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A potentially important econometric test of profit maximization by producers is a test on the implied relationships among coefficients of different factor demand equations; i.e., a test for symmetry between factor demand equations. In this paper such a test procedure is developed and implemented for two lower income economies and implications are drawn for future work. In particular, an economy is disaggregated into the three sectors which are believed to have considerably different production functions--the primary or agricultural sector, the secondary or manufacturing sector, and the tertiary or service sector. Cobb-Douglas production functions for these sectors are then specified and the utilization of factor inputs is determined by static profit maximization. Finally, the resulting equations are estimated with data from Colombia and pre-war Japan in order to ascertain whether such a model is consistent with the empirical results.
The conclusion from the tests is that the model is completely refuted by our data. The result implies that at least one of the following is the source of the rejection: (1) Firms are not profit maximizing in less developed countries, at least in the static sense; (2) the functional forms for the production functions or product demand functions are inappropriate specifications; (3) the measurement of the cost of capital by its supply price is fallacious; (4) the basic data are subject to large and important errors; or (5) the data are on too high a level of aggregation. [ABSTRACT FROM AUTHOR]

This article presents abstracts of articles on economics published in the January-March 1965 issue of The Indian Economic Journal. In the paper An Activity Analysis Approach to Measure Productive Efficiency in Agriculture: A Case Study of Ahmednagar and Nasik Districts, by K. R. Bharadwaj and R. Bharadwaj, the authors have made an attempt to employ the activity analysis technique to measure productive efficiency of agriculture in India. This technique enables the authors to handle more efficiently multiple inputs without varying the usual index number problems. The approach requires only the more general convexity condition on the production set and the non-positivity of the slope of the isoquant. In the first two sections the methodological issues and the empirical procedure have been discussed. In the final section the results of an empirical enquiry using the farm management data pertaining to the Ahmednagar and Nasik districts have been presented. Furthermore, the article Central Banking in Developing Countries: Some Lessons of Australian Experience, by H. W. Arndt considers each of the major central banking functions such as foreign exchange policy, control of money supply, selective control of credit and development of capital market in order to show how they have come to be exercised by Australia's Central Bank, what problems have arisen and what lessons the Australian experience may hold for central banking in the developing countries. Moreover, the purpose of the paper Production Function for Indian Steel Industry, by A. K. Sarkar is to study the functional relationship of output in the Indian steel industry with that of different inputs. The modified Cobb-Douglas type regression equation has been fitted to the time-series data by the method of least squares in the multiple regression equation with a linear relationship.

Responds to the comment made by economist Paul A. David on the author's paper on agricultural labor productivity in rural England from 1850 to 1914. Attempt of the author to demonstrate the existence of regional variations in farm labour productivity; Factors influencing the pattern of regional differences in productivity; Comment of the author on the analytical style of David.

The article discusses issues and topics related to plant diseases. The loss of agricultural products from different pests and diseases varies greatly from year to year and place, but their total over the whole world is enormous. This paper presents several examples of pests and diseases which have led to great famines, or which have made it impossible to grow a previously flourishing plant. These events are all thought to have followed the introduction of a pathogen into new territory, and they might be taken as evidence of what might be achieved deliberately during a war.

The purpose of this paper is to show that in spite of the favorable factors, the Schultz hypothesis remains plausible for a newly settled region; that is, no significant growth of agricultural productivity may be expected for the region in the long run if production is based on traditional factors. To support the argument an attempt is made to derive an agricultural productivity index through constructing aggregate output and input indices for the northeastern region of China—Manchuria. The region has an area approximately equal to that of the states of Illinois, Indiana, Iowa, Michigan, and Minnesota combined. After it was open to immigration in the late nineteenth century, agricultural population rose from half a million in the 1880s to 20 million in the mid-1920s and 34 million in 1957. The increase was largely derived from the expansion of traditional inputs. Manchuria, therefore, provided a typical case of newly settled traditional agriculture. Section II outlines the approach employed to derive the productivity index for Manchurian agriculture. Section III presents the principal findings. An interpretation of these findings is contained in section IV. Section V is a short summary of conclusions. [ABSTRACT FROM AUTHOR]

The article explains how trade barriers between U.S. states can be a disturbance to domestic agricultural trade. The author points out the most important considerations for policy made by the Department of Agriculture. They include that farmers be able to live and work in good conditions with a reasonable income, consumers be able to purchase needed goods at low prices, that foods be healthy and clean, and that future growth be protected. The conflict between increasing the inspections, standards and regulation of food supplies while supporting farmers' profitability is expressed. Agricultural challenges may be solved by efficient production, processing, transportation and marketing.

The author identifies three classes of problems amongst many, first, a decline in the income of some farmers from previously satisfactory levels associated with a general economic recession, to be corrected by general economic recovery and temporary support; second, low earnings of farmers in a high employment economy resulting from overproduction of a particular commodity, to be corrected by reallocation of resources, with temporary support and aid in adjusting; third, low earnings of inefficient, ill-equipped farmers, to be corrected by raising their productivity in agriculture, or by raising their potential productivity in industry, or, hopelessly, by direct relief. The author implies that because the measurement of parity involves the use of good and desirable indexes this somehow makes the present definition of parity good and desirable. The significance of parity as it appears in the various agricultural acts of the past quarter century does not lie only in how it is defined. What is more important is that parity, so defined, is adopted as a goal of agricultural programs. In an economy of competitive private enterprise, prices are commonly held to have a function. Changes in prices likewise have an important function in a dynamic economy. But parity prices, when measured in dollars of constant purchasing power, are essentially fixed, unchanging prices.

With the establishment of a permanent system of production credits in 1933, the American farmer was provided with a publicly sponsored institution to meet each of his credit needs. Although the legislation establishing the earlier agencies was controversial and attracted general notice, that setting up the production credit system received comparatively little attention. This paper describes briefly the structure of the system and outlines the scale of loaning operations to date. At the end of 1934 it seems probable that the system had approximately one-tenth as many loans outstanding for agricultural purposes as did the commercial banks. The competitive position of the system, particularly in relation to country banks, is discussed in some detail. Attention is also given to the perplexing problem which the system faces in its efforts to maintain a uniform loan rate for all parts of the country. [ABSTRACT FROM AUTHOR]

The subject of production incentives has received much attention from social scientists concerned with economic development. After some early debate, it has become generally recognized that some peasant farmers in almost all countries do respond to economic incentives. However, a number of constraints affect incentives to adopt new or increased quantities of productive inputs. The introduction of new seed varieties, along with the increased availability of fertilizers and irrigation tube wells, has greatly enhanced the production potential of Asian agriculture. Adoption of these inputs has been quite rapid in some parts of Asia by some types of cultivators. The pace of adoption has been uneven, however, implying a possible weakness of incentives for some cultivators to invest in the new input "packages." Little empirical work has been done in an attempt to assess the rates of return and constraints affecting adoption of the new, fertilizer-seed-water input packages. This study is an attempt to begin to fill that void by means of a case study of one important agricultural area in Asia. This paper combines partial budgeting and discounting procedures to compute present values and internal rates of return in an attempt to measure incentives to invest in new packages of agricultural inputs in north India. The packages include high-yielding seeds, fertilizer, irrigation inputs, and minor inputs. Returns to a number of input packages were found to be generally attractive, even when output prices are as much as 25 percent below six-year (1962-67) market averages. Small size of land holdings, extensive land fragmentation, and high down-payment requirements for loans were found to be serious hindrances to farmer investments in tube wells. For farmers with larger or less fragmented holdings, inclusion of a tube well in the investment package appears to be highly attractive. [ABSTRACT FROM AUTHOR]

The objectives of this paper have been developed on the assumption that the functional effectiveness of a state varies spatially within its own territorial limits. The case of West Pakistan has been considered. An attempt has been made to distinguish the areas of varying degree of functional effectiveness in West Pakistan and thus to provide a framework for a more realistic understanding of the functional relationship of a state with the various parts of its territory. The concept implies that the area is culturally homogeneous, and is used here to measure the administrative- economic quality of a given area. The basic criteria employed are a) the density of population and b) density of transportation lines. The ecumene (the effective state area) has been delimited as that part of the total area which provides economic support to most of its inhabitants. The remaining portion of the state has been termed extra-ecumerical." The ecumene has been classified into minimally effective area, intensively effective area, is more, and the core area. The intensively effective area is more densely populated ( 100 persons to the square mile) and has a closer mesh of transportation lines (each part lies within five miles of a motorable road or railroad station. Additional measures of agricultural productivity, intensity of market potential, magnitude of manufacturing, and the degree of urbanization have been used to locate the core area which is depicted as the Lahore-Lyallpur axis Karachi, because of its nonagricultural base, falls short of the measures of a core area and has been termed the "sub-core." Thus it has been found that there are observable disparities of functional effectiveness in West Pakistan.

The article comments on a paper by economist E.H. Hunt related to the agricultural labor productivity in rural England from 1850 to 1914. Hunt has advanced the intriguing idea that well into the present century large areas of rural England continued to manifest many of the features typical of economically underdeveloped agrarian societies. In the paper, Hunt begins by suggesting that the appearance during the nineteenth century of a persisting pattern of inter-regional agricultural wage-rate differences within England did not lead to corresponding regional variations in unit farm labour costs. While wage rates in the south-eastern and East Anglian counties remained below those prevailing in the northerly districts, this is held to have conveyed no advantage to the conduct of agriculture in the cheap labour areas, because lower wages were merely the counterpart of lower output per worker there. Lacking comprehensive statistical measures of regional average labour productivity in agriculture to support this contention, Hunt found it necessary to fall back upon such qualitative indications as are supplied in the reports of various Royal Commissions dealing with nineteenth-century agrarian problems.

The article discusses the effect of innovations on patterns of rural development and in particular on output per acre and on labor input per acre. Data from a sample of 240 smallholdings in five different areas of Malawi are examined. The article indicates that the existence of differing patterns of rural development in these areas. It discusses the implications for rural development policy. The article shows a bias among the smallholders in favor of innovations and a skepticism about the viability of yield increasing innovations.

This paper examines the agricultural tenure system of East Pakistan and how it has contributed to or impeded the growth of productivity in that province. Improvements in the system may raise productivity if the tenure system is the only impediment withholding growth of output in agriculture. At the same time it has to be realized that the tenure system is merely a part of the multifarious forces impeding or promoting growth in output. The economy of East Pakistan is based primarily on agriculture. Ninety per cent of the people live in rural areas and earn their living directly or indirectly from agriculture. The population is increasing at the rate of 3% per annum and the population density of 1000 people per square mile is one of the highest in the world. The per capita land allocation is half an acre. The level of education is very low with 78.5 per cent of the people illiterate. Jute and tea grown in East Pakistan account for the bulk of Pakistan's export earnings. The fundamental problem, therefore, is one of finding ways and means by which the peasants receive the incentive to produce surplus of food and fibers over and above their own consumption.

Presents the author's response to the paper "Income, Productivity and Factor Allocation in Thailand: A Comment," by Paul B. Trescott that was published in vol. 35 of the Journal "Economica." Comparison between agricultural and industrial productivity in Thailand; Influence of labor force on productivity; Differences between urban and rural cost-of-living; Welfare effects of labor movements in sectors.

The article author replies to comments made by economist James Hanson on his (author's) paper on employment and rural wages in Egypt. Hanson has reinterpreted the data on employment and rural wages in Egypt which were collected by the rural employment survey, Employment Problems in Rural Areas (EPRA), of the U.N. International Labor Organization and the Institute of National Planning in Cairo, Egypt. Moreover, he has presented some qualifications to the author's interpretations which are justified, but his basic alternative interpretation of the seasonal fluctuations of daily wages does not hold water. This alternative interpretation was carefully examined and rather effectively rejected by the EPRA report itself on the basis of information which Hanson has overlooked. Hanson's efforts to prove that men are to some extent unemployed at certain times of the year and that outside work is not always available only repeat what the author thought was obvious from his article. According to the author, the major issue in the rural surplus labor problem is: does there exist a surplus of labor in the sense that marginal productivity of labor at all times of the year is zero so that labor could be withdrawn permanently from agriculture without detrimental effects on output; or, is the surplus of a purely seasonal nature and if so, how large is the seasonal surplus and how long a time of the year does it exist.

This article identifies some of the relevant economic factors in terms of a simple theoretical framework in the U.S. The actual significance of the framework is checked in an empirical analysis of interregional cross-section data pertaining to Indian agriculture. The basic theoretical model and the properties of equilibrium were analyzed through comparative static results with respect to variations in the wage rate. The authors concluded that the empirical results confirmed with some of the hypotheses in the theoretical sections.

This article presents information on several articles on several articles on economics, that appeared in various journals. The article "Gunnar Myrdal and His Methodic Ideas on International Economy," appeared in the "Journal of Economic Behavior," in April 1962. "The Logical Foundation of Economic Theory," by S.Y. Wu appeared in May 1963 issue of the "Asian Economic Review." M. Bowley's "Some Seventeenth Century Contributions to the Theory of Value," appeared in the May 1963 issue of the periodical "Economica." Other articles mentioned include G.C. Abbott's "The Future of Economic Co-operation in the West Indies in the Light of the Break-Up of the Federation," "Growth Targets for Northern Ireland," by W. Black, "The Estates and Economic Development in Northeast Sumatra," by D.J. Blake, "Agricultural Production and the Rural Standard of Living in the U.S.S.R since 1917," by V.R. Boev, "Economic Growth in a Semi-Nomadic Herding Community," by A. Bottomley and "Balance of Payments of the U.S.S.R., 1959-60," by M. Caiola.

This article reports deals with the structure and development of the socialist agriculture in Czechoslovakia. There are two basic forms of ownership — 346 state farms and 6,463 unified agricultural co-operatives. The lower limit of the optimum size for large scale forming is 500 ha AL. The merging process of small unified agricultural co-operatives creates more favourable conditions for the better utilization of means of production. For the determination of the optimum size of farms, the essential considerations are — the principle of economic efficiency and economic goals, to obtain the highest production per hectare of land, with a minimum of labour and material costs and the principle of regional-zonal-adaptation of agricultural production and terrain conditions. Optimum farm size varies according to different production regions. In the second part of the article the forms and methods of management of unified agricultural co-operatives, basic ways of remunerating and social security of co-operative farms, are analysed.

This article reports that recent literature considers prevailing land tenure patterns a barrier to agricultural development in many developing countries and much discussion has focused on land reform as a means of removing this barrier. Most land reform programs emphasize the need to shift to an owner-operator based agriculture, following the hypothesis that prevailing tenure patterns do not lend themselves to providing the incentives necessary for increased production. Since most literature on the effect of tenure on production concentrates on the tenants and owner-operator groups, a study was undertaken at the College of Agriculture, University of the Philippines, to analyse the role of the Filipino landlord, to develop a typology of each type with its functions and factors involving operational decisions. The results indicate differences in whether annual crops or perennial crops are grown. Class levels tend to follow absentee vs. resident landlord groups, with more of the former in the upper class and the smallest number in the lower class. A pattern of landlord-tenant relationships emerged that was either paternal or non-paternal and traditional or modem in the landlord's attitude toward the development of the enterprise.

This article discusses employment implications of India's industrialization. This article presents estimates of the sectoral direct and indirect employment potential of the 77 sectors of the input-output table. The static input output system is used to arrive at these estimates. No attempt has been made to discuss the problem of choice of techniques; however, the problem of product or output mix has been taken into consideration. The sectors are agricultural and create substantial employment per unit of final demand. Increase in the consumption of the products may not be acceptable due to its impact on capital accumulation. The conflict between present and future consumption and its impact on employment is clearly demonstrated. It should also be mentioned here that it may not be correct to hold the view that agricultural sectors are incapable of generating substantial employment. Among these nine sectors there are two key sectors, viz, metal products and petroleum products. Both these sectors are nonagricultural. The other seven sectors are characterized by poor forward linkages but strong backward linkages.

This paper extends the effective-protection concept to include tariff and nontariff trade distortions and also the entire structure of domestic farm policy measures. Nominal and effective rates of protection are then presented for disaggregated agricultural production and processing industries for the years 1958, 1963, and 1968. The estimates reveal that nontariff measures give rise to extremely high effective protection rates in certain agricultural sectors; in others, tariff and nontariff measures affecting intermediate inputs have important taxation effects. The analysis also indicates that agricultural policy changes have substantially altered the rates of protection accorded certain agricultural sectors. [ABSTRACT FROM AUTHOR]

Low rates of return (defined as earnings below opportunity costs) on farm resources have long been considered a major farm problem and one justification for government commodity programs. This paper first analyzes influences (such as economic growth, inflation, and technology) that generate disequilibrium and low returns. But the major issue analyzed is why farm disequilibrium persists after an extended period of full national employment, a strong national economy, an expansion of the aggregate farm plant, and a slow growth of farm productivity in the 1960's. The fixed resource theory, the increasing returns to size theory, and the imperfect competition theory are examined to explain persistence and permanency of disequilibrium and low returns. The fixed resource theory explains low returns as a labor fixity problem and suggests that the problem is either nonexistent or temporary. The increasing returns to size theory points to an extended duration for the low returns problem as long as the large majority of farms continue to operate on uneconomic size units. Finally, the imperfect competition theory depicts low returns as virtually permanent, given the economic structures of the farm and nonfarm sectors. [ABSTRACT FROM AUTHOR]

Examines the role of agricultural products and factor markets in agricultural development in Southeast Asia. Problems of product market structure and performance; Stages of development surplus agricultural production; Aspects of marketing associated with international trade; Alternative ways of organizing the logistical support for input markets.

Two main sets of spatial cost variations influence the geography of commercial agricultural production. These are marketing costs and production costs. Marketing costs vary spatially mainly through the effects of varying distance to the market, even with the much flaunted improved and more efficient means of transport. Production costs vary with prices of factors of production, and with amounts of factors necessary to produce a given quantity of output. The determination of factor price is, in reality, the extremely complex result of the interaction of a host of forces influencing factor demand and factor supply.

Comments on several articles about world agricultural production and U.S. farm and food policies. Influence of weather on farm productivity; Factors associated with uncertainties; Effect of fertilizer shortages on the output of grains; Issues concerning U.S. farm policies.

The article discusses efforts to develop the Italian economy, with an emphasis on the food and agricultural sector, as these make up forty percent of the work force and account for half of the disposable income expenditures. The article notes that the internal industrial and nonagricultural industries within these economies can only grow if the incomes of food producers and handlers increase. This necessitates efficiency within the food production and marketing industries. The article outlines problems and proposes policy, including directing public investment to those areas of food production with the highest unemployment, thereby increasing production. Further, the author suggests the abolition of market restrictions and the passing of legislation outlawing discrimination and monopolies.

The author reflects on the impact of Cultural Revolution on the economy of China. He assessed that the Revolution could be considered as a temporary interruption to the development programs of the country. High labor-to-land ratio led to the adoption of labor-intensive production methods causing high yields per unit of land but low yields per man. He argued that it disrupted the transportation of inputs and controlled the agricultural sector though no intervention has been done within the sector.