The majority of people in the developing world earn their living from agriculture and the key to economic development is therefore to raise agricultural productivity, discuss.

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ESSAY TITLE: “THE MAJORITY OF PEOPLE IN THE DEVELOPING WORLD EARN THEIR LIVING FROM AGRICULTURE AND THE KEY TO ECONOMIC DEVELOPMENT IS THEREFORE TO RAISE AGRICULTURAL PRODUCTIVITY”. DISCUSS.

In the first 25 - 30 years of the next millennium the world's population will increase by about 2 billion people. Most of this increase, about 95 percent, will take place in the developing world. This in itself is a challenge feeding an extra 2 billion people while hopefully reducing the more than three-quarters of a billion people who do not have enough to eat today. The production challenge we face in the next millennium is not unprecedented. Between 1975 and now we have added close to 2 billion people to the world's population and production more than kept pace. Enough food was produced to feed everyone if it had been more equitably distributed. Poverty is the key reason why people do not have enough to eat. Over 1.2 billion people live on less than US$1 a day and a further 1.6 billion live on less than US$2.

Experts estimate that as many as 73 million people are being added to our planet every year, while resources available to feed them, land and water, are diminishing. At the moment, the world produces enough food for its people, but food is often not available to those most in need, leaving some 800 million people hungry, 95 percent of them in the developing world. To produce enough food for everyone in 2020, we must increase world food supplies by 50 percent.

Food surpluses produced by developed countries cannot reach many of the people who need them in the developing world. Developing countries may not have enough income to pay for food imports. Additionally, many of the world's poor and hungry live where there are no roads or other infrastructure to deliver the food to the needy. These people are best helped if they are enabled to grow their own nourishment.

The poor usually live in the most undesirable and unproductive areas, in deserts, swamps, near garbage dumps or in industrial zones. Wherever they live, they seldom have enough for a nourishing diet, education, family planning or medical care. Women and children are the most vulnerable. Poor living standards and uncertain food supplies contribute to out-of-control population growth and the downward spiral of poverty. Imagine a couple engaged in subsistence farming in southern India. Their land barely produces enough to feed themselves, let alone children. But they need the labour of children to work on the family farm and to help support them as they age. Their children will be malnourished and seldom receive health care. The couple may have many children because they know that some, or even most, of their children are likely to die.

At this point, it is important to present2 tables, in order to explain the progress of agricultural productivity over the last decades.

“In Table 1, we present the growth (and stagnation) of per capita agricultural production in Third world between the years 1948 – 1970.

As we can see from Table 1, in Latin America, there is a decrease in per capita agricultural production; also Africa is even worst. The agricultural performance in Asia was only slightly better. In the Near East there was a decline in the rate of growth compared with the pre – 1960 period. During the 1960 – 1970 decade, agricultural production tended to stagnate. As a conclusion of this table, we can say that per capita agricultural production in Third World, during the 1960s, showed a downward process as a whole.

To be more specific and to analyse better ...

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To be more specific and to analyse better the case of the agricultural process in the developing countries, it is helpful to use Table 2.

In Table 2, we describe the agricultural population and production in developed countries between 1960, 1980 and 2000. In 1960 the agricultural population of the developed nations totalled 115 million people. They produced a total output amounting to $78 billion, or about $680 per capita of their agricultural population. In contrast, we see that the per capita product of the agricultural population in the underdeveloped countries in 1960 was only$52. In other words, agricultural labour productivity in developed countries was more than 13 times as large as that in the less developed countries. Projections for the end of the century (year 2000), show this productivity gap widening eventually to 40 to 1”.

Source: Michael P. Todaro – Economics For A Developing World (2ND EDITION) p.223, 225

There is another point of issue which influences agriculture, it is urbanization. During 1975-99 the urban population of developing countries increased by 1.2 billion. In the next 25 years it will increase by 2 billion, essentially doubling the urban population in just 25 years. Between 1750 and 1850 when industrialization was in full swing in Europe, it took 100 years to add 500 million to the world population. We will add about four times as many people in one- quarter of the time. The size of many of the developing country cities will far exceed most of the largest cities in the industrial countries. These cities will be in countries where agriculture is still the key economic sector. In 2015 Bombay will have over 26 million residents, Lagos 24.6 million, both of them more than double the 1950 population of New York City and far in excess of the predicted New York population in 2015. Why does urbanization add to the food production challenge? Rural populations in developing countries obtain most of their food from subsistence production or local markets. Urban populations, on the other hand, obtain around 90 percent of their food from the marketplace. In India and China, two countries with the highest absolute numbers of people, indications are that less than 40 percent of rice and wheat production enters the market beyond the localized market at the point of production.

In the next millennium the fact that population growth takes place in urban areas, rather than rural, means that required growth in marketed food surplus in the developing world is increased more than proportionately. Every time a person transfers from a rural area to an urban one, their marketed food supply requirement doubles. Using conservative estimates we calculated that while population growth projected from now until 2025 is 42 percent, the required growth in marketed surplus of grains would be 60 percent. The production challenge is therefore great because of three things: the absolute increase in population, where it will occur, and the doubling of urban populations.

Given constraints on new land availability and increased competition for water, most of the food production increases must come from intensification of agricultural production on existing land.

There are three major stages for agricultural and rural development in the developing world, in order to produce more agricultural products and to eliminate hunger. First of all, in most of the developing countries, there is available agricultural technology and innovations in cultivations, to raise and improve the level of crops, and thus the level of output.

There are only two sources of technological innovation which can increase the level of productivity, but both of them is difficult to be applied for the purposes of the Third world agricultural development. The first source is the replacement of labour force by the mechanized agriculture technology. This change enables the increase in the level of productivity, especially if the land is huge and cultivated. As an example, we can say that it is better for a farmer to who owns a huge combine harvest to produce more in a single hour with the available agriculture technology what would require hundreds of workers using traditional methods. The problem to apply the technological innovation in the Third world, is that usually the landowners have small cultivated tract and therefore, it is inexpedient the use of machines. Although if we assume that the apply of technological innovation is possible, then the labour force who is abundant, will be guided to unemployment, and the situation will be worst.

The second source of technological innovation is the use of biological and chemical methods. This kind of innovation may improve the quality of cultivated land and to increase the level of agricultural products. The use of advanced seeds and techniques of irrigation and crop rotation, the use of fertilisers, pesticides and herbicides, and also advanced technology in veterinary medicine and animal nutrition, are basic examples of biological and chemical methods in modern agriculture. In relation with the previous source, this method can be applied effectively on large and small-cultivated lands, in order to increase the agricultural productivity in Third world nations.

Another source of agricultural development in the Third world is the social institutions and government economic policies. Normally, they serve the needs and the interests of the small group of wealthy landowners. This kind of policy aims to drive the small landowners out of the market, also large landowners have access to low-interest government credit, while smallholders turn to moneylenders. The result of this policy is to widen the gap between the rich and the poor and to gather the cultivated land in the hands of the few large landowners. Although, this kind of plan, tend to be antidevelopmental if social institutions neglect the participation of small landowners in the process of agricultural development.

Many governments in the third world, keep the prices of agriculture products very low, in order to provide cheap food for the urban areas. This matter have as a result the decrease of profits for the farmers, which in many cases are below the cost production, and also there is not a chance for them to invest in new technology and to increase their production.

According these sources and the difficulties that face in order to apply for agricultural development in the Third world, there are a few conditions, which presuppose decisive and dynamic strategy.

The first proposition is that agricultural and rural development can be effectively succeed through a joint effort, by the government and all farmers, not only the large landowners.

. The main challenges to small-scale agriculture are to increase productivity of both land and labour, to diversify production, to add value through processing, to retain a greater share of the final value of products through improved marketing, and to achieve environmental sustainability. To this end, government action, with the support of official donors and the multilateral institutions, and with the active participation of farmers themselves, needs to ensure the following:

There must be a greater access to land, water, biological and chemical methods. In many countries, notably in Latin America, this access can only be achieved through redistributive agrarian reform. Demarcation and protection of land rights of traditional populations are also important. Women’s rights and entitlements often need strengthening. Secure access to natural resources helps ensure that small producers are not displaced by expanding export agriculture, and encourages sustainable forms of production.

Secondly, agricultural credit is essential for growth and competitiveness. Other financial services such as saving schemes and crop insurance are also helpful. There are equity and economic arguments for subsidies, so service provision cannot be left to the private sector alone.

Thirdly, it is important to be a greater access to and control of knowledge. Small producers and their associations need appropriate technical assistance and training, based on research relevant to their needs. This should cover the development of processing activities and the challenging task of producing export-quality goods. Patent regimes should not deprive farmers of access to seeds and technology, or of the fruits of their own historical inventiveness. The development of human capital in rural areas also requires the provision of good education and vocational training.

Another important action of the government is that small producers can only survive in more open markets if they acquire ‘critical economic mass’, and this means developing associative forms of economic activity, covering joint purchasing of inputs, warehousing, refrigeration, processing and marketing. Although marketing and agro-industrial co-operatives and their variants have a chequered history, they remain a key condition for development of the sector.

Also, the need for governments to ensure that the agricultural sector as a whole is competitive i.e. that there are not effective monopolies operating in input supply (such as agro-chemicals), in processing, in wholesaling, in domestic retailing or in exporting. Market domination by a few companies is common at both provincial and national levels, sometimes because of state favours. These firms take the lion’s share of the value generated in agriculture, and of the benefits generated by export growth.

Finally, there must be fair and stable prices. Governments often intervene in domestic agricultural markets by setting official prices, by engaging directly in commercial activities, by holding stocks, or simply through tax policy. These interventions, while sometimes legitimately aimed at securing stable, low prices for urban consumers, must give due weight to the interests of small-scale rural producers. If they are aimed at supporting agriculture, they should favour the poorer producers. Price fluctuations in international commodity markets are a major deterrent to exporting by smaller farmers. A combination of risk management and insurance schemes, as well as use of buffer stocks, could help stabilise farm gate prices, thereby extending to smaller producers the security routinely enjoyed by big companies and traders. These initiatives would, however, require a substantial injection of ideas and finance from international institutions.

Concisely, according in the analysis and the process of agricultural productivity in the developing world, the conclusions tend to be discouraged than would normally be positive. We are in the 21st century, which is described by huge companies, co-operations between the developed states, rapid evolution of technology, even though the world is separated between the industrial states and the others (Third world).

Unfortunately the part of the Third world with the problems of hunger, poverty, diseases, is much more greater than the part of industrial states. But the most significant part of all this, is that by the next 30 years, world population will increase by 2 million people, and 95 per cent will take place in the Third world. That means all the above problems, which encounter these states, will be greater and the disaster worst. To defend on the future disaster, the developed states must find a solution to help the poor countries improve their standard of living. There are plenty of solutions, but the main point to this is to be implement.

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