Self-Production of Mulberry Leaves and Market Participation of Sericulture Farmers in Prewar Japan

Abstract

Sericulture, as with animal husbandry, is a form of agriculture in which satisfying the demand for intermediate input is crucial for successful management.　Quantitative studies on sericulture during the prewar period of Japan paid little attention to the functions and the limitations of the mulberry leaf market, because sericulture farmers at that time generally managed mulberry gardens themselves.　However, some historical records show the existence of local mulberry leaf markets in many of the sericultural regions of prewar Japan.　To fill the gap, we conducted micro-econometric analyses using a unique data set obtained from the “Record of Sericulture Management Survey”.　The analyses investigated the main factors of the market imperfections that resulted in the existence of autarkic mulberry leaf farmers, and also evaluated the leaf input efficiency for farmers who participated in the market.　

First, we consider two causes of market imperfections:a price difference between the purchase and selling prices of leaves in the market and differences in the quality of self-produced and purchased leaves.　The data show that a price band existed in the leaf market.　At the same time, the literature shows that the leaves of the mulberry species cultivated in Japan deteriorate more easily than species in China, where a more active mulberry leaf market was observed during the prewar period.　The agricultural household model suggests that both factors can result in the existence of autarkic farmers.　Therefore, the main cause of the market imperfection is an empirical question.

To investigate differences in quality, we estimated the production function of cocoons to detect a difference in productivity between self-produced leaves and purchased leaves.　No significant difference was detected in the productivity, even after controlling endogeneity and selection bias.　The results suggest that the low quality of purchased leaves is not the main cause of market imperfection.　

If the price band is the only reason for the market imperfections, the input of mulberry leaves by farmers who participate in the market was efficient;the marginal value of mulberry leaves for the net buyer （seller） of leaves is equated to the purchase （selling） price.　A strict test for this hypothesis was rejected, but a more generous test was not rejected.　The marginal value product of leaves for the net buyer （seller） is not far from the purchase （selling） price.　Therefore, we concluded that the price band was the main reason for the existence of autarkic farmers.　Once participation in the leaf market has become optimal for sericulture farmers, the market allows them to adjust for excesses and shortages of mulberry leaves in the individual farm economies.　However, regression analyses also suggest a quantitative limitation in the market.　Farmers who had a relatively high demand for their leaves compared to their supply abilities may have not been able to satisfy the demands to achieve efficient sericultural management.

JEL Classifications:C23, D13, N55, O13, Q12