Agricultural development and economic transformation promoting growth with poverty reduction

AGRICULTURAL DEVELOPMENT AND ECONOMIC TRANSFORMATION Promoting Growth with Poverty Reduction JOHN W MELLOR Palgrave Studies in Agricultural Economics and Food Policy Series Editor Christopher Barrett Cornell University Ithaca, New York, USA Agricultural and food policy lies at the heart of many pressing societal issues today and economic analysis occupies a privileged place in contemporary policy debates The global food price crises of 2008 and 2010 underscored the mounting challenge of meeting rapidly increasing food demand in the face of increasingly scarce land and water resources The twin scourges of poverty and hunger quickly resurfaced as high-level policy concerns, partly because of food price riots and mounting insurgencies fomented by contestation over rural resources Meanwhile, agriculture’s heavy footprint on natural resources motivates heated environmental debates about climate change, water and land use, biodiversity conservation and chemical pollution Agricultural technological change, especially associated with the introduction of genetically modified organisms, also introduces unprecedented questions surrounding intellectual property rights and consumer preferences regarding credence (i.e., unobservable by consumers) characteristics Similar new agricultural commodity consumer behavior issues have emerged around issues such as local foods, organic agriculture and fair trade, even motivating broader social movements Public health issues related to obesity, food safety, and zoonotic diseases such as avian or swine flu also have roots deep in agricultural and food policy And agriculture has become inextricably linked to energy policy through biofuels production Meanwhile, the agricultural and food economy is changing rapidly throughout the world, marked by continued consolidation at both farm production and retail distribution levels, elongating value chains, expanding international trade, and growing reliance on immigrant labor and information and communications technologies In summary, a vast range of topics of widespread popular and scholarly interest revolve around agricultural and food policy and economics The extensive list of prospective authors, titles and topics offers a partial, illustrative listing Thus a series of topical volumes, featuring cutting-edge economic analysis by leading scholars has considerable prospect for both attracting attention and garnering sales This series will feature leading global experts writing accessible summaries of the best current economics and related research on topics of widespread interest to both scholarly and lay audiences More information about this series at http://www.springer.com/series/14651 John W Mellor Agricultural Development and Economic Transformation Promoting Growth with Poverty Reduction John W Mellor Cornell University Ithaca, New York USA John Mellor Associates, Inc Washington, District of Columbia USA Palgrave Studies in Agricultural Economics and Food Policy ISBN 978-3-319-65258-0 ISBN 978-3-319-65259-7 (eBook) https://doi.org/10.1007/978-3-319-65259-7 Library of Congress Control Number: 2017950561 © The Editor(s) (if applicable) and The Author(s) 2017 This work is subject to copyright All rights are solely and exclusively licensed by the Publisher, whether the whole or part of the material is concerned, specifically the rights of translation, reprinting, reuse of illustrations, recitation, broadcasting, reproduction on microfilms or in any other physical way, and transmission or information storage and retrieval, electronic adaptation, computer software, or by similar or dissimilar methodology now known or hereafter developed The use of general descriptive names, registered names, trademarks, service marks, etc in this publication does not imply, even in the absence of a specific statement, that such names are exempt from the relevant protective laws and regulations and therefore free for general use The publisher, the authors and the editors are safe to assume that the advice and information in this book are believed to be true and accurate at the date of publication Neither the publisher nor the authors or the editors give a warranty, express or implied, with respect to the material contained herein or for any errors or omissions that may have been made The publisher remains neutral with regard to jurisdictional claims in published maps and institutional affiliations Cover image © Nigel Cattlin / Alamy Stock Photo Cover design by Fatima Jamadar Printed on acid-free paper This Palgrave Macmillan imprint is published by Springer Nature The registered company is Springer International Publishing AG The registered company address is: Gewerbestrasse 11, 6330 Cham, Switzerland FOREWORD After the heyday of the Green Revolution, a generation of scholars and policymakers took agriculture for granted Then the global food price crises of 2007–2012 reawakened appreciation of the central role agriculture plays in the process of economic development locally and globally John Mellor was among the earliest and most influential champions of that fundamental truth His landmark 1961 American Economic Review paper with Bruce Johnston, “The role of agriculture in economic development” was, along with the Nobel Laureate W Arthur Lewis’ classic 1954 paper, absolutely foundational to subsequent understanding of how agricultural development ignites economic growth and poverty reduction at larger scales That 1961 paper drew on Mellor’s own intensive field research in south Asia in the 1950s, which set the stage for a career of careful empirical investigation and deep engagement with the messy realities of agricultural and food policy around the world A sequence of heavily cited studies—most notably his 1966 book The Economics of Agricultural Development and his 1976 work The New Economics of Growth—built up the evidence base that helped prompt Green Revolution investments by underscoring the crucial role of institutional and technological change in agriculture, and of public investment in agricultural research and extension, in spurring economic transformation While public intellectuals feared that population growth would bring mass famine, Mellor and others charted a course that instead helped usher in a period of historically unprecedented reduction in poverty and hunger A burgeoning academic literature today is now rediscovering the old truths first articulated by Mellor and his collaborators Mellor was unusual not only in the extraordinary intellectual impact of his scholarship on subsequent research, but equally in the practical impact he had on real world policymaking As a Cornell University professor, he influenced a generation of talented students, several of whom went on to highly influential careers of their own, most notably his doctoral advisee Lee Teng-Hui, who served as President of the Republic of China (Taiwan) from 1988 to 2000 Serving as Chief Economist of the United States Agency for International v vi FOREWORD Development in the early 1970s, including during the world food crisis of 1973–74, Mellor exerted considerable influence over the United States government’s response to unfolding events of immense humanitarian consequence, as well as those of other governments Indeed, Mellor’s sage influence helped prompt the creation in 1975 of the International Food Policy Research Institute (IFPRI) Mellor then served as IFPRI’s Director General from 1977 to 1990 That period secured for IFPRI an enviable reputation as the global leader in policy-oriented research on food and agricultural policy to reduce hunger, malnutrition, and poverty and to stimulate economic growth, environmental sustainability, and human development In the quarter century since he ran IFPRI, Mellor has served as a prized adviser to a range of senior government officials around the world, remaining remarkably active as a global thought leader to this day Hence my great excitement that John Mellor has written this volume Very rarely we students get the opportunity to learn from the expert insights of an early giant of the field reflecting on more than half a century’s research and practical experience in the field, much of it sparked by his own path-breaking work The questions Mellor and his collaborators pursued decades ago remain highly topical today We continue to struggle to understand how best to ignite inclusive economic growth that can rapidly and sustainably reduce the extreme poverty that still disfigures much of the world, especially in rural areas of Africa and Asia The linkages between the farm and non-farm sectors, although indisputably substantial, remain underappreciated and only weakly understood The appropriate role of government in these domains remains hotly disputed On these and other key issues, Mellor has a vantage point like no other By virtue of the extraordinary longevity and stature of his contributions, Mellor’s insights merit careful study, perhaps especially where they buck current prevailing beliefs The central theses Mellor advances in this volume are powerful in their implications Mellor argues that small commercial farmers, rather than largescale farms or poorer, semi-subsistence producers, are the key engines of economic growth and poverty reduction A significant portion of that impact comes through local general equilibrium effects through labor markets and those farmers’ demand for non-tradable goods and services, both of which generate high multiplier effects that concentrate gains among the poor Pervasive rural factor and product market imperfections and the significant public good elements of investments in, especially, agricultural research and extension, necessitate a central role for government That requires more substantial public sector spending and activity than has been the case in most developing countries over the past generation These claims challenge some conventional wisdom today and invite rigorous testing of many subsidiary hypotheses More than 50 years after his seminal work spawned a generation of scholars to pursue research agendas he advanced, John Mellor offers in this volume more than a powerful valedictory address from one of the field’s giants He again challenges the agricultural and development economics community to engage in research that makes a difference It is a tremendous privilege to introduce a FOREWORD vii volume that any serious student of agricultural development and economic transformation needs to read The unsurpassed historical sweep of Mellor’s observations, drawing on an extraordinary career of great scholarly and practical impact, make Mellor’s insights as timely in the early twenty-first century as they were in the mid-twentieth century Cornell University Christopher B Barrett PREFACE My intention is to explain how rapid agricultural growth accelerates the economic transformation to a modern economy and most important why it is the prime instrument for removing rural and much of overall poverty From that I explain why modernization of agriculture is essential to filling that role and state what the initial conditions and requirements for that modernization are The focus is on low- and middle-income countries—the ones striving to become high income and modern Modernization of agriculture is of great importance to progress in those countries The reader should come away with a clear, integrated picture of why and how to develop agriculture That picture is quite different to much of the academic analysis and practice of foreign assistance agencies and many low- and middleincome governments It is consistent with the practice of several governments that have been highly successful in achieving rapid agricultural growth and poverty reduction That consistency is in part because I closely observed and learned from them I take clear positons throughout the book, based on my own research and reading, and my lengthy and wide ranging experience drawn from living in rural areas, doing and administering research, senior government experience, and a recent 25-year period of interacting within low- and middle-income country governments The topic of this book is broad and so the relevant literature is vast A comprehensive review is not possible I cite research that draws different conclusions to mine as well as some in agreement and emphasize review papers The citations lead to a further broadening of the literature for those who wish to pursue topics in depth Quantification of key relationships between accelerated agricultural growth, the economic transformation and poverty reduction is either original to this book or an extension of my previous work with several colleagues All that empirical work is reproducible from spreadsheets that are made available For the purposes of this book much of the survey data based research has two shortcomings: First, it fails to differentiate the non-poor commercial small ix x PREFACE commercial farmers who produce the bulk of agricultural output from the comparably large number of farmers who are at subsistence or below subsistence levels and produce but a small fraction of agricultural output Second, it fails to distinguish the geographic areas in which modernization is under way with accelerated agricultural output growth from those that remain predominantly in slow moving traditional agriculture As a result, it understates the potential for growth and diverts attention from the means of that growth The Economics of Agricultural Development, the predecessor to this book, was published 50 years ago Ten years after publication it won the American Agricultural Economics Association award for research of lasting value It is of course dated It refers to Japan as a developing country and it was before the birth control pill However, the errors are largely of omission rather than commission (See the annex on intellectual history at the end of this book.) What has changed in the intervening 50 years is copious research on every facet of the subject and an extraordinary diversity of experience I had the good fortune to have an extraordinary set of people open the way to the diverse experiences that led to this book Those experiences fall into four classes: The discipline of years of field research, teaching and learning from students, and leading the staff of a large research institute; the derived wisdom from close interaction with farmers, intensively in India, Ethiopia, Pakistan, and the United States, and more fleeting in many other African, Asian, and LatinAmerican countries; the healthy cynicism from a stint as Chief Economist of the US foreign assistance program and years of interaction at the field level with foreign aid missions; and a sense of reality from the most recent 25 years meshing research results and country experience in interacting with caring officials at all levels of low- and middle-income country governments Bruce Johnston my co-author in a much quoted American Economic Review article and two review articles in The Journal of Economic Literature was an early leader for many of the ideas in this book He brought experience with the post war land reforms in Japan and introduced me to the seminal Japanese thinkers about agricultural development, Professors Ohkawa and Ishikawa F F Hill, Cornell University and later the Ford Foundation, guided my efforts to understand development problems of the then backward southern United States and had the faith to entrust me with starting a major academic program on agricultural development long before it became fashionable I owe a lot to my Cornell colleagues I also learned from Hill how he and his associates built the government instituted Farm Credit Administration and saw it become farmer managed and farmer owned—such a grand lesson about agricultural finance The early US agricultural institutional history is valuable to understanding current needs and 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A combined biophysical and socioeconomic approach Food Policy, 36(6), 770–782 INDEX A Administrative costs, 185, 187, 192 Africa, 30, 51, 151, 153, 154, 156, 163, 228 birth rates, policies for reducing, 21 cell phone’s impact on agricultural marketing efficiency, 121 foreign aid to agricultural growth, 109, 208–212, 216 growth rate in fertilizer use, 169, 172 large-scale farms and plantations, 89 potential for irrigated rice, 174 proportion of land in large-scale farms, 54 rapid agricultural growth, 12, 24 rapid rise of cities, 197 role of credit, 176 rural electrification, 120 share of government expenditure on agriculture, Sub-Saharan Africa (see Sub-Saharan Africa) African Union, 108, 227 Comprehensive Africa Agriculture Development Programme (CAADP), 3, 4, 13, 30, 32, 172, 215, 217 Age distributions, 20, 51, 225 Agricultural Development Led Industrialization (ADLI), 107, 215 Agricultural export commodities, 136 Agricultural finance systems collateral issues, 190 inflation, 191 interest rate policy, 191–192 risk, 191 Agricultural growth, 1, 2, 7, 13, 21, 25, 30, 47, 57, 67, 107, 108, 123, 131, 135, 137, 138, 167, 172, 181, 183, 187, 191, 195, 199, 214, 215, 218, 229, 230 on economic transformation, measuring impact of, 29–45 foreign aid to, 208 infrastructure and, 118 in poverty reduction, 22–25, 54 rapid, 12, 22, 48–52, 56, 59, 61, 62, 65, 66, 69, 70, 76, 92, 95, 109, 114, 130, 136, 142, 144, 151, 166, 170, 197, 207, 213, 216, 217, 221, 222, 224–226 trained personal to rural areas and, 116 Agricultural growth rate, 57, 137, 138, 158, 161, 181, 199, 216, 225 Ethiopia, 30–34 Japan, 153 Punjab, Pakistan, 34–36 Sindh, Pakistan, 36–38 Agricultural income, 9, 41, 43, 63, 140, 197 Agricultural income growth, 47 Note: Page numbers followed by “n” refer to notes © The Author(s) 2017 J.W Mellor, Agricultural Development and Economic Transformation, Palgrave Studies in Agricultural Economics and Food Policy, https://doi.org/10.1007/978-3-319-65259-7 251 252 INDEX Agricultural modernization, 12, 24, 54, 103, 105, 108, 113, 123, 126–128, 165, 209, 227–230 Agricultural price policy, 136 Agricultural prices, 67, 69, 135, 138, 212 government interventions, 136–137 raising, 84, 112 Agricultural private sector, Ahluwalia, M S., 22, 234 Ahmed, R., 136 Alabi, R A., 211 Alston, 153 American foreign aid program, 162 Anderson, 63, 67, 144 Antle, J M., 132 Apex body, 106, 189 Appalachian plateau, 51 B Bangladesh, 5, 98, 114, 115, 125, 126, 128, 129, 167, 168, 184, 185 Banking system, 67, 68 Barrett, C B., 2, 79 Bates, R H., 103 Belgian Congo (Zaire), 160 Bell, C., 24 Bennett’s law, 57 Besley, T., 192 Binswanger, H P., 174 Biodiversity preservation, 95, 96 reduction, 27n1 Birkback, M., 91 Birth control technology, 21 Birth rates, reduction, 127 Bradfield, R., 162 Buck, J L., 76, 85n1 Byerlee, D., 90 C Capital, squeezing agriculture for, 62–64 Capital inflows, 61 Capital transfers, 61, 67–69 urban sector, 68–70 mechanisms, 65, 66, 70 Carletto, C., 131 Cash crops, health and, 131 Cell phones, 121 Cereal price stabilization, 137–142 Cereal prices, 136 Cereal production, 146–149 growth rate in, 139–141 increment in, 147–148 Cereals demand income elasticity, 141 sources of, 142 Changing fashion, in foreign aid, 212, 213 Chemical fertilizers, 70 China’s one-child program, 19, 20 Christiaensen, L., 22, 23, 143 Cities, rise of, 196, 197 Climate change, 58, 97, 98, 160, 161, 213 Collier, P., 94 Colonial governments, 63 Commercial banks, 184–188, 229 Community level board, 189 Comprehensive Africa Agriculture Development Programme (CAADP), 3, 4, 13, 30, 32, 172, 215, 217 Consultative Group on International Agricultural Research (CGIAR), 58, 153, 162, 163, 201, 208, 217, 218 Consumer Price Index (CPI), 137 Consumption expenditure, 233 Contract farming, 184, 204 Conveniently located branches, surveys, 187, 188 Cooperative credit, 182 Cooperatives, 105 Coping mechanisms, 55 Corruption, 109, 110, 212, 215 Cost of living, 65, 159 Cost reductions, 67, 201 Cow town, 25 Credit, 192, 193 Credit role, 176 Crist, E., 27n1 Crop agriculture, 186 Crop insurance, 55, 56 Crop yields, 55, 77, 78, 80–83, 87, 95 CYMMT, 162, 233 INDEX 253 D De Janvry, A., 80, 83, 91 Degree of variability, 85n1 Deininger, K., 90, 92, 94 Delgado, C L., 24 Demand equations, 138 Demographic dividend, 21 Demographic transition, 17 Dercon, S., 94 Desai, G.M., 170 Diverse labor/leisure choices, 78 Domestic agricultural consumption, 70 Domestic human consumption, 141, 148 Dominant public expenditure, 227 Doucouliagos, H., 211 Duflo, E., 172 Ethiopian government, 137 Evenson, R E., 153 Exchange rate distortions, 67 Exchange rates, 61, 63, 67, 70 Expenditure, 230 on extension, 155 on research, 154, 155 Export commodities, 63, 200–202 Export commodities problem, 145 Extension, 53, 63 expenditure, 155 farmer control of, 157 integration of, 156 rate of return on, 154 variability in returns, 154 Extreme poverty, 47, 135 E Economic-based fixed price models, 29 Economic indicators, infrastructure on, 114–115 The Economics of Agricultural Development (1966), 232 Economic transformation, 2, 11, 12, 17–26, 61, 65, 75, 151, 195, 199, 224–226, 231 agricultural growth impact, 29–43 agriculture’s impact, variable, 22 demographic transition, 17–19 reducing birth rates, policies, 19–22 Education, 50 Education and improved health, benefits, 126 Elasticities, 25, 26, 32, 139, 141, 145 Elastic supply, of labor, 66 Employment elasticity, 25–26 Engels law, 57 Entrepreneurial women, 52 Environmental issues, 95, 96 Ethiopia, 153, 154, 171, 175, 209 agricultural growth rate, 32–34 employment and income growth rates, 31, 33 employment elasticity, 32 rural non-farm sector, 30, 32 traditional growth rate, 32 urban production sector, 30 World Bank poverty data, 30 F Famines, 2, 48, 63 Fan, S., 110, 111 FAO, 84, 95 Farmer decision making, 104 Farmer motivation, 170 Farmers’ incomes, 135 Farm fragmentation, 87, 88 Farm operator labor, 78 Farms, subsistence level, 53 Farmyard manure, 81 Fei, J C., 231 Female small commercial farmers, 52 Female-headed households, 52, 85, 172, 189 Fertilizer, 70, 97, 136, 165, 166, 170, 171 environmental concerns, 168 growth rate in, 169 health concerns, 168 production system, 170 profitability and efficiency, 169 types of, 167, 168 variability in intensity, 166, 167 Feudal holdings, 36, 41, 50, 68 Feudal land tenure systems, 91 Feudal landholders, 41 Feudal sector, 41 Feudal sharecropping, 54 Feudal systems, 89, 91 Financial constraint, 108 254 INDEX Financial requirements, road investment, 117 Food aid, 217 Food allocation problem, 53 Food prices, 66 Food security, 2, 47, 56, 57, 138, 235 Food transfer, 61 Forced abortion, 19 Foreign aid, 3, 56, 110, 161, 196, 204, 207–219 Africa, 209, 210, 216, 217 agriculture, 209 agriculture in 1970 and 1980s, 213–216 exporting countries agriculture, 218, 219 golden age, agricultural growth, 208 health, 129 impact of, 211, 212 policy, programs, 160 Foreign assistance, 160 Foreign assistance agencies, 109 Foreign assistance donors, 58 Foreign exchange rates, 66, 67 Foreign technical assistance, 176 G Galor, O., 18 Garenne, M., 18 Gavian, S., 8, 24 Gender, 53, 84, 85 Genetically modified organisms (GMOs), 159 Geographic concentration, 110, 111 Geographic location, Giller, K E., 165, 169 Girls’ education, 20, 124 importance of, 127, 128 Government agricultural price interventions, 136–137 Government expenditure, on agriculture, 3, 4, 108, 112, 129, 172, 200, 217, 227 Government-forced divestment, 143 Government forgiving loans, 143 Government presence, private sector and, 108 Government subsidies, 135 Governments, vision and strategy, 107 Great leap forward, 63 Green revolution, 23, 151, 152, 173 Griffin, K B., 23 Gross domestic product (GDP), 2, 5, 6, 32, 34, 154, 199 Group micro-credit, 53 H Haggblade, S., 29 Hayami, Y., 103 Hazell, P B., 24, 110 Health cash crops and, 131 pesticides and, 132 Heavy manuring, 81 Herdt, R W., 233 Higher education, 161 High-income countries, 4, 59, 77, 97, 105, 107, 119, 120, 126, 136, 159, 181, 185 Highly subsidized insurance, 136 High population density rural areas, 92 High-value perishables, critical role, 198–200 Hill, F F., 162 Hirschman, A O., 233 Home economics extension, 132 Hopper, W D., 76 Huisman, J., 128 Hurley, 153 Hybrid plants, 175 Hybrid vigor, 175 Hypothetical labor production, 49 I Income, incentives to, 116 Income elastic—demand, 62 Income inelastic cereals, 138 Income elasticities, 139, 145 decline in, 141 Income-elastic tropical export commodities, 196 Inflation, 192 Infrastructure investment, 93, 113, 114, 119 INDEX Infrastructure, upgrading, 118 Inorganic fertilizer, 168 Insurance, 192, 193 Intensive livestock, 53 Intensive publicity efforts, 21 Interchangeable savings, 192, 193 Interest rate policy, 191, 192 International Food Policy Research Institute (IFPRI), 3, 24, 57, 154 International markets, 145 International prices, fluctuation, 144–145 Irrigation, 93, 95, 98, 173, 203 J Japanese model, 156 Jayne, T S., 85n1, 172 Johnston, B F., 69, 91, 232, 233 Jorgenson, D W., 231 Joseph, V., 18 Juselius, K., 211 K Kaminski, J., 143 Khandker, S R., 118 Kharif-harvested crop, 81 Kilby, P., 233 Krueger, A O., 63 Kumar, S K., 58, 84, 141 Kumro, T., 139, 234 L Labor costs, 62, 79, 83, 94 Labor input, agricultural production, 83–85 raising agricultural prices, 84 taxation, 83, 84 Labor input, diversity, 80–83 Labor leisure utility function, 79 Labor mobilization, 79 Labor productivity, 12, 23, 62, 231 Labor surplus economies, 66 Labor transfer, 61 Labor/leisure choice, 79 Labor-intensive goods, 24, 233 Lancaster, C., 129, 209 Land abandonment, 95 255 Land degradation, 95, 96 Land Grant Act, 126 Land grant system, 214 Land productivity, 87 Land reform, 36, 38, 41, 50, 69, 90, 91, 216 Land registration, 88 Land settlement programs, 93 Land tenure, 89 Large and feudal farmers, direct investment, 68 Large commercial/feudal farmers, 9–11 Larger credit, 52 Large-scale commercial farms, 94 Large-scale farms, 7, 23, 54, 55, 89–91 Large-scale irrigation projects, 173, 174 Large-scale lending, 192 Large-scale organizational effort, 21 Lee, T H., 69, 70, 232 Lee, R., 18 Lele, U., 212, 217, 231, 233 Lentz, E C., 217 Lewis, W A., 26, 62, 65, 231 Liedholm, C., 8, 24 Livestock and horticulture problem, 145 Loan officers, 188, 189 Long-term rapid growth, 61 Low capital job creation, 64, 65 Low population density areas, 92 Low-cost rural road research, 119 Low-income countries, 4, 6, 7, 17, 20, 48, 56, 108, 137, 145, 156, 159, 208 Low-potential rural areas, 119 Lu, C., 129 M Machinery, 177–178 Maertens, M., 105 Malik, S J., 8, 30, 234 Marketing costs, private sector role, 198 Marketing expenditure, 195 Marketing functions, 203 Massive-scale livestock production, 199 Maumbe, B M., 177 McCullough, E B., 26, 58, 65 Mead, D C., 8, 24 Mechanization, 11, 59, 178 Meiji period, 153 Mejia Japan, 12 256 INDEX Mellor, J W., 8, 30, 85n1, 91, 136, 139, 231–234 Mendelian genetics, 159 Meyer, R L., 181 Mgbenka, R., 110 Micro-credit, 21, 52, 53, 56, 85, 182, 184, 185, 207 Micro-finance, 184–185 Middle-income countries, 2, 4, 6, 7, 17, 34, 48, 59, 156, 195, 200, 203, 228 Migrants, 50 Migration, 34, 50 Ministerial coordinating body, 223 Ministry of Agriculture, 222, 223 Minten, B., 121 Mixed fertilizers, 168 Modern consumption goods, 78 Modernization, 111 Montenegro, C E., 124 Moser, C., 113, 117 N Nagarajan, G., 181 National financial system, 68 National government, overarching role, 106, 107 National income level, 4–6 National institutional finance system, 190 National planning, for implementation, 222 Chief of State, 222 Ministry of Agriculture, 222, 223 setting narrow priorities, 223 National politics, 50 Nature reserves, 95, 96 Net capital outflow, 69 Nitrogen, 167 Non-food expenditures, 56 Non-governmental organizations (NGOs), 106, 157 Non-tradable goods, 1, 8, 24, 224 Non-tradable sector, 225, 233 North, D., 103 Nutrition quality, 47, 57, 58 O Obesity, 132 One child policy, 19 Open trading regimes, Open-pollinated plants, 175 Open-pollinated seed, 175 Opportunity cost, 65 Ortman, G F., 105 Oxford Dictionary, 12 P Pakistan, 36–38, 54, 91, 114, 125, 129, 158 agricultural growth rate, 36 GDP growth rate, 36 urban industrial investment, 68 Palacios-Lopez, A., 84 Paldam, M., 211 Pardey, P G., 153 Patrinos, H A., 124 Per capita, 5, 17, 19, 140 Pesticides, 176, 177 and health, 132 Physical infrastructure, 21, 50, 113–121 Pingali, P L., 132, 177 Plant breeding, 175 Plantations, 89, 90 Policy reform, 63 Poor numbers, fluctuations, 55 Population density, 22, 47 Population growth rates, 17–19, 32, 75 Poverty, 6, density, 51 impact of roads, 115, 116 proportion of, 51 traps, 57 Poverty reduction, 1–3, 8, 20, 47, 48, 110, 119, 195, 196, 207, 209, 226 agricultural growth, 22–25, 48–54 Price fluctuations, 142 Price issues, for poor, 144 Price policy, 135–146 Price relationships, 69 Price stabilization, 137–142 Primary education, 124 Private business needs and decisions, 104, 105 Private firms, 157 Private importers, 171 Private sector, 196, 221 government role and, 175 INDEX extension, 157 Private sector research, 157 priorities setting, 158, 159 Private traders, 171 Privatization, 3, 171 Production incentives, 117 Productive employment, 78 Productive land, 78 Productive technology-responsive lands, 51 Protective tariffs, 63 Public health expenditure, 128 Public institutions, 205 Punjab, 7–9, 36–38, 41, 43 agricultural growth rate, 34 employment and income growth rates, 35, 37 GDP growth rate, 34 Purchased inputs, 165–178 Q Quality of diet, 58 R Rabi cropping, 80 Radical land reform, 50, 91, 216 Ranade, C., 43, 232 Ranis, G., 231 Rapid agricultural growth, 12, 13, 24 Rapid capital accumulation, 65 Rashid, S., 171 Rate of return on extension, 154 public expenditure, 124 on research, 152–154 rural education, 124 Reduced consumption, 55 Reducing birth rates, policies, 19 Regional research sub-stations, 161 Representative electoral systems, 103 Research expenditure on, 154, 155 integration of, 156 rates of return, 152 Resources, scarcity of, 108 Return on investment, 64 Riddell, R C., 106, 212 257 Road building, 119 Road maintenance, 118 Rosegrant, M W., 174 Rural areas, trained personnel, 116 Rural banks, 186 Rural education, 123 Rural education and health, quality of, 131 Rural electrification, 120, 203 Rural employment programs, 119 Rural finance system, 187, 189 Rural financial initiations, 183 family and friends, 183 village money lenders, 183 Rural health status, 130 Rural infrastructure, 113 Rural labor markets, 26 Rural non-farm (RNF) households, 138, 148 Rural non-farm enterprises, Rural non-farm households, 8, 9, 50 Rural non-farm population, 1, 7, 48, 54 cereal consumption, 139, 140 Rural non-farm sector, 2, 23, 25, 43, 62, 70 size of, 25, 26 Rural population, 48 Rural poverty, 1, 2, 11, 47, 48, 135, 142, 160 Rural poverty reduction, 90, 221 Rural urban income disparities, 58, 59 Ruttan, V W., 103 S Sachs, J D., 212 Safety nets, 56 School attendance rates, 125 School lunch programs, 56 Schultz, T W., 76 Secondary education, 124 Seed, 175 Sen, Amartya, 2, 65, 225 Sex identification tests, 20 Sharecropping, 11, 38, 41, 48, 91 Sindh agricultural growth rate, 38 employment and income growth rates, 39, 40 feudal farm sector, 36 258 INDEX Sindh (cont.) feudal holdings, 36 rural non-farm sector employment, 38 small commercial farmers, 38 Small commercial farm, 89 Small commercial farmer, traditional agriculture, 76–78 crop yields variability, 77 labor and, 76 risk for, 77 Small commercial farmers (SCF), 1, 6–8, 52, 58, 59, 62, 66, 67, 135, 136, 203 aversion to risk, 170 commercial banks, 185–186 contract farming, 184 credit availability, 182 expenditure, 2, 23–25 finance for, 181–193 government responsiveness, 108 income gap, 146 increased consumption by, 140 micro-finance, 184 price issues for, 142–144 rapid growth of, returns to credit, 182 rural non-farm proportion, 54 sharecropping, 38, 41, 42 specialized financial system, 186, 187 traders, 184 Small watersheds, 173 Small-scale irrigation projects, 173 Smart subsidies, 172 Smits, J., 128 Social indicators, infrastructure on, 114–115 South Asia, 4, 6, 47, 57, 84, 124, 166 Specialized agricultural credit system, 187 Specialized agricultural finance system, 186, 203 Speculation, prices, 143 Stagnant agriculture, 24 Stevens, R D., 232 Storage losses, 143 Strong local governments, 109 Stylized population phases, 18 Sub-Saharan Africa, 4, 75, 84, 85n1, 145, 155, 166, 174 Subsidies, 171, 172 Subsidy program fertilizer, 172 Subsistence level, 79 Substantial foreign aid technical assistance programs, 21 Substantial foreign assistance, 181 Substantial geographic areas, 47 Substantial resource transfers, 64 Substantial spillover effects, 153 Substantial subsidy, 63 Substitution effect, 84 Subtler, 63 Supermarkets, 202–205 Supply side push, 170 Supply–demand balances, 135 Surplus labor, 62, 197 Sustainability, 95 Swinton, S M., 177 T Taiwan, 64, 68, 153, 174 Tanzania, 209 Tenant farms, Teng-hui Lee, 69, 70 Timmer, C P., 23, 136, 144 Trade issues, 70 Traditional agricultural systems, credit, 89 Traditional agriculture, 75, 226 labor leisure choices, 78–80 Traditional farms, 75 Transfer of resources, 66 Transitory poverty, 55, 56 Tropical export commodities, 160 Two-child family, 21 U Underemployed labor, 18, 62, 65 Underemployment, 43, 50, 62 UNDP, 47 Unemployed family labor, 78 Unemployment, 34 Urban areas, 197 Urban consumption, 137 Urban employment, 26, 36, 66 Urban household, 31, 33, 35, 37, 40, 42, 138 Urban investment, 66 Urban manufacturing, 26 Urban population, 66, 196 INDEX increased consumption, 140 Urban poverty, 197 Urban sector agriculture’s requirements, 62 growth rate, 30 Urban unemployment, 222 Urbanization, 195, 196 Urban-oriented consumption patterns, US foreign aid programs, 65 US foreign assistance, 162 US model, 156 USAID, 48, 57, 162, 182 V Vandercasteelen, J., 197 Verhofstad, E., 105 Vermont, 51, 58 Village money lenders, 183 Vocational education, 128 W Wage rates, 65, 66 259 Wages, 64 Wages good, 65 Water pollution, 96 Water use efficiency, 174 Weather-related events, 142 Weil, D., 18 Well-functioning modern agriculture, Women, 21, 52, 85 in traditional agriculture, 85 World Bank, 6, 7, 22, 32, 47, 118, 136, 154, 155, 172, 181, 214 World Bank report, 155, 169 World Development Report, 23, 48 World Food Program (WFP), 48, 56 Y You, L., 174 Yunus, Muohammad, 184 Z Zenawi, M., 107 ... 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