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Chinese and Indian Agriculture: A Broad Comparison of Recent Policy and Performance

Published online by Cambridge University Press:  23 March 2011

Pranab K. Bardhan
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Abstracts

In both China and India agriculture is the key sector and yet detailed comparisons of agricultural development in the two economies are difficult to obtain. A major problem is, of course, the availability and reliability of data. This paper puts together some of the information that is now available and assesses its reliability to draw some rough generalizations.

On the whole it seems that agricultural production in the two countries has grown at fairly similar rates. In terms of absolute level Chinese yield per hectare in most crops, of course, exceeds that of India by a significant margin, but this has been true for quite a long time in the past.

In provision of inputs like organic and inorganic fertilizers and irrigation water the Chinese performance has been much better than that of India. Both countries have devoted not a very low proportion of their total gross investment to the agricultural sector. But the effectiveness of this investment has been quite unsatisfactory on account of, among other things, technical deficiencies and faulty planning in both countries, and the excesses of over enthusiastic but unskilled party cadres in China and a very much restricted framework of village institutions and administrative setup in India. In land policy much of the period under consideration was taken up in China in bold experimentations—with the inevitable advances and retreats—in search of the optimum size of land management in a backward peasant economy, while in India in spite of copious land legislation some of the crucial land relations have remained basically unaltered. The Chinese policy of moving away from age-old small-scale family farming and of emphasizing joint management of land and labour has, on the one hand, significantly strained peasant incentives, but on the other hand rid Chinese agriculture of the burden of uneconomically small and fragmented holdings, tenurial insecurity and crop sharing which still afflict a substantial part of Indian agriculture. The problem of ensuring enough marketed surplus of foodgrains to feed the nonagricultural sector has, however, remained unsolved in both countries, in spite of all changes in institutions and production.

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Articles
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The Journal of Asian Studies , Volume 29 , Issue 3 , May 1970 , pp. 515 - 537
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Copyright © The Association for Asian Studies, Inc. 1970

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References

1 There is a well-known article by W. Malenbaum (“India and China: Contrasts in Development Performance,” American Economic Review, 06 1959Google Scholar) contrasting the general development performance of the two countries in the period 1950–58. Our discussion goes into somewhat more detail as it is concentrated on the agricultural sector alone. Besides, much has changed in both economies since 1958, and we take into account some information relating to this later period (as well as new information on the earlier period). More recendy, K. N. Raj [India, Pakistan and China: Economic Growth and Outlook. (New Delhi: Author, 1967)] has gone into an illuminating general discussion of Chinese economic policy in contrast to Indian. S. Ishikawa's recent book [Economic Development in Asian Perspective (Tokyo: Kinokuniya Bookstore, 1967)] also provides a very useful framework for a comparative study of agricultural development “in Asian perspective.”

2 In numerous textbooks on comparative economic systems, we found elaborate comparisons of the American and Soviet economies but hardly any mention of a China-India comparative study, which, in our opinion, should be a very important part of any discussion on comparative economic systems in the present world.

3 In both countries dependence on agriculture as a direct source of income is also very substantial, even after all these years of industrialization. In India the share of agriculture (including animal husbandry, forestry and fishery) in the net national produce in 1948–49 prices was 48.6% in 1952–53 and 43.2% in 1964–65. In China, the share of agriculture in net domestic product in 1952 prices was 46.1% in 1953 and 34.4% in 1965 according to estimates based on official data recomputed on the standard concept of net domestic product, including incomes originating in the “nonproductive” sectors (the estimate for 1965 is very crude because of the fragmentary nature of official data available). See Ta-Chung Liu, “The Tempo of Economic Development of the Chinese Mainland, 1949–1965,” in An Economic Profile of Mainland China, vols. 1 and 2, U. S. Congress, Joint Economic Committee, 1967, pp. 56–63, 68–69. One should note here that the prices at which output is valued being more favorable to industry in China than in India, the relative share of modern industry in national income appears larger in China than would be the case if a comparable structure of relative prices were used in national income estimation in both countries.

4 See on this, Tang, A., “Policy and Performance in Agriculture” in A. Eckstein, W. Galenson, and T. C. Liu, Economic Trends in Communist China (Chicago: Aldine Publishing Co., 1968)Google Scholar, for example.

5 Most of the information on India we have used is from publications of the Ministry of Food and Agriculture and of the Planning Commission. In this paper we explicitly mention the source of Indian data when it is different from either of these two sources.

6 The estimates of per capita food grains production for China should be taken as very crude approximations; among other things, the population figures underlying them are subject to doubts by some observers. The population figures for 1960 and 1965 are those used by Edwin F. Jones (“The Emerging Pattern of China's Economic Revolution,” in An Economic Profile of Mainland China, vols. 1 & 2, U. S. Congress, Joint Economic Committee, p. 93)Google Scholar. For 1965, Jones takes the official estimate after the mid-1964 “census” and projects it to the end of 1965. Population estimates and projections on the Ecobasis of several alternative hypotheses made by John Aird (“Population Growdi and Distribution in Mainland China,” in An Economic Profile of Mainland China) seem to suggest that 728 millions for 1965 is an underestimate. (For a contrary view, however, see W. Klatt's comment in China Quarterly, July–Sept. 1967.) Aird arrived at an estimate of 1965 total population of somewhere between the extremes of 714.6 million and 874.6 million. As Eckstein, Galenson and Liu [Economic Trends in Communist China (Chicago: Aldine Publishing Co., 1968), p. 13Google Scholar], comment, “judged by what is known about the food supply and employment the true magnitude is probably nearer the lower limit.”

7 It is assumed that the output of food grains (unprocessed) in China in 1960 was 150 million tons, the figure mentioned by Mao to Viscount Montgomery as reported in The Sunday Times, 10 15, 1961.Google Scholar

8 For China, 1952–57 and 1960–65, we take the reconstructed official figures of food grains output from Jones (“The Emerging Pattern of China's Economic Revolution’); since hardly anybody believes in the official figures for 1958 and 1959, we have taken the alternative figures of Dawson, also mentioned in Jones, op. cit., for those two years. We took the 1966 and 1967 food grains (unprocessed) output figures to be 220 and 230 million tons, respectively. The 1966 figure is mentioned in Han Suyin, China in the Year 2001 (p. 54); the 1967 figure was given by Anna Louise Strong in her Jan. 15, 1968 “Letter from China,” which reportedly got official approval before being released. The difference between the 1966 and 1967 figures is consistent with Vice-Premier Hsieh Fu-chih's reported statement that 1967 grains production had increased over 1966 by about 10.5 million tons.

We have also run an alternative regression for China with the same output data except that for 1966 we took the more conservative estimate of 210 million tons (indicated by Jones) and 221 million tons for 1967; these two figures are consistent with Hsieh Fu-chih's statement above and Chou-enlai's statement of Apr. 28, 1968 that the 1967 grains production was about 5% higher than that of 1966. The rate of growth on the basis of regression analysis of this alternative set of figures is 1.7% for China.

9 The rates of growth for India and China mentioned above are, of course, for food grains alone and not for total agricultural production. For India the linear rate of growth of total agricultural production between 1952–53 and 1964–65 on the basis of 3-year moving averages was 3.2%. The Chinese rate of growth of total agricultural production is likely to have been slightly lower than that of food grains.

The most important nonfood crop in China is cotton. Its output went up from 1.3 million tons in 1952 to 1.64 million tons in 1957, then there was a substantial drop in production and it crept up to 1.4 million tons in 1965. Since 1959, shift of acreage from nonfood crops to food crops has resulted in a relatively slow rate of growth of the former. See Jones, , op. cit.Google Scholar

In India, at least up to 1963, movements in relative prices of cash crops to food crops were favorable to the former, and much shift of acreage (as well as inputs like fertilizers and water) took place. Between 1952–53 and 1964–65 acreage under food grains grew at a linear rate of 1.2%; the rate was 2.3% for nonfood grains.

10 This is as reported in Johnston, B. F., “Agriculture and Economic Development: The Relevance of the Japanese Experience,” Food Research Institute Studies, no. 3, 1966.Google Scholar

Recendy, some of the past estimates of growth in agricultural production in Meiji Japan has been seriously questioned by Nakamura, J. I. [Agricultural Production and the Economic Development of Japan, 1873–1922 (Princeton: Princeton University Press, 1966)]Google Scholar, who shows that agricultural production was grossly underreported in the earlier part of the Meiji era as a tax evasion device and that this underreporting tended to decline over time. Yamada has now undertaken a careful revision of official estimates and arrives at a rate of growth smaller than that of, say Ohkawa [Ohkawa, K. et al. The Growth Rate of the Japanese Economy since 1878 (Tokyo: Kinokuniya Bookstore, 1957)] but much higher than that of Nakamura.Google Scholar

11 It is interesting to note, as Ishikawa (Economic Development in Asian Perspective, p. 77Google Scholar) points out, that China had attained the 2.3 ton level of per-hectare unprocessed rice yield by the 10th century (with the establishment of the present-day notation pattern), and that it has been nearly stagnant since then, until very recently.

12 For pointing out an error in the use of conversion figures for Japanese weights and measures in an earlier draft, I am grateful to Henry Rosovsky. Japanese figures are in terms of unprocessed rice.

13 If one accepts Nakamura's estimates, the rate is, of course, much lower, far below 1%. See the review article by Rosovsky, H., “Rumbles in the Ricefields: Prof. Nakamura vs. the official Statistics,” Journal of Asian Studies, XXVII/2 (02 1968) 347–360CrossRefGoogle Scholar, for a critique of Nakamura's estimates.

14 See, for example, Rosovsky, H., Capital Formation in Japan 1868–1940 (Glencoe: Free Press, 1961).Google Scholar

15 See State Statistical Bureau, Ten Great Years (Peking: Foreign Language Press, 1960)Google Scholar and Jones, E. F. “The Emerging Pattern of China's Economic Revolution.”Google Scholar

16 Ishikawa, S., “Factors Affecting China's Agriculture in the Coming Decade, unpublished, and National Council of Applied Economic Research, Long Term Projects of Demand for and Supply of Selected Agricultural Commodities (New Delhi: National Council, 1962), p. 123.Google Scholar

17 Walker, K. R., Planning in Chinese Agriculture (London: Frank Cass & Co., 1965)Google Scholar, extensively discussed the relationship of changing availabilities of pig-manure in China with the government's policy changes towards the small private plots of peasants.

18 See E. F. Jones (“The Emerging Pattern…”).

19 Official reports claim that between 1949 and 1960 an estimated 50 billion man-days were spent on water-conservancy projects and a total of 70 billion cubic meters of earthworks and masonry—equivalent to excavating 960 Suez Canals—were completed.

20 “Statistical Data of China's Irrigated Area in Recent Years,” Hydroelectricity, no. 7, 04 11, 1957.Google Scholar

21 Dawson, O. L., “Irrigation Developments under the Communist Regime,” in J. L. Buck, O. L. Dawson, and Y. L. Wu, Food and Agriculture in Communist China (New York: Frederick A. Praeger, 1966).Google Scholar

22 Throughout the period, however, the propertion of minor to major irrigation projects has been much higher in China than in India. See Ishikawa, , Economic Development…, p. 152.Google Scholar

23 Another complementary input, to some extent, is labor on the farm. We have not discussed this in detail in this paper. For a good discussion of the contribution of additional farm labor to agricultural output on the basis of farm economic surveys in India, China, and Japan, see Ishikawa, , Economic Development…Google Scholar, Chapter 3. We might only note here Ishikawa's conclusion that it is very rare to find cases where an increase in per-hectare input of labor is associated with an increase in per-hectare output without any paralleled increase in certain other inputs, and that there is a very high degree of complementarity between the labor input and inputs like fertilizers and irrigation. The higher levels of irrigation and fertilizers (both organic and inorganic) in China largely explain the correlation between larger input of labor and yields per hectare in China as compared to India.

24 See E. F. Jones (“The Emerging Pattern … ”).

25 For a detailed discussion of price policy in China, see Perkins, D. H., Market Control and Planning in Communist ChinaGoogle Scholar and Swamy, S., “Price Policy in the Peoples' Republic of China,”Google Scholar Harvard Institute of Economic Research Discussion Paper no. 4, Nov. 1967. For a good summary of the different aspects of price policy in India see Dantwala, M. L., “Incentives and Disincentives in Indian Agriculture,” Indian Journal of Agricultural Economics, 04–06 1967.Google Scholar

26 These dates are from Perkins, op. cit., p. 30Google Scholar, except for the 1963 figures which are from Swamy, op. cit.

27 One should, however, point out that compared with the pre-war period, the 1952 prices of agricultural relative to industrial products were in favor of the latter in China and the former in India.

28 This has also been true in China as is evident from 1950–58 data for the retail price index of Ammonium Sulphate in China as reported in Swamy, op. cit., Table 11.

29 From Table 5, the fertilizer-crop price ratio seems to be much higher in China than in India. But at the same time, data derived from a large number of fertilizer trials conducted on farms in both countries seem to indicate that at equivalent doses of N per-hectare, increase in rice yield per unit of N is much larger in China than in India. See, for example, Panse, V. G., “Fertilizer Recommendations” in Proceedings of National Seminar on Fertilizers, Fertilizer Association of India, 1965Google Scholar; and Liu, Jung-Chao “Fertilizer Application in Communist China,” China Quarterly, 10–12 1965Google Scholar and “Fertilizer Supply and Grain Production in Communist China,” Journal of Farm Economics, 11 1965.Google Scholar

30 Hollister, W. W., “Trends in Capital Formation in Communist China,” in An Economic Profile of Mainland China.Google Scholar

31 See U. Datta Roy Choudhury, “Technological Change in the Indian Economy, 1950–60,” Economic and Political Weekly, 08 20, 1966Google Scholar. It should be pointed out here that the estimate for China is at current prices and excludes change in inventories, whereas the Indian estimate is at 1960–61 prices and includes change in inventories.

32 As, to cite only two examples, in cases of sugar and rayon and staple fiber.

33 In the Third Five-Year Plan period, less than 30% of the target was achieved in production of both nitrogenous and phosphatic fertilizers. In the second plan period also, actual production at the end year was 34% of target in nitrogenous fertilizers and 45% of target in phosphatic fertilizers.

34 Chinese performance in the production of agricultural machinery and implements has also been substantially better than that of India, particularly in recent years, although in neither country for obvious reasons of factor proportions agricultural mechanization is an immediate objective. Chinese production of powered machinery for irrigation and drainage went up from 0.56 million HP in 1957 to 7.28 million HP in 1964, that of tractors from 2720 in 1953 to 124,000 in 1964 and that of medium- and small-scale agricultural machinery and implements quadrupled between 1957 and 1965; see Kojima, R., “Self-Sustained National Economy in Mainland China,” The Developing Economies, 03 1967Google Scholar, Table 3. In India the production of tractors was negligible in 1955–56 and was 5,600 in number in 1965–66; that of power-driven pumps went up from 37,000 in 1955–56 to 200,000 in 1965–66, and that of diesel engines (stationary) from 10,000 to 500,000 in the same period.

35 Eckstein, A., Communist China's Economic Growth and Foreign Trade (New York: McGraw Hill Book Co., 1966).Google Scholar

36 It is to be remembered that water conservation absorbed a major portion of agricultural investment. Investment in water conservation constituted an estimated 62% of total state investment for capital construction in agriculture druing the First Five-Year Plan. See Ishikawa, S., National Income and Capital Formation in Mainland China Tokyo: Institute of Asian Economic Affairs, 1965), pp. 161–63.Google Scholar

37 Perkins, D. H., Market Control …Google Scholar

38 See, for example, Dasgupta, S., Producers' Rationality and Technical Change in Agriculture with Special Reference to India, unpublished Ph.D. Thesis, London School of Economics, 1964.Google Scholar

39 See, for example, Yang, C. K., A Chinese Village in Early Communist Transition (Cambridge, Mass.: M.I.T. Press, 1959), p. 26.Google Scholar

40 This has been noted by, among others, D. H. Perkins Market Control … and in “Community Development and Economic Development, Part I,” Economic Council for Asia and Far East, p. 48–52.

41 See, for example, D. and Thonner, A., Land and Labour in India (Bombay: Asia Publishing House, 1962)Google Scholar, on the water distribution from Sarda Canal in U.P.

42 See Sharma, P. S., “A Study of the Structural and Tenurial Aspects of the Rural Economy in the Light of 1961 Census,” Indian Journal of Agricultural Economics, 10–12 1965Google Scholar. The actual importance of tenancy in rural India may, however, be more than is suggested by this figure on account of two major reasons. Since the prevalence of tenancy is significantly higher in the wet, and therefore generally more productive, areas (including irrigated land) than in dry areas, the loss from tenant cultivation is more than what may be suggested from the all-India average figure.

According to an estimate by A. K. Sen and T. C. Varghese (“Tenancy and Resource Allocation in Indian Agriculture,” 1966, unpublished), for the areas with assured rainfall (of 1,150 mm a year or more), the area covered by holdings under pure and mixed tenancy is 27.6% and for areas with extensive irrigation (with 50% or more of gross sown area under irrigation), it is as high as 35.3%.

Second, what may not have come out in official data is that land legislation in some areas has in fact driven underground some forms of tenancy, numerous cases of eviction of tenants have taken place under the guise of “voluntary surrenders,” and that informal arrangements have been made with sharecroppers disguised as agricultural labor ers. The high pressure of population on land as well as the balance of social and political forces in the countryside has made it possible for land owners to impose such arrangements on the landless and defenseless agricultural population. This has tended to defeat the major aim of protective tenancy reforms.

43 See, for example, the Report of the Team for the Study of Community Development Projects and National Extension Service, vol. II., p. 101.

44 The share is, however, relatively small; the agricultural tax rate was about 15.5% of output in the 1950's.

Besides, the tax is fixed according to the so-called “normal” yield of land, i.e., the amount the land should produce in an ordinary year. This considerably reduces the disincentive effects.

45 It has been calculated by Jung-Chao Liu, (“Fertilizer Application in Communist China”) from data on relative price and yield response functions of rice to Ammonium Sulphate that with the 15.5% proportional agricultural tax rate the Chinese farm gains only 41.2% of the increase in revenue when 15 kg. of N is applied per hectare of rice production, 33.1% of increase in revenue when 30 kg. of N is applied per hectare and only 9.8% of increase in revenue when 60 kg. of N is applied per hectare.

46 Holdings get progressively smaller through the operation of the law of inheritance. Legislation has been adopted in several states to prevent subdivision below a prescribed minimum size. But on account of excessive pressure on land, such laws have not been effective at all.

47 It has been calculated on the basis of Farm Management Studies data that the minimum size of holding for employing a pair of bullocks fully is about 7.5 acres, and that for yielding a minimum net farm business income of Rs. 1200 per family is about 15 acres under average Indian conditions.

48 For example, in 1961–62 the proportion of annual borrowings from cooperatives to aggregate annual borrowings by all rural households increased uniformly from 4% for the lowest asset group to 20.5% for the highest asset group, according to All-India Rural Debt and Investment Survey data (see Reserve Bank of India Bulletin, 09 1965).Google Scholar

49 Buck, J. L., Land Utilization in China.Google Scholar

50 Hoffman, C., “Work Incentives in Chinese Industry and Agriculture,” in An Economic Profile of Mainland China.Google Scholar

51 There is some evidence in Indian Farm Management Studies data that land productivity is invariant with respect to the size of farm when holdings are corrected for fertility differences.

52 An official survey in 1957 covering 228 agricultural cooperatives in 24 provinces showed that saving in these cooperatives came to about 15% of net income, and this marked a significant increase over earlier years.

53 Ishikawa, S., “Resource Flow Between Agriculture and Industry: The Chinese Experience,” The Developing Economies, 03 1967.Google Scholar

54 The Ministry of Food and Agriculture has some data relating to arrivals of food grains at selected market centers in different parts of the country. If we take these market arrivals as a proportion of production in the districts which contain those markets, we find that the proportion has gone down between 1960–61 and 1963–64 for rice, wheat, and jowar. This trend seems to have continued even in the bumper crop year of 1964–65. One should, how-ever, note that a decline in market arrivals at these market centers may not necessarily mean a decline in the amount actually marketed, particularly since government procurement policy often drives away the flow of grains from these markets.

55 The income-elasticity of demand for food grains for the rural sector is between 0.5 and 0.7 on the basis of NSS cross-sectional data. See Gangulee, A. et al. Studies in Consumer behavior (Bombay: Asia Publishing House, 1960).Google Scholar

56 See Narain, Dharm, Distribution of Marketed Surplus of Agricultural Produce by Size-level of Holdings in India, 1950–51 (Bombay: Asia Publishing House, 1961).Google Scholar

57 In recent years there has been a strong emphasis on the need for Party cadres to have administrative and technical competence. See, for example, Han, Chao, “Some Questions Concerning Party Cadre Policy,” Red Flag, no. 12, 1963.Google Scholar

58 The following extract from the recent Second Evaluation Report for the Intensive Agricultural District Programme (IADP) is an example of a very frequent criticism of Indian development programmes:

‘One of the most serious obstacles that the IADP has to face is the archaic administrative system which obtains in the country. This system based essentially on checks and balances evolved in a different time and for a different purpose has proved woefully inadequate for any operation the aim of which is not to maintain the status quo, but to change it.’

Contrast this with the numerous cases of Party directives in China where the leaders try, sometimes in vain, to restrain the lower-level party cadres from overdoing things, from changing things too much and too hastily.