Technical change and dualism within agriculture in India

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Abstract
The dichotomy between subsistence and market‐oriented farmers in many developing countries is a well‐recognized fact. There have been empirical studies in India of the differences between subsistence and market‐oriented or ‘commercial’ farmers; and interest is now developing in the impact of the new agricultural policy on dualism within agriculture. While the theoretical literature deals extensively with dualism between a traditional agricultural sector and an advanced industrial sector, dualism within the agricultural sector itself is less discussed.1 However, this dualism has become of increasing practical importance in India with the introduction of the ‘New Strategy for Agricultural Development’ in 1966–67.2 This policy concentrates on raising output per acre very sharply, especially for the food crops, by the use of new high‐yielding varieties of seeds and complementary inputs. In the beginning, at least, these measures are to be confined to a small part of the total acreage under food grains. Critics have also alleged that they have been confined to the larger farmers, thus accentuating the existing inequality of agricultural incomes, and that this inequality must have several undesirable social, economic and political consequences. But these consequences have not been elaborated, partly for lack of data, but partly also because the theoretical implications of technical change for a dualist development of agriculture have not been adequately discussed. The first object of this paper is to examine the changes in income distribution within agriculture when technical progress is confined to the commercial sector. Thereafter we show that if dualism cannot be directly attacked by such measures as land reform, the second‐best policy from the point of view of maximizing output may in fact be to encourage the use of ‘new’ inputs, such as fertilizers, in the commercial sector.

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