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close this bookCERES No. 114 (FAO Ceres, 1986, 50 p.)
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THE FAO REVIEW: Giving equity a chance
ISSN 0009-0379

Cereal marketing in Mali benefits from mixed system

The Cereal Market Restructuration Programme (PRMC) launched in Mali five years ago is about to enter its second phase.

The Programme aroused great interest when inaugurated in 1981-82. One of the reasons for this is that Mali was one of the first African countries to attempt to change its entirely government-controlled cereal marketing system (in competition, however, with a flourishing black market) to a mixed system in which the private sector plays an increasingly important role. Another reason is that it was the first time that a number of bilateral and multilateral donors (including Belgium, Canada, USA, EEC, France, Federal Republic of Germany, WFP) had decided to coordinate their measures on an informal basis.

Under PRMC, the Malian agricultural production agency (OPAM), which until 1980 had the monopoly of the cereal market, has maintained its task of supplying the cereal deficient areas and communities (the armed forces, schools, hospitals, prisons). Moreover, in controlling the market, OPAM is called upon to maintain farm-gate prices - an official ceiling price is established after sowing - and to intervene on the market to protect consumers from excessive price increases connected with seasonal or artificially created shortages. The Agency is assisted in its task by donors who, with the creation of PRMC, agreed jointly to provide the equivalent of 50 000 tons of maize per year. Deposited in a common fund, the proceeds from the sale of these cereals give OPAM a margin of financial flexibility, thus making it possible to accomplish its double task.

The numerous analyses and studies of PRMC stress the fact that notable progress has been made in certain areas. For instance, there has been great improvement in political relations between Malian government representatives and the donors who now have consulting functions; also, certain donors joined the group once the programme got under way. OPAM management has evolved: the 1 000 employees of 1979 have dropped to fewer than 700 only five years later, and the operational deficit has been reduced by more than 85 per cent, from more than 4 billion CFA francs in 1984-85. The more efficient management of the vehicle fleet and the cereal storage system has also made it possible to reduce post-harvest losses (12 per cent in 1980) by half, and OPAM measures have been implemented much more rapidly than before. One of the consequences of this more functional management is the gradual homogenization of consumer prices throughout the various regions of the country.

In accordance with the programme's objectives, the marketing of maize, millet and sorghum was liberalized in the first year, but it was only in 1984-85 that the Malian authorities decided partially to liberalize the marketing of rice produced in the irrigation districts of the Mopti rice project. Next year, liberalization should be extended to all domestic agricultural products. Also, farmgate prices and consumer prices have increased more slowly than expected. Studies show that despite the rapid increase in the prices of maize, millet, and sorghum in early 1984 (from CFAF 125 to 165 in six months), consumer prices, in real terms, dropped between 1981 and 1985. This government decision to limit the increase in official cereal prices must, however, be interpreted in the broader context of an IMF financial policy aimed at reducing me Government's budget deficit. Except for a slight increase in 1982, the salaries of government employees have been frozen since the early 1980s: this measure affects some 60 000 families and is equivalent to a salary reduction of 5 per cent a year, which, of course, has made it politically difficult to impose a further increase in cereal prices.

During the three-year drought that has affected the country, OPAM has revealed itself to be an efficient structure capable of coping not only with the increasing volume of cereals offered within me framework of the PRMC, but also with most of the considerable flow of food aid to Mali. The record harvest of 1985-86 took both OPAM and its donors by surprise: after having tried to maintain farmgate prices within the limits of its financial resources, OPAM was suddenly faced with an enormous quantity of cereals, the market price of which was higher than that asked by private traders who had bought them more cheaply.

On the eve of the second phase of the PRMC, this has led several experts to be more flexible in fixing prices so they can be revised during the season in accordance with the available wholesale and retail stocks, or which may differ from one region to another. Such measures would perhaps lead to a reduction in the margin between official consumer prices and private retail prices which has remained virtually the same throughout the five years programme. To eliminate the gap created by sending enormous amounts of food aid, some experts suggest that it would be preferable for donors to provide inputs, in order to enable OPAM to give more direct support to producers.

Finally, in addition to the real success obtained in the past five years by this ambitious programme, numerous experts consider that by applying its present policy the PRMC can neither obtain a real balance between farmgate and consumer prices, nor guarantee on its own a real step ahead in agricultural production. To give it a real boost in a country that at one time was considered the region's cereal storehouse implies making progress in other sectors of the economy, and particularly in the expansion of small and middle-sized enterprises, there must also be a real effort to develop infrastructures, especially roads, which would facilitate trade between the towns and rural areas. Part of the common counterpart funds of the PRMC could be used to finance such projects. In this way the programme, which since the beginning of the decade has gradually taken on a central role in reorienting agricultural policy, could pave the way for other changes in the country's economy.

Dani Blain

Saudi Arabia seeks to reduce costs of cereal subsidies

Current low oil prices are forcing Arab governments to look again at ways of cutting their food import bills - one of the most serious drains on their shrinking foreign exchange resources.

Economic realities dictate some sort of action, and quick. Oil revenues in the Near East and North Africa jumped from $10.5 billion in 1972 to $225 billion in 1981. With this rate of increase they were well able to afford a sevenfold rise in the cost of their food imports from $1.7 billion to $12.7 billion over the years 1970-72 to 1978-80.

But while oil revenues have dropped over the last five years, food imports have not. This year, if the price of oil averages $15 a barrel, Arab countries will net $71 billion. If, as is more likely, it stays at around $10 a barrel, revenues will be a mere $48 billion, or less than twice the most recently computed total for food imports to the Arab world-$27 billion in 1984.

Agriculture accounts for only 1 per cent of Saudi GDP, according to FAO figures. In 1984, the last year for which full figures are available, 2.3 per cent of resources went an agriculture and related water resources.

There are various remedies available to this region with its problem of a declining food self-sufficiency ratio. Near Eastern countries can simply resolve to cut down their purchases abroad. But that is not as easy as it might seem. In the last decade Arabs, moving to cities and then further afield to work and travel overseas, have gained a taste for non-traditional foodstuffs. At the same time, Arab importers have found themselves the target of stiff competition from the heavily subsidized farmers of Europe and the United States.

Through regional research centres like ICARDA and ACSAD, and their national equivalents, Arabs have had some success in improving the quality of their seeds and the efficiency of their farming practices. But the practical effects of any new measures have yet to filter through to the field, let alone be noted in increased output.

Therefore many Arab governments are looking to see what lessons they can draw from the most ambitious solution of all to the food deficit - the attempt by the richest country in the region, Saudi Arabia essentially to pay its farmers to produce a surplus.

In 1984 Saudi Arabia, was the largest importer of agricultural products in the region. It paid $5.7 billion (up from $1 billion eight years previously) to buy in food for a population of just 10.4 million. In the same year food imports in Egypt amounted to only $4.1 billion, in Iraq $3 billion, in Algeria $2.7 billion, and in Morocco, Kuwait and Libya around $1.5 billion each.

However, such a high food import bill amounted to only 4.75 per cent of Saudi Arabia's GDP (Egypt's by comparison amounted to 12.2 per cent). Saudi Arabia was in a unique position to juggle its budget and use its oil wealth to provide subsidies to boost domestic agricultural production.

Initially Saudi Arabia's planners decided to use wheat as a test case to show it was possible to revert the tide of growing imports. Just a few years earlier US Agriculture Secretary John Block had infuriated the Saudis by telling them it was not worth growing wheat in such an inhospitable environment as theirs. They should buy it all abroad. In some respects Block was right. Even in their most expensive year, 1981, Saudi wheat imports were valued at just $117 million - negligible compared with Saudi Arabia's total food imports in 1984 of $5.7 billion.

Aware, however, of their vulnerability to the "food weapon" should the US ever decide as some threatened - to use it against the Near East if oil prices rose too high and the newly emerging Arab economies became too powerful, the Saudis were determined to reduce their dependency on the outside world and to become self-sufficient at least in one crucial commodity, wheat.

During 1984 the incentives offered to farmers made Saudi wheat, at around $1 000 a metric ton at the farmgate, nearly ten times more expensive than the world's average price. A Saudi farmer receives free seed and pesticides, free irrigation water, half the cost of feed and fertilizer and 45 per cent of the cost of imported agricultural machinery. If he imports over 50 cows at one time, the state pays him a 100 per cent subsidy. In addition, loans to farmers from state institutions exceeded $1 billion in 1984.

Nevertheless, this policy brought immediate results. Wheat production in 1984 doubled to 1.3 million tons - up from 130 000 tons in 1970 and 875 000 tons in 1983. During the year domestic demand of 900 000 tons a year was exceeded for the first time. In 1985 output increased to 1.5 million tons and the harvest completed this July may top 2 million tons.

This extraordinary advance has not been made without some criticism. From the start it was clear the Saudis' subsidy policy encouraged too many weekend farmers, just in the business for the capital appreciation. Experts began to say it was contributing to the depletion of the Kingdom's scarce water resources. What is more, Saudi Arabia simply did not have the storage space for the crop. Taking all these factors into consideration, the state-run Grain Silos and Flour Mills Organization (GSFMO), which has a capacity of 900 000 tons, unilaterally reduced its wheat procurement price in 1985 from $999 per ton to $570 per ton for farmers selling over 500 tons.

The farmers themselves were outraged at this unheralded change of policy, which played havoc with their planting schedules. They appealed to King Fahd to overrule the order, which he did. To deal with what now amounts to overproduction, Saudi Arabia has begun exporting wheat, first to Bahrain, Qatar and the UAE, and, by way of food aid, to the Sudan and Bangladesh. Having achieved self-sufficiency in wheat, and bearing in mind currently reduced oil revenues, the Saudi Government is now trying to rationalize its subsidy policy. It needs to trim expenditure on subsidies while at the same time continuing to boost agricultural production.

It seems likely this year it will once again try to cut back the prices it pays for wheat purchases from the larger farms, but for this policy to be successful and well received, it will need to be implemented well in advance of the planting season starting in November. Lately the Saudi Government has turned its attention to its most costly food import, barley. In 1984, Saudi Arabia imported around 6 million tons of barley, mainly for animal feed. For this it paid its importers a subsidy of $82 a ton, again almost three times the world price. Now there is talk that the Kingdom will abolish this import subsidy and pay its farmers to grow more barley at home. However, thoughts of attaining self-sufficiency and producing anything like 6 million tons in Saudi Arabia are currently unrealistic. Saudi Arabia's planners will also still be able to call upon, and, if need be, tinker with the existing panoply of financial incentives designed to boost agricultural production.

What does all this mean for interested Arab countries? In bald terms, not very much at the moment. In their present reduced circumstances, other oil producers do not have Saudi Arabia's resources to throw at agriculture. A fair number of them are struggling with budget deficits and even talking to the IMF about stand-by loans. What would the IMF say if Egypt, for example, took Saudi Arabia's lead and spent about $1.3 billion (in 1984) buying in home-grown wheat that could have been acquired on the world market for just $225 million? Such policies fly in the face of the solemn arguments for freer trade, both internally and externally, put forward by the World Bank in its latest World Development Report.

On the other hand, and probably more significantly in the long run, Saudi Arabia has at least shown it is possible to reverse the trend of the Arab world's food deficit. Over the past decade, while they enjoyed budget surpluses, other Arab countries, such as Iraq and Libya, have also managed to boost their agricultural production, though the momentum has now rather fallen away. There is no reason to doubt that, when the oil market picks up again in perhaps four or five years, the Near East will not be able to turn the necessary resources to agriculture once more.

Andrew Lycett

Versatile palm adds diesel fuel to product range

The truck driver of the Centre for Research and Development (CEPED) of Bahia, stationed his vehicle at noon near a restaurant near the highway to have lunch. When the waiter took his order for a traditional Bahian fish dish, he realized that the oil that propelled his enormous diesel truck was the same (although, evidently, in a different form) as the oil on his plate: it was oil of denda kind of Brazilian palm. His perplexity would have been even greater if he had known that the same oil was also used to temper steel, like that used in his truck, and had been used in the manufacture of the soap with which he had just washed his hands.

Rudolph Diesel, however, would not have been surprised like our Bahian truck driver, since as long ago as 1900 an engine that ran on groundnut oil was exhibited at the Paris Exposition. Nevertheless, the enormous possibilities of vegetable oils were ignored during the years of cheap energy from fossil fuels - until the recent petroleum crisis revived interest in alternative sources of energy. The CEPED truck was an experimental part of a pilot
development project in progress in Bahia to study and evaluate the potential uses of palm oil as diesel fuel.

From the fruit of the dendt is possible to extract two types of oil: from the pulp and from the kernel. And those oils have enormous application in the food industry (at table and for cooking, or in the manufacture of sails, glycerine, detergents, and, finally, fuels. In Brazil there are four types of dendalm: one native (Melanoccaca), two introduced into Bahia from Africa (Dura and Deli dura), and one imported from Malaysia (Tenera) and widely diffused throughout many Brazilian states. It is estimated that more than 77 million hectares in the country could be planted to dend74 million in the Amazon basin alone.

The rural entrepreneurs of the south of Bahia, Para, Amapa and Amazonas, where the total demand predicted for 1987/88 is 6 million hybrid seeds of good quality to extend the area planted to palm, have for some time been showing interest in this crop. Motivated by their interest, as much as by the government's, in the real possibilities of this oil, FAO sponsored in 1984 in Brazil a regional roundtable on the processing of palm oil in small and medium industries. It was the third meeting in a series begun in Peru in 1980, when 12 countries (including Brazil) established a network for Technical Cooperation in Dendil, sponsored by the FAO Regional Office for Latin America and the Caribbean. The technical cooperation networks are flexible mechanisms aimed at exchange of experiences and practical knowledge between the institutions of member countries.

In July 1985 an FAO specialist in palm processing, Michael Hadcock, arrived at Castanhal, a hundred kilometres from Bel(Para) to carry out a project consisting essentially in the adaptation of small machinery and in the training of personnel, in a programme of support for development of the processing of palm oil on a small and medium scale.

The project joined another 15 already operating in the area, also with international help. Such is the case of the work carried out in the Amazon area by EMBRAPA, with the collaboration of the French Institut de Recherche pour les Huiles et les Olineux, which gives guidance to local business and large cooperatives for optimizing the cultivation and industrialization of dendHadcock's work, in collaboration with a cooperative, Cooperativa Agrla Mixta Amaza (COOPAMA), is aimed, specifically, at the small producers to permit them to work with equipment that is suitable, small, adequate for their economic possibilities, thus producing, themselves, the oil from their plantations. Brazil has, for more than ten years, been manufacturing equipment capable of extracting up to 30 000 kg of fruit per hour. The objective of the project mentioned was to stimulate the industry so that it would produce small equipment, from 0.25 to 1.5 tons per hour, efficient, cheap, and easy to handle, thus freeing the producers of limited income from becoming merely collectors of fruit.

Michael Hadcock's mission to Brazil had two phases. The second phase, which lasted half a year, was completed at the end of 1985. In that period he worked with Brazilian technicians from the Ministry of Agriculture, emphasizing the technical and educational aspects of the problem. With the cooperation of COOPAMA (in space, facilities, manpower, and raw materials), he built a pilot micro-plant, with machines and tools manufactured, modified or simplified in two metallurgical factories at Castanhal, under the guidance of the FAO expert and his Brazilian colleagues, notably the mechanical engineer Paulo Tolini. Besides designing new machines and adapting other traditional equipment to local conditions, the project trained technicians, professionals and local producers for the construction, operation and maintenance of the new machines, including guillotines, pitters, digesters, clarifiers, and presses.

The problem of small and medium producers of dendas important social and economic aspects, since they cultivate (or at least harvest) a very large part of the fruits that reach the industry. In the Amazon region alone, it is estimated that the next harvest will yield $12 million but the share received by small and medium producers is very small. When they are technically and financially able to process their own harvests, they will be able to contribute to increasing production of oil, as well as improve their standard of living.

Claudio Fornari

Conflicting claims increase pressure on Egypt's land

Although many regions of the world can offer dramatic evidence that interference with the ecosystem frequently brings disastrous consequences, some Third World nations seem addicted to such practices. Egypt is a case in point: a country with a limited area of habitable and arable land, hemmed in on east and west by the desert.

As the habitable area does not exceed 3 per cent of Egypt's territory, large chunks of arable land are being sacrificed to urban development. On the other hand, land reclamation, which provides the only means of compensating for the loss, is costly and sometimes uneconomic. The conflicting pressures created by the food and housing requirements of a fast-growing population (2.8 per cent per annum) have tended, therefore, in conjunction with deterioration of the soil in recent years caused by salinity, water logging, and alkalinity, to bring about a sharp drop from the self-sufficiency of over a decade ago to a $4 billion food import bill in 1983.

The bill is rising and in all probability will continue to rise. Egypt is the second most populous nation in Africa, and its population, now in excess of 48 million with a density of about 1800 people per km2, is expected to reach a peak of 70-75 million by the year 2000. It follows that if the country is to have any hope of successful food management, it should not delay in heading for the optimum utilization and development of its resources, namely agriculture and fisheries.

But that does not seem to be the case. An important example is provided by Lake Nasser, the freshwater artificial reservoir of some 5 000 km2 crested by the construction of the High Dam, the largest structure of its kind in the world. Even though it was meant to provide a huge alternative fish resource, the damming of the Nile at Asswan had the effect of disrupting the important fishery of the Delta, without developing the infrastructure necessary for using it. Moreover, the benefits of the new resource came to be seen, in the total picture of food production, against the fact that a great part of the decline in agricultural production has been attributed to the loss of the traditional process of land fertilization, the Nile inundation of the Delta, and, even worse, the loss of all the arable land north of the High Dam.... Inundation had been a regular feature of Egypt's agricultural cycle since time immemorial - until the High Dam was built.

But what compounds the problems of a country deprived of its only fertilizing effort has been the seemingly uncontrollable encroachment on food production by urbanization, under the increasing demographic pressures experienced by a country where 44 per cent of its people live in urban concentrations.

Now a new threat is looming on the horizon. The chain effect has manifested itself in a further encroachment on the natural fishery resources for the purpose of land reclamation. It has been estimated that this reclamation process for crops will, by the end of the century, deplete nearly 140 000 hectares of the littoral lake region, a prime food resource in the northern Delta comprising a number of brackish lakes (Manzala, Burullus, Edko and Maryut, with a total area of 2 300 km2), and lagoons (Bardawil, Port Fouad, and Qarun, with a total area of 940 km2). With yields varying from a high of 1 400 kg/ha per annum, from Maryut, to 250 kg/ ha, from Manzala, to a low of 37-45 kg/ha from the lagoons, the whole littoral resource adds up to a potential of 143 000 tons a year of fish.

Such potential should be viewed against the fact that if the present level of fish consumption of 5.4 kg per caput annually is to be maintained, a population projected to reach the 70-75 million mark will require at least 350 000 tons a year. If we add the potential yields of other fishery resources (i.e., the marine fisheries of the Mediterranean, the Red Sea and the Gulf of Suez, not to mention the Nile and the aquaculture ponds), it will emerge that Egypt is on its way to facing an annual deficit of approximately 100 000 tons. But if nutrition is to be improved in a country where malnutrition is rampant among the poorer classes, then annual demand may be as high as 450 000 tons, raising the supply deficit to 200 000 tons annually. It is indicative of things to come that in 1983, fish imports made up 37.4 per cent of the total consumption. Imports, therefore, represent an unacceptably high national expense, and it is unlikely, given the enormous size of the food import bill, that the country will ever find itself in a position to meet the cost of fish imports.

In the light of such a situation, high priority should be given to easing the burden of the projected increase in demand using local resources. Yet there are now clear indications that the continued existence of at least two of the largest Egyptian lakes (Manzala and Burullus) is threatened by a creeping process of desiccation. The mouths of the Manzala lake have, for some unfathomable reason, been dammed while effluent of city wastes is being poured into the now stagnating waters. The lake faces a slow biological death. Its fish yields have already dropped significantly. Meanwhile, fisherfolk who have made their living from the lakes for centuries are being eased out by wealthy investors who are carving the whole 1 400 km2 lake into veritable fiefdoms, varying in size from one to twenty feddans. They are converting their newly acquired holdings into fish farms and, in some cases, agricultural land to compensate for land converted elsewhere into building sites. In the process, land prices have soared: a feddan of lake land now sells for LE 7 000 to 8 000. (One feddan = approximately 4 200 m².)

A close look at the cost-effectiveness of fish farms suggests that they are not necessarily economically viable substitutes for naturally productive lakes. The Egyptian Government itself has embarked on an ambitious 100 000-hectare fishfarming programme, of which the 2000-hectare Port Said farm was the start. In Khashaa and Zawia, two more farms of 1 000 hectares each now exist. From past experience, the cost of fish farms may be estimated at LE 5 to 6 million per 1 000 hectares, with an expected maximum yield, upon completion of the projected 100 000 hectare project, of 50 000 tons under exemplary conditions and careful management of the resources.

In comparison, the 1 400 km2 feddans of Manzala yield, in their present condition, at least 60 000 and 75 000 tons a year, which could be doubled to 150 000 tons at a fraction of the cost of LE 5-6 million per 1 000 hectares being spent on state fish farms. The situation in Burullus, with about 560 km2, the second largest lake of the northern Delta, is even worse: 7700 feddans have already been desiccated and sold as agricultural land. In Balteem, 8 400 feddans have been desiccated and sold as agricultural land. In other lakes, the process of desiccation is gaining momentum and putting the existence of that vital resource in jeopardy.

It is highly doubtful that the loss of lake land means a gain of farm land. For one thing, the fertility of the areas under attack is questionable. For another, land by itself is not all that is needed for successful agriculture; irrigation and drainage are also essential. The absence of drainage on other agricultural land along the Nile has resulted in salinization, or the threat of salinization, of up to a third of Egypt's arable land. In 1982, almost all irrigated areas in the country were found to be potentially salt affected, and at least half the irrigated land (12 000^2) is already affected.... When all this is taken into account the economic feasibility of the whole process would look improbable.

More seriously still, there remains the vexed question of ecological balance. FAO and other international agencies have repeatedly pointed out that tampering with the environment is likely to entail dangerous imbalances in the ecosystem of the areas concerned. This is certainly a danger meriting investigation in Egypt, where only 25 000 km2 are cultivable out of a total of one million.

Medhat Makar

Groundnut shells provide base for organic fertilizer

Senegal's annual production of groundnuts in the shell amounts to 1 million tons. That means that about 200 000 tons of shells are either incinerated in the furnaces of groundnut-oil factories or left to rot in the desert. Groundnut shells are an abundant raw material and a largely unexploited one.

Senegalese peasants have used groundnut powder gathered after shelling as a low-yielding fertilizer for their gardens, but anything more than that seemed impossible. Agronomists, in fact, maintained that the shells would not ferment and thus could not be used more extensively as an organic fertilizer.

But the problem of disposing of groundnut shells remained, and the Senegalese authorities often, especially beginning in the 1970s, tried to solve it. Years of research and experimentation were needed, but in the end there were results. An environment suitable for fermentation was found. It is a tub in which the shells, ground to a powder, are immersed in an aqueous environment where chemical additives are mixed (e.g., urea, potassium sulphate). The process of fermentation is set off by a "base" of bovine fertilizer and bacterial proliferation is extremely quick: in general four or five days, a week at most.

The mechanism was developed in the 1970s in France in the laboratories of IRCHA (National institute for research on applied chemistry) beginning with wheat straw, and was patented in 1971 by CIDR (International centre for research and development), a non-governmental organization. But it was the 1973 rise in the price of petroleum, with its inevitable repercussions on that of chemical fertilizers-already prohibitive for most African peasants - that led to the practical application of the process. Thus the Senegalese authorities sought the help of CIDR, which had dusted off its own patent.

The first pilot experiment was conducted in 1975, at Bambey, on land belonging to the National Centre for Agronomic Research (CNRA), with credits granted by France and the EEC. All the byproducts of Senegalese agriculture were tested: from sugar-cane bagasse to rice straw to groundnut shells. These last gave the best results: under the control of CNRA agronomists, the fertilizer derived from them, tested on tomatoes, brought record yields of 70-72 tons per hectare.
Of course, that was virtually a laboratory experiment. The land on which the test was conducted had been kept fertile for decades by technicians and researchers and certainly did not represent average Senegalese soil conditions. Nevertheless, the results were sufficiently encouraging that it was decided to build a first factory to produce this new type of fertilizer.

It is going up at Tivaouane, a large suburb on the outskirts of Thi and will use raw material supplied by the shelling plant owned by Aloune Palla Mbaye, a local notable, member of the Senegal national federation of veterans and victims of war, who has assumed the role of patron of the initiative. This plant, which employs a dozen persons, handles, from September to May, varying tonnages of groundnuts: 58 000 in the best years. From 2 000 to 10 000 tons of shells are extracted, depending on how the season went. Now at least part of them will be converted into fertilizers.

The setting up of the plant has been entrusted to the French engineer Pierre Garrigues of CIDR and carried out by CORDIA (the Paris based Company for the Organization of Industrial and Agricultural Development), of which Garrigues is president. "It was believed," he said, "that chemical fertilizers had the definite advantage over vegetable fertilizers. But, at the end of the 1970s, the international scientific community recognized that chemical fertilizers could fulfil their function only on lands with a sufficient content of organic matter." That is, of humus, the colloidal matter of the soil which derives from the decomposition of organic residues and which makes a breeding ground for bacteria. The bacteria in turn metabolize the soil's mineral salts, making them thereby assailable by the plants, and expel carbonic gas, which allows the plants themselves to manufacture their cellulose structure. No chemical fertilizer produces the essential carbon. This is a problem particularly in the tropics, where the soil rapidly becomes exhausted under the combined effects of wind and torrential rains.

"The new groundnut-based fertilizer," says Garrigues, "offers another fundamental advantage: it will cost 20 times less than chemical fertilizers and that will largely compensate for the fact of having to use a larger (triple) dose of it per hectare." In Senegal, as elsewhere in Africa, one of the most urgent problems is, in fact, to reduce to the extent possible the use of chemical fertilizers, which are extremely costly for the peasant economy.

A basic element for the best application of the new technique is the size of the fermentation trench. Research shows that the larger it is, the better the results. Consequently, the trench for the Tivaouane plant should have a capacity of 35 m3 (as against the 7 m3 of the experimental trench at Bambey); and, with two trenches, the unit could set off a production of 500-1 000 tons of fertilizers. That would be offered to horticulturists of the area around Niayes, on the seacoast, Senegal's most important region for fruit and vegetable production.

It is a first step. But it looks like this small industrial unit - which the Senegalese Government is watching with particular attention - established in the right place and in the right way, can, if well managed, demonstrate the usefulness of the new technique and be a point of departure for the creation of similar plants, serving the rural communities of many African countries, beginning with those of the Sahel.

Gabriella Lapasini

Promising results as Cuba reshapes fishing industry

In 1985 the Cuban fishing fleet extracted a total of 219 000 tons of fish from national waters (marine and fresh) and international waters (the Gulf of Mexico and the Atlantic and Pacific oceans) combined.

That figure, contained in the Anuario Estadico de la Repa de Cuba, or Cuban statistical yearbook, published by the Government of Cuba (cf. FAO, Cuba Basic Data 1984-85), is very significant. It demonstrates that the fishing industry of the Caribbean island has returned to and surpassed the high levels attained at the end of the 1970s, which is to say before the international 200-mile limit went into effect.

The limitations on coastal fishing introduced by the Law of the Sea had brought about a real collapse in the Cuban fishing industry: the total quantity of fish captured within and out side Cuban territorial waters fell back to only 153 900 tons, a little more than the level of six years before, in 1973. Then there was a comeback: 186 400 tons in 1982; 199 800 in 1984. In 1985 the figure shot more than 5 000 tons past the record of 213 200 tons reached in now-distant 1978.

The 1985 yearbook contains some other data on the Cuban fishing industry which, carefully examined, give a good picture of the state of apparent robust health which this important branch of the island's economy seems to be enjoying. The success of the considerable work of modernization, reorganization and expansion promoted in the last five year period by MIP in the various branches of the sector also emerges from a reading of the data.

Next to the quantity of fish captured in 1985, the yearbook gives the total production of the relatively young aquaculture industry - 15 400 tons. That figure represents a rise from 12 500 tons in 1983 and 14 500 tons in 1984. Therefore the 1985 total is important not only in absolute terms, but also be cause it confirms a phase of constant and marked growth in a sector of the fishing industry that was almost nonexistent until the middle of the 1970s. Faced with reduced prospects in fishing along the coasts of Latin American or African countries, the Cuban industry, to its credit, knew how to employ fresh energies in aquaculture, obtaining brilliant results and opening new perspectives for the entire sector.

The yearbook, with the meagreness of the figures registered (in-shore fleet, 1 526 vessels; high seas and internal waters fleets, 187 vessels), does not convey the profound changes that have occurred regarding the make-up and subdivision of the fishing fleet in this sector of primary importance in the fishing industry.

Although in the last decade the total number of vessels, large and small, for fishing in Cuban and international waters has remained around 2 000 units, the dimensions of the individual fleets have undergone heavy variations. The typology of the vessels belonging to each of the fleets has also changed.

The old division into In-shore Fleet, Gulf Fleet, and High Seas Fleet has been replaced by a new one. There are still three different types of fleet but the old Gulf Fleet has been eliminated. Since 1980 the more than 100 fishing boats operating in the Gulf of Mexico and which dedicate themselves to the catching of shrimp (the highly valued camarones) have been converted to other fishing operations. The dismantling of the Gulf Fleet was the first serious and irreversible consequence of the introduction of the 200-mile limit by the new Law of the Sea.

The large High Seas Fleet has been doubled: the Atunera de Cuba, specializing in the capture of the large tunas in the open seas of the Atlantic and Pacific oceans, and the Cubana de Pesca, for other species of fish, such as hake, using trawl-nets. This fleet in 1974 had only 18 large boats but has increased, in the middle of the 1970s, to 36 units in 1978; but from then the number of boats has remained practically frozen at 35. The old vessels, however, have gradually been replaced by real gems of fishing technology with the most modern equipment for the processing and freezing of the captured fish.

The number of vessels assigned to tuna-fishing has remained almost unchanged in the last decade. The tuna fleet consisted of 24 large units in 1974 and maintained that number until 1978. Since then it has lost three units. Today it has 21, of which one is a tanker for refuelling the others on the high seas.

In January 1985, the director of the Cubana de Pesca, Roberto Ferrer, announced at a press conference that for the first time in its 22 years of activity the fleet had registered, for 1984, a profit of 2.7 million Cuban pesos, equivalent to about US $3 million. The announcement caught everyone by surprise, especially since the Cubana de Pesca had estimated a balance in the red of about 8.6 million pesos, or about $9 million, for 1984. To the Cuban journalists who seemed a bit sceptical, Ferrer explained that the exceptional result was made possible by a triple effort on the part of the boats' crews: the choice of fishing grounds nearer to Cuba; better selection of fish to go after and repairs to the boats made in record time in Cuban dockyards instead of in the much more costly ones of Europe and South America.

The last important statistic for the 1985 fishing industry contained in the Cuban yearbook is the average quantity of fish consumed per caput by Cuban citizens: 11 kilograms a year. This figure is extremely important for two reasons. It shows that the Cuban population must now be counted among the largest consumers of fish products, and it demonstrates irrefutably that the Cuban revolutionary government has in 20 years succeeded in modifying - for the better - the eating habits of the island's people. In 1959 fish consumption was far below one kilo a year. Altogether in 1984 to the population was distributed a quantity of fish equal to 116 000 tons. A part of this fish (33 000 tons was imported in order not to cut into the percentage of high quality fish caught by the Cuban fleets for export.

Overall the data reported in the Cuban yearbook provide more than enough information to make a positive analysis of the state of the Cuban fishing industry at the end of a real five-year period of fire, begun in 1980 with the introduction of the 200-mile limit and concluded in 1985 with the international economic crisis (the problem of heavy debts owed by the developing countries of the South, including Cuba, to the industrialized countries of the North).

Confirmation comes from the fact that the fishing industry is now counted among the five items of the Cuban economy that are earning a profit: sugar, tobacco, nickel, and tourism.

Whether the fishing industry is really in the black is difficult to say (the same is true for other sectors of the Cuban economy). It probably is not, or is not yet. Furthermore, it employs 42 000 workers and disposes of an army of 13 400 fishermen. The sale and distribution of fish to all the sectors of the population, furthermore, achieved in the face of difficulties of every sort, especially logistic, fills social requirements and surely affects negatively the profitability of the industry as a whole.

But bear in mind that the announcement made proudly by the director of the Cubana de Pesca was followed by similar announcements. The promising aquaculture sector could very soon show a profit: according to the magazine Mary Pesca... there have been real production explosions in aquaculture (from 165 to 330 kg per hectare of water surface) at Lom de Tierra, Cotorro, near Havana, and Las Tunas Bezaza in the Gulf of Guacayanabo, in the south-central part of the country.

In his report to the third Communist Party Congress Fidel Castro was able to present the fishing industry as one of the most promising sectors of the entire economy of the country - one of the sectors which, in the 25 years since the beginning of the Revolution, have been able to construct solid bases for the immediate and long-term future.

Castro cited both the imposing and articulated complex of infrastructures which today MIP has (the large fishing port with its modern naval installations, the plants for processing and freezing the fish, canneries) the important research centres of the CIP (Centre for Fisheries Research) and CITIP (Centre for Technological Fisheries Research), both at Havana, the Oceanological Institute of the Academy of Sciences, the three schools for the training of new generations of fishing technicians (Instituto de Pesca, Escuela tica, Escuela de cualificaciica) attended as well by hundreds of youths from the Third World.

The Cuban leader could cite with pride the giant steps made by the Cuban dockyards toward full autonomy in construction and repair of fishing boats of all sizes. Cuba has constructed thousands of boats longer than ten metres, in both ferrocement and plastic, and is able to equip them with sophisticated instruments suitable for many kinds of fishing, whether coastal or on the high seas.

Among the chief objectives of the Cuban fishing industry, Castro indicated the following: 1) maximum exploitation of the fish resources of Cuban waters; 2) development of aquaculture in the inland waters of the island and starting up of projects for marine fish farming; 3) maintenance of the levels of fish of the seagoing fleets at, however, lower costs; 4) maximum utilization of the national capacities for better industrial processing of fish products, for better exploitation of exports and for the construction and repairs of the vessels.

Pino Cimo

FAO in action

LOCUST THREAT CONTAINED - FOR THE PRESENT

The emergency campaign for the control of grasshoppers and locusts, coordinated by FAO (see FAO in action, May-June 1986) has prevented widespread crop losses in Africa, but a threat to 1987 crops remains. According to a late October assessment, more than 90 per cent of the food crops threatened by the Senegalese grasshopper in western Africa had been saved, while eastern Africa had been spared an anticipated scourge of Red and African migratory locusts. However, southern Africa continues to be threatened by a Brown Locust plague now in its second year, and an upsurge of Desert Locust activity in the Arabian peninsula is causing further concern. Reviewing the performance of the US$35 million international campaign, FAO Director-General Edouard Saouma credited its near-term success to early warnings of the threatened infestations and to "an unprecedented level of donor and African cooperation that made control operations timely and efficient". Most of the resources needed for the campaign were mobilized through two donors' meetings held at FAO headquarters in May and July of this year. A special Emergency Centre for Locust Operations, established at FAO headquarters in early August, coordinated a massive spraying operation that covered 1.6 million hectares in 13 African countries and involved at least 15 donors, 36 aircraft, more than 500 tons of pesticides, a multitude of support personnel and countless African farmers. Major donors included the United States, the European Community, Canada, the Federal Republic of Germany, Italy, Japan, the Netherlands, France, Norway and Sweden.

AFRICA SHARES IN RECORD HARVESTS

Many African countries have shared in the above-average harvest of cereals that has characterized 1986 crop production almost worldwide. FAO Crop Assessment missions have confirmed that the Sahelian countries of western Africa will have a record output for the second year in succession. Both Morocco and Nigeria have harvested record crops. In the Sudan, preliminary estimates are for another good harvest, despite reduced acreage. Crop prospects in most of Ethiopia's important grain-growing areas are generally good. A number of African countries are likely to have coarse grain surpluses available for export, perhaps as much as one million tons. However, the extent to which they will be able to enter world markets will depend on their ability to match the terms of sales being offered by major exporters or to make special arrangements, such as barter deals, or triangular transactions. FAO's most recent Food Outlook report estimates 1986 world cereal production at 1 858 million tons, or about 16 million tons more than the record harvest of 1985. At the same time, world cereal trade for 1986-87 is expected to drop to 174 million tons, the lowest level in eight years, reflecting reduced import demand mainly due to a larger USSR harvest this year. The implications, according to the FAO Food Outlook report for December: "In view of the weakening demand for imports this season and the growing competition for markets, including from a substantial number of smaller and occasional exporters, only a few countries are expected to maintain their volume of shipments in 1986-87 or to be able to dispose of their export surpluses. Among the major exporters, only the United States, Canada and South Africa are likely to export as much as in the previous year. Sales by a number of smaller exporting countries are likely to fall short of their potential because of difficulties encountered in matching the increasingly favourable terms, including both low prices and non-price elements, such as credit arrangements offered by some major exporters. FAO currently forecasts that the aggregate shipments of these smaller exporters will fall by about five million tons this year; their share of the market would thus decline to about 18 per cent, compared with 20 per cent in 1985-86.

AID-IN-KIND STUDY PLANNED FOR AFRICA

FAO will undertake a major feasibility study on "aid-in-kind" to help Africa's agricultural recovery and to relieve foreign exchange constraints in obtaining such inputs as fertilizers an and seeds. Approval for the undertaking was given in November by the 90th session of the FAO Council, which declared "The study should have two principal objectives: determination of likely input needs for the next five years and an assessment of the potential role of aid-inkind to meet them and the possible modalities for doing so." The study of aid-in-kind had been requested by African agricultural ministers meeting at FAO's Regional Conference for Africa last September after it had been proposed by FAO Director-General Edouard Saouma as part of his Programme of Action for African Agriculture. (See Ceres No. 113, p. 13.) Mr Saouma told the Council that an expansion of such aid, already provided on an ad-hoc basis, could be beneficial to both the developing and developed countries. "The Third World," he said, "crippled by debt and short of foreign currency, is hardly in a position to make the necessary financial efforts. Developed countries, whose industrial capacities are often underused because of the crisis, could make an exceptional effort to supply such goods on easy terms."

FAO CONFRONTS CASH FLOW PROBLEM

The FAO Council also endorsed the Director-General's proposals for adjustments in the Organization's programmes in order to achieve savings of about $16.4 million as a means of averting a serious cash flow problem in 1987. The savings would mostly be made from delayed filling of vacant posts and reductions in the number of meetings and publications. The shortfall in income is attributed to a number of factors, principally domestic legislation in the United States (the Organization's largest contributor) limiting payments to international organizations, but also to arrears in contributions from other member nations, a decline in miscellaneous income because of lower interest rates and a lower level of investible funds.

GUINEA PROJECT TAPS WATER RESOURCES

In one of the small valleys that traverse the high Fouta Djallon plateau of central Guinea, a few score peasant families are responding positively to a pilot project for improved market garden production based primarily on overcoming the problem of uncertain water supplies. For the 110 households who are the initial beneficiaries of the FAO/UNDP project, watering crops had always meant drawing it manually from the river channel, an arduous, archaic system that limited each family's growing area to 500 or 600 square metres. Although the climate favours double cropping, the drying up of the river channel every March made this impossible. The problem of the lack of permanent water resources has been resolved with the completion of a 750 000 cubic metre dam from which water is now channelled to the fields along a 4 200 metre primary canal, permitting peasants to susbstitute gravity irrigation for strenuous manual methods. The peasants, who are hired by the pilot centre on a rotating basis in order to become familiar with gravity irrigation methods, are now producing two irrigated dry season crops, instead of one watered by hand. The peasants have also formed production groups to improve their efficiency and to control certain key aspects of their activities, such as group purchases of seeds and fertilizers. Meanwhile, with a view to guiding the development of market gardening in the region, the project has undertaken a survey on the marketing of fruits and vegetables, covering the main producing zones and markets in the interior, as well as in Conakry. In the longer run, it is envisaged that the valley could support 400 to 450 families. While it is not possible that large retaining dams could be provided for neighbouring valleys in the plateau, the Fouta Djallon has 6 000 more-or-less permanent springs, each of which would permit construction of a small earthen dam able to irrigate a few hectares of market garden crops. The preparations required for this type of installation are easy and the topography of the valleys of the plateau is well suited to small water projects of this type.

RURAL BUILDINGS AT MINIMAL COST

Half a dozen developing countries in eastern and southern Africa are making concerted efforts to promote building of low-cost farm structures to provide better drying and storage facilities for food crops. The project, financed by the Swedish International Development Agency (SIDA) and executed by FAO, emphasizes the use of locally available materials and skills. The immediate objective is to develop national expertise in the field of rural structures. Since the project was initially launched eight years ago, the six participating countries - Kenya, Lesotho, Malawi, Swaziland, Tanzania, and Zambia - have established rural structures units which organize testing and evaluation of structures, prepare drawings, specifications and manuals, support training for extension workers and farmers, and promote improved structures in rural communities. For the time being emphasis has been put on crop storage, but this will later be extended to include structures for livestock, water storage and family dwellings.

The transnational role in Mexico's seed industry

by David Barkin and Blanca Suarez

For several decades the technology of seed genetics has progressed rapidly, attaining more and more recognized varieties and higher yields. Later, equally rapidly, problems began to arise from this green revolution technology. The most widespread of these was the erosion of the centres of genetic diversity, which means a process of displacement and elimination of local primitive varieties to the extent that traditional varieties are replaced by those obtained in plant research centres or the laboratories

Of transnational seed companies. Other problems derived from the control and privatization of seed technology at a global level by a growing number of transnational firms.

Improved seed is a strategic input for agriculture. Up to now it has been left mainly in the hands of genetic specialists under the direction of transnational corporations or the network of research centres of the Consultative Group for International Agricultural Research (CGIAR). However, as a factor in food supply, seed becomes a subject of debate in both social and technical aspects. Thus the interest of some countries in seeking mechanisms for greater control over the use and management of seeds.

This debate is now reopening, in that the question of food requirements is assuming greater importance in the face of the difficulties encountered by Third World countries in food production and supply. Many issues related to food security converge at precisely the issue of the future of seed production and conservation, that is to say, the capacity of each country to conserve its resources and allocate basic foods.

Today, the selection and use of a specific seed variety involves more than the production of a commodity, since such decisions depend on such other factors as the yield levels attained by different varieties, size and quality type of market, relative prices, and demand. In other words, selection is governed mostly by the logic of economic viability, as shaped by world market trends, even in the case of individual farmers, as a result of the growing involvement of the rural sector in the capitalist system.

In this context, the role of the seed industry is significant. The evolution and development of the industry worldwide has witnessed important modifications in the management and appearance of new enterprises. There is also a strong tendency toward transnationalization, even when in some countries, such as Mexico, laws and regulatory mechanisms have been introduced to develop this activity. The presence of transnationals in the seed industry of Mexico plays a major role both in the performance of the industry itself and in the appearance of some new cultivation trends.

The purpose of this article is to examine the structure and functioning of the Mexican industry as well as the problems it encounters in the protection of genetic resources. It will also be important to look at both the extent to which the Mexican Government has intervened in the regulation of seed industry activities and the prevailing place that transnational firms have come to occupy in the industrial structure.

The seed industry and official agencies. Agricultural research in Mexico goes back to the first years of this century, with the founding of the Experimental Station at San Jacinto in 1907. From that time on, the Government displayed constant attention to improving yields and agricultural practices in the Mexican countryside. The history of these efforts constitutes the base of the present seed industry, which has always relied upon strong government support. In fact, a law passed in December 1960 established the National System for the Production, Certification, and Marketing of Seed.

The intent of this law was to increase the availability of good quality seeds, which were to be produced from the genetic materials that had been improved by scientists in the national research programmes. Twenty-five years later it is interesting to find a state commitment to oversee the growth of the industry and to participate in the production of seeds for basic crops. Even today, the Mexican agreement to consider all activities related to research, grading, production, yield, and certification, as well as the distribution, sale, and use of certified seeds as a public utility (even if not a state monopoly) is unique in the world.

The new system is integrated with the National Institute for Agricultural Research (INIA), the National Seed Producer (PRONASE), producers' associations, and other agencies involved in the registration, grading, and inspection of seeds. The legislation of 1960 opened the possibility that a group of institutions could confront, with power of decision and a broad field for action, the requirements of Mexican agriculture for seeds, including the problems encountered by campesinos in the modernization of agriculture. The law represented a legal and institutional framework sufficiently broad for the development of an improved seed industry in Mexico. It constituted a solid base over which the public sector could operate and control the development of the industry without disregarding the active participation of the private sector in research, production, and marketing of high-yielding seeds.

But any standard system simply establishes some guidelines for its functioning. Its impact on society is the result of its interaction with the actual production establishment and with economic pressures.

Organization and functioning of the industry. At present the functioning of the seed industry depends to a great extent upon the activities of INIA and PRONASE. INIA is concerned with research on genetic materials for the improvement and breeding of new varieties and the conservation of existing varieties; PRONASE, together with some producers associations, receives the results of research, the basic and registered seed. Also participating in this framework are the national private sector, which imports seeds for multiplication in the country, and the certification for distribution to rural producers. Then there are the transnational enterprises that import genetic material directly from their parent companies.

The productive and structural results of INIA's work are shaped by the performance of the agricultural sector and its present crisis. This does not mean that INIA must assume all the problems of agriculture; but the twists imposed by the market and by agricultural policies come to be reinforced by the lack of a basic research effort in appropriate agricultural technology for rainfed production and of basic crops for mass consumption.

This productive turn and the debates regarding the orientation of research that influenced the creation of INIA in 1961 are not isolated cases. In fact, it follows the prevailing conflict between the professionals who advocated the production of hybrid seeds and those who worked to improve the selection of native and other open-pollinated varieties. These debates are reopening today between those who defend private rights to genetic material in favour of the transnational system of seed production and marketing and those who are concerned for the preservation of genetic diversity, the increased availability of open pollinated seed varieties, and the strengthening of peasant production systems.

Like INIA, PRONASE was conceived as a cornerstone of the new seed policy. Maize and wheat have had priority in its programmes. During the 1970s a substantial part of its limited resources were designated for increasing the production of seed for such basic crops as rice, beans, maize, and wheat. This concentration in basic crops gave way suddenly to a policy of diversification in response to important structural changes. The principle of a new phase for the private sector was recognized in 1968 with the creation of the Mexican Seed Association (AMSAC). This reflected the enormous growth in the numbers of foreign and national firms and the consequent increase in the availability of improved seeds. But INIA was also able to supply new crops and varieties in sufficient quantities to permit the launching of a certified seed multiplication programme for general use. Beginning in 1970, PRONASE linked its expansion and diversification programmes to the necessity of regulating the basic market to ensure that it had a larger role in the production of the different seed varieties required by farmers.

This meant that new areas were contracted for the production of these seeds and the yield potential of more crops and varieties was increased. However, despite the great diversification efforts of PRONASE, its relative share in the other markets did not reach any spectacular growth. In some crops, such as the traditional ones, it maintained a high degree of participation. But in maize, its share of the market began to drop in the face of competition from the transnationals. All this necessitated reconsideration of its role in the improved seed industry.

Transnational enterprises in the industry. The transnationals were beginning to establish themselves at the beginning of the 1960s, confining their activities almost exclusively to the importing and distribution of seeds in the domestic market. Meanwhile, construction was beginning of the first installation for improvement of seeds produced in Mexico under the direction of private capital. In 1961, three subsidiaries of North American enterprises began operations in an effort to penetrate the Mexican market: As grow, Northrup King, and Semillas Hibridas (Dekalb). These enterprises were concerned with carrying out their own research to adapt basic genetic materials to Mexican conditions in order to generate new varieties in different types of crops to facilitate the rapid penetration of the market.

In parallel with the burgeoning of these enterprises (between 1960 and 1965), other smaller nationally financed firms began to appear. These initiated their activities with the importation of seeds from seed companies in the United States, giving birth to a private sector which would eventually dominate importation and distribution of vegetable seeds and of sorghum and maize hybrids. Over the 1960s the number of enterprises increased to 25, of which more than half were transnationals. At present, 30 firms are operating, and although the number of national firms (13) is high, it is transnationals, 17 in all, that have determined the guidelines and behaviour of the industry as a whole.

The private sector firms are grouped in AMSAC, through which they have sought to structure and organize the many groups working in the industry, as well as to help face the problems that frequently arise with government agencies concerning permits for import, export, or research.

The promoters of this organization were the transnationals. They probably conceived it as a mechanism that would in the future permit them to negotiate on matters of interest to them, and at the same time as a pressure group, since its members include most of the firms producing and distributing seeds.

Recently the Association managed to gain membership in the Committee for Grading Plant Varieties. Its presence on the Committee obviously allows it to negotiate and defend better the positions and interests of its associates. Thus, AMSAC is an effective instrument for the industry in its efforts to shape a structure able to secure the objectives of the industry.

Despite some examples of managerial innovation and production with which Mexican firms have responded to necessity, the real situation in which these firms operate is determined by their access to North American genetic material. In 20 years of gradual expansion, these firms have achieved a certain influence in the national market for oilseeds, vegetables, and, some of them, sorghum. They have also been most successful in competing with their foreign counterparts, since the technology and systems of production and distribution which they use differ very little. The private sector as a whole, maintains a high level of participation in oleaginous, industrial, and vegetable seeds. Although of minor importance, an increase was achieved in basic crops as well.

The majority of the transnationals involved in seed production are based in the United States and only seven have been authorized to undertake their own research, while others have had to wait for permission. These privileges are granted directly by the Ministry of Agriculture and Water Resources. Subsequently, the other agencies of the National Seed System (Comitalificador de Variedad de Plantas y el Servicio Nacional de Inspecci Certificacie Semillas) had the responsibility to evaluate, grade, and approve the registration of new varieties. In this sense, the transnationals' research included concrete measures to cover an agreement on the technical standard set by these agencies. However, the criteria for authorizing the research permits have till now been subject to the decisions of the incumbent minister rather than to more specific rules. Nevertheless, some national forums have examined the possibility of increasing soon the number of research permits, which would stimulate availability of varieties and volumes of seeds, but under criteria previously defined by the National System.

Under these conditions, the transnationals have been in a favourable situation, having the capacity to develop or adapt their own varieties and to adapt the requirements of the national market to suit their interests. However, some executives in the private sector estimate that the majority of the seed firms are working with 70 per cent imported seeds and only 30 per cent Mexican. Transnationals do encounter problems with importation now and then, but these are often only bureaucratic procedures that hamper the delivery of permits or the like and do not constitute real obstacles to their operations.

The majority of the firms interviewed declared that they intended to reduce imports to the extent that it was possible to increase production capacity. This intention seems real, considering that expansion plans appear to respond to the enlargement of the market created by national policy. However, it seems that dependency upon seeds imported from transnationals will continue.

Seed marketing. The distribution and marketing of improved seeds involves a variety of channels through which transnational and national firms as well as PRONASE distribute them to agricultural producers, once a variety has passed yield trials. Most of the seed moves through commercial channels. The amount that firms sell directly to producers is reduced. The most usual distribution channels for Mexican seed firms are the National Rural Credit Bank (BANRURAL) and private distributors. Seed producers associations, which operate mainly in the northwestern part of the country, are also an important means of distribution, especially for wheat, in both national and international markets.

BANRURAL buys seed principally from PRONASE on behalf of those producers for whom it is providing financing. Seventy per cent of the certified seed that PRONASE produces is sold in this way. Private firms sell most of their seed production through an extensive network of distributing houses located through the country. Since these distributors are obliged to offer a full range of varieties in order to cover their regional markets, exclusive representation is rare. Thus, distribution is not an activity integrated within the seed firms, but is managed independently of the proprietor of the brand name and of the yield trials. In this way, farmers usually resort to these outlets to acquire certified seed.

One of the major problems that arises in seed marketing concerns BANRURAL. The bank issues contracts specifying that it will buy "up to a certain quantity" but promises to take only that amount which effectively qualifies for credit. The informality and uncertainty of this procedure causes numerous problems for the firms, substantially increasing their costs. However, the problem of ensuring an adequate supply of seeds is really linked more closely to the general fragmentation of the industry than to the difficulties of any one particular sector in the chain of distribution. This reflects the lack of harmony between the requirements for basic foods and what the seed industry produces for national agriculture.

Some final comments. The fragmentation of growth in the seed industry in the recent past appears clearly. Although it has been able to rely on the legal and institutional base conferred upon it by the national seed legislation, which permitted its development, today it does not present a common effort to enable an adequate supply of seeds. Even more, it is well known that the conduct of each of the participating sectors is not governed by the same strategy. Let us consider that in 1961 PRONASE emerged through political necessity immediately after serious conflicts within the agricultural community that were resolved in favour of modern technology. The same legislation that created the National Seed System also allowed for the emergence of numerous private enterprises for seed production and marketing, although this development received considerable official surveillance. The fragmentation to which we refer results from the absence of a clear policy regarding the respective roles that the public and private sectors should play in seed production. The original intentions of PRONASE to regulate the market and ensure the production of seeds for staple food crops encountered problems accordingly as private firms specialized in working for commercial farmers whose production was oriented toward sorghum and high-priced export crops. PRONASE responded to the growth in the less private seed sector by diversifying its activities and giving priority to commercial products. In the 1960s the institution was operating under the general guidelines of an economic policy then in vogue that favoured the growth of the modern sector of agriculture, implicitly leaving behind the majority of farmers practising the cultivation of staple food crops with traditional methods.

The present structure of Mexico's seed industry does not respond to the needs of the country. It is not capable of guaranteeing a regular supply of high-yielding seeds (either hybrids or selected native varieties) for staple food crops. Even in the seed market covering commercial and export crops, the supply of hybrid and improved seeds is inadequate and frequently inappropriate. For example, in the private sector the anarchical organization of the market and the duplication of effort among firms has led to overproduction of sorghum seed while large volumes of seeds for other crops continue to be imported.

To these problems of private initiative is added the lack of a sensible strategy in the public sector for intervening in the regulation and strengthening of the market.

Investment in basic research reflects contradictory criteria, motivated, on the one hand, by the evaluations of specialists as to the number of varieties that could be released and their desired level of production; and, on the other hand, the policy decisions regarding the immediate priorities of the agricultural sector.

There is a deep conflict in the public sector in regard to industry. The dominant current would convert it into a pillar of support for the transformation and modernization of agriculture, accelerating its orientation toward export markets and the support of cattle raising. In this scenario, PRONASE would produce seeds for commercial lines and gradually reduce the programmes that currently represent a subsidy to the campesino sector. INIA would also move in this direction, expanding its research in horticulture, sorghum, and forage crops.

On their side, members of AMSAC would enjoy another privileged moment in its history. The boom in demand for improved seeds has probably scarcely begun. Real restrictions on research and production activities have diminished, even though there have been no modifications to legislation. At present it is being advocated that the country subscribe to the industrial code for patents in order to protect its innovations; however, there is the inconvenience that this would also permit the acquisition as private property of varieties that are now in the public domain.

The opposite tendency to this scenario would be to place major emphasis on the campesino economy. This points toward the incapacity of society to continue its dependence on imported food and reflects the lack of alternatives for many of the resources that peasant societies possess. Besides the social cost implied in allowing the campesinos sector to underutilize its resources: the development model does not offer the campesinos productive employment alternatives in other sectors of the economy, and they are obliged to defend their social and even material existence.

All the while, the tendency exists to safeguard the most efficient and to leave traditional producers to defend their own resources. This implies strengthening still more the production of improved seeds, since the best producers are identified by going modern and are rewarded with credit and technical assistance. The campesinos, who are now adrift, will have to respond energetically to this situation in order to survive. The form and consequences of this response remains to be seen. However, there is a danger that the natural and social phenomena that have so greatly eroded the native seed stock in recent years will seriously restrict the options for this social group in particular and for the country in general, when food self-sufficiency is restored again as the order of the day.

Rural industry china's new engine for development

by Tu Nan

Agriculture in China has made impressive progress in the past five years. Gross product value of agriculture increased at an average rate of 10 per cent per annum while in the 28 years from 1953 through 1980, it averaged only 3.5 per cent. In the Sixth Five Year Plan per caput net income of farmers more than doubled, from 190 yuan to about 400 yuan, surpassing the total gain of net income in the previous 28 years.

New policies and strategy, accumulated investment, and more input, coupled with more advanced science and technology all played an important part in the process. In the policy field, the contracted responsibility system combined with better pricing and marketing policies and decentralization all contributed to better results.

Yet in recent years, a new star is rising rapidly on the horizon and fast gaining central stage - rural industry. In the five years from 1979 to 1983, its gross product value increased an average of 17 per cent a year, surpassing the annual growth rate of national industrial development of 14 per cent. In 1984 and 1985, rural industry advanced at the astounding rate of 40 per cent and 45 per cent respectively. It is estimated that the total value of its output, at 330 billion yuan in 1986, surpassed that of agriculture, at 304 billion yuan, for the first time in history. This marked a significant new phase in China's rural development.

The background. The conspicuous features of the environment for China's development and modernization are the country's huge population, limited agricultural resources and a rather low starting base. China is far below world average in the use of some essential agricultural inputs. Arable land per caput is less than a third of world average. Per caput water and forest resources are only one-quarter and one-fifth of the world average respectively. Yet such limited resources have to support a huge rural population of over 800 million, 95 per cent of which is crowded into the southeastern half of continental China. Chinese peasants had long been seeking an opportunity to break out of their poverty and take part in the process of development and modernization. The family farming system introduced some eight years ago released the long pent-up enthusiasm of Chinese peasants for production and prosperity. Agricultural efficiency was thereby enormously improved, but redundant labour, that which agriculture could not absorb quickly, became common in the countryside and now accounts for about half the rural labour force. It is only natural that these workers are eager for new undertakings. As the policy of invigorating the domestic economy got under way, the surplus labour force in the countryside immediately seized new opportunities to launch all kinds of rural enterprises. On the other hand, inadequate infrastructure, especially the transport bottleneck, also makes it necessary to process large amounts of additional agro-products on-site in the countryside. Rising living standards also create demand for more diversified consumer goods that the public sector cannot fully meet.

In some countries modernization has more or less followed the pattern of advanced industrial cities and backward agricultural countryside accompanied by the migration of population from the latter into the former. For a huge country like China, this is neither possible nor desirable, in either financial or physical terms. Since the founding of the People's Republic, the bulk of state investment went to cities, industry, and transport. The result has been impressive but far from satisfactory. Until eight years ago differences between the cities and the countryside were actually widening. Under the old economic system one might say that the cities and the countryside of China had been running on separate tracks. In encouraging the development of rural industry and achieving admirable results, China seems to have found its own particular road to industrialization, modernization, and urbanization suited to its specific conditions.

The miracle. There are now 22 big cities with non-agricultural populations exceeding one million and 28 medium cities with populations between half a million and a million. The 22 megacities alone account for some 40 per cent of the urban population of China and the bulk of the country's industrial capacity, revenue base, and institutions of higher learning. On the other hand, there are over 90 000 rural towns and townships, each with a population of several thousand. It is in these towns and townships that the miracle of rural industry has taken place. The range of enterprises covers almost every trade. There are now about 370 million labourers in rural China. About 300 million of them work in agriculture at least part of their time. About 40 million are in secondary industries, mainly in manufacturing, building, and mining, representing a 74 per cent increase over 1980. About 30 million are in tertiary industries, mainly in transport, commerce, catering, and other services. Rural industry now employs about 20 per cent of the labour force of the Chinese countryside and accounts for some 25 per cent of the total industrial output value of China. In some sectors, rural enterprises have become a sizeable force in the national economy. They now produce over 80 per cent of all iron farm tools, 53 per cent of building material, around 50 per cent of garments and shoes, 43 per cent of sulphate of iron, about 25 per cent of textiles, and some 20 per cent of coal. Their products not only sell throughout the country, but have begun to enter the international market. In 1985, they contributed US$4 billion worth of goods and services on the international market. Now over 8000 rural enterprises are engaged in export production of some 1 500 varieties of products. Nearly 900 of them are joint enterprises with foreign capital. Their 8 million building workers represent more than 60 per cent of the national construction force. Seasonal migrant skilled workers are another feature. For instance, the province of Jiangsu alone sends 35 000 building workers to Sinjiang, in extreme west China, to work for some 10 months of the year and come home every winter. In short, rural industry is now playing an indispensable role in supplementing the deficiencies of state industries and is filling considerable gaps of every conceivable kind.

The pace of expansion of rural industry in China is really remarkable. In the six years between 1980 and 1986, the number of enterprises increased 214 times, from some 56 000 to over 12 million. Gross product value quadrupled, from 65.6 billion yuan to 330 billion yuan. The taxes paid to the state annually quintupled. In the fourth largest city of China, Shenyang, tax paid by rural enterprises accounted for 70 per cent of all local government revenue in 1985 (all Chinese cities have a number of agricultural counties under their jurisdiction). Their total profit approximately tripled in the four years from 1980 to 1984, from 6.6 billion yuan to 18.7 billion yuan. In the past five years, more than half the income increment of the rural population came from rural industry. It is now safe to say that rural industry has become the most dynamic part of the Chinese economy.

The merits. Rural industry in China has been developing under difficult conditions, but there are a number of positive factors that contribute to its vitality, among them:

High flexibility. There are various forms of partnership at varying levels below the county. Enterprises of the county level and higher are mostly state-owned. The most popular and fastest expanding form is the family household undertaking and its alliance with some sort of collective or cooperative enterprise. These are usually centred around certain products, some kind of technology or a line of service. They are inevitably small-scale, permitting quick management decisions in fast-changing market conditions as well as specialization in the production and marketing of thousands of small commodities. About half of all the buttons in China nowadays come from a tiny township in Wenzhou in east China that has developed into the button centre of the whole country for both manufacturing and marketing. Its turnover in button trade exceeded 100 million yuan last year.

Low cost. Rural industry needs no investment from the state. There are no managerial staff assigned by the state with their cradle-to-grave social security cover. An elastic wage system mostly linked to performance is also highly cost saving. Where some investment is inevitable, it is much less than in a state enterprise. For instance, while large state coal pits need 200 yuan of investment to create the capacity to produce one ton of coal, small rural pits need only 20-30 yuan. Thus the 200 million tons of coal produced by rural enterprises annually saved government investment to the tune of some 3.5 billion yuan. Generally speaking, to give employment to one person in a city requires over 15 000 yuan of investment from the state, but rural enterprises need only about 10 per cent of that amount to create one job. Their circumstances dictate that their overheads have to be very small. A great many rural manufacturing enterprises subcontract the making of parts to family workshops where there might be only one or two small lathes using spare space in the family home. They are able to make optimum use of manpower; often they use marginal material or even scrap rejected by state enterprises.

Creating employment. The population of China, now greater than 1 billion, is expected to be between 1.2 and 1.3 billion around the turn of the century. Youngsters entering the labour market number more than 10 million a year and are expected to peak at 13 million before the year 2000. Providing jobs for them is perhaps the single most formidable task facing the Chinese Government. Rural industry, being labour intensive by necessity, appears to be a possible solution to this problem. It absorbed 12 million additional workers in 1985, a 22 per cent increase over 1984, and is bound to provide the main outlet for 10 million-plus fresh labourers coming on stream every year in coming decades.

Better management. Here the picture is certainly mixed. It is generally believed that only some 30 per cent of rural enterprises are well managed, some 40 per cent are of average management standard, some 20 percent are poorly managed, barely remaining in operation, and the remaining 10 per cent are facing closure or bankruptcy. However, in some aspects, they compare favourably with state-run enterprises. In 1984 for every 100 yuan fixed asset, the output value of rural industry is more than twice the average for state enterprises. Profit, at 34 yuan, is more than three times that of the state enterprises. Tax generated at 15 yuan is nearly one and a half times as much. In a country where the science of management was once deliberately ignored, it is difficult to imagine that undereducated peasants, some still illiterate, can properly manage rural enterprises. Here the very nature of the entities in a given situation makes all the difference. In contrast to state enterprises rural enterprises link remuneration directly to performance. The quality of their management and their ability to react immediately and correctly to shifting market conditions are a matter of survival for them. Generally, only better educated and more talented peasants venture to set up such enterprises.

Increasing revenue. As rural industry creates much more wealth per caput than agriculture, it is fast becoming an ever more important source of revenue for the Government. In 1985, it paid over 13.7 billion yuan of tax to the state, representing 7.5 per cent of the total tax revenue and 20 per cent of new added tax income during the year. In recent years, it has been increasing at the rate of some 30 per cent a year, a rate much faster than that of other tax revenues. Besides, it paid over 30 billion yuan in the five years between 1981 and 1985 to local governments and over 8 billion yuan a year to collective welfare undertaking. Taxes paid by rural enterprises now account for over two thirds of state revenue collected from the countryside. In Jiangsu province, some 85.5 per cent of new increased revenue came from rural industry in the past seven years.
The problems. Like all new ventures, rural industry in China is fraught with problems. Chief among them:

Obsolete equipment and low technology. There are about 1.8 million technicians in some 400 000 enterprises at the county level and above in China, but rural enterprises have extremely few, if any. Serious environmental pollution is but one aspect of this vast problem.

Shoddy product quality. A considerable glut of many products of inferior quality has already appeared and is forcing many rural enterprises either to improve or to be driven out of existence. But the picture is far from uniform. Some rural enterprises are turning out products of excellent quality of international standard.

Low productivity. This obviously depends on the method of calculation. The comparison with state enterprises can only be relative and the picture extremely mixed. While its productivity is generally higher than agriculture and could compare favourably with the less efficient part of state enterprises, it certainly lags far behind the more modern and better managed ones. It is also generally more energy-consuming.

Shortage of raw material and energy. This is a common problem facing many industries, but an especially acute one for some rural enterprises. Now only about a quarter of them working under contract with state enterprises or having direct links with them receive allocations of raw material at official prices under state plans. The other three quarters have to buy their raw material on the market, where it can be several times more expensive. They get only about half their power supply from the regional grid. For the other half, they have to generate their own electricity in very expensive ways. The shortage of current compels some of them to operate only three or four days a week. A number of rural enterprises are criticized for competing with more efficient modern factories for a limited supply of certain materials.

Shortage of capital. Capital formation for rural enterprises relies mainly on the savings of peasants, the majority of whom are still far from prosperous. Banks and credit institutions gave some assistance, totalling nearly 48 billion yuan of loans of all kinds in 1984, but with the tightening of credit in an overheated economy, this has dwindled. Internal accumulation and the savings of employees totalled about 30 billion yuan in 1984.

Inadequate information. In China where commodity economy was officially recognized only recently, market information is bound to be inadequate. A few family undertakings specializing in the dissemination of market information have appeared and proved very popular, but they are far from adequate. Therefore, decisions to create new enterprises are occasionally taken on the basis of insufficient or inaccurate information.

Declining profit. High costs, low productivity, and excessive levies all cut into the profit margin of rural enterprises. In the five years between 1979 and 1983, their overall profit margin declined from slightly under 25 per cent to just over 15 per cent. When capital increment depends largely on the internal accumulation of on enterprise, this obviously weakens its ability to upgrade equipment and expand production.

Irregularity and disorder. It should not be surprising when large numbers of small enterprises based on profit incentive mushroom in an unruly manner in an underdeveloped rural society. The Government gives tax relief to new enterprises for a couple of years, but some of them change their name and brand frequently to prolong the privilege. They close down and open again too easily. In the absence of a sound land-use law, they tend to take up too much good land. Fakes and substandard products of every description have also appeared. But such practices are being subjected to regulation and are not the main stream of the development of rural industry.

Disincentive to agriculture. The prosperity of rural industry and the higher wages paid to its workers naturally reduces the interest of peasants in tilling the land, especially for lower-priced grain crops. The solution seems to lie in providing special favourable treatment to grain production and encouraging the development of the so-called vertically integrated farming and agroprocessing as a means to achieving better economy of scale and the more even distribution of wealth.

Polarization or equalization. Under the new economic policies, some families become rich sooner and faster than others. But a few enterprises have grown to a sizeable scale, employing several hundred workers. Credit institutions also tend to give more credit to bigger and more profitable enterprises as there is better assurance of repayment and fewer larger loans are obviously easier to handle. Whether private enterprises of such a scale, and even larger, should be allowed to develop further in a socialist society, and whether they should be limited, raises a policy issue as well as a practical problem that has yet to be answered. But the marvellous development of rural enterprises of partnership or ownership has so far definitely contributed to accelerate the growth of the economy and improve the living standard of the rural population.

Uneven regional development. As of 1984, eight relatively developed provinces and metropolitan areas along China's east coast accounted for over one-half of all the country's rural industry while eight least developed inland provinces had only some four per cent of the total. In the highly developed province of Jiangsu, rural enterprises now employ some 10 million people. Their product value of 2.25 billion yuan in 1984 already accounted for over half of the total product value of industry and agriculture. But such uneven development is being remedied, and the less developed areas are fast catching up.

Too much levy. In an ambience long wedded to poverty, it is not strange for many quarters to turn to the new "rich" for all sorts of need for help. In fact, their wealthiness has been overestimated. In an underdeveloped countryside, where casual customary manners rule far more widely than strict law and order, levies of all kinds have been imposed on rural enterprises by local authorities. But such excesses have caught the attention of higher authorities and efforts are being made to curb them to lighten the burden of rural industry....

The policies. China is now in a crucial stage of development, and economic reforms of historic significance are being implemented. The major components of a new set of more liberal policies may be summarized as: - invigorating the domestic economy and opening up to the outside world - reduced mandatory planning to be integrated with expanded guidance planning - macro-economic control to be combined with micro-economic decontrol - direct control by administrative means to be replaced by indirect control through economic leverage - vertically controlled management to be replaced by horizontal linkages between related enterprises - driving force of enterprises to come from within enterprises rather than from without - enterprises are to shift from a closed pattern to an open pattern where micro-economic decision-making is decentralized. In such a context, and in line with the official recognition of the economy as commodity-based and market-oriented, it is only logical that the main content of the Government's policy toward rural industry is to develop a sound market system in which support to the growth of rural industry is lent through such economic leverages as tax, credit, interest, subsidy, supply of raw material, and quality control. Such a market system should cover agroproducts and byproducts, agricultural inputs, consumer goods, technology, information, capital and financial services, labour and jobs, and building and construction. Two aspects are being given special attention: the collection and dissemination of market information and the gradual development of a sound legal system together with the provision of legal service, as these are obviously indispensable in any effective market system. In other words, government endorsement of the development of rural industry will come mainly in the form of policy guidance with the provision of relevant information and regulation through law enforcement in a favourable economic climate. Other policy measures worth mentioning include:

- Financial assistance and resources reallocation. It is generally believed that state enterprises still enjoy considerable advantages over rural enterprises in, for example, the supply of raw material, investment funds, planned production, marketing outlet, and energy provision. Hence it is considered necessary to give rural industry some special treatment in tax payment and credit as compensation and to ensure fair competition. It should be pointed out, however, that rural enterprises have generated as much as four times more revenue for the state than they received in favour and support from the state in recent years. But perhaps of even greater importance is the policy of using part of the revenue from rural industry to support agricultural development. It is estimated that modernization of agriculture in China at a moderate rate requires investment of 1 trillion yuan. The state would be hard-pressed to provide that amount. The bulk of it would have to come from the countryside itself. Rural industry already contributed over 10 billion yuan to agriculture accounting for 15-20 per cent of its total profit in the past five years and is destined to generate the overwhelming majority of investment capital needed by agriculture in the years to come.

- Encouraging horizontal links. In a vast country like China, great variety in natural resources and the extent of development is a distinctive feature. Generally speaking, the coastal areas are far more developed, with much more managerial talent and technical skill, than inland provinces, which are, however, generally endowed with more natural resources, but they are also much more densely populated with an acute land shortage. Voluntary association of all kinds of partnership based on the principle of mutual benefit enables them to compensate for one another's deficiencies and give full play to the different strengths of various localities. After a long period of excessively rigid control from the central Government, the benefit of such horizontal collaboration is especially pronounced and is giving a push to rural development. In one instance, about half the rural industry near Shanghai has become subcontractors, supplying parts to large enterprises in the metropolitan centre.

- Assisting better division of work. For historical reasons, the processing of agricultural products in China is located mostly in cities and towns rather than in the countryside. These industries are going to shift gradually back to where the raw material is produced. This would make processing much more economical. Furthermore, rural enterprises are encouraged to cover the whole line of such undertakings, including preproduction services, packaging, storage, transport, marketing, and other post-production services. In other words, rural industry, which by necessity is agriculture-based, should in turn provide a complete range of services to promote agricultural development, thus leading to the formation of local vertically integrated agro-industrial businesses. Industries not suitable for developing in cities will gradually be shifted out to the countryside.

- Technical assistance. The Government has formulated a programme, named SPARK, designed specifically to assist the technological upgrading of rural industry in the Seventh Five Year Plan period. It consists mainly of: developing 100 complete sets of relatively advanced equipment suited to the conditions of rural China and organizing their mass production; assisting the establishment of 500 model rural enterprises for demonstration purposes and providing them with complete sets of appropriate technology, management rules, product design, and quality-control methods; training 1 million young managers every year with knowledge of appropriate technology and modern management knowhow. Some 2.3 billion yuan of investment capital has been secured so far. Bank loans and government appropriation account for only some 16 per cent of the total amount. The bulk is generated by the enterprises themselves. It is expected that this programme will add over 10 billion yuan of annual output value to the rural enterprises in a couple of years' time with an input/output ratio of nearly 1: 5....

Prospects and implications. The extraordinary pace at which rural industry is developing in China is rapidly giving it predominance in the country's rural economy and pushing agriculture into second place in the more developed parts of the country. In less advanced areas, it is rapidly catching up. The size of its employment is expected to expand by 70 per cent by 1990 to reach 120 million and further to. 220 million by 1995 or shortly thereafter. Its pace of growth in recent years is two to three times faster than the average speed of industrial development in general. Its output value is expected to reach approximately 60 per cent of the gross product value of the Chinese countryside by the end of this century. In fact, the expansion of rural industry in China accounted for around half of the net increase of gross product value of her industry in the last couple of years. But even more important is the pivotal role it played in the improvement of the structure of the rural economy by introducing extensive diversification into the countryside. Taking all factors into consideration, its productivity is expected to improve by five per cent a year in the next decade. Its share in total export is expected to account for no less than 15 per cent.

But the significance of the development of rural industry in China goes far beyond its quantitative expansion. It has important implications in finding a solution to the huge population and employment problem, in supplementing the deficiencies of the state-run industries and m narrowing the wide gap between cities and countryside. In the past 36 years, urban population in China has roughly doubled, from 100 million to 200 million, with the additional 100 million divided equally between natural growth of urban population and controlled migration of rural inhabitants into cities at very high cost to the state. It is projected that the labour force of the Chinese countryside will reach 450 million by the year 2000, but agriculture will be able to absorb no more than 220 million of them. Rural industry, labour-intensive by nature, is poised to absorb the balance. In many countries, a clearly defined way to urbanize is a problem yet to be solved. In the case of China, by one key indicator, the annual output value of an industrial worker is, at 4 500 yuan, 7.5 times that of a farmer, at 600 yuan on average. It is difficult to imagine that a modern socialist state could be built with advanced cities but a very backward countryside. The development of rural industry offers a solution to the difficult problem of narrowing the rural-urban gap; this is the gradual industrialization and modernization of the huge intermediate area between the agricultural countryside and the metropolitan centres by building large numbers of small towns and townships (the number of townships increased over 150 per cent in the past five years). Such a network of small towns and townships would form a multitude of bridges between cities and countryside through which capital, technology, managerial talent, raw material, finished and semifinished products could flow back and forth. In another sense, it also enables China to avoid potentially dangerous antagonism between workers and peasants and between cities and the countryside which the widening differences between them would inevitably induce.

Another question of no less importance is the spiritual and cultural aspect of rural development. The significance of cultural and educational advancement and the gradual change of traditional values and social concepts cannot be overemphasized. For rural China to move ahead from a semi-subsistence, half closed farming society, with all its inertia and stagnation, to a modern commodity-oriented agro-industrial society, it needs all the impact of a cultural shock, which only the development of rural industry with its entrepreneurial spirit and managerial acumen can bring about. On the other hand, the material improvement of rural conditions would also contribute to the rural population's cultural advancement. Some 20-30 per cent of the after-tax profit of rural industry in recent years has already been devoted to the development of education, culture, public health, sports and local government administration in the Chinese countryside.

One more lesson which China has learned in the past three decades is the limitations of state-run enterprises. The Government can take direct charge only of crucial lifelines of the economy and a limited number of key enterprises. It has to rely mainly on a whole set of policies and strategies to guide the rest of the vast economy. Rural enterprises will develop under such guidance and fill the innumerable gaps which the public sector cannot possibly take care of, especially the thousands of omnipresent small commodities.

The remarkable thing about rural industry is that it needs very little of what China is short of investment capital to make optimum use of what China has in surplus - manpower. By relying mainly on correct policies and strategy, it is able to tap the vast potential of the smallest economic cells of rural China in terms of both human and physical resources, thereby avoiding the biggest weakness of China in its industrialization, modernization, and urbanization and turning it to its best possible advantage. In a sense, it might be considered a sort of extension of the contracted responsibility system in agricultural production - both rely mainly on the catalytic role of policies to stimulate the initiative and enthusiasm of workers, peasants, and managers. In another sense, it might also be likened to the early stages of the industrial revolution in the West. The main difference lies in the presence or absence of firm state guidance and/or regulation in the context of the whole social system. Past lessons in the shortcomings of excessive rigidity in economic policies and over-centralized administration in China have been well learned. The emphasis of the new approach will be the ever improved use of a gradually more finely tuned regulated market mechanism and a measured flexibility to facilitate healthy development.

The full-fledged development of rural industry in China has only a short history. All kinds of problems and defects are inevitable in the initial stage, but these are by nature relative and transitory. The objective laws governing the development of rural industry will see to it that these would be rectified in the process. China should have learned enough lessons in the past decades to realize such historical rationale and logical necessity to be able to guide rural industry to maturity.

New directions for vietnamese agriculture

by TrDuc

Viet Nam has been an agricultural country for thousands of years, and recently new trends have appeared in farming practices. This article proposes to examine both the structure of agricultural production and the technical and scientific efforts made in this sector of the economy.

The experience of other countries has shown that, generally speaking, a structural revolution in agriculture gives a boost to production. Viet Nam began by replacing spring rice crops by winter crops, thus increasing rice yields by two to three metric tons per hectare and making it possible to apply new cropping methods (azolla followed by spring rice, intensification of market garden crops and secondary cereals, promoting the cultivation of export crops). This radical change in food crop cultivation stems from the need to improve the nation's diet. At the present time, the daily food intake of our people consists of about 48 grams of protein and 23 grams of fats, amounting to a total of 2 000 calories. In the immediate future our efforts will be concentrated on the overall calorie intake (essential food intake) before diversifying the diet and integrating it with amino acids (rational food intake).

In recent years our country's annual food production has reached 16-17 million metric tons. In addition to rice and the other cereal products, efforts are being made to develop our bean production. In the past, the area under beans was much smaller than that of other food crops, but from now on this crop will be playing an important role in improving the people's diet.

It will take several five-year plans before we can reach the rational consumption level of meat, eggs, and milk. We are also counting on increasing fish production to improve the quality of our meals. In the long term, cereals will gradually be replaced by a rational proportion of vegetable and animal protein.

Plans for the development of industrial crops include improving the entire perennial and annual plant production. In dealing with annual industrial crops, a distinction must be made between those grown extensively (e.g., groundnuts, tobacco) and those cultivated on limited areas (e.g., jute, rushes). For perennials, priority is given to crops which are most appreciated on world markets, such as tea, coffee, or hevea. In the years to come our efforts will be concentrated on improving the production of annuals in order to obtain the capital required for expanding perennial crops.

Appropriate cropping techniques must be selected for each category of crops. For example, groundnut production must mainly be left to farm cooperatives and family concerns; hevea and coffee production, requiring fairly heavy investments, will be carried out on state farms and in farm cooperatives. The time it takes for development to become effective depends on our ability to solve both the population's food supply problem and that of our cooperation with other countries.

For animal husbandry to become more economically important, a reform must be undertaken in animal feeding. This reform will be speeded up as soon as we have solved the food problem for our people, in which maize will play an important role. For the time being, maize yields are still very low, about 1.2 tons per hectare. We expect to bring them up to three and even four tons over several successive five-year plans. We are also concentrating on the production of soya, which in recent years has reached between 60 000 and 70 000 tons. In future, after we have reached the target of several hundred thousand tons, we have reason to believe that the "white revolution" will begin with soya and that our people will be drinking more vegetable milk than animal milk.

Pig raising is developing fast in a densely populated rural world in areas where rice is grown. There were 10 million pigs in 1981,13 million in 1985, mainly raised on family farms. The cattle population was 4.15 million in 1981 and 5.2 million in 1985. Up to the year 2000, buffalo will continue to be an essential source of wealth.

Poultry breeding and pisciculture have been popularized. Fish breeding is practised in flooded rice fields and water courses and will be encouraged in our numerous ponds and pools.

Handicrafts are flourishing in several rural localities. In 1982, the sector included 1.6 million craftsmen with fixed funds of 1.6 billion dong. This sector contributes to the development of agricultural products and can supplement farmers' incomes. We hope it will gradually be possible to separate the handicrafts sector from agriculture and create artisans' cooperatives. For a certain number of important products (such as ones with a high export value), it will soon be possible to modernize production with a view to improving quality. In order to develop the handicrafts sector it is, of course, important to adopt judicious policies on investment, credit, farming techniques, and human diet.

In our country, these structural revolutions do not progress along separate roads but are closely coordinated in each region. Let us consider the example of the Red River delta. Since the early 1950s, the "brown revolution" has distributed the land to the farmers; it was followed by the "blue revolution", which brought irrigation and drainage to the rice fields. At the end of the 1950s the "red revolution" modified agriculture on the road to socialism; in the mid-1960s came the "green revolution", and in the early 1980s the "red revolution" was resumed with the adoption of a global agricultural contract. The scientific and technological revolution is aimed at arousing awareness and a sense of responsibility in farmers, while the purpose of the productive revolution is to improve their management ability and to form the social basis for the socialist revolution.

The scientific and technical revolution first of all calls for the mechanization of agricultural techniques. In a fairly densely populated country (180 inhabitants/km)... for an area of 32 536 000 hectares, and with a surplus labour force, the initial goal of the scientific and technical revolution must be to achieve efficient intensive farming.

Experience has shown that in the 1976-1980 plan, the rate of increase of food crop yields was low because our efforts were only aimed at increasing the cultivated area. But with the promotion of intensive farming in the 1981-1985 plan, the rate of increase was fairly high. In the coming period, we must both accelerate the green revolution for rice and such other crops as maize, beans, and industrial plants, and we must launch the biological revolution, which, in substance, will be the second green revolution. If this is to take place in the 1990s, now is the time to lay the foundations for the era of information technology, to apply the latest advances in this field and in micro-biology, so that we can create new seed varieties and new food products. In the immediate future our task is to distribute seed, set up a network to protect vegetable crops and domestic animals, ensure that farmers are provided with the equipment they need at the right time, and set up irrigation systems.

In parallel with the promotion of intensive farming, the cultivable area must be extended and new land cleared the question of farming machinery will be solved gradually. As a developing country we have had to pay a high price for our tractors (which numbered 39 400 in 1982).

In learning our lesson from our experience, by the year 2000 we will have achieved selective mechanization. For instance, there will be mechanized irrigation, drainage, tilling, transport, insecticide treatment, etc., for rice crops. But for all crops, mechanization must be combined with manual work. In regions where automation has partially been achieved, we shall reorganize tractor stations, consolidate labour groups, and improve management by giving priority to machinery repair and supplying spare parts.

In the change from small- to large-scale production, we realize that we cannot simply rely on the revolutionary enthusiasm of the masses to achieve a hasty socialization of production by adopting administrative measures, and we know that we must choose the right forms of collectivization.

In 1982, the five million farmer families belonging to the country's 15 000 agricultural cooperatives account for 96.9 per cent of the population in the north and 24.4 per cent in the south, with varying forms and degrees of collectivization according to the level and type of productive forces prevailing in each locality. In addition to the cooperatives and mutual aid organizations, to stimulate production further, we are setting up a network of buying, selling, and credit cooperatives.

The sector of family economics is of fundamental importance since it provides the population with the majority of its foodstuffs. We must insist on the vast expansion of vegetable gardens, fish breeding, and animal husbandry with the help of the collective economy and under the protection of organizations responsible for technical services.

Farm cooperatives, state farms, and family farms constitute complementary economic sectors. The combination of all three makes it possible to obtain high yields.

In order to implement the aforementioned socio-economic strategy, several broad policies must be adopted. First of all an investment policy: in any economy, the percentage of finished products is an extremely important indicator. Given the predominant role of agriculture' we must invest in that sector. In the 1976-1980 plan, agricultural production accounted for 28 per cent of gross production, but investments in the agricultural sector represented only 21 per cent of the overall investments in the nation's economy.

This investment policy was applied during the period of transition to socialism: particularly in the initial phase in which the collective and private economy still represents a notable proportion and where state capital is still limited. That is why our policy will be backed by the slogan: "The State and the people work together. Central and local organizations work together." In agriculture this slogan has begun to yield positive results.

Investment policy in agriculture and in the economy in general is closely connected with the population growth policy. We all know that the investment funds are divided into three parts: one to maintain and repair existing structures, another to promote production, and the third concerns the population growth rate (food, housing, clothing, nursery schools, schools, health, vocational training). In recent years, our country's population growth rate has been high. From 1979 to 1983 it was 2.1 per cent, which had a negative effect on our economy. We must therefore take the necessary measures to promote family planning in order to reduce the investments envisaged to compensate for the population growth rate, and to increase the volume of capital injected into the economy.

What future for morocco's poor?

by Mohammed Ennaji

In North Africa, Morocco can be taken as an example to illustrate the problem of farmers without land, since the proletarianization of the peasantry there is not new. Colonization had already cornered over 15 per cent of the useful agricultural land. Just before independence, a few thousand settlers and landlords owned 40 per cent of the cultivable land (reducing an ever-increasing number of peasants to destitution: the number of farmers owning no land rose from 33 per cent in 1932 to 60 per cent in 1952). In the 1970s, almost 75 per cent of farming families still either owned no land or possessed an area which, due to rapid population increase, had become insufficient to cover their needs....

Since most of the rural population no longer possess sufficient means of production, they are driven to sell their labour in order to survive. They subsist by resorting to paid occupations in several economic sectors and to such activities as gathering, handicrafts, and petty trade. This is how most members of the family make their living, leaving only a few to work on the farms which are too small to support the entire family. The women, who normally work in the home, occasionally resort to paid work outside. Children are taken out of school to look after the small family herds or to do odd jobs. When they reach adulthood they seek work elsewhere; thus the family breaks up. The changing rural world has completely disrupted the living conditions of the poorest members of the community.

The ancient tribal, feudal, or communal order consequently falls to pieces, and lineal solidarity weakens. The degeneration of traditional institutions has not yet been replaced by new structures such as centralized political parties, government services, and local authorities.

The economic difficulties of most farmers lie in this new social framework: the land is owned by a minority, and the high population growth rate has increased the imbalance between available resources and the needs of the population. The land has become so fragmented that the farms are now merely microholdings - too small to ensure for the new rural generations the same harvests as their forebears.

Monetarization of the peasant economy. Today, through numerous but in sufficient measures, the Government has aggravated the feeling of need in its aid to the poor (distribution of wheat or work camps for the unemployed). By acting as intermediary in a traditional society, the Government has often become an easy structure to resort to, thus confirming the inefficiency of the traditional order. The break-up of groups and of the traditional family drives individuals to distress, puts pressure on them to move to the towns to seek any kind of odd job and to accept precarious, hopeless employment. The situation is increasingly more stressful with the endless creation of new needs. For instance, a number of consumer goods unknown to the peasants or which would normally have been considered luxuries have already become necessities: sugar, tea, but also shoes, furnishing fabrics, petrol lamps, bicycles, and bed linen. These goods seem to have become more and more necessary and cost more and more. Hard cash has become the foundation for interpersonal relations, and bartering disappeared a long time ago from the markets and villages.

Diminishing stock and the new needs bring agricultural products on to the markets, even if the farmers have to buy them back for their own consumption. Also, contributions in kind (chickens, eggs, butter) have been replaced by bargaining. Nowadays services are exchanged only for payment in cash.

This state of affairs drives the poor farmers, left to their own devices, to a state of constant anxiety and despair, for they can no longer benefit from the redistribution process which was part of the traditional society. At the beginning of the century, the land was leased out against a symbolic loaf of bread, as the idea of paid labour was rare. Today it is normal to negotiate labour against half of the harvest. The price of land and increasing land rent are connected with the fact that the bulk of the land is in the hands of a few landlords and the number of landless farmers is on the increase. The development of leasing out land is another factor which makes the situation even more critical, for it assumes that the leaseholder disposes of sufficient liquidity and agricultural inputs even before he starts production.

Up to not so long ago, farm ownership and social mobility in the rural areas of Morocco were still attainable goals. The status of shepherd, sharecropper, labourer, smallholder were all steps up the ladder of progress in the life of the farmer who started out without any land. Of course, not all of them managed to reach the top of the ladder, but the efforts of enough of them were crowned with success to give hope to others.

Today the high population growth rate and the fact that less and less land is available at a time when traditional institutions are crumbling mean that the peasants at the bottom of the social ladder no longer benefit from even the tribal or feudal protection systems. They hold no recognized position; only the most tenacious and the most enterprising manage to escape from marginalization.

Instability is the rule. There can be no progress when the activities practised for survival are precarious and unstable. An example of this situation is afforded by agricultural wage-earners: permanent farm jobs have been reduced to the advantage of odd jobs or seasonal labour, and workers are not always paid the minimum legal wage. Trade unions are virtually non-existent outside the state farms.

Schooling does not make the situation any brighter: in 1982 only 27 per cent of rural children aged five to 19 attended school, which is no guarantee for success. The majority of them leave school very early to find a job. The youngsters are attracted to the towns, where, however, there is no guarantee of a future. There is no longer any hope in farming. The occupation of the farmer is gradually losing its meaning. This trend is accentuated by the division of labour on the big farms: employers prefer workers who are poorly paid and are willing to move around, who have no legal status and can easily be fired, rather than experts or technicians. The only permanent labour they have are a few keepers or herdsmen.

Increasing inequality. In order to combat the rural exodus, income in rural environments must improve substantially and a sustained effort must be made to make more investments in favour of depressed areas. But, in actual fact, inequality is increasing.

Land has been distributed to barely two per cent of the farmers. Out of one million hectares of land taken over by the Moroccan Government after independence, one-third has been passed on to the new rural te, another third is awaiting allocation, and the last third has been distributed among 24 000 peasants.

But there is more than one form of inequality with regard to land ownership: government aid goes to the richest; only two per cent of landless farmers have access to farm credit, and subsidies for agricultural inputs are preferably granted to the big and middle-sized farms. Barely 18 per cent of the subsidies for consumption reach the poorest echelons of the population. Labour laws, which are already inadequate, are not respected by employers. And generally speaking, agricultural policy focused on "viable" farms does not concern the marginalized peasants.

The creation of non-agricultural jobs is limited and continues to give priority to the urban and not the rural areas. The Government tries to make up for this by creating work camps, but barely five per cent of the poorest families benefit from this operation (200 days of work per person a year). At this rate there is no hope of improving the destitution of much of the population.

Limited land resources. The most obvious solution in the fight against the impoverishment of the landless farmers would be to facilitate their access to land ownership and to the inputs of agro-pastoral production. But most of the land available to the Government has already been parcelled out. The easiest policies are adapted in order to avoid any unrest or social disturbance. It would have been a wise social measure, for instance, to take back the land from the foreign occupants as soon as independence was achieved and distribute it to the poor peasants. Of course, there is still some government-owned land that has not been distributed, but, by handing it out, it would be possible to satisfy only two per cent of the demand.

Other land resources could be mobilized by imposing a limit on the amount of land one is authorized to own: for the time being, this solution has not been envisaged.

Another consideration is that in Morocco, the total redistribution of cultivated land into 13-hectare plots would solve the problem for about 500 000 rural families, or one quarter of the demand. The remaining three-quarters could then not all find jobs since almost all the labour would be provided by the family. The creation of a government controlled farm credit organization could restore a balance in the unequal division of land, but it would probably produce only psychological and political effects. Finally, legislation covering the sharing of undivided inherited wealth could have a positive effect, particularly at the economic level.

Under the present socio-political trends, there is little hope of reducing the number of landless farmers by waiting for land to become available. Other measures should be sought to allow use of the land and other factors of production in conditions that would favour growth of productivity and income.

Reforming the status of sharecroppers, landlords, managers, and farmers would appear to be the more generous and useful measure. Unlike the reform of agrarian structures, reform of the status of tenant farmers would involve no political or social complications for the legislator: it is merely a technical operation that would basically satisfy all parties concerned. There would be no winners or losers. But efforts in this direction made in 1969 and 1973 have largely remained inoperative. The power system in rural areas can only very gradually accept seeing leaseholders improving their status with respect to that of the owners. The experience of the last 20 years shows, on the contrary, that the authority of the landowners appears to have been reinforced, probably because the power of the trade union and political organizations in the villages has diminished.

If all the programmes concerning access to land ownership cannot solve the crisis of rural life, solutions must be sought elsewhere.

Intensified farming. It would be possible to increase paid jobs in the agricultural sector by taking account of the fact that if the cultivable area cannot be extended on the surface it can certainly be extended in depth and in fertility. Increasing soil productivity means employing more people, better skilled and therefore better-paid labour.

Agriculture in Morocco is still largely extensive. Although much progress has been made in irrigated areas, much remains to be done; cropping methods tend to be simplified without necessarily increasing yields; the number of working days per hectare is very low, with a maximum of 40 days per year for rainfed crops, 200 in irrigated areas, and an average of barely 250 days for market-garden crops.

Since independence, 28 reservoirs have been built to bring almost 900 000 hectares under irrigation (so far 600 000 ha are irrigated) at an enormous cost, and the results have yet to be seen. At most, the intensification of production through irrigation will apply to only 12-15 per cent of the cultivable land. In rainfed areas, farmers are not yet familiar with the technical solutions and do not apply them extensively. Thus there are only 4 000 tractors for 5 million mechanically arable hectares of land, i.e., one for every 1 250 hectares. However, tractors are not necessarily a condition for intensive farming - sometimes quite the opposite could be true - but considering how much deep ploughing and early sowing increase both the cropping area and average yields, it is regrettable that so few machines are used.

Working the land by mechanical means would not require less manpower than annual crops do using draught animals, since the machines make it possible to sow much larger areas and, above all, to increase yields and thus also employment. However, the effects of mechanization are not all positive, particularly when it is used in extensive farming. In some regions the use of farm machinery leads to the elimination of those crops that are not easy to cultivate mechanically, such as pulses or certain industrial crops (flax, fenugreek), in favour of cereal monoculture. Agricultural development therefore implies polyculture and rotation cropping (necessary for maintaining soil fertility and for better distribution of labour throughout the year).

Training rural manpower. Every year, the lack of intensified farming to meet the needs of a rapidly increasing population leads to the departure-of masses of rural inhabitants to the towns. It is the young men who leave, often the strongest, the more innovative, the better educated. The rural areas are losing the only inhabitants able to change their way of life and who have the vitality and the will to succeed. Their reasons for leaving are numerous and obvious. Life is easier in the towns, and the opportunities and prospects for employment are greater there. The villages offer no cultural life but restraints and customs instead.

Because those workers who stay behind are the less skilled, problems of know-how on the farms arise. As a result, orchards have been reduced in size on the big farms, seed improvement has been delayed, cropping methods have been simplified, and several of the more specialized skills have disappeared (grafting, pruning, etc.). The opposite seems to have occurred, however, in the market gardens of the big towns and with the new industrial crops.

There is no point pleading for the cause of retraining farm labourers unless such a programme in accompanied by a number of related measures: intensified farming, greater crop variety, better markets, higher pay for labour, and technical training according to need.

But to achieve this, it is not sufficient to make rules, or pass legislation, or even provide purely financial or administrative measures. The problem is to make a global change in the economy, increase purchasing power in urban areas, and bring about a positive change in the demand for labour.

Improvements must be made in labour legislation, which is of no use if it is not backed by a strong social movement. The need for it must be voiced clearly by those concerned. Labour laws are no good on their own, but no progress can be made without them.

For instance, in the same way that it imposes taxes, the Government could impose on employers a wage scale, better protection for workers against industrial injuries, proper lodgings for them, recognition of their level of education, and a pension scheme. But all this implies a change in the relations between the Government and the land owners. The long-term interests of both parties cannot do without improving the conditions of farm labour.

Improving non-agricultural employment. If the smallest viable farm covers 13 hectares, half the rural population must find a living in non-agricultural activities. This is already happening: part-time work is no novelty, nor is it a Moroccan speciality, but it has become more and more typical of the labour situation in Morocco in the last 15 years or so.

Recent studies have shown that secondary activities, which in numerous cases have become the principal activity, are mainly in the services, transport, urban construction sites, and government work camps. Secondary productive industries and handicrafts are in a bad way in rural areas, except where the products are intended for the tourist market.

One solution would be to consider "proto-industrialization" by encouraging workers from areas with insufficient available land to move to the highly productive agricultural areas and work in the processing sector. The range of possible activities would include: processing dairy produce, wool, skins, horns, honey and wax, pottery and ceramics, stonework, oil; drying (dates, apricots, pulses), preserving (meat, jam), fibre (plaits, weaving, hide tanning), energy products (biogas, wind and solar energy), leisure industries and tourism.

In order to develop and expand these possibilities, serious investment programmes need to be devised and adapted to each single case, and these must consider continuous training for the labour force.

When modernization theories stumble on peasant realities

Economics of Agricultural Development in Tropical Africa, by Seth La Anyane. John Wiley, Chichester, 1985, 153 p., 14 pounds sterling.

Agricultural development in tropical Africa poses perhaps the most serious of the many problems that together form the permanent crisis of Third World development - most visible in the recent famines in Ethiopia and the Sudan. This book by Seth La-Anyane, former Dean of Agriculture at the University of Ghana, "concentrates on the contributions by the peasant small scale farmers to economic development and on the indigenous institutions that need to be recognized and strengthened in order to render more effective their role in agricultural economic development." This statement, in the author's preface, is quite promising.

The first chapter characterizes African agriculture with respect to its ecological pre-conditions and its present state of development and attempts to summarize the basic theoretical arguments about the role of agriculture in economic development. Regrettably, this summary excludes some of the most important lines of discussion, among others that on peasant societies, which seems to me of fundamental importance for understanding indigenous socio-economic institutions. Ignoring this discussion makes it difficult to understand basic differentiations between different types of peasant production. La-Anyane considers a "discrepancy between theory and practice" that theoreticians frequently claim that peasant farmers in tropical Africa react to increasing prices by working (and producing) less, while in reality in Ghana's cocoa industry there is a "positive response of peasant farmers to the attractive prices offered by the industry". The author obviously does not take into consideration that the cocoa farmer, with his income-maximizing orientation, has little to do with those peasant societies oriented toward the fulfillment of needs and therefore logically react to higher prices for their products with a reduction of their productive efforts. To call this response "perverse", as the author does in the final chapter, and the income-maximizing attitude "the normal economic way" corresponds to the "normal" bias of orthodox neoclassical economics.

The subsequent chapters of the book repeatedly remind the reader of the fact that its first draft had been completed by 1973 - in most aspects, just the well-known prescriptions of modernization theory are repeated. US agriculture is seen as the positive example, with a "meteoric lift in farm productivity... due to a package of improved technologies, larger farm enterprise units, and heavy capital investment". Agricultural development is thus defined as "the transformation of peasant agriculture into modem commercial farming of larger farms". This, of course, implies the abolition of communal ownership of land, for only individual land titles offer a sufficient incentive for improvement and farms large enough that the small cultivator is able to apply the same technologies as large farms, i.e., "to purchase and use fertilizers and spray chemicals necessary to maintain the highest economic yield over the life of the plant, to utilize methods of processing and extraction of produce which will guarantee the economic return to the producer".

Agent of modernization. The role of the state in this context is that of an efficient agent of modernization. Well functioning state credit and agricultural extension services are to be supplemented by the expansion of modern infrastructure. Building of roads, improvement of education, availability of electricity everywhere in the countryside, extended irrigation systems should provide the conditions for a rapid rise in agricultural productivity. The author's rather positive assessments of the Tanzanian Ujamaa village programme and the Ethiopian land reform after the 1975 revolution fit into this modernization orientation, though today one would expect him to deal with the widespread criticism on Tanzanian development and to refer to the Ethiopian famine from which the country has already been suffering in the first half of 1984.

Had it been published in 1973, the book would still have fit into the mainstream of literature on agricultural development. Since that time, however, there have appeared abundant criticisms of strategies of agricultural modernization as they are proposed here - from conservative points of view as well as from rather left-wing positions. Though the author takes up problems of low agricultural prices ("urban bias", etc.) and of state intervention (corruption and the illegitimate enrichment of politicians and bureaucrats, etc.), there is no systematic discussion of neo-liberal criticisms of state-sponsored modernization politics. Furthermore, the great number of critical studies on the ecological and social effects of agrarian modernisation - particularly the so-called green revolution - appear not to exist for La-Anyane. He makes no attempt to evaluate the ecological impact of fertilizer and pesticide use (such as the contamination of rivers and lakes or the growing resistance of insects against chemicals), nor does he discuss the value of species variety in traditional agriculture, the problems of deforestation (he sees tropical Africa as a land-surplus region) or the often negative experiences with irrigation schemes. There is no discussion of the increase in social inequality fostered by capital-intensive agrarian modernization. For La-Anyane, it appears to be self-evident that - as in Europe or the US - industrial development will create sufficient employment for those who will no longer be able to live from agriculture. Nothing is said about the negative experiences of Latin American countries with respect to job creation in industry. Significantly, environmental problems are referred to only in a short paragraph under the heading of "external barriers to development" ("external" in the sense of "from outside the national society"!).

The author's statement that "traditionalist action tends to be reactionary and thereby acts to retard progress" is consistent with this kind of philosophy. But where, then, remains the recognition and strengthening of indigenous institutions demanded in the preface?

Certainly, the book makes some interesting points that deserve a more prominent place: the reference to the absence of any significant intra-African trade, the problems of foreign exchange (particularly of the US dollar as general means of payment), the proposition to diversify export production (with new products like ginger, avocados, mangoes, eggplant), the critique of unrealistic planning and administration in many African states. These points, however, disappear behind the stereotypes of modernization theory.

Wolfgang Hein

The theory and practice of food policy

Food Policy: Frameworks for Analysis and Action, edited by Charles K. Mann and Barbara Huddleston. Indiana University Press, Bloomington, 1986, 243 p.

"Throughout the world there is a broad commitment to reducing hunger and malnutrition." With that striking sentence Charles Mann, former Associate Director of Agricultural and Social Sciences of the Rockefeller Foundation, opens a volume which seeks to develop an integrated framework for food policy. The various contributions, first aired at a workshop in Bellagio, Italy, in 1982, develop a dialogue between food policy analysts and practitioners from the advanced industrial societies and the Third World. They share a broad consensus that national food policy is weakened by the lack of an interdisciplinary approach and a failure to link micro and macro-level decision making.

In their introduction, Mann and Barbara Huddleston (Chief of the Food Security and Information Service in FAO's Economic and Social Policy Department) pose the major issues to be analyzed by the various contributors. Then Peter Timmer provides a general framework for food policy analysis centred on a distinction between a micro perspective, examining the behaviour of food producers and consumers, and a macro perspective, which focuses on the influence of monetary and fiscal policies on their behaviour. Several contributions address the nutrition aspects of food policy and the role of crops and livestock in relation to food systems. Joan Mencher's discussion of the role of women in agriculture is particularly interesting. She argues that "the question of women in agriculture is not a separate issue but is integral to all discussions relating to food policy." Policy prescriptions that do not recognize women's contribution to food systems will not be able to achieve an equitable supply of food for Third World people.

The debate on food consumption and nutritional status questions the conclusion of earlier surveys that low incomes lead to low levels of intake, which lead in turn to malnutrition. Lincoln Chen finds that in Bangladesh at least, the relationship between socio-economic factors and child caloric intake is weak. He suggests that community-wide behavioural or agro-ecologic variables may be more important factors than household wealth, income, or food availability. Hasan Gena writing of Turkey, argues that "there is also no apparent relationship between low incomes and quality of diet as measured by the minimum levels of animal protein contained in the diet." This lack of a causal relation between income and nutritional status may not hold in less developed countries. These findings are, of course, controversial and further research would be necessary before we could assert that mothers' education was more significant than household income in determining nutritional status.

Practical approaches. The second part of the book is devoted to practical approaches to developing national food-policy capabilities. There are contributions on the role of external agencies, the role of the university, and the training needs of food policy managers. A particularly topical element is David Dapice's "preliminary observations" on the use of microcomputers in developing countries. He warns against impressive tables based on weak data which mean nothing more than "garbage in, garbage out" for the computer. The rapid spread of microcomputers for practical problem-solving in the Third World is foreseen. Charles Mann adds "a tale of two computers" used as part of a food policy field project in Tunisia. The computer system with sophisticated outside programmers was less successful than the one which developed local expertise. Mann concludes that "the combination of user-friendliness and power of the microcomputer represents a qualitative difference from earlier computers." Productivity increased dramatically when the more routine tasks of the food-policy analyst could be carried out by a computer. In this context it is not surprising that some Third World countries, such as Brazil, are striving to create a strong national computer industry.

For the food-policy analyst, this volume contains many insights and a summary of the current state of affairs in this area. For the non-specialist, however, it is disappointing. The papers bear all the hallmarks of conference proceedings. No doubt there was much fruitful discussion and debate in Bellagio in 1982 after the papers were read, but there is no sense of this in the book.

Some papers seem curiously dated. Thus Edward Schuh (Director, Agriculture and Rural Development at the World Bank) notes that "central to the North-South debate is a belief on the part of the South that they have been exploited by international exchange," but adds, "Despite the persistence and vehemence of this allegation, there has been little empirical research on the issues." It is hard to believe that two decades of research on unequal exchange has failed to percolate through to the World Bank. Another writer refers to the problem of "political pathology" in the "rapidly developing economies of Latin America". One presumes he is referring to authoritarian military regimes but this is not at all clear. At any rate, it reflects a general political natunning through the book. Indeed, Mann's remark in the preface that "technical people in general have no appreciation of politics" seems to be true of this book as well.

A number of chapters do address the political dimension of food policy capabilities but it is within a rather restricted understanding of what politics means. Maurice Williams, for example, argues that "the elements of political action for reform are: conviction of the need for change, knowledge of how to respond to the problem which necessitates change, diffusion of that knowledge to policy makers and to the people who will be affected by the reform, and its sustainability through training and public education." There is nothing wrong with this statement except its narrow institutional view of politics. There is no sense of conflict or mobilization in this enlightened vision of social engineering. Later in the chapter Williams makes the plea that "people who are living on the margin of subsistence need help now". True, but there is more going on in Third World politics than the work of First World aid agencies.

Problems of food security can only be understood in the context of the whole social, economic, and political system. We need to understand how the international political economy affects the food system of Third World nation-states. Food policy analysis cannot develop in a political vacuum because food flows in a particular country are affected by decisions elsewhere. In short, we cannot divorce our discussion of food policy from the broader question of what causes food shortages in the Third World.

Ronaldo Munck