1. Agricultural Transformation and Rural Development
“It is in the agricultural sector that the battle for long-term economic development will be won or lost.”
Gunnar Myrdal
320RK

2. Agricultural Transformation and Rural Development: Outline
Integrated rural development
Growth and stagnation of the agricultural sector since 1950
Characteristics of agrarian systems in Latin America, Asia, and Africa
Economics of peasant subsistence agriculture and transition to commercial farming
Land reform and land markets
Role of women in agriculture
Case Study
320RK

3. Agricultural Transformation and Rural Development: Introduction
The heavy emphasis in the past on rapid industrialization may have been misplaced
Agricultural development is now seen as an important part of any development strategy
Although agriculture employs the majority of the LDC labor force, it accounts for a much lower share of total output
Trends in per capita food and agricultural production,
320RK

4. Agricultural Transformation and Rural Development
How can agricultural output and productivity per capita be substantially increased that will benefit the small farmer and support the urban population?
What is the process by which traditional farms are transformed into commercial farms?
Why do traditional farmers resist change?
Are price incentives sufficient to increase output?
How can rural development be achieved?
320RK

5. % of L force in Agriculture Agricultural output as a % of GDP
Agricultural stagnation and Growth Since 1950: Output and employment, 1995
Region
% of L force in Agriculture
Agricultural output as a % of GDP
South Asia 64 30
East Asia 70 18
Latin America 25 10
Africa 68 20
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9. Distribution of Farms and Farmland
Avg. Operational farm size hectares
% of farmland above 50 hectares
% of tenanted area in farmland
Asia:
Bangladesh
India
Philippines
1.6
2.3
3.6 Na
3.7
13.9
20.9
8.5
32.8
Latin America:
Brazil
Costa Rica
Peru
59.7
38.1
16.9
84.6
79.7
79.1
10.2
9.0
13.6
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11. Structure of Agrarian Systems
Two kinds of world agriculture:
Efficient agriculture- high labour and land productivity
Inefficient agriculture- diminishing returns to labour
320RK

12. Agricultural in Latin America, Asia, and Africa
Peasant agriculture in Latin America, Asia, and Africa
Latin America
The Latifundio-Minifundio pattern
Resource underutilization
Asia
Fragmentation and subdivision of peasant land in Asia
Africa
Extensive cultivation patterns
Shifting cultivation
320RK

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14. Latifundio-Minifundio pattern
Latifundios- employment of 12 or more
Minifundios- employment of 2 or less
Family farms- employment of 4-12 workers
Inefficient operation of latifundios
Inequality in land distribution
320RK

15. Fragmentation and subdivision
High population density and small patches of land
Equal distribution of land
Traditional pattern of land ownership arose from 3 forces:
Colonial rule
Power of money lender
Rapid population growth
320RK

16. Subsistence Agriculture and Extensive cultivation
Importance of subsistence agriculture in the village community
Practice of shifting cultivation
Right to common property such as land and water
Historical forces restricting growth of output:
Traditional farming practices
Intensive and shifting cultivation
Scarce labour supply during peak season
320RK

17. Economics of agricultural development
Three broad stages in the evolution of agricultural production:
Primitive stage- subsistence peasant farm
Mixed family agriculture- consumption+sale
Modern farm- specialized and commercial farming
320RK

18. Economics of agricultural development: Transition process
Specialized, modern commercial farming
Diversified or
mixed farming
Subsistence farming
320RK

19. Subsistence farming: Risk aversion and uncertainty
Small farmer attitudes toward risk: Exploding the myth of irrational producers
320RK

20. Subsistence farming: Risk aversion and uncertainty
320RK

21. Crop yield of different farming techniques
320RK

22. Incentives under share cropping
320RK

23. Sharecropping and interlocking factor markets
Sharecropping occurs when a peasant farmer uses the landowner’s farmland in exchange for a share of food output which the peasant farmer grows.
Is share cropping inefficient?
Marshall’s observations
Cheung’s findings
Shaban’s study
Hayam’s findings
Recent approach to share cropping in the event of interlocking factor markets
320RK

24. Sharecropping and interlocking factor markets
Interlocking factor markets occur when different inputs are provided by the same suppliers and these suppliers exercise monopolistic or oligopolistic control over resources.
Case study of Sharecropping and Constraints on Agrarian Reform: India at
320RK

25. Land Reform: Is it inevitable for tenant’s welfare
Land reform means the redistribution of property or land rights for the benefit of the landless, tenants, and farm laborers.
Agrarian reform embraces improvements in both land tenure and agricultural organization.
Types of land reform intervention:
Land tenure reform
External inducements or market based incentives
External controls
Confirmation of title
320RK

26. Land Reform: Is it inevitable for tenant’s welfare
Land reform means the redistribution of property or land rights for the benefit of the landless, tenants, and farm laborers.
Agrarian reform embraces improvements in both land tenure and agricultural organization.
Types of land reform intervention:
Land tenure reform
External inducements or market based incentives
External controls
Confirmation of title
320RK

27. Land Reform: Inevitable for Tenant’s Welfare
Points for discussion:
What is the case for equitable land distribution?
Are big farms more efficient?
Design of a land reform
Should land reform be a permanent, one-shot reform? (revolutionary)
Should landlords be compensated? (evolutionary)
Alternatives to traditional land reform
Market assisted land reform
Tenancy reform
320RK

28. Land reforms Additional material:
Land Reforms: Prospects and Strategies by
Abhijit V. Banerjee, Massachusetts Institute of Technology at
You may like to use the points for discussion to go through the paper or rely on your class notes.
320RK

29. Toward a strategy of agricultural and rural development
Improving small-scale agriculture
Technology and innovation
Institutional and pricing policies
Supportive social institutions
Conditions for rural development
Land reform
Supportive policies
Integrated development objectives
Role of women in agriculture (case study applies to supportive policies and integrated RD as well)
Microfinance - Hope for the Poor: The Grameen Bank of Bangladesh at Microfinance at
320RK