The Green Revolution: Do Farm Subsidies have Farmers Ears?

By Joseph Bedell

Introduction
The Green Revolution, an event that significantly increased agricultural productivity, resulting from the introduction of pesticides improved management techniques and the use of high-yield grain varieties, had insurmountable implications for the 20th century and beyond.

The impact of the Green Revolution cannot be denied, but that is not to say that the Green Revolution has not faced any criticism. Critics range from environmentalists, who point to an increased use of water and the frequent use of pesticides on crops, to sociologists who claim that the impacts of the Green Revolution have not been as positive as purported. There are others who say that the Green Revolution has only put further stress on the ability of earth to sustain an increasing population. Those who continue to put forth this Malthusian idea believe that an increasing population will only harm the earth as resources cannot match the rate of growth that population experiences. Another major criticism of the Green Revolution argues that the Green Revolution has only widened the gap between rich and poor, and as a result of this widening gap, government policies have been implemented to try and give poor farmers a fair shot at competition with their large acre farm competitors.

The most common response of government in terms of policy to the Green Revolution is usually manifested in farm subsidies or price supports for crops. Farm subsidies, or agricultural subsidies, are a type of government subsidy paid to farmers or agricultural businesses to supplement their income and influence the cost and supply of crop commodities. Farm subsidies are widely used by governments throughout the world, including the United States, to encourage farmers to grow a greater amount of certain crops to reduce their overall price.

Over the past 30 years, the Green Revolution has had a significant impact on developing nations most specifically in Asia and Africa. As a result of Green Revolution practices, these developing nations have seen tremendous growth economically and agriculturally as well as increased population as more food allows a country to sustain a greater population. Although these countries have received the benefits of the Green Revolution, such as increased yields of crops, they have also seen a significant change in socioeconomic status of their citizens. This research paper will look at the effects that the Green Revolution has had on government and the different reactions in policy by government, to the agricultural practices advanced by the Green Revolution most specifically the role of farm subsidies.

Benefits of Farm Subsidies

There are conflicting opinions by researchers on the effect that farm subsidies have on the market in response to the Green Revolution. Some view farm subsidies as beneficial to the market as they allow small and large farms to fairly compete and also increase crop output and raise wages; but others contend that farm subsidies disrupt market incentives and incur financial costs. M. Ghaffar Chaudry, a researcher writing about Pakistan and the effects that the Green Revolution has had there, concludes that farm subsidies and price supports put in place by the Pakistani government have been an enormous help to the small farmers in rural Pakistan. According to Chaudry, this is because small farms cannot easily compete with their large-scale competitors who own thousands of acres of farmland, and therefore have developed more efficient and cost cutting business practices. Chaudry goes on to discuss how it is much more likely for small farms to take profits they have earned and reinvest them into their farms compared to large farms.  He goes on to discuss the importance of subsidies and support prices when he states, “Input subsidies and support prices have been of enormous help to small farmers, considering their weak financial position… lower managerial costs have enabled the small farms to enjoy higher productivity than large farm.” (Chaundry 195)

Another article written by M. Chaudry, Shamim A. Sahibzada and Abdul Salam, contends that farm subsidies are beneficial and encourage agricultural growth. The researchers discuss Pakistan and the impact that the removal of farm subsidies had on the agricultural market during the 1993 to 1994 period. They discuss the impact that the continued removal of farm subsidies would have on the current market when they write, “If this were to happen again (which is the most likely situation in view of political resistance to increases in food prices), a slow-down or negative trend in the growth of agricultural output might be expected.”(Chaudry, Shamim, Sahibzada715) They go on further to suggest that the stagnation that occurred in agriculture in that same 1993 to 1994 period was a result of the removal of these farm subsidies and price supports. If a connection does exist, and it is hard to determine even in the researchers view, between stagnation in growth and the absence of farm subsidies; it could have a significant impact on whether or not farm subsidies can play a part in future agricultural growth.

In another article M. Hossain, describes the economic impact of the Green Revolution as being beneficial to Bangladesh by showing the increase in wage rates in the labor market and concludes that the Green Revolution has greatly helped by improving income and technology in rural underdeveloped without much government intervention in the market. But Hossain does conclude that without government subsidies in the input market of fertilizer and irrigation, small farmers will pay greater costs than large farms. “The small farmers, however, pay higher prices for inputs, particularly for water, labor, and working capital loans.” (Hossain 88)  Hossain finds that small farms compared to large farms pay a relatively higher price when it comes to the inputs of labor, water and working capital. This would suggest that for small farms and large farms to fairly compete, subsidies would be needed to support the small farms. Economic researcher Harry M. Cleaver continues this point when he writes about the impact of Indian farm subsidies, “(Indian) Government subsidies have sharply reduced the relative cost of equipment to farmers. ”Labor shortages” in some Green Revolution areas are also accentuating this trend by raising cash wage rates.” (Cleaver 182) Cleaver’s concurrence with Hossain’s findings supports the belief that farm subsidies, especially to small farms, have favorable (non-concentrated) results in not only fair competition between farms, but also in raising wage rates for farm workers.

Financial Burden

Yet, Chaudry does admit that although input subsidies (government subsidies to fertilizer and irrigation for farmers) may be beneficial, they have a cost as well, “A continuation of input subsidies may be undesirable for it involves mounting financial burdens for the government. Rapidly increasing fertilizer consumption… causes of the rising subsidy bills.” (Chaudhry 196) By saying this, Chaudry is both acknowledging the enormous benefits that subsidies have for small farms, but at the same times recognizes the cost that these subsidies incur on a government budget. This brings up a very delicate, yet important topic concerning farm subsidies which asks the question, does the money spent on these farm subsidies benefit all of society and not just the farmers? And also, can a government continue farm subsidies if their cost continues to grow? The researches Rahul and Jacob Nellithanam write about this financial aspect of subsidies when they discuss the effect that subsidies have had on the Indian government’s budget, “These subsidies now constitute 164.02 per cent of the government’s planned annual expenditure on agriculture. This has obviously become unsustainable…” (Nellithanam 16) This financial aspect is important to address because it shows that even though farm subsidies can be beneficial to some farmers, these same subsidies may not be sensible if they continue to take up a large, and growing, percentage of a government’s budget.

Other researchers, Zingel and Pinckney, discuss the impact that the Green Revolution has had on Pakistan and other countries in South Asia. They conclude that farm subsidies do not pose a threat to more socialistic government action and centralized control of the agricultural market, “No serious steps were undertaken for a redistribution of wealth and income. Land reforms were not very efficient and consumer subsidies were paid more as a fringe benefit to selected group…” (Zingel Pinckney 722) This is important to address considering that as farm subsidies take up a greater part of a governments spending, fear could arise about how far a government may be able to interfere in the market. And still, this fear of market manipulation may be derived from the dissidents of farm subsidies.

The Downside to Farm Subsidies

There is some research that does not come to the same conclusion concerning the positive impact government policies have had on the market. In his paper entitled, Implications of the Green Revolution for Land Use Patterns and Relative Crop Profitability Under Domestic and International Prices, M. Afzal discusses the impact that the Green Revolution has had on Pakistan and the government response implementations of Green Revolution practices. Afzal states that his research in Pakistan looks at the efficient and inefficient uses of land since the introduction of Green Revolution practices. “In addition to government policies of input subsidies (water and fertilizers), price support (wheat and rice), protection (sugar-cane), and an overvalued exchange rate have affected the profitability of crops unevenly.” (Azfal 135) Afzal states that government interventions through farm subsidies and price supports have changed the incentive structure within the market so that farmers will use their land to grow wheat and rice because they are more profitable than other crops due to government policies within the market. He further illustrates this point when he writes, “The impact of the ‘Green Revolution’ and government policies have provided incentives to the farmers to change their land use patterns.” (Azfal 136) Azfal goes on to discuss the four main types of crops that are grown in the West Pakistan region, these being: corn, rice, wheat and sugarcane. He states that each of these specific crops is in direct competition with one another for the use of land acreage in the region. But policies put in place by the Pakistani government have drastically changed the incentive structure for certain crops and therefore manipulated the amount of land that would be used for one rather than the other. Azfal explicitly uses sugarcane as an example of this manipulation within the market when he states, “The Government of Pakistan declared that all the sugarcane cultivated within a radius of 10 miles of sugar mills must be purchased by the mills at specified prices.… acreage under sugarcane has been continuously falling for a few years, despite the fact that profitability from sugarcane production is the greatest in absolute terms.” (Azfal 139) What Afzal is stating, is that in a normal unregulated market (one without government interference) farmers would have an incentive to grow sugar cane because of the high demand for it, indicated in the high profitability of sugarcane, but rather than farmers growing sugarcane they are growing wheat and rice instead. The choice for farmers to grow wheat and rice more than any other crop comes from the price supports and subsidies put in place by the Pakistani government to increase the production of wheat and rice. Although Azfal does not directly state that Pakistani government subsidies have not hurt or helped those who they intend to help, he does show that these subsidies have had an implicit effect on the incentive structure in the agricultural market of Pakistan.

It is valid to say that wheat and rice have more widespread uses for society, when compared to sugarcane, and therefore this justifies the intervention into the market by government. Meera Nanda, while writing about the Green Revolution in the third world, addresses this issue when she states, “If businesses need inducement from governments (tax breaks, subsidies in the form of basic research and development), then the government should, in return, direct them to conform to certain socially acceptable norms…” (Nanda 23) She goes on to say that it may be in the best interest of society to allow such intervention due to a government’s ability to care about the effects that the Green Revolution has on an entire country, and the environmental aspects that a farmer may be able to protect, but a government could. This is an important aspect of farm subsidies and overall government intervention into the market, as it postulates that a government can be keener to protect and correct a negative externality (the cost incurred to an uninvolved party) that may exist. Going along with this view of the positive benefits of society, Rauf A. Azhar brings up an important point when he discusses the role that education plays in the Green Revolution. He contests that the education of farmers (agriculturally speaking) in third world and developing countries has positive impacts on overall crop output, “The results show that 1 additional year of schooling leads to increases of 1.28% and 1.52% in the farm output of wheat and rice, respectively.” (658 Azhar) This connection to education and output could have a variety of positive effects. Not only does it show that education can help farm output, but it also offers a possible alternative to direct farm subsidies. And although this issue may not directly deal with farm subsidies and government policy, it does coincide with the general premise of how to help society best within the Green Revolution. In the future, would it be better for a government to focus on the education of farmers as being a net benefit for society, or the continuation of farm subsidies?

Conclusion

It is undeniable that the Green Revolution has had positive effects in terms of crop output and therefore greater food output, but since its practices have been put into place there have been some questions about what the effects of the Green Revolution will have on the future. This paper mainly looks at the effect that the Green Revolution has had on the socioeconomic status of farmers and the response of government policies on these farmers and on the market. But there are many more important issues that have not been directly discussed within this research paper. The Green Revolution is not a one-time occurrence with a single specific outcome; it is an ongoing ever changing event that has nearly impacted every individual in one way or another. The Green Revolution has had, or will have, an impact on human population, the environment, globalization and even gender. And even though this paper does not directly address all of these issues, they are all important to look at to determine if all of the consequences of the Green Revolution have truly been, or will be, positive. The complex question addressed in this paper is whether or not government responses to the Green Revolution hurt those they intend to help or curb the problem at hand. As it has been said many times before and may even seem cliché to use, “The road to hell is paved with good intentions.” is a thought provoking proverb to consider when looking at the response that government has to a significant change in the world; that is not to say that all government actions have negative consequences, but rather, the realization that government policy has pregnant seen and unseen, positive and negative ramifications upon its implementation.

Works Cited

Afzal, M. “Implications of the Green Revolution for Land Use Patterns and Relative Crop                          Profitability Under Domestic and International Prices.” Digital Programs and                    Systems [Gateway]. N.p., n.d. Web. 02 Apr. 2013.

Azhar A. Rauf “Education and Technical Efficiency during the Green Revolution in Pakistan” Economic Development and Cultural Change , Vol. 39, No. 3 (Apr., 1991), pp.                                    651-665

Chaudhry, M. Ghaffar, and Shamm A. Sahibzada. “Agricultural Input Subsidies in Pakistan:                       Nature and Impact.” N.p., n.d. Web.

Chaudhry, M. Ghaffar. “Green Revolution and Redistribution of Rural Incomes: Pakistan’s                        Experience.” Digital Programs and Systems [Gateway]. N.p., n.d. Web. 02 Apr.                              2013.

Cleaver, Harry M. “The Contradictions of the Green Revolution.” N.p., n.d. Web.

Hossain, M. “Nature and Impact of the Green Revolution in Bangladesh.” Google Books. N.p., n.d. Web. 02 Apr. 2013.

Nanda, Meera. “Transnationalisation of Third World State and Undoing of Green Revolution.” Digital Programs and Systems [Gateway]. N.p., n.d. Web. 02 Apr. 2013.

Nellithanam, Rahul. “Green Revolution and Subsistence Agriculture: You Reap as You Sow.” N.p., n.d. Web.

Shrum, Wesley. “Digital Programs and Systems [Gateway].” Science and Story in Development:The Emergence of Non-Governmental Organizations in Agricultural Research. N.p., n.d. Web. 02 Apr. 2013.

Zingel, Wolfgang-Peter, and Thomas C. Pinckney. “Consumer Subsidies in Pakistan and Other     South Asian Countries.” Digital Programs and Systems [Gateway]. N.p., n.d.                  Web. 02 Apr. 2013.

 

 

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