SUPERVISION PROBLEMS AND THE SIZE‐PRODUCTIVITY RELATION IN BANGLADESH AGRICULTURE
| Author | M. A. Taslim |
| Date | 01 February 1989 |
| DOI | http://doi.org/10.1111/j.1468-0084.1989.mp51001004.x |
| Published date | 01 February 1989 |
OXFORD BULLETIN OF ECONOMICS AND STATISTICS, 51, 1 (1989)
0305-9049 $3.00
SUPERVISION PROBLEMS AND THE
SIZE-PRODUCTIVITY RELATION IN
BANGLADESH AGRICULTURE
M. A. Taslim
I. INTRODUCTION
The existence and nature of an inverse relationship between farm size and
productivity of land in the agriculture of economically less developed
countries have been the subject of a vigorous debate ever since the publica-
tion of the findings of the Indian Farm Management Studies in the mid-fifties.'
Most of those who believe in the existence of such a relationship commonly
attribute it, following A. K. Sen (1962, 1964), to the low opportunity cost of
labour of the smaller farmers. But the inadequacy of such an explanation
became apparent with the availability of more evidence (see Bhagwati and
Chakravarty, 1969; Aghijit Sen, 1981; Ahmed, 1981). One could not invoke
this theory of low opportunity cost of labour to explain an observed inverse
size-productivity relation among predominantly hired labour farms; nor
could it be applied to a situation where most of the farmers employed a
substantial amount of wage labour. It is contended in this paper that the
explanation is instead to be found in the extent and severity of the problems
of supervision and control of wage labour faced by employers. When most
farms, particularly the relatively large ones, employ substantial amounts of
wage labour, the problems of supervision are not trivial and cannot be
ignored or assumed away as has been the usual practice in the literature.
These problems not only have a significant impact on the production process
of individual farms, but also influence the tenurial arrangements and choice
of technology in agriculture.
Supervision problems are an important and unavoidable aspect of agri-
cultural production in many developing countries like Bangladesh where a
substantial proportion of the total labour input is supplied by hired labourers.
Supervision problems impose an effective restriction on the scale of agri-
cultural production and dampen land productivity2 on farms which employ
substantial amounts of hired labour.3 The problems of supervision of hired
For an excellent discussion of the Farm Management Studies, see Bharadwaj (1974).
2Througfiout this paper 'productivity' means, unless explicitly stated otherwise, land produc-
tivity, i.e., the quantity (or value) of output produced per unit of land per unit of time (year).
similar argument was also made by Ghose (1979) and Abhijit Sen (1981).
55
BULLETIN
labour have been widely recognized (see Akerlof and Yellen, 1986; Quibria
and Rashid, 1986), but its implications for the size-productivity relationship
in agriculture have not been fully explored. Productivity relationships in
agriculture, and indeed the structure of agriculture itself, cannot be
adequately explained without reference to such problems which not only
limit the intensity of cultivation of farms employing much hired labour but
also lead to widespread leasing-out of land and switching from labour- to
capital-intensive techniques in agriculture.4
These hypotheses are tested with data from Bangladesh. A short
discussion and an empirical test of the theory of low opportunity cost of
labour advanced by some authors in Bangladesh, notably Hossain (1977), are
contained in Section.5 The nature of supervision problems and their effect on
the agricultural production are discussed in Section III. An empirical test of
the propositions regarding supervision problems and the size-productivity
relationship is also undertaken in this section. A brief summary and con-
clusion are offered in Section 1V
II. THE THEORY OF LOW OPPORTUNITY COST OF LABOUR
The existence of an inverse relationship between farm size and productivity is
often taken for granted in Bangladesh. Hossain (1977), who has provided by
far the most exhaustive analysis of the issue, attributes the alleged inverse
relationship to the low opportunity cost of labour of the smaller farmers.6
The cost is thought to be low due to the existence of widespread unemploy-
ment in the labour market where the going wage rate, which is restricted to be
at or above the subsistence requirement, does not equilibriate the demand for
and the supply of labour; in consequence the smaller farmers are forced to
intensify the use of any surplus family labour on their farms. However, such
an explanation of the alleged inverse relationship is analytically deficient.7
There is an increasing recognition that it is not tenable, or at least not
relevant, for the majority of the smaller farms as there are few farms, however
small, that rely exclusively on family labour for cultivation (see Rudra and
Mukhopadhyay, 1976; Ahmed, 1981). A large number of the smaller farms
are also frequently engaged in various income generating off-farm activities.8
Moreover, the fact that the inverse relationship, when it exists, is found to be
4Supervision problems may also provide at least a partial explanation of the paradoxical high
capital-intensity in manufacturing and other sectors of less developed labour-abundant
econoniies.
Although there are quite a few explanations of the inverse relation, we have examined in
some detail only the labour-based theory because of its wide acceptance in Bangladesh. Indeed,
some of the policy recommendations of the Land Reform Committee (1983) derive directly
from this theory.
6 In an earlier study Zaman (1973) used the theory of low opportunity cost of labour of the
small farmers to explain the observed lack of inefficiency of cropshare tenancy in Bangladesh.
Hossain's paper is an important contribution on the issue, it suffers from a
number of problems; see Taslim (1987), Chapter 6 for critique.
8 See Khuda(1985)and Taslim(1987).
56
To continue reading
Request your trial