Poor farmers: the key to growth in the third world

Are we in the West doing what we can, in tune with hard times and budget austerity, to hasten the third world's quiet agricultural revolution? Farming matters because it is the main element in any lasting solution to the world's economic crisis. Bigger wheat, rice, and corn harvests on the tiny plots of some 2 billion people just may be the only way to reduce the growing pile of poor nations' IOUs.

Maybe so.

Steady progress depends upon (a) the prospect ahead for new agricultural technology and (b) whether enough governments become economically efficient enough to put that technology into productive effect. Both depend more on brains than money, something the Reagan administration, with its eye peeled for funding bargains, has been quick to see.

Take agricultural research. The $5.7 billion in American aid pumped into India since the 1950s did not triple India's wheat production to 33 million tons in 1967-79. Nor did $2.5 billion to Indonesia double its rice output to an amazing 22 million tons of milled rice last year.

The giant strides in Asia's cereal yields and production came because plant breeders, at relatively little cost, spent years and years patiently applying Mendel's 1865 law of genetic inheritance to agriculture, first in cold climates and, from the 1940s on, to tropical farming. It took exactly 100 years for Mendelian techniques to pay off, at last, in Asia's peasant villages.

A new global scientific network of 13 agricultural research centers, set up mostly during the 1970s, now exists to seize upon new scientific discoveries anywhere in the world and at once try to apply them as tropical farm technology. Scientists from every nation on earth pool knowledge and genetic material on every crop grown today.

Important as it is, the whole setup is incredibly cheap to run: the overall budget for all 13 centers was $20 million in 1972, $150 million last year. As scientific knowledge grows, so should in their modest fashion, the centers researching techniques to apply it to grow more food.

The United States pays 25 percent the World Bank 10 percent. Last November the Reagan administration, showing a readiness to invest when the payoff is this big, proposed increasing its share to expand the total budget to $176 million. Several European governments refused to increase their shares, which means the centers have to curtail some of their research just as the need and demand for it is growing.

If we seek world economic recovery, priority must be given to the transfer of the most sophisticated Western science. This all takes money not to be had from private sources at market terms. It requires government spending and, since we in the West have the science, some foreign aid.

But the other side of the equation, economic efficiency to apply the new farm technology once you have it, works better the more you let free market forces have full play. Successful agriculture and public ownership and management don't mix, whether in Russia, China, Vietnam, or some hippie commune in Oregon. Even government distribution of an input like fertilizer can get bogged down in inefficiency and corruption, as in Mexico and dozens of countries one could name. Agricultural advance depends too much on a free market, adequate incentives and the stimulus of gain and private ownership.

Institutions like the World Bank and Agency for International Development (AID), perhaps because they are staffed by well-paid bureaucrats and technicians , tend to display an antimarket bias. The Reagan administration's conservative Republican pro-market bias seems to give it a better grasp of markets, prices, and the distribution of inputs.

For example, AID's new Bureau of Private Enterprise, a $30 million pilot project set up 18 months ago, is conducting some interesting experiments to provide a better investment climate, encourage agricultural firms and private banks, and create financing mechanisms so that a small amount of AID money can bring in local and foreign private investment.

Perhaps AID's most successful experiment in demonstrating the virtues of the free market has been in Bangladesh. Here the government was helped to replace its old, corrupt and inefficient public fertilizer distribution system with a new nationwide grid of private wholesalers and retailers. It took just a little AID seed money to get things going. The new system has been a big success, supplying farmers at lower cost. A whole new class of entrepreneurs has emerged and the government of Bangladesh is looking for new ways to collaborate with them.

At bottom, the third world doesn't need money so much as scientific, managerial, organizational, and technical skill to speed the spread of things like higher-yielding crops, rural electrification, small-scale agri-industry, and other enterprises that will get economic growth in stride.