Will Developing Country Nutrition Improve with Income? A Case Study for Rural South India

Income Effects on Undernutrition

A salient theme in D. Gale Johnson’s work is the importance of agricultural development for general prosperity and for economic diversification (e.g., Johnson 2000). Johnson has also noted that most of the world’s poor are engaged in farming, so that a key focus of development policy is to raise the incomes of farmers. From a global perspective, increasing the productivity of agriculture, given the fixity of land, is necessary for both poverty reduction and the development of the nonagricultural sector. At the level of the world, agricultural productivity gains, poverty reduction, and the growth of the nonfarm sector are complements. However, the question remains whether these observations imply that every poor country should focus its public resources on agricultural development in order to raise the incomes of people now engaged in farming and whether such a policy is necessary for obtaining economic diversity. In this article, we use the experience of India over the past 30 years to address the issue of whether agricultural technical change actually leads to economic diversification and income growth within the rural sector in the context of an open-economy country in which there are cross-area trade and capital flows. We focus in particular on the rural sector because this is the sector in which linkages between agricultural and nonagricultural sectors are thought to be the strongest. We exploit the fact that India has maintained a policy of openness with respect to agricultural technology over this period, permitting and actively supporting agricultural development, and has moved to a reformed regime in which goods are traded and capital is more mobile in the 1990s. Evidence on the relationship between agricultural growth and nonfarm

E CONOMISTS have expended enormous effort examining the rationale for various contractual arrangements in agriculture, particularly sharecropping. While economists have made considerable theoretical efforts to understand agricultural contracts, few empirical studies have been undertaken. The dearth of empirical analyses of agricultural contracts is particularly striking for modern Western agriculture.' This is an important omission, not only because the existing empirical work tends to focus on the question of efficiency, but also because the theoretical models tend to examine contracts that bear little resemblance to those found in the United States today.

This paper reviews various studies which have provided a description and possible explanation to patterns of innovation adoption in the agricultural sector. The survey points out that the tendency of many studies to consider innovation adoption in dichotomous terms (adoption/nonadoption) may not be appropriate in many cases where the actual decisions are defined over a more continuous range. More attention needs to be given to the socio-cultural and institutional environment in area studies so that their interrelation with economic factors affecting adoption can be inferred. The presence of several interrelated innovations is another aspect that needs to be considered more carefully in future research, since a number of simultaneous decisions may be involved. Furthermore, the possibility of regular sequential patterns in adopting components of a new technological package should be specifically addressed in future studies. Finally, the impact of differential adoption rates on land holding distribution merits attention in future research.

The purpose of this paper is to explore the hypothesis that a common basis for rapid growth in agricultural output and productivity lies in a remarkable adaptation of agricultural technology to the sharply contrasting factor proportions in the two countries. It is hypothesized that an important aspect of this adaptation was the ability to generate a continuous sequence of induced innovations in agricultural technology biased towards saving the limiting factors. In Japan these innovations were primarily biological and chemical. In the United States they were primarily mechanical.

Nonfarm Activities and Household Production Choices in Smallholder Agriculture in Vietnam

This article focuses on the link between agricultural productivity and health and nutrition status of peasants in Ethiopia. The data come from the first round of the Ethiopian Rural Household Survey conducted in 1994. The sites selected were those in which farmers practice ox-plow cultivation of cereals. A stochastic frontier approach was adopted for the agricultural production. The findings of the study show that the distance to the source of water as well as nutrition and morbidity status affect agricultural productivity. The market wage rate is also very responsive to the weight-for-height as well as the body-mass index and height. In a context where separability between consumption and production decisions of the household is rejected elasticities of labor productivity with respect to nutritional status are noted to be strong and similar in technology estimates and wage equations. Moreover returns to investment in nutrition are clearly high in the Ethiopian context. Overall the results indicate substantial loss in output due to technical inefficiency even after accounting for the health and nutrition of workers.

Internal and external migration can have a profound impact on rural asset accumulation in most Third World countries. In many African, Asian, and Latin American countries the bulk of the labor force still lives in the countryside. In these countries the large difference between expected rural and urban or foreign incomes, coupled with the risk-reducing functions of migration, causes workers to migrate, either to urban centers or abroad. The remittances—defined as the money or goods sent home by migrant workers—can have a large effect on the accumulation of assets in these rural areas. For example, an inflow of external remittances to rural households at the upper end of the income distribution could increase land accumulation by the rich. In general terms the effect of remittances on asset accumulation in a rural Third World economy depends on answers to three questions: (a) Who migrates? (b) How much net income do migrants remit? and (c) What are the marginal effects of these remittances on household consumption and investment? Because of data limitations, in this article I propose to examine only the first and the third questions; other researchers have addressed the second issue. In the past surprisingly little attention has been focused on the question of the marginal effects of remittances on household consumption and investment in the rural Third World. This inattention has been due to three considerable methodological problems. The first is fungibility; because remittances are like any other form of cash income, it is difficult to associate this income source with any particular changes in household expenditure behavior. The second problem relates to the multiple-round effects of remittances on the local economy. For example, an inflow of remittances into a rural area may lead to a surge in expenditures in housing, which may, in turn, create new income and employment opportunities for the poor and unskilled. Unfortunately, however, few studies have

Shenggen FanInternational Food Policy Research Institute and Institute of AgriculturalEconomics of the Chinese Academy of Agricultural SciencesLinxiu ZhangCenter for Chinese Agricultural Policy of the Chinese Academy of SciencesXiaobo ZhangInternational Food Policy Research InstituteI. IntroductionChina is one of the few countries in the developing world that has madeprogress in reducing its total number of poor over the past 25 years.

Development strategies increasingly emphasize agricultural development, employment, and equity; it is therefore important to examine the role of education in light of these new emphases. The purpose of this paper is to synthesize the conclusions of a number of studies of the effect of a farmer's educational level and exposure to extension services on his productivity. Eighteen studies conducted in low-income countries provided 37 sets of farm data that allow a statistical estimation of the effect of education. The overall conclusion of this paper is that farm productivity increases as a result of a farmer's completing at least 4 additional years of elementary education rather than none. Also, the effects of education were much more likely to be positive in modernizing agricultural environments than in traditional ones.

China is undergoing a marked transition in its diet and nutritional status patterns. This study determines the structural change in the impact of income on food consumption in China during 1989-93. Utilizing data from a longitudinal study of 3800 households in China evidence points to a shift in the relationship between income dietary structure and total nutrient intake at the macrolevel. Overall it is noted that the increase in income over time in the country coincided with a shift in the demand for inferior and normal food groups. In addition there was a pronounced increase in the income elasticity for more luxury foods during the specified period while less superior goods became more inferior over this 4-year span. Such an increase in income elasticities for total energy and for energy from fat suggest a worsening of the composition of the diet in ways that are linked to obesity and obesity-related diseases as incomes continue to rise. In view of this several implications for the formulation of future nutrition policies in China are cited.

The emergence and eventual prevalence of the household responsibility system, which replaces the production team system as the unit of production and income distribution, has brought about dramatic changes in China's rural areas since 1979. This institutional change has resulted in remarkable growth in agricultural productivity.' However, in the literature on collective farms, a theory that is capable of explaining the causes and effects of this change is yet to be developed. The formal theory about collective economies developed so far by Ward, Domar, Sen, Oi and Clayton, Bradley, Maurice and Ferguson, Cameron, Bonin, Chinn, Israelsen, Putterman, and others suggests that the allocation of resources in a collective farm is efficient at least in

The objective of this paper is to understand the effects of China’s migration on source communities and to discuss their policy implications. We draw from New Economics of Labor Migration (NELM) theory to understand how migration and migrant remittances can relax or tighten market constraints in China’s rural economy. Using simultaneous-equation econometric techniques and household survey data from China, we estimate net, sectorspecific effects of migration on rural household income, focusing on farm production and self-employment. Our econometric findings indicate that the loss of labor to migration has a negative effect on household cropping income in source areas. However, we provide evidence that remittances sent home by migrants positively compensate for this lost-labor effect, contributing to household incomes directly and indirectly by stimulating crop and possibly self-employment production. This finding offers evidence in support of the NELM hypothesis that remittances loosen constraints on production in the imperfect-market environments characterizing rural areas in less developed countries. Taking into account both the multiple effects of migration and the change in household size, participating in migration increases household per-capita income between 14 and 30 percent. Migration and Incomes in Source Communities: A New Economics of Migration Perspective from China China is experiencing the largest peacetime flow of labor out of agriculture ever witnessed in world history (Solinger, 1999; Rozelle et al., 1999). Despite the rapid expansion of labor migration, China’s work force is still disproportionately employed in agriculture compared to other countries at similar levels of per-capita GDP (Taylor and Martin, 2001). Hence, as China’s economy continues to expand, the flow of labor to urban areas will continue and even accelerate (Johnson, 1999). The massive flow of labor away from farms has intensified research interest in China’s migration in recent years. However, as in the broader literature on migration in less developed countries, most recent studies on China’s migration have focused on determining the size and composition of the labor flow, macroeconomic implications of increased migration, and the effects of migration on urban areas (Zhao, 1999; Yang, 1999; 1997). Less emphasis has been placed on researching the effects of migration on the rural communities that migrants leave, even though evidence shows that the rural household in the village of origin is typically the central concern of all those involved in migration– both those who leave and those who stay behind (exceptions include Wang and Zuo, 1999; Bai, 2001). Moreover, the recent increase in migration has left policy makers particularly concerned regarding the way source communities will be affected (MOA, 1999). They are concerned that as labor flows away from farms, food production and crop income will decline, potentially threatening China’s food security. Furthermore, policy makers are concerned about the increasing gap between urban and rural household incomes. If migration exacerbates this gap, some fear that as it grows rural residents eventually will flood cities ill-equipped to absorb them. Others fear that discontent over a rising urban-rural income gap could even spill over into political unrest (Yang, 1999). Because China’s markets and other modern economic institutions are still relatively undeveloped, migration may play a pivotal role in creating or overcoming constraints caused by the lack of well-functioning markets and/or institutions (Knight and Song, 1999; Benjamin and Brandt, 2000). The “new economics of labor migration” (NELM) literature analyzes migration as a household decision rather than as an individual decision (Stark, 1991). The NELM hypothesizes that rural households facing imperfect market environments decide

In seeking to explain why poor countries tend to choose policies that tax agriculture relative to manufacturing while rich countries do the opposite, archetypical parameters for a poor agrarian economy and a rich industrial one are inserted in a computable general equilibrium model to simulate the medium-term effects on income distribution of policies that distort the relative prices of tradables. The model includes a non-tradables sector and intermediate inputs, realistic features that ensure even greater skewness in the distributional effects of protection than simpler models suggest. The magnitude of the results helps explain the tendency for countries to change gradually from taxing to subsidizing agriculture relative to manufacturing as their economies develop. The paper draws out the implications of the analysis for agricultural and trade policy reform in the 1990s.(This abstract was borrowed from another version of this item.)

Structural Adjustment and Economic Efficiency of Rice Farmers in Northern Ghana