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Agricultural Transformation & Rural

Development

Economic development is the cornerstone for any prosperous community, state or territory. As

humans have progressed technologically and sociologically, our methodologies, dealings, trade

etc have also evolved, first leading up to rather simple and classical Economics, and as we

progressed further, into more complex and intricate Economics. This is very visible in our

paradigm shift from basic agricultural-based economies industrial-based economies, and once

visiting each of these extremes, culminating, for now, to our present-day economies, searching

to strike a more prosperous balance between agriculture and industry.

Among the first classical economists of the mettle of the revolutionary Adam Smith was DavidRicardo. He was the first to delve into Smiths theories, and expand them, along the time the

Industrial Revolution was sweeping up mainland Great Britain and much of the then-civilized

world. His commentary on the theories regarding the agriculture/industry debate revolved

around the apparent fact that conventional agriculture was a hindrance in the path of the now

booming Industrial Revolution, which showed much promise. This was so because it led right

into the thesis that the continuing rise in population would result in a rise in demand for

foodstuff, thereby needing more land for cultivation, and handing national income right back

into the hands of the land barons, rather than the workers, thus reversing things back to the

pre-revolution era. However, what Ricardo did not fully realize was that the new revolution

brought with itself newer complexities to the trade, and overlooking them would lead to a

rather biased standpoint over how to yield the true potential of the newly rising industries.

As we realized the potential of industries and the fundamental necessity of a strong agricultural

base better, Simon Kuznets insights came to much help. He argued that the role of both

agriculture and industry within a successful and prosperous economic model was interwoven

and interdependent. His models regard the both apparently opposite beasts of economics as a

somewhat complex system of give and take, which in this balance, yield higher-than-before

results, through reforms such as Transfer of Value, easier access to raw material, consumer

goods from the industry going back into the agricultural sector, to make their jobs easier and

more productive, and so on.

Another notable name further down the road is of one Breton Woods, whos self-titled Breton

Woods System and other notables such as the Modernization Theory focused on the

underdevelopment of proper agricultural sectors and systems in developing countries. What

was interesting in this perspective was that it seemed improbable for almost any economical

model to sustain and grow without a proper agro base, and develop the so sought after process

of industrialization, thus proving that both go hand in hand. This also proved that unless the

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social structure around a possibly progressive economy changes for the better, i.e., becomes

more welcoming to change, prosperity is not an achievable target. This trend of pro-

agricultural economies only kept on growing until it was openly acknowledged that not only

does agriculture take care of growing nutritional requirements of the general population, but

also to facilitate the raw material requirements of all growing industries. Suddenly, the

importance of agriculture seemed more like a long-standing fact, rather than an oft-triedtheory. Economists accepted and propagated the benefits of a steady and growing agricultural

sector within every nation, because not only did it provide food and raw material, but also

labour opportunities and a major source for foreign exchange. It was also seen as a saviour for

struggling developing countries, and some economists went as far as saying that if the agro

sector was not properly developed, the national progress of any country would stop.

So, as we come into more recent times, we see a somewhat opposite shift from the emphasis

on industry and the neglect of agriculture at the start of the Industrial Revolution, to the re-

discovery of the enormous potential of agriculture, teamed up with that of the industrial sector,

to produce much more progressive and successful economies. However, this raises the

question of whether this whole emphasis on agriculture will push things back to the way they

were pre-revolution. One solution to the above dilemma was proposed by Theodore Schultz in

his Peasant Rationality. He stated that peasants and farmers were not, as widely believed,

lazy, lethargic and non-risk takers in newer agricultural ventures for themselves, but rather

rational people who would venture into more risky propositions and bring about great changes

in production, if given proper access to modern technology, or in other words, if the industrys

products help them. This will stop them from falling into the same rut of unproductively faced

by older generations, because they had to rely on landlords etc, which did not do well for

production and agricultural advancement. Another solution comes from Michael Lipton,

another leading scholar. His claims, while somewhat around the lines of those of Schultz, say

that this problem would vanish if the inequalities of the urban and rural classes would bebrought down to lower levels. The argument being that since urban classes dominate in almost

all matters, be they political, public or private sector related, the rural setup is bound to get the

short end of the stick and underperform, and to correct that, rural living standards should be

brought to better levels. He also says that the lack of capital available to rural classes, since he

believes they can turn a more effective output per unit capital invested, but still keeps in mind

the importance of an industrial sector closely in-sync. Among his theories lie some albeit

controversial ones as well, such as maintaining that urban sectors, like manufacturing, should

not be subsidized, and shifted to urban surroundings, but we easily find examples to dispel that

particular theory.

Nonetheless, the gist of all these modern scholars and economists is united; agricultural

transformation is now. It will not only take care of the overriding problems of world hunger, but

also, through advances in the agro sector, launch forward otherwise waning industrial sectors,

launching their respective economies into prosperity. Of course, this all needs to be handled

properly, and it must be made sure that the agro sector is being lead to its full potential to reap

all its direct and inductive fruits. The Lewis model is a great example of this proposition, as it

ensures progress in both sectors by simply using the surplus labour and cheap food from the

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agricultural sector. If we go briefly into how this might be accomplished, three things spring up

from the other probable choices; accelerated output growth through technological, industrial

and price incentive changes to raise the productivity of small farmers, raising the domestic

demand for agriculture output, and diversified and non-agriculture labor-intensive rural

development activities that directly or indirectly support and are supported by the farming

community. Along with this, suitable agro-structures also need to be tweaked for theirrespective areas, such as the African agro-structure needs to be brought up to date in terms of

equipment and methodologies. Progressive local reforms as required by their respective areas

will be a necessity for this all to work.

By: Zufah Ansari

0911292