Agricultural Transformation and Rural Development

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Agricultural Transformation and Rural Development

Agricultural Transformation and Rural Development

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  • 1. Agricultural Transformation & Rural Development.
  • 2. Contents
    • Facts.
    • Rural Development.
    • Kinds Of Agriculture.
    • Agrarian System in Latin America .
    • Agrarian System in Asia.
    • Stages of Agricultural Development .
    • Recommandations/ Policies.
  • 3. Rural Development
    • More than half of the world population lives in rural areas.
    • Living conditions: Precarious & subsistent.
    • Wide spread poverty, growing inequality, unemployment & rapid population growth.
    • Any development strategy to be meaningful must focus on rural development.
  • 4. Rural Development
    • Any such policy requires at least 3 basic complementary elements:
      • Increase productivity of small farmers
      • Increase domestic demand through employment-oriented urban development
      • Diversify, non-agricultural, labor intensive rural development strategy
    • Without such integrated rural development any industrial growth will only give rise to inequality, poverty and unemployment
  • 5. Facts on Agriculture
    • Agriculture employs at least 60% of the labour force in
    • Asia and Africa, but it only accounts for no more than
    • 30% of GDP.
    • Between 1950 and 1970, per capita food and
    • agricultural production grew less than 1% per year in
    • the developing world.
    • The green revolution has helped increase agricultural
    • productivity in developing countries.
  • 6.
    • China has shown the largest growth of per capita food production in the last two decades.
    • Africa has shown a significant decline in agricultural productivity in the last two decades.
    • Major reason for poor agricultural performance in developing countries - neglect of agriculture coupled with a bias toward urban industrial economy.
    • Solution integrated rural development
  • 7. Two Kinds of World Agriculture.
    • Highly Efficient
    • Developed countries
    • High output per worker
    • Small number of Farmers can feed entire nation.
    • Technological and
    • biological improvements.
    • Inefficient
    • Developing countries.
    • Low productivity.
    • Agricultural output can
    • barely sustain farm
    • population.
    • Technological Stagnation.
  • 8. Agrarian system in Latin America
    • There are two types.
    • Latifundios
    • Minifundios.
    • Latifundios : latifundios are very large landholdings that employ from 12 to even thousands of workers.
    • Latifundios are inefficient : they do not exploit the economies of scale of large production, but rather they underutilize the land.
    • Reasons why latifundios are inefficient: (1) large
    • landholdings are a symbol of power rather than a
    • productive asset; (2) monitoring costs are higher for large landholdings.
  • 9. Minifundios.
    • Minifundios: These are small farms that can only provide for a single worker.
    • Minifundios comprise up to 90% of the farms, but only occupy up to 17% of total agricultural land.
  • 10. Agrarian system in Asia.
    • Asia suffers from land scarcity: a large number of
    • peasants are crowded in too little land
    • Traditional agrarian structure is the village: the
    • community owns the land, and peasant families can
    • use it to provide goods and services to the whole tribe
    • European colonization changed the system by
    • encouraging private property ownership. This created:
    • (1) landlords: who own the land, but usually live in
    • the city.
    • (2) sharecroppers and tenant farmers: who actually work the land.
  • 11.
    • Sharecropping occurs in about 85% of the land in Asia.
    • The transition from subsistence to commercial
    • production gave rise to the money-lender: he
    • provides cash to the farmer to cover for seeds,
    • fertilizers and food while the crop is harvested.
    • Land plays the role of collateral.
    • The money-lender phenomenon has led to many peasants losing their land, being forced to become tenants paying high rents, and being trapped in poverty.
  • 12. The Economics of Agricultural Development.
    • Three stages of agricultural development:
    • (1) Subsistence : low-productivity, subsistence level,
    • peasant farm.
    • (2) Diversified: mixed family agriculture, part for consumption, part for sales.
    • (3) Specialized: high-productivity modern farm
    • with specialized agriculture geared to commercial markets.
  • 13. Characteristics of Subsistence farming.
    • 1. Most output produced for family consumption.
    • 2. Land and labour are the main factors of production, while capital investment is minimal.
    • 3. It is threatened by the failure of rains, and the potential appropriation of the land by the money lender.
    • 4. Labour is underemployed most of the year, but highly occupied for planting and harvesting.
    • 5. Farmers are often resistant to technological innovation due in part to the limited access to credit, insurance and information: there is a lot of uncertainty and risk involved in subsistence farming.
  • 14. Transition to mixed and diversified farming.
    • A successful transition from subsistence to diversified farming depends on the availability of credit, fertilizers, crop information and marketing facilities.
    • Farmers need to feel secure that his family will benefit from the change in order to guarantee successful transition.
  • 15. Transition to specialized, modern commercial farming.
    • This type of farming usually emerges when other sectors of the economy, such as the industrial sector, have already developed.
    • It usually involves capital intensive and labour saving techniques of production.
  • 16. Policies for agricultural development.
    • Policy # 1:
    • Encourage technology and innovation in farms, not in the form of labour-saving machinery (since developing countries are abundant in labour), but rather in the form of hybrid seeds, irrigation and fertilizers.
    • Policy # 2:
    • Better design of government policies to guarantee equitable access of all farmers to credit and technological innovations. Often the benefits of these policies are only enjoyed by large-scale farmers.
  • 17. Policies.
    • Policy # 3:
    • Implementation of land reform coupled with
    • access to credit in order to provide rural families with ownership of productive assets (land) and break the vice circle of highly unequal distribution of rural income.
    • Policy # 4:
    • A fully fledge integrated rural development, which includes:
    • (1) not only increasing agricultural productivity, but also encouraging nonfarm activities in the rural areas;
    • (2) Access to health, education and housing in rural areas.
  • 18. The End Any Question.