Cristina C. David

Modern rice technology and income distribution in Asia

Studies seven Asian countries, with diverse production environments and agrarian and policy structures, to determine to what extent the adoption of modern rice varieties (MVs) only in the irrigated and the favourable rain-fed lowland areas has exacerbated inequalities in income distribution.

Segmentation in rural financial markets: the case of Nepal

Abstract Based on a farm household survey in Nepal, this study found that farm size and irrigation are major determinants of borrowing from formal institutions, whereas family size is the most decisive factor in borrowing from informal sources. Formal sector borrowing per hectare of cultivated area, however, initially increases and then decreases with farm size. Our analysis indicates that while very small farmers tend to be excluded from the formal financial market because of a lack of collateral, very large farmers choose to borrow less from that source because of lower production efficiency.

Political Economy of Rice Price Protection in Asia

Rice continues to be the most important food staple in Asia, contributing 40%-80% of total calorie intake. Rice is also the major source of livelihood of small farmers and agricultural labor households in this region, where at least two-thirds of arable land is planted to rice. At least half of that rice area is rain-fed and vulnerable to drought and floods. Even in irrigated areas, higher cropping intensity has increased pest problems, contributing further to the production instability that characterizes the rice economy of monsoon Asia. Because of the economic and political importance of rice in Asia, no government has left its domestic rice sector freely influenced by market demand and supply forces. Invariably, the central food policy question confronting Asian governments is how to reconcile the conflicting objectives of providing low rice prices to consumers and remunerative incentives to farmers. Maintaining stable domestic rice prices to both consumers and producers is a separate and equally important concern. Moreover, given the political importance of rice and the instability of the world rice market, most Asian countries aim for rice selfsufficiency rather than rely on international trade to pursue their food security goals. Among rice exporters, on the other hand, raising government revenues from rice exports is another policy objective. To achieve the above objectives, a wide variety of policy instruments have been used to influence output and input prices directly or to increase productivity. Except for Thailand, most Asian governments control rice prices in the short run through a monopoly on international trade, as well as by engaging in domestic marketing operations.1 On the other hand, governments also invest in irrigation,

Informal finance through land pawning contracts: Evidence from the Philippines

Land pawning contracts have increased in importance in Philippine rice growing villages, and this article examines the determinants of choice of pawning contracts and the observed loan size. The analysis shows that pawning is an informal credit instrument used by small farmers to obtain large loans to finance productive investments, such as non‐farm employment, where the returns to investment are high. The econometric results suggest that poorer farm households pawn‐out land, while wealthier farm households pawn‐in. The observed loan size is explained by reputation of pawners and rice cropping intensity in the region.

Modern rice technology and regional wage differentials in the Philippines

Fear has been widely expressed that the modern rice varieties have created large disparities in regional income distribution, as the productivity gap between favorable and unfavorable rice-production environments widened due to differential technology adoption throughout South and Southeast Asia over the last two decades. Technology affects the income of farm population directly through its effects on productivity and factor use, and indirectly through its effect on factor prices. In particular, the ultimate distributional impact of modern varieties will critically depend on the interregional labor-market adjustments through migration in response to regional wage differentials created by the differential technology adoption, since labor is the main resource of the majority of the rural population. We studied favorable and unfavorable rice-growing villages in the Philippines, and found that adoption of modern varieties during the 1970s was positively related to population growth rate. Contrary to popular belief, no association was observed between wage rates and adoption of modern varieties as of 1986. These findings support the hypothesis that the differential adoption of modern rice varieties induced interregional labor migration toward equalization of wage income across different production environments.

Differential adoption of modern rice technology and regional wage differential in Nepal

In Nepal, which consists of ecologically distinct regions, the concentration of the adoption of modern rice varieties in the favourable rice growing areas of the country has raised fears that regional income disparities have widened. This study shows that greater demand for hired labour due to the adoption of modern rice varieties has induced permanent and seasonal migration from unfavourable to favourable areas. This appears to have largely equalised average wage rates across different production environments. Thus, as far as labour income is concerned, benefits from the modern varieties have been widely shared.