AGRICULTURAL EFFICIENCY GAINS IN CENTRALLY PLANNED ECONOMIES

This paper estimates the growth of agricultural production efficiency in nine centrally planned economies over two time periods, 1965-1977 and 1978-1989. The second time period was one of agricultural policy reform for most of the nine countries. Our major finding is that production efficiency improved in the second time period, helping to check a fall in growth of agricultural output. Gains in production efficiency were as large in Central and Eastern Europe as the gains in China, even though economic reforms were deeper in China, where production was privatized. The slowdown in growth of agricultural production in the 1980's was not due to production inefficiencies, but rather due to slower growth of inputs, particularly fertilizer. The implication of our results is that privatization of farming may be unnecessary in order to achieve high production efficiency gains. (C) 1994 Academic Press, Inc.