V - Conclusions

Summary

The findings in Chapters III and IV can be summarized as follows:

All four forms of productivities were increasing since the first year of the Second FYP, that is, from 1974/75. The growth in productivities started at a very slow pace but gained momentum at the end of the Second FYP. However, the momentum of growth lasted about four years, slowing down at the end of the Third FYP up to 1985/86. The same pattern is found in the case of agricultural production, which confirms the strong influence of productivity on production.

Growth throughout the decade of study was contributed by land-saving, labour-saving, and cost-saving types of technology. Complementarity among these types of technologies are found. Thus, in general, it can be said that the general level of technology is increasing throughout the decade. Furthermore, the highest contribution to growth comes from the land-saving type of technology. Thus, the preference pattern of the present growth pattern seems to be the land-saving type of technology.

Among all factors contributing to the land-saving type of technology, fixed capital and current capital seemed to be the two dominant moving forces. Out of these two factors/inputs, fixed capital — comprising tractors, draught cattle, and government capital sectoral expenditure — is supposed to be more significant than current capital including state current expenditure, fertilizers, and chemical inputs.

Of the inputs utilized in the study, fixed capital seems to have contributed the highest share in raising land productivity at the present level of technology. The return to scale of fertilizers and other components of current capital has been declining, which suggests that fertilizer consumption may be approaching diminishing returns although it still has a share in the contribution. This means that the impact of the “Whole Township Special Rice Production Programme”, of which fertilizers and HYV seeds are the main components, is declining. Unless other “less significant” components of the package such as motive power (in the form of tractors and draught cattle), water management, and infrastructure (in the form of government expenditure) are expanded, the stagnant situation will linger on. Since the base is already high, unless the government gives timely emphasis on fixed capital and incentives (such as price reform), the performance of the agricultural sector will become sluggish and may lead to undesirable consequences in the future.