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Production functions for third-season vegetables
Land area mainly determined the output of third-season vegetables for adopters
(Table 10). Although the estimated coefficients for area of land cultivated,
preharvest labor/ha, and dummy variable 4 for the nonadopter group were not
significant at conventional levels of significance, they were larger than their standard
errors. (Note that labor/ha was used to avoid the multicollinearity problem). The
correlation coefficients between land area and labor were 0.58 for adopters and 0.55
for nonadopters. The significant parameter estimates of dummy variable 1 in the
production function for vegetables grown by nonadopters indicated that the farmers
who were adopters by persuasion were better than the farmers who voluntarily
adopted the technology.
Preharvest labor per unit area contributed significantly and positively, but
dummy variable 4 had a coefficient with a negative sign in the production function
of adopters. This significant parameter estimate of dummy v:iriable 4 indicated that
the production of vegetables by tenant farmers was more efficient than production
by owner-farmers. The tenancy arrangement was leasehold; therefore, it is possible
that leased lands were cultivated with better care and intensity to obtain yields that
were high enough to cover land rent.
Functional and personal income distribution
Factor-share analysis. It is assumed that each factor of production is paid its
marginal-value product; therefore, the expenditures on all primary factors reflect
the value these factors add to total production. If long-term equilibrium prevails, the
total payments to each factor plus the payments on current inputs would exhaust the
total value of production. Nevertheless, because these situations do not commonly
prevail, there is a difference between the total value of the product and the total
cost, i.e., the net income or profit. Because management cannot be easily separated
as a factor of production in rural agriculture, this difference really contains
payments to management and profit. Therefore, it is more appropriately called a
residual.
Payments to all primary factors, the residual (value added), and payments to
purchase current inputs show the functional or factor-income distribution. Because
payments to current inputs go to the sectors that produce, the value added accrues
to the factor owners in agriculture. Accordingly, the distribution of personal income
of the various factor owners is determined by the levels of use of their resources.
The personal income of peasant farmers in the current setting most probably
consists of the residual, payments for farm-family labor, and payments to farmer-
owned capital items. This analysis was conducted on these basic principles.
Factor sllure in first-season rice. Except for factor income of labor and
residual, there were no marked differences between adopter and nonadopter groups
of farmers (Table 11). Adopters used more family and exchange labor, which are
not paid for, and less hired labor. The nonadopters used more hired labor and less
family and exchange labor. The negative values of the residuals for both adopters