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2017 | Buch

Introduction Kapitel lesen Erstes Kapitel lesen

Agricultural Development and Economic Transformation

Promoting Growth with Poverty Reduction

verfasst von: Prof. John W. Mellor

Verlag: Springer International Publishing

Buchreihe : Palgrave Studies in Agricultural Economics and Food Policy

Enthalten in: Springer Professional "Wirtschaft+Technik" , Springer Professional "Wirtschaft" , Springer Professional "Technik"

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Über dieses Buch

This book examines the role of agriculture in the economic transformation of developing low- and middle-income countries and explores means for accelerating agricultural growth and poverty reduction. In this volume, Mellor measures by household class the employment impact of alternative agricultural growth rates and land tenure systems, and impact on cereal consumption and food security. The book provides detailed analysis of each element of agricultural modernization, emphasizing the central role of government in accelerated growth in private sector dominated agriculture. The book differs from the bulk of current conventional wisdom in its placement of the non-poor small commercial farmer at the center of growth, and explains how growth translates into poverty reduction. This new book is a follow up to Mellor’s classic, prize-winning text, The Economics of Agricultural Development.

Inhaltsverzeichnis

Frontmatter
Chapter 1. Introduction
Abstract
This chapter first summarizes the two “big ideas” that are the subject of this book. These ideas differ from current central tendencies in thinking about the agriculture of low- and middle-income countries and poverty reduction. That is followed by definition of the concepts that are central to the analysis in this book—geographic area and national income level, four types of households (small commercial farm, large-scale/feudal farm, rural non-farm, and urban), economic transformation, agricultural modernization, and rapid agricultural growth.
John W. Mellor

Agriculture and the Economic Transformation

Frontmatter
Chapter 2. The Economic Transformation
Abstract
The economic transformation is the overriding feature of economic growth in low- and middle-income countries. The transformation is from a predominantly rural and agricultural nation to one that is predominantly urban with urban industry and services dominating the economy. It is accompanied by a demographic transition. The population growth rate first accelerates then slows and eventually declines. Health and life expectancy improve greatly. The many factors determining these two transformations are discussed.
John W. Mellor
Chapter 3. Measuring the Impact of Agricultural Growth on Economic Transformation
Abstract
This chapter measures the impact of rapid growth in agricultural production on income, employment, and food security. It does so by accommodating the variables described in Chap. 2 in a spreadsheet and calculating and comparing the effect of a six percent and a three percent growth rate in agricultural production. The methodology is presented, followed by application to three percent and six percent agricultural production growth rates and then the effect of converting feudal land holdings to small commercial farms. The applications are to Ethiopia and two quite different provinces in Pakistan. A sensitivity test of change in the employment elasticities is carried out and the results sensitive to that assumption are shown.
John W. Mellor
Chapter 4. Poverty, Food Security, and Nutrition
Abstract
The poor who tend not to benefit from rapid agricultural growth represent a difficult context for poverty reduction. There are substantial geographic areas that have a high proportion of their population in poverty but which are not suitable for the application of the improved technologies that drive agricultural income growth and its transfer to the poor. More amenable to solution are classes that may not fully participate in poverty reduction even though they are in areas suitable for rapid technological advance: female-headed households, subsistence farmers, high proportions of rural non-farm households, and disadvantageous tenure conditions. As poverty is reduced, food security increases and the focus can shift to the complex problem of improving nutritional quality.
John W. Mellor
Chapter 5. Capital Formation and the Exchange Rate
Abstract
Agriculture can speed economic transformation by financing capital for the urban sector. Some countries have extracted massively from agriculture in the context of little or no agricultural growth. The result has been reduced income in agriculture and even massive starvation. Overvalued exchange rates as a means of extracting from agriculture often have an unfavorable effect on agricultural growth. A contribution from agriculture has quite a different impact when agricultural productivity is growing rapidly through technological change. Taiwan illustrates how a wide variety of mechanisms for capital transfer from agriculture played a substantial positive role in the development of the urban industrial sector. A comparative statement of the role of trade in a rapid agricultural growth strategy is presented.
John W. Mellor

Traditional Agriculture: The Base for Modernization

Frontmatter
Chapter 6. The Farm, the Farmer, and Labor Supply
Abstract
Rapid agricultural growth with all its benefits is possible because of the potential for the small commercial farmer to change from low-productivity underutilization of resources in traditional agriculture to high-productivity greater use of resources in a modernizing agriculture. The conditions of traditional agriculture provide the base for modernization, influencing how it proceeds, and its impact. Of particular importance are the labor/leisure choices of the small commercial farmer, how they differ considerably and among farms, and how that provides the basis for quite different outcomes in a variety of situations. Discussion of policies for increasing production in traditional agriculture explains why continuous rapid growth does not occur in traditional agriculture.
John W. Mellor
Chapter 7. Land and Land Tenure
Abstract
In both traditional and modernizing agriculture, area and quality of land farmed is the principal determinant of income potential. The essence of modernization is a large sustained increase in crop yields. That potential is influenced by the characteristics of land in traditional agriculture. This chapter describes characteristics of land, systems of land tenure, the potential for increasing land area, and sustainability and environmental issues in land preservation. Large-scale feudal farming once dominated large areas but now have mostly been converted to small commercial farms through radical changes in government. Systems dominated by small commercial farmers are most suitable to rapid agricultural growth and to poverty reduction.
John W. Mellor

Modernization of the Small Commercial Farm

Frontmatter
Chapter 8. Government and the Institutions of Modernization
Abstract
This chapter introduces the essential public institutional structures for modernization of agriculture, what they are to accomplish, how they interact with the dominant private sector, and key issues in their development. Discussion proceeds to farmers and private businesses whose incentive-based decisions determine the effect of government policies and institutions. That is followed by discussion of the key issues important in determining the long-run success of government programs for agricultural modernization. Next is the critical issue of geographic concentration of government effort. The final section outlines the interrelation between succeeding chapters.
John W. Mellor
Chapter 9. Physical Infrastructure
Abstract
Agricultural modernization requires large-scale investment in rural physical infrastructure—roads, electrification, communications, computer access. Infrastructure must be constantly upgraded. Agricultural modernization also requires integrated markets. Marketing margins widen greatly, reducing the incentive to modernize as roads become worse or non-existent. Rural infrastructure is also critical to rural social well-being, including the universal objectives of health and education systems. The highly trained personnel critical to modernization generally refuse to live in areas with a deficient infrastructure. Governments vary tremendously in the extent to which they allocate resources to rural infrastructure. Such investment is an important indicator of government concern or lack of concern for the people of rural areas and rapid agricultural growth.
John W. Mellor
Chapter 10. Rural Education and Health
Abstract
Increased rural employment and income derived from rapid agricultural growth create an improved context for school attendance and improved health. Education and health increase the response by small commercial farmers to productivity-increasing modernization. Rural education and health require constantly increasing public sector investment. They are as important to universal social objectives as to agricultural growth. All levels of education are essential to agricultural modernization. Primary education must be universal so everyone has the basic skills of literacy and numeracy. Secondary education must be achieved by a rapidly increasing portion of the population as modernization demands those skills and for selection to higher education. Higher education is essential for rapidly increasing qualified staff for public and private institutions.
John W. Mellor
Chapter 11. Prices and Price Policy
Abstract
Agricultural price policy and analysis have a quite different context and requirements when associated with rapid agricultural growth as compared to slow-growth agricultures. Technology-based agricultural growth increases incomes of both farmers and the rural poor. The thrust of this chapter is that government subsidies to cereals output and input prices have a prohibitively high opportunity cost in foregone investment in agricultural growth. The rural poor may be driven into extreme poverty with long-term loss of productive capacity owing to rising cereal prices. In that case, intervention to assist the poor is a good idea, especially, as is often the case, if it is paid for by foreign assistance donors.
John W. Mellor
Chapter 12. Research and Extension
Abstract
The foundation for agriculture’s role in economic transformation is largely public modern science institutions producing a steady flow of improved technology. That technology must be locally based to ensure suitability to highly variable local conditions. Agriculture stands out relative to other sectors in the centrality of modern science to its progress. Research results must reach farmers and farmers’ requirements must feed back to research. As a result, research and extension must be tightly integrated. The research system is also the repository of the best technical knowledge and all the other institutions feed off of it. It is central to rapid agricultural growth, which is usually underinvested, and often grossly so.
John W. Mellor
Chapter 13. Purchased Inputs
Abstract
The core of agricultural modernization is yield and income-increasing technology based on modern science. Associated with new technology is a shift from inputs produced on the farm to those that are purchased and dramatic increase in the quantity of those purchased inputs. That in turn requires new types of servicing businesses and institutions. There is scope for increased efficiency in the use of purchased inputs and there are environmental problems that must be addressed. However, they are essential in large quantities to modernization and all its benefits. Five types of purchased inputs are discussed in this chapter: fertilizer, irrigation, seed, pesticides, and machinery.
John W. Mellor
Chapter 14. Finance for the Small Commercial Farmer
Abstract
Loans to small commercial farmers increase their investment and significantly accelerate the agricultural growth rate. Increased lending to those farmers requires a specialized lending agency such as that in all high-income countries and the bulk of Asian countries. Competition in lending is desirable so a plethora of other lending institutions is desirable but the core is the specialized agency. This chapter starts with background information and then provides brief points on the wide range of rural lending institutions. That is followed by detailed analysis of the requirements for a specialized agricultural lending institution. The chapter closes with a discussion of literature that presents saving, insurance, and borrowing as being interchangeable.
John W. Mellor
Chapter 15. Cities, Consumption, and Marketing Dynamics
Abstract
The economic transformation, associated rapid growth of cities and small towns, rising incomes, and expanded export markets bring large changes in the level, location, and composition of agriculture consumption. These in turn bring major opportunity for change in the size and composition of agricultural production and a large increase in the proportion of consumer expenditure on post-farm marketing. In the context of these major changes, small commercial farmers maintain a cost of production comparative advantage but face problems in meeting the new requirements with respect to what they produce and in marketing. That requires further progress in the basic institutions and investments that drive agricultural production as well as new or improved institutional structures.
John W. Mellor
Chapter 16. The Role of Foreign Aid
Abstract
Rapid agricultural growth in low- and middle-income countries is possible because of the potential for a rapid catch-up with the present high-income countries. Thus, technical assistance from those countries should be especially valuable. Poverty reduction is central as an objective of foreign aid and we have shown that that requires rapid development of agriculture. Thus, it is surprising that foreign aid has had a mixed record in increasing growth and productivity of agriculture, and hence in poverty reduction. The comparative advantage of foreign technical assistance lies with agricultural research/extension systems, including higher education, with large-scale training with the emphasis on advanced degrees, assistance to a specialized lending agency for the small commercial farmer, and policy analysis.
John W. Mellor
Chapter 17. Conclusion
Abstract
This chapter concludes in two contexts: first, national planning for implementation; and second, departures from current conventional wisdom. The task in low- and middle-income countries is building and adapting to changing circumstances the critical set of institutions and making large investments for agricultural growth. That is to be done largely in the public or quasi-public sector and in the context of acute scarcity of financial and trained personnel resources. That requires explicit national vision, strategy, and planning and priorities or sequencing of efforts. The departures from conventional wisdom are with respect to the role of agriculture in the economic transformation, the nature of traditional agriculture, and in several aspects of modernization.
John W. Mellor
Backmatter
Metadaten
Titel
Agricultural Development and Economic Transformation
verfasst von
Prof. John W. Mellor
Copyright-Jahr
2017
Electronic ISBN
978-3-319-65259-7
Print ISBN
978-3-319-65258-0
DOI
https://doi.org/10.1007/978-3-319-65259-7

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