TRANSFORMING TRADITIONAL AGRICULTURE

1979 Nobel Price Winning Book by

Schultz

Supervised by: Prof. Dr. Kesab Khadka and Slide Presented by Raj K
Pandey
 Conceptual Framework
 Farming based on factors of production that have been
used by farmers for generations is traditional agriculture;
 Technology plays crucial role in transforming agriculture
development;
 It is essential to modernize in the traditional agriculture;
 Only high productivity can not yield high production
without support of technology which will also ease in
distribution pattern; and
 States are ignoring agricultural investment which is main
challenge in transforming agriculture.

Supervised by : Prof Dr. Keshab Khadka and Slides by Raj K Pandey

 MAJOR ISSUES RAISED BY SULTZ

FACTORS:

 Which factors of production are mainly responsible for

the differences in growth rates between agriculture
sectors in different countries?

INCOME:
 Can low income agriculture communities increase their
output by more efficient allocation of production factor?
 Under what circumstances does it pay to invest in
agriculture?

Supervised by : Prof Dr. Keshab Khadka and Slides by Raj K Pandey

 What is Traditional Agriculture in
General?
 Farming as a way of life only for livelihoods;
 Farming as a cultural performance-not as economic
activity for commercial purpose;
 Institutional set up: ownership and tenancy at different
hands; the share of agro-product to different actors of
production generally favoring feudal lords;
 Technical property: labor based and time lengthy
production process undermining both sector i.e. per
capita and per unit production.

Supervised by : Prof Dr. Keshab Khadka and Slides by Raj K Pandey

 Major Constraints in Traditional
Agriculture
 Rural psychology and socio-cultural values;
 Low marginal return to additional work;
 Low marginal productivity of capital;
 Low incentives to save and invest;

 A kind of status qua among farmers in terms of:

 A state of arts;
 Sources of income;
 Life pattern;
 Level of contact and limited horizons.

Supervised by : Prof Dr. Keshab Khadka and Slides by Raj K Pandey

Necessity for the Structural Changes
 Agriculture and community life has closed relationship
and only agriculture transformation can support to up
liftmen of the rural communities in developing nations.
 It is necessary to change the mindset of ignoring
agricultural transformation and it to be given certain
level of reorganization that agriculture also can
contribute in national development process.
 Investment in agriculture to be increased in
qualitatively as well as quantitatively and liberal
attitude in investment in the agriculture sectors.
 Traditional agriculture based communities to be
encouraged for saving.

Supervised by : Prof Dr. Keshab Khadka and Slides by Raj K Pandey

MAINE ASSUMPTIONS IN THE THEORY
 Allocation Efficiency Assumptions:
 Lack of efficiency in agricultural consumption;
 Total agricultural income is less and its expenses
patterns are non-scientific and unproductive;
 Expenses are for socio-cultural and traditional values
which is non-productive in character;
 Traditional agriculture based communities are
receptive to change for modern technology.
 To change traditional pattern of agriculture, investment
is necessary and it should address the need.
Supervised by : Prof Dr. Keshab Khadka and Slides by Raj K Pandey
High Return Assumption in Traditional
Agri
 There is low productivity in traditional agriculture due
to several reasons but if investment is increased and
the technology is adjusted and/or improved, the
productivity will yield high production.

 The rural peasants, who are based on TA, should be

mobilized for the higher income.

 Assumption of TA as Economic Growth:

 If we increase traditional agricultural by technology, it

will raise permanent income level of the peasants;

Supervised by : Prof Dr. Keshab Khadka and Slides by Raj K Pandey

 …Continued…

 The increase in income will yield additional return that

can be invested in the agro and non-agro sectors of
economy of the developing counties.

 The economic growth will support in transformation of

the traditional agriculture and it will eventually enhance
the economic development of the country.

Supervised by : Prof Dr. Keshab Khadka and Slides by Raj K Pandey

Assumptions of Investment in Human
Capital
 To transform in traditional agriculture, the investment
should also focus on the “Human Capital” of the
concerned manpower.
 The new knowledge, skill and experience handed over
will support to change the traditional agriculture pattern
of the rural communities in totality.
 Capacity enhancement among farmers will increase in
the production pattern.
 Such changes will adopt new technology and skill.

THANKS NOW YOUR COMMENTS….

Supervised by : Prof Dr. Keshab Khadka and Slides by Raj K Pandey