Files
Abstract
For the first time, the model developed by Hayami and Herdt is applied to
determine gains from modern varieties of rice in Bangladesh and the distribution
of these gains between consumers and producers. The results suggest that consumers'
surplus is much greater than it would have been had the high yielding
crop varieties ( HYVs) not been introduced. By keeping the real price lower than
it would have been otherwise, the modern varieties have tended to be income
equalizing for urban consumers. The Hayami-Herdt partial model even suggests
that, given the relatively inelastic demand for rice in Bangladesh, the real cash
income of producers has risen slightly as a result of these new technologies. In
reality, however, the impact of these changes on incomes of farmers and the
distribution of income between those involved in production is more complex. It
is suggested that if a less partial view is taken and if account is taken of lower
cost of obtaining home-consumed produce, the increase in income may be greater.
In any event, there are dangers in using such a partial model to predict the
developmental consequences of technological changes affecting a staple crop, and
attention needs also to be given to the possibility that the supply curve may not
have the simple form and pivot in the way supposed by Hayami and Herdt. While
the Hayami-Herdt model is simple to apply, it is best used as a first approximation
or starting point rather than a final solution. It ignores a number of
criteria that could be important in assessing new agricultural technologies, such
as their impact on the variability of benefits to producers and consumers and
their consequences for sustainability of production. Furthermore, the Hay-ami-Herdt model does not deal specifically with changes in factor shares in farm
production. Nor does it consider the impact on income distribution of the ownership
and control of critical input like irrigation and imperfection in the rural
credit market. It is pointed out in our paper that the adoption of HYVs has been
associated with important variations in factor shares in Bangladeshi rice production.
Analysis of available farm level data indicates that the relative share of
labour has fallen, suggesting an uneven distribution of gains from technological
changes between the owners of non-labour resources and those of labour resources.
However, the absolute share of labour has increased, and it seems that rural
employment has risen as result of the new technologies.