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Book reviews

The Dragon and the Elephant: Agricultural and

Rural Reforms in China and India

Edited by Ashok Gulati and Shenggen Fan, John Hopkins University

Press, Baltimore, 2007, 576 pp, ISBN 978-0-8018-8786-4, $75

(harcover), ISBN 978-0-8018-8787-1, $38 (paperback); for SouthAsian customers, also available in hardcover from Oxford University

Press-India

In the last few years, there has been a flurry of books and papers referring to

China and India the two emerging economies as the Dragon and the

Elephant respectively. The edited book under review is one of the latest in

the Dragon-Elephant series, and it attempts to apply the above comparative

implication to the agricultural sectors in these two countries.

The preface begins with the statement that between 1978 and 2005, Chinasper capita income overtook Indias at such a rapid pace that it was double

that of Indias in 2005. This transformation is attributed to a quarter of a

century of reforms. After 1978, China is argued to have reformed its agricul-

ture by moving into the household responsibility system in land use, liberal-

izing agricultural prices and creating a free market for agricultural products.

As a result, Chinas rural poverty fell from 33 to 11 percent between 1978 and

1984. On the other hand, even after a series of reform measures beginning

from 1991, Indias agricultural growth has fallen compared to the 1980s,and its record in reducing rural poverty is poorer than Chinas. The

Editors ask: What can the two nations learn from each other in terms of

their reform experiences and their impact on agricultural growth and

poverty? The chapters included in the book, arranged in seven sections,

are geared towards answering this question.

In posing the question as to what India and China can learn from each

other in introducing free-market policies in agriculture, the Editors shrink

the books scope into a very narrow perspective. There are a few presump-

tions that underlie this perspective in the book: (i) China owes its outstand-ing agricultural growth to the reform policies after 1978, and whatever

happened before 1978 was limited to creating favourable initial conditions

for post-reform growth; (ii) these reforms are in conformity with the

Community Development Journal Vol 44 No 3 July 2009 pp. 415426 415

& Oxford University Press and Community Development Journal. 2009

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prescriptions of the Washington Consensus; (iii) the progress on agricul-

tural reforms in India is rather poor, and this would explain its poor agri-

cultural growth and slow poverty reduction after 1991; (iv) to raise

agricultural growth and reduce poverty, India has to further liberalize its

agricultural markets, as China did after 1978; and (v) in both China and

India, the future lies in rapid economic growth to be achieved by continu-

ing on the path of reform. The above points are best captured in the Editors

concluding sentence in the book: the Dragon is breathing competitive fire

over a large part of the world, and the Elephant is ambling briskly.

Most of the chapters in this book follow the above thread. In Section 2

(dealing with issues of access to land, health and education), it is argued

that if an economy has more equitable distribution of land and better

human capital endowment as initial conditions, market reforms woulddeliver best.

In Section 3 (dealing with investment in agriculture, technology and

irrigation), it is argued that better initial infrastructure endowments in

irrigation and agricultural research as well as in power and transport at

the outset of market reforms would ensure faster growth and poverty

reduction.

In Section 4 (dealing with market and trade reforms), it is argued that

food security is no longer bound to domestic self-sufficiency in an era of

free trade. China opened up agricultural trade earlier, and more vigorously,

than in India, which reflects in better trade indicators for China. Better trade

indicators are anticipated for India too with the continuation of liberaliza-

tion, particularly in the spheres of minimum support prices, public distri-

bution system and input subsidies.

In Section 5 (dealing with rural diversification and vertical integration), it is

argued that rural diversification can be encouraged by creating a freer econ-

omic environment for private players, market-oriented reforms and relax-

ation of government interventions. Diversification does not just involve ashift of people from agriculture to non-agricultural sectors, but also a shift

within agriculture from food grains to non-food grain crops that are high

value and export intensive. A shift in cropping pattern is warranted by a

shift in demand patterns; data show a shift in consumption basket away

from cereals and towards fruits, vegetables, meat, fish, egg and milk.

In Section 6 (dealing with poverty alleviation programmes and safety

nets), it is argued that compared with other types of public investment,

public spending on anti-poverty programmes has had the lowest impact

on poverty reduction, due to leakages, poor design, lack of targeting and

corruption. Growth is argued to be the best bet against poverty.

All the five presumptions in the book summarized above can be called

into question.

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The book argues that the outstanding agricultural growth of China in the

1980s was a result of a set of market reforms in agriculture, beginning from

an egalitarian base set by the earlier regime. It is very difficult to agree with

such a view. China had a long history of reforms in agriculture after the

revolution in 1949. These reforms began with the land reform, and included

the mobilization of peasants under collective forms of land use and signifi-

cant public investment in irrigation and rural infrastructure. These were

more than just initial conditions. One of the major achievements of this

policy was to evolve over time a system of farm management that sought

to ensure a rational use of labour, natural resources and capital as well as

share risks. The resulting agricultural growth also contributed significantly

to the growing industrial sector through resource transfers. Also, rural

reforms succeeded in raising significantly the achievements in educationand health of the rural masses.

The period of Cultural Revolution between 1966 and 1976 was indeed a

period of excesses. Applying an incorrect understanding of classical

Marxist texts, Chinese policy in this period stigmatized the role of natural

economic laws and agrarian capitalism. As a result, this decade was

marked by serious distortions in the incentive structure in agriculture,

leading to stagnation in agricultural growth.

The book under review would have us believe that the Chinese govern-

ment introduced a slew of liberalization measures in 1978 to address this

situation. Such an argument betrays a lack of theoretical grasp of the

post-1978 policy changes in China. Reform in Chinese policy cannot be

equated with an embrace of the Washington Consensus. Quite to the con-

trary, post-1978 policy changes in agriculture were driven by the Marxist

dictum of ensuring harmony between the relations of production and the

forces of production. As the Chinese scholar Luo Hanxian argued,

Highly significant among these basic changes are those that have takenplace in agriculture since 1978, which are actually a continuation of the

transformation of the socialist relations of production. The aim is to make

production relations and management systems in the countryside

conform to the present state of development of the productive forces in

agriculture, and not to maximize collective management or effect the

highest possible degree of public ownership. . . (Hanxian, 1983, p. 20).

It is the continuity of the Marxist method in determining policy that the

book portrays as the abandoning of collective farms. To say that China

embraced a free market regime in agriculture after 1978 is to deny the fun-

damentally socialist character of Chinese agriculture in the 1980s and 1990s.

First, even under the household responsibility system, land remained under

collective ownership, and production was under contract. Secondly, the

Book reviews 417


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collective continued to manage ploughing, seeding, irrigation and water

conservation in the farms. Thirdly, peasants continued to contribute to

the collective accumulation fund that was used for public investment in

rural infrastructure even under the new reformed system.

Indeed, a peculiar combination of the instruments of the state and the

market mark the post-1978 Chinese policy. As the East Asian experience

has showed us, such a combination of instruments can be a powerful

driver of growth in an era of expanding world trade. In China, however,

the range of instruments used by the state was far wider than what the

East Asian governments used or the Washington Consensus prescribed.

The new regime in China was thus erected on the shoulders of the old,

representing a distinctive symbiosis of both.

Indias liberalization of agriculture began in 1991. Unlike China, thereforms in Indian agriculture mirrored significantly the prescriptions of

the Washington Consensus. The performance of Indian agriculture during

the period of reforms has been unambiguously adverse. The growth rate

of the index of agricultural production (IAP), which was 3.4 percent

between 19811982 and 19911992, fell sharply to 1.8 percent between

19921993 and 20022003 (Ramakumar, unpublished note). Significantly,

for the first time after independence, the rate of growth of IAP fell behind

the rate of growth of population after 19921993.

There is a lack of seriousness in the book in analysing this slowdown in

agricultural production in India after 1991. The argument in the book is

that the slowdown in production after 19921993 was due to large unfin-

ished agenda in agriculture, specifically in infrastructure, domestic market-

ing and investment. What is interesting is the refusal of the authors to apply

to India the same framework as used for China. The book misses the critical

point that reforms in India were implemented over an agrarian structure

that was deeply distorted in terms of power relations and livelihood

options. Unlike China, the Indian state failed to implement land reformor invest adequately in mass education and public health. The Editors of

the book argue that creation of initial conditions, such as land reform, is

not politically feasible in India.

To conclude, while the book covers a wide range of topics related to the

agricultures of China and India, the arguments in different sections are

deeply coloured by a dogmatic neo-liberal perspective. On China, most of

the arguments in the book ignore the basic socialist character of Chinese

agriculture even while it allowed private agents more freedom. Some of

the market-friendly measures in China are cherry picked and portrayed

in the book as representing a sharp drift into Washington Consensus-type

economic policy. Further, the fundamental contribution that the agricultural

sector in China made to its industrialization through resource transfers is

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left uncovered. On India, the book argues for more liberalization in agricul-

ture, even though all available evidence point to a severe slowdown in

agricultural growth after the reforms began. India is advised to learn

from China in implementing market-friendly measures in agriculture,

even though India lacks all the initial conditions that China had. Interest-

ingly, India is not advised to implement land reform, which was Chinas

most significant initial condition.

To come back to the question: What can the two nations learn from each

other in terms of their reform experiences and their impact on agricultural

growth and poverty? One conclusion that is quite clear for this reviewer is

that China does not appear to need any lessons from India in organizing

agricultural policy. Unfortunately, the Editors evade this important con-

clusion that any sensible reader is likely to draw from its chapters.

R. Ramakumar

Assistant Professor, Centre for Development Studies, Tata Institute of Social Sciences, Mumbai;

email: [email protected]

Reference

Hanxian, L. (1983) Economic Changes in Rural China, New World Press, Beijing.

doi:10.1093/cdj/bsp030

State, Markets and Inequalities Human

Development in Rural India

Edited by Abusaleh Shariff and Maithreyi Krishnaraj, Orient Longman Pvt.

Ltd., Hyderabad, India, 2007, 784 pp, ISBN 9788125027775, Rs. 975.

This volume has 18 chapters based on the results of a survey conducted by

National Council of Applied Economic Research (NCAER). The central

thrust, as the title suggests, is on human development in rural India. The

principal concerns of the volume are: human development indicators,

employment and its determinants, education, status of children, fertility,

maternal mortality, childrens status, education, health care and differentials

in development across social groups. There is a fairly comprehensive intro-

duction by the editors, which attempts to connect the chapters thematically.

At the outset, it needs to be said that the introduction is one of the strengths

of the book even though it has certain limitations, which are briefly pointed

out below.

Book reviews 419

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