CHAPTER 9: AGRICULTURAL TRANSFORMATION

AND RURAL DEVELOPMENT

QUESTION 1-5
Page 458

By:
Ade Ayu Laraswati 155020107121010

ECONOMICS DEVELOPMENT
FACULTY OF ECONOMICS AND BUSINESS
UNIVERSITY OF BRAWIJAYA
 Chapter 9
Agricultural Transformation and Rural Development

1. Why should any analysis of development problems place heavy emphasis on the
study of agricultural systems, especially peasant agriculture, and the rural sector?

Answer:

In almost all developing countries major proportion (between 60% - 65%) of

total population resides in rural areas. Their main occupation is agriculture that is
subsistence or peasant agriculture. Most of these rural dwellers grind out a meagre
and often inadequate existence in agricultural pursuits.

This stagnant and often regressive economic life in rural areas breeds the main
problems such as poverty, inequality, and high population growth rate in
developing countries and is acting as an important road block in the path of these
countries to achieve economic growth in real meaningful sense.

With large proportion of population confined to rural areas and engaged in

agriculture related pursuits, developing countries if want real development and also
on self-sustaining basis, then they have to include the rural areas in general and
agricultural sector in particular in their development plans and formulate specific
policies that address the issues of these two avenues.

So, in view of sheer number of people being located in rural areas and dwelling
in absolute poverty and primarily engaged in subsistence agriculture any analysis
of development problems should place heavy emphasis on the study of agricultural
system, especially peasant agriculture, and the rural sector because then only the
fruits of development could reach the majority of population around the world.

2. What are the principal reasons for the relative stagnation of developing-country
agriculture in Africa? How can this disappointing performance be improved on in
the future? Explain your answer.

Answer:

The principal reasons for the relative stagnation of developing country

agriculture in Africa are:

1. Many developing countries in Africa have unused and potential cultivable

land but in absence of adequate quantity of modern tools farmers have to
rely on traditional tools and thus could be able to utilize small portion of the
land for cultivation. Also, due to long dry season in most parts of Africa
there is absence of sufficient quantity of fodder which makes it impossible
 for African farmers to use animals in agriculture and thus have to rely
solely on human labor resulting in lower productivity stagnant output.
2. Majority of Farmer families around Africa have small amount of land at
their disposal for cultivation. This small piece of land in addition to limited
amount of capital and non-existent credit sources compel farmers to utilize
traditional technology. Also, these small areas are tend to be intensively
cultivated resulting in soil degradation and falling productivity. Increase
population density is also putting break on the practice of shifting
agriculture that traditionally is an important source for the most African
tribe to meet their subsistence food requirements.
Thus, absence of modern agricultural technology, required credit
facilities, and absence of shifting agriculture as resulted in lower
productivity and stagnation of developing country agriculture in Africa.
3. African farmers are still dependent on the unimproved seeds which are
shown by them on the land characterized by degraded soil and
overdependence on rainfall in absence of feasible irrigation source results in
lower productivity and stagnation in agriculture sector all around Africa.

How to solve and improve the productivity?

a. Technology and Innovation

By introducing mechanized agriculture to push cost of labor. Also by

introducing hybrid seeds, better irrigation, fertilizer, pesticides, insecticides
innovation, etc.

b. Facilitate Credit
c. Subsidies and Investment

3. Discuss three main systems of agriculture found in the developing world. To what
extent are these systems concentrated in three major developing regions?

Answer:

Three main system of agriculture found in the developing world are:

First, system of agriculture pertains to those countries where agriculture

contributes the largest share of GDP. These countries are generally termed as
agriculture-based countries. In these countries almost two-third population resided
in rural areas and is engaged in agriculture primarily subsistence agriculture.

Second, system of agriculture pertains to those countries where majority of

population resides in rural areas but agriculture contributes only a small share of
GDP. These countries are termed as transforming countries.

Third, system of agriculture pertains to those countries where majority of

population resides in urban areas. In fact, majority of poor population itself resides
 is urban areas. In these countries agriculture contribution to GDP is very small.
These countries are termed as urbanized countries.

These group of countries in some cases, is not stagnant. They may move from
one group to another group. From Figure 9.3 I take India and China as the
examples. India moved from agricultural based into borderline agricultural
countries.

4. Compare and contrast the nature of peasant or small-scale traditional agriculture

in Asia, Africa, and Latin America. How do overall agricultural systems differ among
these regions? What are the common characteristics?

Answer:

Nature of Peasant or Small-Scale Traditional Agriculture in Latin America

In Latin America, agrarian structure act as a basic feature of entire social

economic, and political aspect of rural life. Most of the Latin American agricultural
pattern is characterized by two types of landholdings – Latifudinos and Minifundios.
Apart from them, considerable amount of agricultural production also occurs on
family farms and medium-size farms.

Latifundios are basically A very large landholding found particularly in the

Latin American agrarian system, capable of providing employment for more than 12
people, owned by a small number of land-lords, and comprising a disproportionate
share of total agricultural land.

On the other hand, family farms and medium-size farm use a more efficient
balance between labor and land and thus, have much higher total factor
productivity than either latifundios and minifundios.

Moreover, there is still need for the reorganization of social and institutional
structures in rural areas so that poor peasants especially peasant belonging
indigenous population gets real opportunity to lift themselves from their present
state of economic and social misery.

Nature of Peasant or Small-Scale Traditional Agriculture in Africa

• Low productivity due to lack of technology

• Shifting Cultivation

• Seasonal demand for labor depending on rainy season

• High dependence on unimproved seeds sown on unfertilized, rain-fed

fields

• Relatively high fraction of underutilized land

 • High concern about climate change impact

• Need for an African new green revolution, there are hopeful signs that it
is getting underway

• Gender discrimination among women

Nature of Peasant or Small-Scale Traditional Agriculture in Asia

• Impact of colonial rule in strengthening land tenure systems of private

property rights and the consequent rise of moneylenders

• Contemporary landlordism in India and Pakistan involves absentee

landlordism and persistence of sharecroppers and tenant farmers

• Rapid population growth resulted in more fragmentation and peasant

impoverishment

5. Explain the meaning of Gunnar Myrdal’s quote at the beginning of this chapter: “It
is in the agricultural sector that the battle for long-term economic development will
be won or lost.”

Answer:

“It is in the agricultural sector that the battle for long term economic development

will be won or lost.”

The statement made by a Nobel Laureate in Economics, Professor Gunner

Myrdal is still much applicable to developing countries where agriculture and rural
development has become an essential ingredient of national development.
Approximately, half of the world population resides in the rural areas. Majority of
the population in rural areas depend on Agriculture. Therefore, importance of
agricultural and rural development cannot be over-emphasized. Poorest rural areas
need to be develop first otherwise development in third world nations cannot be
achieved. It has come to the notice that the largest increase of per capita food
production is in China while for Africa there has been a significant decline in
agricultural productivity in the same period. This in turn, results in increased
economic development in China and worsening of economic situation in Africa.
Economic life in rural areas faces problems of poverty, mounting inequality,
increasing unemployment and high population growth. All these are the
consequences of neglection of agricultural development and preference given to
urban industrial economy. Advancement in agriculture encourages progress both in
rural and urban regions. In the current scenario, share of agriculture in the overall
national income has shown some steady decline. This is because of progress in
secondary and tertiary sectors. Also, worthy of emphasis is that agriculture supply
raw materials to run top industries like cotton to textiles and sugar to sugarcane
industries. Apart from this, agriculture is a market for industrial products. It also
accounts for international trade in developing countries, thus sustaining a balance
of payments and aid in becoming the country self-reliant. Improvement in internal
trade is also a part of agricultural production which helps various sectors and
government in many different ways. For example:

a. Government earns major part of their revenue in terms of land revenue,

agriculture income tax, etc.
b. Revenues earned by transport industry by transportation of agricultural
goods.
c. Government also earns revenues from export duties on agricultural products.

In order to win battle for long term economic development, Government must
undertake certain policies aiming at encouraging technologies and innovation in
farms. These policies should also target the utilization of hybrid seeds, fertilizers
and irrigation to bring some land in agriculture use, realization of land reforms and
breaking the cycle of unequal distribution of income in rural areas. It is evident
from the above mentioned facts and rational discussion that boosting agriculture

sector’s productivity stimulates economic development in various other sectors.

Hence, Gunnar Myrdal’s assertion could be considered a truism.