9.

1 The Imperative of Agricultural Progress And Rural Development

 Migration to cities in Africa, Asia, and Latin America is largely due to economic
stagnation in rural areas.
 Nearly 2 billion people in developing regions live in inadequate agricultural conditions.
 Over 3 billion rural dwellers in 2018, with a quarter in extreme poverty.
 Rural populations exceed 60% in low- and lower-middle-income countries.
 In 2018, over 820 million people lacked adequate food.
 Development must integrate rural and agricultural sectors to address poverty, inequality,
and population growth.
 Historically, agriculture was seen as passive, supporting industrial growth through cheap
food and labor.
 Modern economists emphasize agriculture as essential for economic progress in
developing countries.
 Key strategies include:
1. Increasing agricultural productivity through Technology, institutions, and
incentives.
2. Boosting demand via urban employment-oriented strategies.
3. Promoting labor-intensive, non-agricultural rural development.
4. Agricultural and rural development are crucial for balanced national
development.
5. Regions exhibit diverse agrarian systems with common characteristics:
traditional, mixed, and commercial farming.
 Agricultural and rural development are crucial for balanced national development.
 Regions exhibit diverse agrarian systems with common characteristics: traditional,
mixed, and commercial farming.

9.2 Agricultural Growth: Past Progress and Current Challenges

9.2.1 Trends in Agricultural Productivity
 Agricultural production has kept pace with population growth, defying predictions of
food shortages.
 Developing countries led in agricultural output growth (2.6% annually from 1980–2004)
compared to developed countries (0.9%).
 Developing countries’ share of global agricultural GDP rose from 56% to 65% during
the same period.
 Successful agricultural programs have increased productivity and reduced hunger
globally, including innovations like Green Revolution methods, pest-resistant crops,
and improved marketing systems.
 Despite global gains, sub-Saharan Africa faced limited yield growth and poverty traps,
exacerbating hunger and famine.
 Agricultural employment in developing countries remains high, but output is lower due
to low labor productivity.
  Uneven progress is evident: Asia achieved significant cereal yield increases, while
Africa struggled with soil degradation and insufficient resources.
 Food price spikes in 2007–2008 and 2011 revealed vulnerabilities, with predictions of
higher prices due to biofuels, increased demand, productivity slowdowns, energy
costs, land scarcity, and climate change.
 Long-term challenges include feeding over 9 billion people by the late 2040s, with calls
for international cooperation to address food security and prevent harmful trade
restrictions.

9.2.2 Market Failures and the Need for Government Policy

 Agriculture in low-income regions has suffered due to government neglect, with a
focus on urban industrial development through rapid industrialisation and import
substitution.
 Government intervention in agriculture has often been harmful, such as requiring
farmers to sell at low prices, and subsidies are costly and inefficient.
 Market failures in agriculture are common and include; environmental externalities,
research and training gaps, monopoly and monopsony power, and missing markets.
 Governments can create markets where they are absent, such as for weather
insurance and credit, and support infrastructure and institutions.
 Poverty traps, such as lack of credit, insurance, and social exclusion, limit farmers’
ability to escape poverty and require government facilitation and NGO support.
 Policies should address market failures and inequality before liberalisation to ensure
poor farmers benefit from agricultural growth.
 Including poor farmers in agricultural growth maximises resource use, accelerates
growth, and reduces poverty.

9.2.3 Agricultural Extension

Agricultural Extension: Demonstration and training services for improving agricultural
practices and raising farm productivity.
 Are usually supported by government, often works with universities, like US land-grant
universities, to teach farmers improved inputs and techniques.
 Includes training in natural resources, health, nutrition, and sanitation practices.
 Introduced high-yielding crop varieties with positive effects, though mixed records in
developing countries.
 Farmer Field Schools (FFSs): Participatory, learning-by-doing education for farmers,
starting in Indonesia in the 1980s.
 ●Junior FFS: Adapts FFS for farm children and youth, focusing on knowledge, skills,
and food security, with potential household spillover.

●Many proven technologies and improved farming practices hold great promise for boosting
agricultural production and reducing poverty in low-income countries. But the adoption of such
technologies smallholder farmers, in sub-Saharan.
 Causes:
1. Causes of low adoption include lack of knowledge
2. lack of access to markets
3. farmers’ inability to distinguish genuine from counterfeit seeds, fertiliser and
other products on the market
4. credit constraints and uninsured risks;
5. problems of coordination with neighbours
Women Farmers
 Underserved by agricultural extension, leading to household imbalance and harm
 Marginalised smallholder women lack opportunities to adopt improved cultivation
techniques.

9.3 The Structure of Agrarian Systems in the Developing World

9.3.1 Three Systems of Agriculture
Understanding agricultural systems in developing regions is key to advancing agricultural and
rural development, particularly the economic transition from subsistence to commercial
agriculture.
Agriculture-based countries
 Agriculture contributes significantly to GDP growth (32% average).
 Includes 417 million people, mostly rural and poor.
 Examples: sub-Saharan Africa (82% rural population), Laos, and Senegal
(undergoing transformation).
Transforming countries
 Rural poverty remains high (80% of poor live in rural areas).
 Agriculture contributes less to GDP growth (7% average).
 Includes 2.2 billion people, mainly in South/East Asia, North Africa, and the Middle
East.
Urbanised countries
 Nearly half or more of the poor are urban.
 Agriculture contributes minimally to GDP growth.
 Examples: Latin America, Caribbean, Eastern Europe, Central Asia.

Countries transition between categories over time:

Examples: India and China (agriculture-based to transforming), Brazil (transforming to
urbanised).
Agricultural productivity varies widely:
  Developed countries have higher land and worker productivity due to more physical and
human capital.
 Grain yields and value-added per worker in developed countries vastly exceed those in
developing countries.

9.3.2 Traditional and Peasant Agriculture in Latin America, Asia, and Africa
 Large areas of land in developing countries are often concentrated in the hands of a
small class of landowners, especially in Latin America and parts of Asia.
 In Africa, historical factors and relatively more unused land have resulted in a different
agricultural structure.
 Impoverished peasants in Latin America, Asia, and Africa struggle for survival, but their
agrarian systems vary.
 In Latin America, the latifundio–minifundio system contributes to the peasants’ struggles.
 In Asia, fragmented and congested small land parcels are the primary challenge.
 Average farm sizes are larger in Latin America than in Asia, but the variance in size is
higher in Latin America.
 Some countries experience smaller farms over time, while others see consolidation into
larger farms, with differing trends in inequality.
 Land Lorenz curves and Gini coefficients measure the distribution of farm sizes and their
changes over time.
 In Asia and increasingly in Africa, farm sizes are becoming smaller due to subdivision.

9.3.3 Agrarian Patterns in Latin America: Progress and Remaining Poverty Challenges
Latin America’s rural landscape is characterized by the latifundio-minifundio system, a colonial-
era dualistic agrarian structure. This system consists of:
Latifundio 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
Landlords, and comprising a disproportionate share of total Agricultural land.
Minifundio A landholding found particularly in the Latin American agrarian system Considered
too small to provide adequate employment For a single family.
Gini Coefficients measure how unequally land is distributed.
 Family farm A farm plot owned and operated by a single household.
 Medium-size farm A farm employing up to 12 workers
Latin America’s wealthy landowners control large farms (latifundios) with fertile land. They
prioritize:
1. Power and prestige
2. Idle or farmed less
Latifundio transaction costs, especially the cost of supervising hired labour, are much higher
than the low effective cost of using family labour on family farms.
9.3.4 Transforming Economies: Problems of Fragmentation And Subdivision of Peasant
Land in Asia
If the major agrarian problem of Latin America, at least in traditional areas, can be identified as
too much land under the control of too few people, the basic Problem in Asia is one of too many
people crowded onto too little land.
Three major interrelated forces that moulded the traditional pattern of land ownership into its
present Fragmented condition:
1. the intervention of European rule
2. the progressive introduction of monetised transactions and the rise in power of the
moneylender
3. the rapid growth of Asian populations
9.3.5 Subsistence Agricultural and Extensive cultivation in Africa

The low-productivity subsistence farming characteristic of most traditional African agriculture

results from a combination of three historical forces restricting the growth of output:
1.Traditional Tools and Methods
2. limited land and labor
 Shifting cultivation
Tilling land until it has been
exhausted of fertility and then
moving to a new parcel of land,
leaving the former one to regain
fertility until it can be cultivated again.
3. labor scarcity

9.4 The Important Role of Women

 In Africa, where subsistence farming is predominant and shifting cultivation remains
important, nearly all tasks associated with subsistence food production are performed
by women.
 many studies on African women’s participation in agriculture and found that in nearly
all cases recorded, wwomen did most of the agricultural work. In some cases, they
were found to do around 70% and in one case, nearly 80% of the total.
 Women do much of the labour for cash crop production, cultivate food for household
consumption, raise and market livestock, generate additional Income through cottage
industries, collect firewood and water, and perform household chores, including the
processing and cooking of food
  This heavy workload contributes to women experiencing “time poverty,” meaning they
have limited time for rest and other activities.
 Women are responsible for a significant portion of agricultural labor, ranging from 60%
to 80% in Africa and Asia, and about 40% in Latin America.
 women face various challenges, including limited access to resources, unequal
bargaining power within households, and cultural barriers that restrict their economic
opportunities.
 Government assistance program tend to reach men, not women
9.5 The Microeconomics of Farmer Behaviour and Agricultural Development
9.5.1 The Transition from Traditional Subsistence to Specialised Commercial Farming
Three stages of agricultural development:
 The first stage is the pure, low-productivity, mostly subsistence-level traditional (peasant)
farm, still prevalent in Africa.
 The second stage is what might be called diversified or mixed family agriculture where a
small part of the produce is grown for consumption and a significant part for sale to the
commercial sector, as in much of Asia.
 The third stage represents the modern farm, exclusively engaged in high-productivity,
specialised agriculture geared to the commercial market, as in developed countries, and
often found in the highly urbanised developing countries.
9.5.2 Subsistence Farming: Risk Aversion, Uncertainty, and Survival
 Staple Foods – Main food consumed by a large portion of a country’s population
Subsistence farming is characterized by:
 Low productivity
 minimal capital investment
 Reliance on traditional tools and methods.
Risk and Uncertainty: Crop Failure, Unpredictable weather, Market price fluctuations, Threat of
pests and diseases
9.5.3: THE ECONOMICS OF SHARECROPPING AND INTERLOCKING FACTOR MARKETS
 Sharecropping is a farming arrangement where a tenant farmer uses a landlord’s land in
exchange for a portion of the harvest. For instance, a tenant might give half of the rice or
wheat they grow to the landlord.
Challenges in Sharecropping:
 Tenants are only rewarded with a portion of their output. As a result, they have less
motivation to maximize productivity compared to if they owned the land.
 It keeps farmers poor and dependent.
Alfred Marshall observed that tenants would naturally reduce their effort since their full
labor value is not returned to them.
 Monitoring Approach (Steve Cheung) – monitoring tenant’s effort to ensure optimal work
level. Landlords would establish contracts requiring adequate work effort as well as
stipulating each party’s share of the output.
Screening Hypothesis – shifts the focus from monitoring to self-selection. Landlords could
offer tenants choices between sharecropping and fixed rent contract to differentiate the high-
ability farmers from the low-ability farmers.
 Interlocking Factor Markets: These occur when a single entity (often the landlord)
controls multiple inputs tenant needs, such as credit, seeds, or market access for
selling crops. While this setup can simplify access to resources, it also gives
landlords significant power, potentially leading to exploitation.
9.5.4 INTERMEDIATE STEPS to MIXED / DIVERSIFIED FARMING
 Mixed or diversified farming represents an essential transitional phase between
traditional subsistence farming and modern, specialized farming systems. It
combines the cultivation of staple crops with cash crops and often includes simple
animal husbandry.
Benefits of Mixed or diversified farming:
 Reduces vulnerability to crop failure caused by pests, weather, or market price
drops. For instance, if one crop fails, another may succeed.
 Helps farmers balance their food security needs with market opportunities, producing
some crops for personal consumption and others for sale.
 Provides additional income streams. For example, integrating livestock can generate
income from milk or meat.
Challenges in Mixed or diversified farming:
 Requires knowledge and resources to manage multiple types of farming activities
effectively.
 Infrastructure constraints, such as lack of storage or access to markets, may limit the
profitability of diversification.
9.5.5 FROM DIVERGENCE TO SPECIALIZED: MODERN COMMERCIAL FARMING
 Modern commercial farming is a highly specialized and market-oriented farming
system. Unlike subsistence or mixed farming, it focuses entirely on profit-making and
market demands. Farmers utilize modern techniques, such as, irrigation system,
chemical fertilizers, pesticides, machineries, and hybrid seeds.
Advantages of Specialization:
 Higher Productivity: Innovations in technology and crop genetics ensure higher
yields per hectare.
 Economic Growth: The focus on high-value crops contributes significantly to
national economies.
 Global Trade: Specialized farms cater to export markets, integrating local
economies into global trade networks.
Challenges in Modern commercial farming:
 Limited Resources: It often requires significant capital investment, which small-scale
farmers might not afford.
 Lack of coordination of Experiences
 Specialization can make farms vulnerable to price fluctuations in international markets.

9.6 CORE REQUIREMENT OF A STRATEGY AGRICULTURAL AND RURAL

DEVELOPMENT
The Agricultural and rural development aim to improve the lives of rural populations by
increasing agricultural productivity and reducing poverty.

9.6.1 IMPROVING SMALL-SCALE AGRICULTURE

Technological innovation
Introducing machines like tractors and harvesters can drastically boost productivity and can
increase farm yields. However, in regions with abundant labor but scarce capital,
mechanization might displace workers and exacerbate unemployment.
Biological and Chemical Advances
Innovations such as hybrid seeds, fertilizers, pesticides, and irrigation techniques can
significantly increase yields. These methods are often “scale-neutral,” meaning they can be
adopted by both small and large farms without requiring heavy capital investment. However,
challenges like environmental degradation.
Overall, to improve small-scale agriculture, we need a balance approach. Mechanization
can be helpful, but not only where it suits local environment and does not harm jobs or small
farmers, Biological and chemical innovations offers great potential, but they need to be
implemented carefully to avoid damaging environment. For instance, the excessive use of
fertilizers and pesticide can degrade soil quality and harm ecosystem
9.6.2 INSTITUTIONAL AND PRICING POLICIES
Green Revolution introduced new farming techniques and crops like wheat, corn, and rice,
along with fertilizers, irrigation, and pesticides. These were meant to help farmers, especially
small ones, grow more food. However, these benefits often did not reach small farmers for two
key reasons:
 Access to Resources: To use these new farming methods, farmers needed irrigation,
fertilizers, credit (money to invest), and technical advice. Big landowners had better
access to these resources, while small farmers were left behind.
 Widening Inequality: Big landowners gained even more power and wealth because
they could afford the tools and support to farm efficiently. Small farmers, unable to
compete, often lost their land and became poorer.
  Problems with Food Pricing Policies. Governments in developing countries often kept
food prices low to ensure cheap food for cities and promote industrial growth. While this
helped urban populations, it hurt farmers because:
Low Prices for Crops: Farmers were paid so little for their produce that it sometimes
cost them more to grow food than they earned by selling it.
Lack of Incentives: With such low earnings, farmers didn’t invest in better techniques or
equipment to grow more food. This led to food shortages, and some countries that used
to grow enough food had to start importing it.
Better Policies for Small Farmers
Experts suggest governments should:
 Support Small Farmers: Make sure small and medium-sized farmers have access to
affordable loans, fair pricing for their crops, and resources like fertilizers and irrigation.
 Fair Prices: Set crop prices that reflect market realities so farmers have a reason to
produce more and adopt modern farming methods.
Adapting New Opportunities and New Constraints
Besides growing traditional crops, farmers can explore:
 High-Value Crops: Fruits, vegetables, flowers, and fish farming can bring in more
income because they sell for higher prices in urban markets or can be exported.
 Fair Trade Products: Selling organic or ethically produced items like coffee and spices
can also help farmers earn more.
 Collective Action: Small farmers can work together in groups to market their products
and negotiate better prices, which is more effective than working alone.
Land Grabbing by Foreign Investors
Recently, large foreign companies or countries have been buying or leasing farmland in
developing nations, a practice sometimes called "land grabbing." While this can bring benefits
like jobs, training, and new markets, it also poses risks:
 Loss of Land Rights: Local farmers might lose access to land they’ve used for
generations.
 Environmental Concerns: Intensive farming by foreign investors might damage the
land and water resources.

9.6.3 CONDITION FOR RURAL AREAS

Land reform means redistributing land so that those who actually work it—the farmers—can
own or control it. It can take various forms, such as:
 Giving tenants ownership of the land they already farm (like in Japan or South
Korea).
 Breaking up large estates and giving smaller plots to individual families or
cooperatives (as done in Mexico).
 Allowing landless farmers to settle on unused estates (like in Kenya).
Supportive Policies farmers need support from the government to help them expand their
products and boost their productivity to succeed.
 Giving access to affordable loans, to buy equipment, seeds, fertilizers and tools to grow
more outputs
 Providing agricultural education and technical supports to help farmers use modern and
efficient methods.
Without these support, small farmers may remain stuck in poverty or even lose their new
acquired land due to inefficiency or debt.
Integrated Rural DevelopmentsRural development is not only about helping farmers grow
more crops, it is also about transforming rural life in many ways. For instance,
 Creating Non-farming jobs, developing small businesses in rural areas to provide
additional income source.
 Improving the Quality of Life, by giving better access in education, healthcare, nutrition
and housing for rural families.
 Reducing inequality, addressing the imbalances between urban and rural areas in term
of income and opportunities.
It also emphasizes the protection of nature or environmental sustainability to ensure farming can
continue for future generations.