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Economics of Smallholder Farming in Rhodesia

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Economics of Smallholder Farming in Rhodesia Economics of Smallholder Farming in Rhodesia A Cross-Section Analysis of Two Areas One of a group of STUDIES IN TROPICAL DEVELOPMENT © I968 by the Board of Trustees of the Leland Stanford Junior University Economics of Smallholder Farming in Rhodesia A Cross-Section Analysis of Two Areas Benton F. Massell and R. W. M. Johnson Supplement to Vol. VIII, 1968 Food Research Institute Studies in Agricultural Economics, Trade, and Development Colby' uf )1. :;(hol;15tl«' lJu:ulli, lo.';trHlcsofa 55811 DIRECTOR'S PREFACE Concern with economic growth and development and with the economic problems of low-income countries since the close of World War II has led to more general recognition of the critical importance of the agricultural sector, both in providing for rapidly increasing human populations and in gen­ erating productivity in other sectors. In the second largest continent, Africa, colo­ nial administrators and development planners in the new states have launched a multitude of programs intended to improve the condition of that major part of the population that obtains its livelihood from farming and to accelerate the flow of foodstuffs, industrial materials, and investable funds from agriculture. That these efforts have so often been barren may be attributed in large part to general ignorance about the economic nature of the existing agricultural systems, and, in particular, about the ways in which small farmers organize their very limited resources for production. The present study by Messrs. Massell and Johnson is an effort to extend our understanding, not by speculation, but by careful analysis of observed behavior of African farmers in two situations differing primarily in the amount of resources available to them and in the form of land tenure. The results of this analysis, presented with due caution by the authors, speak to a wide range of critical and disputed questions about the productive efficiency of smallholder agriculture. These questions relate to various aspects of the em­ ployment of labor: the relative magnitude of its marginal product; the competing demands of nonagricultural activity for labor time; the impact of seasonal migra­ tion for wage employment; the response of labor inputs to increased economic return; and the opportunities for increased use of hired labor in traditional agri­ culture. The authors explore allocative efficiency in the two samples of farms; the potential to be expected from greater total inputs of machinery, soil-building prac­ tices, fertilizers, managerial skills, and agricultural education; and the relative advantages of the two alternative farming systems. Their data provide informa­ tion about economies of scale, including the matter of minimum size of farm that is consistent with active participation in the market economy and willingness to invest and innovate. And their study contributes to the debates about the rela­ tive advantages of various forms of land tenure, and about whether or not signifi.­ cant productivity increases can be achieved without a major transformation of the entire agricultural system. The Food Research Institute is very pleased to be able to make available to a wider audience this complete report of the Massell-Johnson study. It is an impor­ tant contribution to the small, but growing, body of knowledge about the pro­ ductive activities of a critically important part of the world's population. WILLIAM O. JONES Director Stanford, California August 1968 PREFACE This study contains an analytical and empirical examination of the factors responsible for low productivity, and the problems of raising produc­ tivity, in African smallholder agriculture. The analysis is based on an examina­ tion of survey data obtained from two agricultural areas in Rhodesia: Chiweshe Reserve and the Mt. Darwin Native Purchase Areas (see map on page 3). The Chiweshe data were collected by one of the authors (Johnson), with the assistance of six research assistants who remained in the area throughout the crop year. The Darwin data were obtained from D. T. Johnson, Agricultural Officer, Mt. Darwin District, Rhodesia. We are greatly indebted to him for making this information available to us. Except as otherwise indicated, all of the figures in this study are derived from the two sets of unpublished data. Some of the results of this study were reported by Massell in two earlier papers, one in Econometrica and the other in Food Research Institute Studies. An earlier version of the entire study was published by The RAND Corporation as a RAND Report. We gratefully acknowledge the support given to the research by The RAND Corporation. We are also grateful to the Rockefeller Foundation for a generous grant in support of this research. We are indebted to many individuals for helpful comments on earlier drafts of this study, notably Richard R. Nelson, William O. Jones, Montague Yudel­ man, Albert Madansky, and Charles Wolf, Jr. B. F. M. AND R. W. M. J. Stanford, California and Canterbury, New Zealand August 1968 CONTENTS DIRECTOR'S PREFACE iii PREFACE ...................................................................... v LIST OF FIGURES .............................................................. Vl11 LIST OF TABLES ............................................................... ix MAP ... ........................................................................ 3 Chapters 1. INTRODUCTION 1 2. A SUMMARY VIEW OF RHODESIAN AFRICAN AGRICULTURE ............ 5 3. TWO AGRICULTURAL ECONOMIES: CHIWESHE AND DARWIN........... 11 4. A STATISTICAL PROFILE OF CHIWESHE AND DARWIN.................. 14 5. ATTITUDES, OBJECTIVES, AND PRICES.................................. 25 6. A MODEL OF PRODUCTION ............................................ 30 7. PROBLEMS OF STATISTICAL ESTIMATION.............................. 38 8. ESTIMATES OF THE PRODUCTION COEFFICIENTS...................... 45 9. GAINS FROM REALLOCATION.......................................... 50 10. RETURNS TO RESOURCES .............................................. 54 11. MANAGEMENT ........................................................ 59 12. CONCLUSIONS AND IMPLICATIONS FOR POLICy........................ 66 CITATIONS .................................................................... 74 LIST OF FIGURES 1 Actual and Potential Output ........................................ 33 2 A Modified Cobb-Douglas Isoquant ................................. 36 3 Interfirm and Intrafirm Production Functions .. .. 40 LIST OF TABLES 2:1 The Number of Cooperators, Plotholders, and Master Farmers in Rho- desia, 1948, 1955, and 1963 ........................................ 9 2:2 Average Yields per Acre by African Farmers in Rhodesia by Govern- ment Rating Groups, 1946-58 .................................... 10 4:1 Average Value per Farm of Output and Sales of the Three Principal Crops: Chiweshe and Darwin ........................... , .. .. .... 14 4:2 Chiweshe and Darwin Farms by Percentage of Output Marketed. '" 15 4:3 Comparison of Land Utilization in Chiweshe and Darwin... .. ..... 16 4:4 Median Yield by Soil Type: Chiweshe and Darwin ....... ,. .... 17 4:5 Farm Implements in the Two Samples... ......... .... ..... .. ... 18 4:6 Farms in Chiweshe and Darwin According to Value of Fixed Capital 19 4:7 Hours Worked per Farm by Operation and Month: Chiweshe and Darwin ......................................................... 20 4:8 Hours Worked per Farm by Labor Group and Crop (A), or Opera­ tion (B): Chiweshe and Darwin................................. 22 4:9 Hours Worked per Farm (A) or per Acre (B), by Crop and Opera­ tion: Chiweshe and Darwin .... .. 23 4:10 Comparative Economic Performance of Skilled, Semiskilled, and Un- skilled Farmers in Chiweshe . .. 24 8:1 Estimated Coefficients: Chi we she Model 1 ......................... 45 8:2 Estimated Coefficients: Chiweshe Model 2 ........ .. 46 8:3 Estimated Coefficients: Darwin Model 1 ..... .. 47 8:4 Estimated Elasticities of Production: Chiweshe and Darwin. ....... 48 8:5 Estimated Marginal Value Productivities: Chiweshe and Darwin... 49 11:1 Mean Economic Performance of Skilled, Semiskilled, and Unskilled Farmers: Chiweshe .............................................. 60 11 :2 Mean Use of Inputs by Management Group: Chiweshe . .. 61 11:3 Simple Coefficients of Correlation Between Management and Factor Inputs: Darwin ................................................. 64 11 :4 Mean Management Index by Years on the Farm: Darwin . .. 65 12:1 Comparison of Economic Performance of Chiweshe Skilled Farmers and Darwin Average Farmers .................................... 71 Chapter 1 INTRODUCTION At the core of the world's problems of underdevelopment lies the modernization of agriculture. Whether it is a ques­ tion of feudal farming in parts of Latin America or the usurious landlord-peasant relationship of monsoon Asia or tribal communal agriculture in tropical Africa, the out­ come-low productivity, low output, disgust with rural life and exodus to the cities-now presents the greatest single obstacle to achievement of dynamic economic growth. Yet the literature available for serious study of this central problem is still very inadequate and in some measure re­ flects the relative lack of priority farming has suffered in the elaboration of development strategy. -Economist, August 22, 1964, p. 273 This monograph contains an analysis of agricultural under­ development in Rhodesia. Our primary concern is to present an analytical and empirical examination of the factors responsible for low productivity, and
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