4. Socioeconomic Differentiation of Agriculture

Increasing Socio-economic Differentiation in Agriculture

In spite of the widespread dissatisfaction with the rather limited achievements of 50 years of development efforts - which is certainly justified in view of the still existing and even increasing poverty among millions of people - one cannot overlook many important changes in the general framework conditions in most of the Third World countries. Without going into detail or striving to achieve completeness, these changes can be described by the following key terms: the transition from stagnation to a dynamic situation; industrial, commercial and agricultural development in many regions; emerging non -agricultural jobs; world market integration; increasing population growth; political instability; poor administrations; and institutional vacuum in many cases. With all that in mind, one can say that the expectations of the 50s have not been fulfilled, but at the same time the situation in these countries today is not comparable with that of some 50 years ago.

These changes have had repercussions on the character of the farms and the socio -economic situation of the agricultural households. The people to land relation has been differentiated considerably.

Types of Farm Households in the 50s

In the middle of this century, agriculture consisted of a limited number of socio -economic types of farm households. Leaving out some special types that existed in only small numbers as well as the collective organization of farming in socialistic countries, one has to differentiate primarily between three types:

• large landowners (landlords),
• small farmers (family farms),
• marginal farmers.

The landlords as a rule did not cultivate their land themselves; instead, decentralized cultivation carried out by tenants was common. For, the landlord, his property was primarily a source of prestige, while production was of lesser importance. The main strategy they employed for achieving a high income was skimming off a high rent rather than increasing the yield. The comparatively stagnant agriculture resulted in a low standard of living for the small share -tenants.

Small farmers had `family farms' on which the family members employed all of their labour and lived off the produce of the land. Cultivation was carried out in accordance with local customs and controlled by the village society. The larger the farm, the more surplus could be sold, but even in this case the requirements of the dependent households and self -sufficiency determined the cropping pattern.

Marginal farm households had too little land at their disposal in relation to their needs and the given soil quality. These households tried to improve their living by at least working partly as labourers on larger farms or in public works. Many tenants belonged to this group.

The decrease in farm size caused by inheritance;, population growth and land reforms; the introduction of new technologies in agriculture - leading to a close interweaving of the agricultural sector with others; the creation of employment opportunities through non­agricultural development; increasing migration; the influence of mass media and mobility integrating the rural population into the overall society; all of these factors led to increasing differentiation among the agricultural households. This may have been more marked in one region that in another, but it certainly influenced all countries. Variations had less influence on the emergence of new types that will be described below than the scope of their existence.

Farm Household Differentiation until the End of the Century

Today, farm households can be differentiated according to the following types.**

1) Households with enough land to enable them to earn their living by land cultivation. The members usually concentrate their efforts on farming and take advantage of the possibilities offered by the new technologies. They try to increase their income by practising good cultivation and good husbandry. This group consists of

• large landowners (landlords),
• `progressive farmers,'
• `economic holdings.'

2) Households which do not have enough land to be able to earn their living by cultivating the land. The members try to improve their condition by taking up non -agricultural activities, but are often not successful. Their goal is to achieve a better income by using all of the resources at their disposal - land, labour and, sometimes, some capital. Their interest in agriculture is sometimes limited, often imposed by a lack of alternatives, and the younger generation in particular, often looks forward to a life outside agriculture. This groups consists of:

- households with multiple employment,

- households with household production,

- holdings of older people,

- marginal existences.

In detail, the different types can be characterized as follows:

1) Households with sufficient land

. large landowners (landlords)

The size of the land available to them decreased considerably due to inheritance, land reforms and preventative measures to limit the impact of future reforms. The wish to maintain their standard of living even after the reduction of the size of their land led to the employment of modern technologies and the intensified land use. Many petty landlords became `progressive farmers' although it is still possible to find feudalistic landlords of the old type who have hardly been influenced by the developments around them.

. `progressive farmers'

This group emerged as a new phenomenon at the point when the technology introduced by the `green revolution' made it possible to earn a high income by practising modern market integrated agriculture on adequate land. .They recruit themselves from the higher strata from among landlords whose estates have become too small in the course of the inheritance process, and from below from among the active family farmers (or their sons) who try to increase the size of their farms by renting land and practising modern farming, often successfully. Their economic power frequently led to political power, and this group has many representatives in district and provincial assemblies.

. `economic holdings'

These family farms, which have sufficient land at their disposal, experienced considerable increase in income brought about by the opportunities made available by the new crop cultivation technologies and, partly, by engaging in modern market -integrated animal husbandry. Household members are frequently interested in farming along modern lines, which is considered to offer perspectives for the future. When they eventually realize that only a farm size which provides sufficient land can guarantee a decent income, it is not unusual for the second son to take up training with a view to obtaining a non -agricultural job.

2) Households with insufficient land to provide a living

The number of households in this group increased considerably in the past, mainly because of reduced farm size following partition in the course of the inheritance process. The members have to earn additional income, often by activities outside agriculture. Hence, the households do not employ all of their labour on the farm and live off the farm proceeds, i. e., they lack the characteristics of atypical small family farm.

. Households practising multiple employment

Differences in the family and farm structure, in resource endowment in the region and the level of economic development have brought about different types of multiple employment:

- Individual Income Combination

In this case, the cultivator himself takes up non -agricultural work as a main ore side­line occupation, or works as an agricultural labourer on other farms. This type is necessary if there are no children in the family who are old enough to - work. Difficulties are particularly due to the daily care that livestock needs. Hence it is only possible to take up a second job locally in areas in which job opportunities are limited, with the exception of the vicinity of cities. An alternative would be to give up husbandry and change to using hired draught power.

- Household Income Combination

One or more sons - and/or daughters in some societies - take up non -agricultural employment, or work as agricultural labourers. The job can be local, or in a distant place - even abroad - on a permanent basis, or whenever work is available.
In other cases, the working life of the people is divided into two stages. Until the age of about 45, the men work outside the village, while their father manages the small farm. When their father becomes too old, the son takes over the farm. By this time, however, the son's. children,have reached working age. This form can be found in remote areas in particular where it is difficult to find employment. In quite a number of cases, men have long -term contracts with the army and receive severance pay, or a pension later on. A precondition for this type of household is the fact that the children are willing to donate at least part of their income to their family, which is frequently the case. The amount they give varies greatly.

- Extended Family Economy

Nuclear families maintain close social and economic ties even after they have migrated. A network of cooperating families emerges with the farm at the centre. The urban branches of the extended family receive food from their parent's farm as a form of support, or for sentimental reasons. The urban families sometimes let the pre­school children live on the farm in order to save rent in the city, and they have the right to return to the farm, an important form of security. In return, they offer their services as help during the harvest, or they remit money to their parents. This does not have to take place regularly, but rather whenever money is needed for investments or repairs.

. Households with Household Production

It is not possible for everybody to find a non -agricultural job, and sometimes there is no suitable person in the family. The strategy for improving income is then to produce whatever is possible within the household, using all available resources, in order to satisfy the family's own needs and sell the other products. This may comprise the production of charcoal, gathering firewood, weaving mats, renting out animals, producing ropes, collecting herbs and honey. The families also avoid expenses by doing maintenance and repair work themselves rather than hire paid workers. The activities the women carry out such as processing, food preparation, tailoring and mending clothing play an important role in such cases. The income is generally rather low, and the cultivation of the land has, therefore, to be extensive. Many households experience a downward trend.

. Holdings of Older People

It is not unusual for all of the children of smallholders who have little land to migrate from remote dry areas to towns in order to find a better living. The head of the household, the father, tries to cultivate his land as long as possible and adjusts his work to suit his capacity by renting out land, or be practising more extensive cultivation, often accompanied by considerably reversing investments. In the absence of other forms of old age security, he has to continue cultivating the land in order to secure his subsistence.

The `holdings of older people' are residual farms. They do not exist because the owners are primarily interested in farming, but rather because they are the only form of social security they have. The income they earn only has to suffice for an older couple, not for a family. The cultivation is extensive, and modern technology is not employed. The number of such holdings is small, but it is growing with the increasing mobility and industrialization.

. Marginal Existences

Some households that do not have sufficient land cannot find any means of earning additional income. Remote locations or personal circumstances such as illness or disability play a role. These households live in extreme poverty and often have to gradually sell their land. The land is cultivated without any investments being made, and the yields are low.

Implications for Development Policies

The socio -economic differentiation that was described above shows that agriculture today is not the same as it was 50 years ago. The cultivation of land cannot be regarded as being primarily cultivation carried out by small farms employing all of the labour available in the cultivating family and providing subsistence for these people.

Perhaps it would be necessary to explain the different types of land cultivating households by using a different paradigm. Instead of farms, it might be better to speak of households that utilize all of the resources they have available to them (land, labour and - perhaps - some capital) to secure their survival and raise their standard of living.

Depending on the specific resource endowment, this can take place in various ways. If sufficient land is available, the household might concentrate on farming, and agriculture is their sole activity. But if there is a shortage of land, people have to make other arrangements in order to earn their living. They either try to find additional non -agricultural employment and, thus, increase their total income, or they engage in household production and avoid expenses. Another possibility would be that only an older couple lies off the land instead of a family.

Naturally the functions of land cultivation vary between these different socio -economic types of households. For household which have adequate land, the key function is to create a reasonable means of existence for the members and to produce food and raw materials in order to achieve self -sufficiency as well as to sell on the market.

For household which do not have enough land, some of these functions play a minor role only, while others become more important. Partial self -sufficiency is still a goal, but old -age security, financing the costs of training and migration and security in case of unemployment become more important.

With changing functions of land, the goals which people have regarding their cultivation will change. Households which have sufficient land will increase their production and productivity as a means of increasing their income. Thus, they take advantage of the possibilities offered by modern technology and the market. Side -goals they have are to facilitate the work and provide security for their old age. Households which do not have sufficient land are much less interested in increasing their yields. Their experience has been that if they have only a small amount of acreage at their disposal, an increase in yields will not make much of a difference in the end. Instead of producing the highest possible yield, they are more interested in the investing the least possible labour input and the smallest possible investment in agricultural production. This makes it possible to engage the existing labour force outside agriculture. If one is successful in securing a permanent non -agricultural job, the financial outcome is much better than all efforts invested in agriculture. Traditional agriculture provides .them with self­sufficiency and keeps the land in the hands of the family. This is an important form of security for the household. One has a rural home and a place to live in one's old age in familiar surroundings. In some cases, the land functions as the family's savings bank.

The changing functions of land and land -cultivating families' goals have consequences for suitable measures for development policies. In view of the large differences in agriculture, it is impossible to develop a uniform policy for all household types.

For households which have sufficient land -_i.e., large landowners, progressive farmers and economic holdings - agricultural policies are a suitable policy instrument. Price policies, structure policies and innovation policies are a help to such farms and their cultivators. They would probably profit the most from a liberalization of the produce and factor markets and `globalization' as they are already market integrated and, in some cases, export -oriented and experienced in reacting to changing policies. Especially in the case of the smaller farms among this category, the supporting institutions (cooperatives, extension services and credit facilities) are of great importance and have significant effects and, at the same time, generate increases in the food production and food security. Whatever changes in the agrarian structure have still not taken place in the case of the landlords must be provided by agrarian reform measures.

But only about one -quarter of all of the land cultivating households belong to this group, while three -quarters of the households do not have enough land and have to rely on multiple employment and/or household production for their existence, or belong to an older couple, or are marginal. To them, agricultural policy measures are of lesser interest. Structural policy measures or agrarian reform can, indeed, provide a possibility for increasing the size of the farm and, thus, cause an `upward' development on the farm. Most of the agricultural policy instruments, however, have little impact for these households and, therefore, hardly represent their interests. This includes supporting institutions for agriculture. A marginal farmer has nothing to sell through the cooperative because he needs all of his produce for his own home consumption. Multiple employment households are not those which regularly consult extension services, and no bank of cooperative will grant a lone or give credit to the holdings of older people. One cannot help these people by means of agricultural policy measures with perhaps the exception of some cases at the margin between both types.

Any promotion of the households which do not have sufficient land has to take into consideration the fact that the long -term focus of these people's interest is usually outside agriculture and that the small size of their farms necessarily limits the quantitative effects of all agricultural measures. The regional development policy measures (which to some extent include agricultural policy measures) provide better prospect for these groups. The promotion of employment, diversification of the economy in rural areas and smoothening the transition from farming to non -agricultural jobs by means of appropriate professional training help these people. In certain areas in which the relation between the population and resources has become too narrow, a certain degree of outmigration is necessary in order to preserve the ecosystem from damage due to overuse.

The discussion showed that the socio -economic differentiation among land -cultivating households has had a strong impact on man - land relations. Today, instead of households that employ their labour on land of varying size and live off the yields of the land, we have a broad differentiation in the kind of relation of people to the land. Whereas in former times the focus of all of the household members was on the land and differences in access to land resulted in differences in income, today these differences concern not only the control of land, but the source of livelihood and the interest in agriculture as well. Not every young man hopes that he can continue to cultivate his father's land. He may want to if the land is adequate in size and of good quality and has access to irrigation. But if the size is small, the soil poor and irrigation possibilities limited or non -existent, then he may only feel forced to continue farming in the absence of alternatives. However, many of these young men will continue to look for alternatives, or at least a mix of income sources, and hundreds of thousands of them will be successful sooner or later.

Under such conditions of differentiation in man - land relations and in the cultivators' interest, a transition from sectoral to a more regional approach in development efforts would seem to be indicated. Moreover, a careful analysis of the target groups regarding their conditions, interests and requirements would be a precondition if the policies are to be successful.

There is an urgent need to integrate this differentiation in man - land relations in our development policies. Applying it would provide the opportunity to concentrate resources and agricultural policy instruments where they are needed, wanted and affective for increasing the income of cultivators and the production of food. With respect to the other households in which agricultural policy measures cannot be effective due to different circumstances and requirements and interests of the people, let us not waste the scarce resources of agricultural policy, but rather employ other policies for the people whose main focus is outside agriculture.

** Kuhnen, Frithjof, "What is Agriculture? Need for a New Paradigm?" in: Quarterly Journal of International Agriculture; 30, 1991, pp. 191 -199.
Slarer, Richard, From Farm to Firm, Diversification in the Asian Countryside, Aldershot 1991.