The 

origins of agriculture occurred from about 10 000 years ago in certain suitable regions,
known as “core areas” or “nuclear zones.” The key factor in this process was the biological
domestication of targeted plants and animals through selective breeding and other forms of
selection (see Domestication and Development .
The history of agriculture records the domestication of plants and animals and the
development and dissemination of techniques for raising them productively. Agriculture began
independently in different parts of the globe, and included a diverse range of taxa. At least
eleven separate regions of the Old and New World were involved as independent centers of
origin.
Wild grains were collected and eaten from at least 105,000 years ago.[1] However,
domestication did not occur until much later. In Mesoamerica, wild teosinte was domesticated
to maize by 4000 BC. Cotton was domesticated in Peru by 3600 BC. Camels were domesticated
late, perhaps around 3000 BC.
The Bronze Age, from c. 3300 BC, witnessed the intensification of agriculture in civilizations
such as Mesopotamian Sumer, ancient Egypt, the Indus Valley Civilisation of the Indian
subcontinent, ancient China, and ancient Greece. During the Iron Age and era of classical
antiquity, the expansion of ancient Rome, both the Republic and then the Empire, throughout
the ancient Mediterranean and Western Europe built upon existing systems of agriculture while
also establishing the manorial system that became a bedrock of medieval agriculture. In
the Middle Ages, both in the Islamic world and in Europe, agriculture was transformed with
improved techniques and the diffusion of crop plants, including the introduction of sugar, rice,
cotton and fruit trees such as the orange to Europe by way of Al-Andalus. After the voyages of
Christopher Columbus in 1492, the Columbian exchange brought New World crops such
as maize, potatoes, sweet potatoes, and manioc to Europe, and Old World crops such as wheat,
barley, rice, and turnips, and livestock including horses, cattle, sheep, and goats to the
Americas.
SCHULTS THEORY OF TRADITIONAL AGRICULTURE TRANSFORMATION

Meaning of Traditional Agriculture According to Schultz:

According to Shultz traditional agricultural is all economic concept. It implies a short of an
equilibrium: When agriculture of an country reaches such an equilibrium, it will become a
traditional agriculture and according to Sehultz, as we have already pointed out, this
equilibrium can be reached irrespective of the cultural attributes of the society, its institutional
arrangements or the technical efficiency of its factors.

According to Schultz, the critical conditions underlying this type of equilibrium, either
historically or in the future are as follow:
(1) The state of arts remains constant

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(2) The state of preferences and motives for holding and acquiring sources of income remains
constant and

(3) Both of these states remains constant long enough for marginal, preference and motives for
acquiring agricultural factors as sources of income to arrive at an equilibrium with the marginal
productivity of these sources viewed as an investment in permanent income streams and with
net savings approaching zero.

The definition needs some elaboration. Schultz is of the opinion that when technology in
agriculture remains unchanged for a long time and when people using various inputs under
such a technology have fully known the pros and cons if the use of these inputs have therefore
finally decided their preference for various input.

It may be noted that Schultz’s definition is unconventional in the sense that according to it,
even a very advanced agriculture can become traditional. It is not like Mellor’s definition which
considers only a backward and labour intensive agriculture using a crude from of capital, as
traditional agriculture, Mellor’s definition is more Pragmatic and is historically sound,

Main Characteristics of Traditional Agriculture as Defined by Schultz:

(A) Allocative Efficiency in Traditional Agricultural:
It is generally felt that resources in a traditional agriculture are not optimally allocated. Heady
had conducted a study on resource allocation for six class of formers in India and found that
allocation of resources was not perfect.

The argument runs as follows. Art of cultivation remains unchanged (for agriculture to become
traditional) and so are the preferences and motives to hold various factors of production, When
year after year farmer, under such circumstances, get the same return (under normal
condition), they are bound to adjust their investment in various factors in such a way limit the
marginal productivity of each factor is finely balanced with its price and this balance will stay so
long as the art of cultivation etc. remains unchanged. As Schultz pointed out. “There are
comparatively few significant inefficiencies in the allocation of factors of production in
traditional agriculture.”
Assumption for the State of Perfect Allocation of Resources:
Schultz made certain assumptions for the equilibrium to prevail in traditional agriculture.

These assumptions are as follows:

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(1) These first assumption is about the nature of factors of production. The factors have been
used for a long time without any change. If the factors have been changing in their nature,
obviously, their returns too will be changing and consequently, long run equilibrium cannot be
achieved. (In fact agriculture cannot be considered as traditional if the nature of factors of
production goes on changing).

(2) No significant activity like construction of road or digging of a canal is taking place. Such
activities will disturb the equilibrium temporarily.

(3) Events like war, partition or recruitment of labour in the army also disturb the equilibrium
temporarily.

(4) Relative prices of various factors as well as of agricultural products are assumed to be
constant.

(5) As the state of arts is assumed to be unchanged, the change in the technology, taking place
at any time is ruled out.

(6) There are no indivisibilities.

(7) There is a perfect knowledge about the returns to various factors.

The Poor Hot Efficient Hypothesis:

From the above implication about perfect allocation of resources, as deduced from the
definition of traditional agriculture. Schultz moves on to the description of another hypothesis
(based upon perfect allocation of resources) which, by now has become quite well known. It is
known as the poor but efficient hypothesis. Schultz implies that people in a traditional
agriculture are no doubt efficient so far as the allocation of resource is concerned but still they
are poor.

According to him, optimum allocation of resources fails to ensure a high income level for the
farmers. This is because the returns form the resources themselves are quite low or using
Schultz’s terminology we can say that the cost of income stream is rather high. This is the
reason, as we shall see later, why Schultz suggests changes in the nature of factors of
production in order to transform traditional agriculture.

Implication of the Poor but Efficient Hypothesis:

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From the fact that the allocation of resources is perfect in traditional agriculture. Schultz
deduced some important conclusions.

These are as follows:

(a) There is no possibility of increasing agriculture production by reallocating the existing
resources. The farmers have perfect knowledge about the returns from these resources and are
already getting the maximum output from their use.

(b) No factor is unemployed in traditional agriculture. The poor but efficient hypothesis also
leads to the conclusion that no resources whether capital or labour, are unemployed
involuntary, if any factor, say a labourer is without a job he is so only voluntary.

(c) The hypothesis leads to the conclusion that even in traditional agriculture, there is no dearth
of efficient entrepreneurs.

(d) The hypothesis also implies that farmers in the traditional agriculture, too are quite
responsive to price changes. This is because perfect allocation of resources is not possible
unless the producer are too sensitive to price changes.

Tests of the Hypothesis:

Schultz does not stop only at deducing the conclusion about resource allocation from his
definition. He relied upon studies conducted by two social anthropologist to prove his point.
The first study was that made by Soltax.

At the same time, Schultz rejected the conclusion arrived at by Heady who studied the resource
allocation by sin classes of Indian farmers and had concluded that there were imperfections in
the resource allocation in these villages. Schultz rejected Heady’s conclusions with the plea that
data used by him was unreliable. It may be noted here that Guatemalan and Indian agriculture
are considered traditional by Schultz.

Critical Review of Schultz Views about Perfect Allocation of Resources in Traditional

Agriculture:
No doubt, Schultz had found supporters for his conclusion about resources allocation in
traditional agriculture. John Lossin Buck and Baner and Yamey, for example, have supported his
conclusions. Still, his views have not been accepted by many.

(B) The Doctrine of Zero Value Labour:

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Yet another conclusion can be derived form the definition of traditional agriculture as given by
Schultz. It is that in a traditional agriculture, there is no disguised unemployment or what
Schultz calls as zero value labour. We have already pointed out that in traditional agriculture, as
per Schultz’s views, no factor of production is involuntarily unemployed.

Critical Review of Schultz’s Views about Disguised Unemployment in Traditional Agriculture:

Schultz’s view about no zero value labour in traditional agriculture have been challenged both
on theoretical as well as empirical grounds. On the empirical plan, studies by Mazumdar, &
Desai, by Mellor and Stevon and by Rosenstein Rodan have shown that disguised
unemployment exists in agriculture in the underdeveloped countries.

Schultz’s conclusions about influenza and its effects on agricultural production have been
challenged. Sen has, for example, questioned the deletion of some states form being
considered by Schultz to show a fall in agricultural production. He has further questioned the
logic of using area under cultivation as an index for agricultural production.

He has further pointed out that natural calamities like Influenza affect farms of all types i.e.
those using hired labour and those using only, family labour. When hired workers die of an
epidemic, production of farms on which disguised unemployment exists.

Schultz’s Suggestions for Transforming Traditional Agriculture:

There are three ways of increasing production. These are to:
(1) Make use of un-utilised resources

(2) Optimally reallocate the resources so as to take the production on to the production frontier
and

(3) Change the nature of factors namely replace all or some of the old factor by new ones with
higher output-input ratios.

Intentionally or otherwise, Schultz’s ruled out the adoption of first two methods meant for
increasing agricultural production. For instance, by his very definition of traditional agriculture,
he has concluded that there is no factor of production lying unused in traditional agriculture.
Land and labour and other capital assets are fully utilized in traditional agriculture.

Market Approach V/S Command Approach:

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By market approach, Schultz, implies that no factor of production should be imposed on the
farmers. The farmers should be left free to decide whether to use a particular factor of
production or not. Let them see for themselves the profitability of a given factor and decide
about its adoption.

The adoption in other words should be guided by the market forces. The only responsibility of
the government in this case should be to ensure that there is an easy availability of the factor of
production and there is a good publicity about it and that necessary skills for the use of new
inputs are properly developed. By command approach, Schultz means system on which the
government supplies a new factor production to the farmers and that direct them to use it
irrespective of its profitability.

The Process of Transformation:

In a market approach, ultimately the supply and demand for the factors of production will
govern the actual use. So Schultz discusses in detail the factors that influence the supply and
demand for such factors. We may in the first instance discuss the problems faced in the supply
of new factors and the suggestion that Schultz, makes to overcome these problems.

A. Supply of New Factors:

According to Schultz three important steps are involved in the supply of new factors.

These are:
(1) Research and Development of new factors.

(2) Distribution of inputs to the cultivators and

(3) Extension of new knowledge.

These steps are described in the paragraphs that follow:

(1) Research and Development of New Factors by Suppliers:
Science and Technology, according to Schultz, play a very important role in the transformation
of traditional agriculture. So what he suggests is that in the first instance, these factors may be
imported from some foreign country and then this factor should be subjected to further
scientific analysis so that it is finally adapted to the physical environments of the importing
country. This will be least costly method of developing a new factor of production.With regard
to the provision of scientific facilities for research, development and adaptation of a new factor

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of production Schultz raises an important question. It is as to who should provide facilities for
such a job: The Government or the Private persons?

According ta Schultz, a private person will hesitate to undertake this research work not only
because it is costly but also because its results may appear after a long time and same times
may even be totally disappointing.

Secondly, the benefits of a successful research are not gaing to accurue solely to the private
person. Other members of the community will also benefit from this research.

(2) The Distribution of New Inputs:

After the new inputs have been developed and technology for their mass scale production has
been perfected a question arises: Who should produce and distribute these inputs? Schultz
himself answers this question. In the beginning when the new inputs are still untested by the
farmers, no private person will take the risk of producing and distributing these inputs.

This cost consists of the following:

(a) the cost of adaptation, though basically, the input has been adapted to the general
condition of the country in the state owned laboratories or in the laboratories run by the non-
profit making institution.

(b) cost of providing information to the users about the availability as well as about the nature
of the input.

(c) Other costs of entry e.g. opposition of the vested interest. People so far supplying the
traditional input are vehemently oppose to the introduction of new inputs. Some expenses will
have to be incurred to overcome their opposition.

(d) Development of extension services. Availability of new input is not sufficient. Necessary
skills for its use are also to be developed.

B. Demand for New Factors:

Supply of new factors is of no use if the farmers do not demand them. Schultz, therefore
analyses the factors which should be kept in view while trying to ensure that a demand is
generated for the inputs.

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According to him, whether he is a farmer in traditional agriculture or a non-traditional one, he
always goes by the economic motive. In this case, the economic motive is governed by
profitability of the new inputs over a long period. If the new inputs profitable the farmer will
accept it and substitute it for an old input.

Profitability of a factor, according to Schuitz depends upon two factor. These are

(a) the prospective yield and

(b) the supply price of the new input. We describe these two factors in the paragraphs that
follow.

(a) The Prospective Yield:

Schultz uses this concept to bring the future yield of the input into the picture. The inputs are
totally new and how their yield behaves in the future is uncertain.

(b) Supply Price of the New Input:

For estimating the profitability of the new inputs, the farmers has to consider other factor also.
It is the supply price of the new input.

Importance of Acquired Skills in Transformation of Agriculture:

Supply of new inputs is essential for transformation of agriculture. However additional
knowledge and skill is also needed to use them. True, in some cases, special training may not be
needed to use these inputs. However, if the new inputs are technically, far superior to the old
input imparting of special knowledge to the farmers becomes very important.

Schultz considers three methods which can be used for imparting such a knowledge. These are
(1) trial and error method (2) on the job training through demonstration, short term courses
etc. and (3) Schooling, Schultz out of these three methods commends the third method i.e.
schooling, the maximum.

According to him, the other two methods are slow and limited in effects. He feels that general
education at the school level will equip the farmers with capabilities to handle all types of
inputs involving technical intricacies. He considers this as an investment in human capital and
quotes the examples of Israel and Japan to prove that schooling has contributed a lot to the
Increase in agriculture production in these countries.

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Critical Reviews of Schultzian Thesis:
We have already critically examined the definition of traditional agriculture as given by Schultz
and also its implications namely the poor but efficient hypothesis (perfect allocation of
resources) and the non-existence of disguised unemployment in a traditional agriculture.Social
interests are likely to be sacrificed in favour of private interests if a total market approach is
followed. Further his suggestion -that only use of modern inputs will transform the traditional
agriculture is inaccurate.