Trae GivensHaightEcon 112Chapter 16 Study GuideREAD CLASS NOTESREAD SUPPLEMENTAL READINGSCHAPTER NOTES: Agriculture contributes to development not only by providing food and raw materials to the population, but as productivity rises in agriculture, the sector also contributes to the supply of labor to the nonagricultural sectors and through higher rural incomes to the demand for nonagricultural as well as agriculture products.

Famine is more of a problem with the distribution of food than with its production. Democracy and a free press can go a long way towards eliminating the dangers of famine arising from government mismanagement of the distribution of food.

Property rights in the form of the land tenure system are the key institution affecting the incentives of farmers to invest or not to invest in their land. Land reform largely is carried out for political purposes, but how it is done can have a profound impact on both the distribution of rural incomes and on farmer productivity.

The two key kind of agriculture inputs are what are often called the mechanical package in contrast to the biological package. The former involves mainly the substitution of machinery for labor to raise labor productivity, while the latter involves mainly the greater use of chemicals and improved plant varieties to improve productivity of land.

Mobilizing agriculture inputs in ways that best increase farmer productivity and incomes involves many institutions: research centers development new plants varieties, extension systems getting the new discoveries out to the farmers, and credit systems that provide farmers with the capital they need to implement some of the improved methods.

Governments regularly attempt to influence the prices paid and received by farmers, and how they do this has a profound impact on agricultural production, farmer incomes, and the political stability of the nation.