth rates of population in most LDCs
during the 1950s and early 1960s effectively reduced the growth of
per capita real income and per capita food availability. Thus,

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necessity became the mother of invention. Faced with the urgent
need of feeding a large number of extra mouths, there was very

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little choice but to introduce technical progress in agriculture.
2. With a limited stock of land, a fast growing labour force, a slow
rate of growth of labour utilization in both the agricultural and the
non-agricultural sectors and lack of a serious and active
government policy for substantial investment in agriculture, food
crises began to occur with regular frequency in some LDCs.
Answer was provided by the invention of a new high yielding
variety of seed—sometimes called the ‘miracle’ seed—for the
production of wheat and rice.
CONT..
4. The invention of new seeds went hand in hand with the increase in
cropping intensity
5. The other important factor which substantially raised yield and

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food production in LDCs is a rise in the use of fertilizer.
6. The next important element for spreading the GR has been the

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availability of necessary irrigation facilities and controlled water
supply.
7. The use of tractors and other machinery in agriculture have also
aided the process of yield improvement in traditional agriculture.
8. Some argue that a major encouragement for the adoption of new
technology in backward agriculture is the usual motive for profit
maximization.
9. Public policy has played a significant role in the adoption of new
technology in agriculture.
EFFECTS OF THE GREEN REVOLUTION ON
INCOME: A SIMPLE THEORY

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 As farmers realize the opportunity of raising their incomes
through the adoption of new technology, However, the relative
changes in factor shares depend on a number of factors such as:

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I. The neutrality or non-neutrality of technical progress

II. Changes in the sum of production elasticities under technical

progress
III. Changes in the capital-labour ratios after the introduction of
innovations in agriculture

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 REVOLUTION
 Although the GR has not yet turned grey by the early 1980s and
raised high hopes among many as a phenomenon which is likely to
continue. A number of problems have attended its productive success.

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1. The ‘first generation’ problem of the GR has been to induce farmers
to adopt the new technology to raise production.

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2. The ‘second-generation’ problem has been associated with the
distribution of gains from increased farm income due to the GR.
 In extreme cases many poor farmers, who failed to introduce new
technology and reap gains from the GR, had to sell their small plots
of land to rich landlords and migrate from villages only to be
destitute in most cases.
 It is therefore necessary to introduce the following policies to prevent
such growing inequality in income distribution stemming from the
GR.
 ROLE OF PUBLIC POLICY
 Public policies should be designed to increase the production and
income levels of small and poor farmers. These may comprise:

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1. Subsidizing the purchase of new seeds, fertilizers and water, etc.
2. A guaranteed price support system to provide incentives to farmers

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3. progressive tax on agricultural income as the GR raises farm
income, particularly of rich farmers
4. A comprehensive system of income transfers from the rich to the
poor.
5. Bringing the domestic price of capital goods in line with world
prices by a more appropriate use of exchange rate policy. It may
also be necessary to impose tariffs on the import of agricultural
machinery (e.g. tractors),

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01/14/23 Fuad Bullo (Msc DE)
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QUESTIONS