AGRICULTURE and DEVELOPMENT Cypher and Dietz, Ch. 11

The neglect of Agriculture in Development Economics and Policy Urban bias Cultural bias Gender bias

Structural Characteristics of Agriculture in Developing Economies: Dependency of Agricultural Development on Governmental Infrastructure Investments Neglect of agriculture → Inadequate investment in: Infrastructure: roads, dams, irrigation canals, crop storage facilities, far Social overhead capital: schools, health clinics, farm extension services, agricultural research and development; farm credit programs

Structural Characteristics of Agriculture in Developing Economies: Primary Product Mono-exporters

Structural Characteristics of Agriculture in Developing Economies: Agrarian Dualism Agrarian Dualism: large versus small cultivators One study in six LA countries found that an average of 52% of all farmland was controlled by the largest landholders although they constituted less than 1% of all agrarian households in these nations.

Agrarian Dualism: Peasant agriculture and small-scale cultivators How to characterize them? Traditional and modern techniques combined Modest marketing of cash crops combined with self- consumption of production Organized around family labor Little capital, labor-intensive, low productivity, low value- added Risk averse yet willing to undertake technical change demonstrated to be worth the risk involved Are peasants efficient cultivators? Three approaches Peasant agriculture has a hidden potential Peasants are in fact true maximizers in the neoclassical sense Peasants are inefficient by neoclassical standards yet they endure due a special logic in peasant cultivation

Agrarian Dualism: Mid-size Farmers: Cash Crop Producers

Agrarian Dualism: Large landholders and Sharecropping In the less-developed countries, large tracts of land owned by domestic owners rarely used to produce agricultural output in a purely capitalistic manner. Large owners divide their land into smaller plots to rent out or for sharecropping. Debate over efficiency of sharecropping versus own land cultivation.

Agrarian Dualism: Transnational Agribusiness Intensive use of modern agricultural technology dependent upon R&D of herbicides, fungicides, insecticides, synthetic fertilizers conducted by TNCs. Strategies developed for their imposition in developing country agriculture. Monopolization of land through practices such as vertical integration in increasingly concentrated restaurant business (e.g. McDonald’s using land for exported beef); or for exotic crops production for export to high-income industrialized nations (“strawberry imperialism”). Transnational agribusiness makes little commitment to high fixed cost assets (land, docks, railroads) in the countries where production is derived.

The Green Revolution Research on new wheat seeds, Mexico Trials on rice, corn, millet and sorghum Wide-spread application of these new plant varieties, 1960s Green revolution, 1968 Enrichment of large farmers at the expense of small farmers, early 1970s Small farmers adopt the high-yield varieties with some time lag and raise yields, late 1970s Increase in productivity yet coupled with environmental degradation reaching the limits of the GR, 1980s onwards

Government in Agricultural Development Free market versus government intervention? Appropriate policy is one which recognizes both the potential for market failures as well as government failures Hence policy intervention is necessary to prevent market failures; yet use markets and private marketing sector as the vehicle for those policy interventions. Policy interventions need to be two pronged: 1. technology development, diffusion and extension coupled with investments in infrastructure; 2. human side policies encouraging dialogue with the farming communities and their active participation in decision making, planning, implementation and evaluation.