Economic Development

Economic stagnation of the rural areas- the reason for the migration of people to the cities
of Africa, Asia, and Latin America in history

3.1 Billion people live in the rural areas of developing countries in 2013. A quarter of them live
in extreme poverty.

60% of the population in both low and lower middle-income countries have people live on
the countryside.

Organization for Economic Cooperation and Development (OECD)

Latin America is highly urbanized the same level as OECD countries by 2011.

Sub-Saharan Africa- 64% of the population

South Asia- 69% of the population

India- more than two-thirds of the population is in the rural areas.

Countries with more than 80% of the population is in the rural areas:

• Ethiopia

• Nepal

• Niger

• Papua New Guinea

• Rwanda

• South Sudan

• Sri Lanka

• Uganda

Basic Concern: SURVIVAL

United Nations Food and Agriculture Organization- 870Million people did not have enough
food to meet their basic nutritional needs.

The core problems of widespread poverty, growing inequality, and rapid population growth all
originate in the stagnation and often retrogression of economic life in rural areas,
particularly in Africa.

AGRICULTURE

• Passive and supportive role

• Primary purpose is to provide sufficient low-priced food and manpower to expanding

industrial economy

• fuels industrialization with its cheap food and surplus labor.

• Dynamic “LEADING SECTOR” in an overall strategy of economic development.

Simon Kuznet: Four Contributions of Agriculture to Economic Development

1. The product contribution of inputs for industry such as textiles an food processing.

 2. The foreign-exchange contribution of using agricultural export revenues to import

capital equipment.

3. The market contribution of rising rural incomes that create more demand for
consumer products.

4. The factor market contribution and the capital contribution.

Capital contribution - “squeezing of peasantry”

- investing first in agriculture and later reaping profits that would be

partially reinvested in industry.

- Ironically, INDUSTRIALIZATION is the core development goal an not

RURAL MODERNIZATION.

Agriculture and Employment-based strategy f Economic Development requires three basic

complementary elements:

1. Accelerated output growth through technological, institutional, and price incentive

changes designed to raise the productivity of farmers.

2. Rising domestic demand for agricultural output derived from an employment-oriented,

urban development strategy.

3. Diversified, non agricultural, labor-intensive Hal development activities that directly and
indirectly support and are supported by the farming community.

Agricultural and Rural Development is the SINE QUA NON of national development.

Integrated Rural Development- the broad spectrum of rural development activities, including
small-farmer agricultural progress.

Examine the basic characteristics of agrarian systems in Latin America, Asia and Africa:

- these regions typically reflect the agricultural patterns of agriculture-based economics

(AFRICA), agriculturally transforming economies (ASIA), and urbanized economies (LATIN
AMERICA).

- these regions often typify the stages of subsistence (AFRICA), mixed (ASIA), and
commercial farming (LATIN AMERICA).

- these regions have high concentration of poverty that also reflect patterns of
traditional agriculture (AFRICA), high population density and subdivided small holdings (ASIA),
and the sharp inequalities of very large and very small farms (LATIN AMERICA).