• PRESENTATION ON AGRICULTURAL

TRANSFORMATION AND RURAL

DEVELOPMENT
presented by :
Ginish j. Dahal
Hem Ghimire
Abinash Adhikari
Ezen Shrestha
Prerana Chaulagain
Sandeep Sharma
Madhusudan Thapa
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Figure 9.1 As Countries Develop, the Shares
of GDP and Labor in Agriculture Tend to
Decline

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Agricultural Growth: Past Progress
and Current Challenges

1. Agriculture employs a larger fraction of labor forces

in LDCs than DCs
2. Agriculture’s share of GDP is much lower than share
of labor force in LDCs
3. => output per worker is much lower in agriculture
QA/A << LA/L => QA/LA << Q/L
4. I.e. incomes are lower in agriculture than non-
agriculture

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Contd…

5. In a majority of African countries, the average per

capita calorie intake has now fallen below minimal
nutritional standards.
6. The major problem in agricultural development is to get
the role of government right.
7. Lacking the collateral , farmers are not getting credit
which is common in Nepal too.

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Poverty

• 2/3 of the World’s Poor People live in Rural Areas

• Rural People are primarily engaged in Subsistence
Agriculture.
• Subsistence agriculture is self-sufficiency farming in
which the farmers focus on growing enough food to
feed themselves and their families
• Thus, reducing poverty first requires reducing rural
poverty.

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How to Reduce Rural Poverty?

• Define a coherent approach to rural poverty reduction in

the context of a broader strategy for sustainable rural
development;
• Strengthen rural institutions, local producer and
community organizations and the sustainable use and
management of natural resources;
• Reduce inequalities in access to productive resources and
social services and gender inequalities in particular;

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Contd….

• Implement programmes and policies that promotes the

generation of decent farm and non-farm employment
opportunities for men, women and youth ;
• Design social protection programmes that effectively
reduce income and food insecurity among rural
populations, while providing stimulus to the rural
economy, empowering women, and enhancing the
capacity of the rural poor and the most vulnerable to
invest in their future and the sustainable use of
resources.
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Figure 9.2 Cereal Yields by World
Region, 1960-2005

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Table 9.1 Land Productivity in
Developed and Developing Countries

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Structure of agrarian systems
in developing world
• Agriculture is still a major source of economic growth because
agriculture makes up a large share of GDP.
• Rural-urban migration has reached the point at which nearly half
or more of the poor are found in the cities.
• Agricultural productivity varies dramatically across the countries.
• The regional disparities can be quite large within countries .for
e.g. in India – modernized Punjab to semifeudal Bihar.

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Peasant Agriculture in Latin
America, Asia, and Africa
• Latin America: the Latifundios –Minifundios dualistic pattern
• Latifundios are very large landholdings. They are usually
defined as farms enough to provide employment for more than 12
peoples, though some employ thousands. In contrast,minifundios
are the smallest farms .they are defined as farms too small for a
small family with the typical incomes, markets and levels of
technology and capital prevailing in each country or region.
• Asia: Fragmented and heavily congested dwarf land holdings
– Very small farms
• Africa: extensive cultivation patterns
– Clear land, farm, wear out soil, move to new land
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Agrarian patterns in Latin
America
• Apart from latifundios (large holdings) and
minifundios (small farms) much production occurs
on family farms and medium sized farms.
• Latifundios (traditional ones, especially) are
relatively inefficient; landlords/owners are
sometimes less focused on the business of farming;
and large farms typically entail higher transaction
costs

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Contd….

• Overall the agricultural sector seems to be doing well

in many Latin American countries. Two prominent
examples: Chile (diversification), and Brazil
(biofuels)
• Extreme rural inequalities still persist.

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Transforming Economies: Problems of
Fragmentation and Subdivision of Peasant
Land in Asia

• Too many people crowded onto too little hand.

• Impact of colonial rule in strengthening land tenure systems
of private property rights and the consequent rise of
moneylenders
• Contemporary landlordism in India and Pakistan involves
absentee landlordism and persistence of sharecroppers and
tenant farmers
• Rapid population growth resulted in more fragmentation and
peasant impoverishment

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Subsistence Agriculture and
Extensive Cultivation in Africa
• Low productivity due to lack of technology
• Shifting Cultivation
• Seasonal demand for labor depending upon the rainy season
• High dependence on unimproved seeds sown on unfertilized,
rain-fed fields.

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Figure 9.4 Expansion of Modern Inputs
in the World’s Developing Regions

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The Important Role of Women

• Women provide 60% to 80% of agricultural labor in Africa and

Asia, and 40% in Latin America
• Women work longer hours than men.
• Nearly, all tasks associated with subsistence food production are
performed by women.
• In addition to commercial crops, women cultivate small
vegetable gardens that provide food for family consumption.
• Their tasks includes processing and pounding raw grains, tending
livestock's, cooking and caring for children's.

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Contd….

• They cultivate food for household consumption, raise and market

livestock, generate additional income through cottage industries,
collect firewood and water and perform household chores.
• Most important role is women are providing food security for the
households.
• A larger fraction of income provided and controlled by wife
tends to be used for children's health and education than that by
husbands.
• So, this should be encouraged from private as well as the
government sectors in the developing countries like Nepal.

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• The Economics of agricultural
development:
Transition from peasant subsistence to
specialized commercial farming

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Subsistence Farming: Risk
Aversion, Uncertainty, Survival

• Price uncertainty and limited access to credit and insurance

explains risk aversion
• Risk averse subsistence farmers prefer technologies that combine
low mean-per-hectare with low variance to alternative high
yielding technologies
• Efforts to minimize risk and remove commercial and institutional
obstacles to small farmer innovation are necessary

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The transition to mixed and
diversified farming
• In this stage:
– The staple crop no longer dominates farm
output
– New cash crops such as fruits, vegetables are
established
– Simple animal husbandry gets started

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Contd….

• The success or failure of efforts to transform

traditional agriculture will depend on:
– Whether the farmer can have a reasonable and
reliable access to credit, fertilizer, water, crop
information and marketing facilities.
– Whether the farmer is able to receive a fair market
price for his output
– Whether the farmer feel secure that he will be the
beneficiary of any improvements
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From divergence to specialization :
Modern commercial Farming

• In this stage:
- The specialized farm represents the final
and most advanced stage of individual holding.
- In specialized farming the provision of food
for the family with some marketable surplus is
no longer the basic goal.
- Instead, pure commercial profit becomes
the criterion of success.
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Contd….

• Economic concepts such as:

– Fixed and variable cost
– Savings, investment and rates of return
– Optimal factor combinations
– Maximum production possibilities
– Market prices and price supports
• Becomes important in such farming

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Toward a Strategy of Agricultural
and Rural Development

1 ) Improving small-scale agriculture

– The first is the introduction of mechanized agriculture to
replace human labor.
– Second one is improving the institutional and pricing policies
maintained by the government.
– Third one is adopting to new opportunities and new
constraints .

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Contd…..

• 2) Conditions for Rural Development

 Land reforms : Farm structures and land tenure patterns must
be adopted to the dual objectives of increasing food production
and promoting a wider distribution of the benefits of agrarian
progress.
 Supportive policies : the government should create the
necessary incentives, economic opportunities and access to
needed credit and inputs .

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•THANK YOU

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