Middle East Research and Information Project: Critical Coverage of the Middle East Since 1971

Samir Radwan and Eddy Lee, Agrarian Change in Egypt, An Anatomy of Rural Poverty (London: Croom Helm, for the International Labor Organisation, 1986).

Alan Richards, ed., Food, States and Peasants, Analyses of the Agrarian Question in the Middle East (Boulder, CO: Westview Press, 1986).

 

These two books are welcome additions to the sparse literature on recent agricultural development and agrarian change in the Middle East. Neither makes easy reading, but students of both economic and social change in the Middle East (mainly Turkey and Egypt) and agrarian change in general will find them useful.

The authors of both books are clearly concerned with how best to promote growth with equity in Third World economies still characterized by a large rural agricultural sector. While Radwan and Lee are less theoretically explicit, editor Richards, in his introductory chapter, deftly outlines some pressing issues in the theory of agrarian development and in their policy implications.

Richards lays out three alternative strategies. First, the strategy of export-led growth, typified by Taiwan and South Korea, gives agriculture a secondary role and encourages foreign and local capital investment in export industries. Export revenues are then reinvested in production for local consumption or used to purchase commodities on the world market to supplement local production. Any agricultural benefits are incidental. Only a few Middle Eastern countries (Lebanon, Jordan, and Tunisia) have tried this strategy, in half-hearted ways.

In contrast, the strategy of import-substitution industrialization encourages investment, by local private or governmental capital, sometimes with foreign capital participation, to produce factory goods for local consumption. The local capital has to be raised from somewhere, usually by extracting surplus product from agriculture (for example, by depressing prices for agricultural goods relative to industrial goods). In the Middle East, Egypt exemplifies this strategy.

Richards argues that both the export-led and import-substitution strategies harm agricultural producers, small-scale producers in particular, and generate unnecessary and even counter-productive socioeconomic inequality. Richards, and to a less self-conscious extent the other authors, promote instead an “agricultural-development-led strategy.” Here the government directly and explicitly supports agriculture, in particular small producers, by protecting landholder security (or by land reform if need be), providing technological change and extension services, and instituting credit, marketing, tax and price policies which do not create disincentives to small producers. He argues that this strategy is viable for three reasons: small farms produce higher output per unit of land than do large farms; rural dwellers with higher incomes provide a growing market for industrial output of both consumer and producer goods; and growth is achieved with more equity in income distribution, in turn decreasing rural poverty, landlessness and pressures for migration. Turkey is the model of this strategy in the Middle East.

The Family Farm Model

The rationale for this strategy stems from Chayanov’s model of the peasant farm economy. Chayanov, an intellectual and political descendent of the Russian narodniks working in the 1920s, directly criticized Lenin’s model of class differentiation in the Russian countryside. He argued that the basic agricultural production unit remains the family farm. Its prime motivation is the survival of the family intact at a socially-defined reasonable standard of living. In order to remain intact, the family develops strategies to cope with a changing environment, adjusting its distribution of output between its own consumption and the market, depending on crop yields, prices and other variables.

Many authors writing in the 1960s and 1970s about Third World agricultural production have pointed to the survival of the family farm as the predominant production unit even in the most developed capitalist countries (e.g., France and the United States) and certainly in commercialized agriculture in the Third World. They have documented the survival strategies of these “peasants” in the face of pressures from government, the international market and population and land-fragmentation. The strategies include alternately renting in and renting out land, shifting to higher-profit crops, adopting intensive-cropping techniques, sending one or more family members into wage labor (locally, or via rural-urban or international migration) on the understanding that wages will be remitted to the family, engaging in cottage industries in the village, or participating in the “informal” sector as petty retailers or service-providers. Given that each family has the potential to have simultaneously a “landlord,” a “commercial farmer,” a “trader,” a “subsistence producer,” and a “wage laborer” under its roof, there can hardly be a meaningful “class differentiation” in this type of economic development.

The combination of the “agricultural-development-led strategy” and the Chayanovian vision of the socioeconomic homogeneity of family farms is certainly an appealing one. It provides the formula for “growth with equity,” on which all development strategists can agree regardless of political persuasion. Unfortunately, both the strategy and the vision have their limitations.

First, in order to establish industries that can produce goods demanded by agricultural producers, an investment fund is needed. Where does that capital come from? In the purest version of the model, it could only come from the savings of agricultural producers. In general, higher income people are more likely to save than lower income people, who consume marginal increments to their income. So more rapid industrialization implies the need for more inequality among agricultural producers. Perhaps, instead, the government could fund investment in industry through taxation. This implies a tax policy which penalizes high income producers and might thus lower rather than raise agricultural output. Perhaps a tax on land-owners, as Radwan and Lee suggest, in a situation of unequal land distribution, rather than an income tax, might do the trick. Or foreign capital might fund the investment instead, as was done to a large extent in the United States in the 19th century.

Second, efficiency, as measured by output per unit of land, tends to vary by crop. Small farms do better in the production of fruits, vegetables, poultry and dairy products; they do less well in the production of basic grains such as wheat and corn. If efficiency is measured in output per labor hour, larger farms in general do better than small farms. So the “static efficiency” of small farms only holds true in situations of a high labor to land ratio and where surplus agricultural labor is available. If the labor supply is depleted, by migration or war, for instance, then agricultural wages rise and small farms lose their efficiency advantages. If labor is trapped on small farms, this would be a major impediment to industrialization.

Furthermore, the efficiency advantages of small farms are only realized when they are organized into cooperatives. Even when there are no economies of large size in production, these still exist in the distribution and use of technology and inputs and in processing and marketing output. Thus the commercialized family farm is not really an independent, self-contained unit; its decisions are subject to, and help to generate, a wide range of external costs and benefits.

Third, a high rate of population growth and insufficient employment opportunities in industry and services would tend to dissipate whatever initial equity among rural households existed or was created through land reform. Development is a dynamic process. The agriculture-first strategy depends on the simultaneous success of development in other sectors. This argues for a development program which balances the various sectors of the economy, not one which simply favors agriculture.

The Chayanov model is essentially static, positing an ahistorical, universally valid behavioral pattern for all peasants in all countries. Yet the “peasants” portrayed in these books seem to be undergoing profound change. They face increased landlessness and growing pressures for emigration. They rely more on non-farm sources of income, and less on home production for family use. The authors document increased inequality in access to resources and to income in rural areas. And a decreasing proportion of the labor force is engaged in agricultural production in virtually every Middle Eastern country. The rural population is growing significantly more slowly than the urban population. Surely we are no longer talking about “peasants” in any meaningful sense. These people are fundamentally caught up in economic change, and there are significant differences among “groups” (one dare not say “classes”) of rural dwellers, differences which did not exist among their grandparents. Chastened by the Chayanov model, one hesitates to use the word “differentiation” as Lenin used it; yet the economic stratification of rural populations in Turkey (see Uner’s article) and Egypt (see Radwan and Lee) exists and seems to be intensifying in the 1980s.

Turkey and Egypt

Both books examine the actual results of different government development programs on agricultural performance. Does the government try to encourage industrialization by extracting a surplus from agriculture directly (through depressed terms of trade for agricultural producers, for example) and transferring the proceeds into urban investment? Or does the government mold relative prices, credit flows and investment in agriculture so as to increase the surplus income of agricultural producers, who then indirectly transfer that surplus into investment in industry via increased savings and increased demand for industrial output? Does the government try to encourage agricultural production for domestic or export markets? Do the government’s land distribution, credit and cooperative programs increase or decrease the economic opportunities and income of the rural poor?

If small-scale producers are provided with the technical means and the material incentives to increase their marketable output, that can slow down rural-urban migration and make urban wages higher (to afford higher food prices). In order to prevent crimping services and industry, the government may have to subsidize urban food consumption, or try to locate more industry in rural areas, or fund industrial investment out of surplus output from some sector other than agriculture (such as the sale of oil, or foreign investment). If agricultural producers face disincentives, and production per capita declines, then the country may need to import food, using scarce foreign exchange to pay for it. This may lead to balance of payments deficits, debt growth and intensified pressure from the international market system.

Egypt and Turkey provide two fascinating alternative scenarios, which these books present from a number of different angles. Turkey stands out as one of the few Middle East countries in which government policy supported agricultural producers and which today can more than feed its population of 45 million. There is a long history behind the Turkish government’s protection of agricultural producers, and Turkish small farmers to this day have a better life, on average, than small farmers in most other Middle Eastern countries. Yet in Turkey, too, the process of commercial competition, on top of population growth, has led to rural-urban and international migration and to dispossession of the smallest-scale subsistence producers.

Turkey’s development scheme ran into trouble when the country could not sufficiently finance the industrialization process out of domestic savings or the surplus from agriculture. Turkish industrialization had to rely on international capital investment and on the purchase of raw materials and technology from abroad. It also had to keep urban wages down through public subsidies of basic commodities. The agriculture-first strategy, for all its accomplishments, could not prevent the series of foreign-exchange crises and severe economic recessions which led to military coups and forced major shifts in government development policy. Perhaps these crises would have been much more severe without the underlying strength of Turkish agriculture to cushion them, but the lesson is that the agriculture-first strategy cannot succeed on its own. Like the import-substitution industrialization strategy or the export-led growth strategy, it is no easy solution to the economic problems of less-developed countries.

In Egypt, the government supported agriculture by increasing irrigation and reclaiming land, as well as through a land reform which significantly benefited middle-sized farmers. However, its price and credit policies have not favored agriculture in general nor small producers in particular. Production per capita of controlled crops such as basic grains and cotton has declined. Throughout the 1970s, imports met the growing shortfall. Export revenues (from oil, the Suez Canal, and especially emigrants’ remittances), combined with aid from the United States, averted a crisis. In the 1980s, the aid component has become more important. Egypt, like Turkey, is now more engaged in the international economy and more dependent on injections of foreign capital than ever before. It is more vulnerable than Turkey to the “food weapon.”

Both of these books promise more than they can deliver, starting with their titles. The Richards volume is a set of conference papers organized very loosely around a common theme. The articles were not edited to unify them, even stylistically. Furthermore, aside from Richards’ valuable introductory chapter, there is very little theoretical treatment in the articles. For example, there is an implicit assumption throughout that inequality is bad, but the reasons for this are not discussed. Policy issues are treated in a piecemeal and scattered fashion. The Radwan and Lee book, rich in detailed empirical material and a useful resource, shares the same problems, but stretched to book-length. Theory and interpretation is sparse, and policy recommendations are simply tacked on without elaboration. Because of the importance of these countries, and the relevance of works of this type for the fate of the peoples of those countries, a sustained, coherent argument would have made each of these books a fuller contribution to the literature.

How to cite this article:

Karen Pfeifer "The Fate of the Family Farm," Middle East Report 145 (March/April 1987).
Cancel