AGRICULTURAL TRANSFORMATION AND RURAL DEVELOPMENT

A. The Imperative of Agricultural Progress and Rural Development

1. Rural Stagnation and Urban Migration:

✓ The massive migration to cities in Africa, Asia, and Latin America is largely due to the economic
stagnation in rural areas.
✓ Despite some progress, nearly 2 billion people in the developing world still struggle in
agriculture-based livelihoods, often under conditions of extreme poverty.
✓ In 2018, more than 3 billion people lived in rural areas of developing countries, and over 820
million were undernourished.

2. Rural Majority and Poverty:

✓ In many developing countries, especially in sub-Saharan Africa and South Asia, the majority still
live in rural areas, and over two-thirds of the world’s poorest people are found there.
✓ These people rely heavily on subsistence farming, with survival—not growth—as their primary
goal.

3. Historical Economic Thinking:

✓ Historically, agriculture was viewed as secondary to industrial development.

✓ It was expected to support industrial growth by supplying cheap food, labor, and capital.
Prominent economic models, like Lewis’s dual-sector model, emphasized industrialization while
minimizing the importance of rural development.

4. Shift in Development Thinking:

✓ Modern development economics now recognizes that agriculture and rural development are
essential for sustainable national growth.
✓ Agriculture is no longer seen as passive but as a vital driver of economic transformation—
especially in low-income countries.

5. Integrated Rural Development:

✓ A comprehensive strategy is needed, including:

• Boosting smallholder productivity through technology and incentives,

• Creating demand for agricultural goods via urban employment growth,

• Promoting rural nonfarm industries that support farming communities.

Without this, industrial growth could be unbalanced and unsustainable.

7. Regional Diversity and Common Patterns:

Despite differences, developing regions show common patterns:

• Africa: Dominated by traditional, subsistence agriculture.

• Asia: Undergoing agricultural transformation with population pressure.

• Latin America: More urbanized but plagued by inequality in land ownership.

8. Pathways to Agricultural Modernization:

The goal is to shift from traditional to commercial farming, which requires not only economic policies
but also social, institutional, and technical reforms. This includes improving infrastructure, education,
health services, and gender-inclusive agricultural extension, as illustrated by the case studies of Kenya
and Uganda.

Conclusion:
Rural and agricultural development is not optional—it is central to addressing poverty, hunger, and
economic imbalance in the developing world. Sustainable progress requires moving beyond viewing
agriculture as a support system for industry to recognizing it as a cornerstone of national development.

B. Agricultural Growth: Past Progress and Current Challenges

B.1 TRENDS IN AGRICULTURAL PRODUCTIVITY

1. Global Agricultural Progress:

• Contrary to neo-Malthusian fears of widespread famine, global agricultural production has

largely kept pace with population growth, especially in the developing world.

• Between 1980 and 2004, developing countries saw agricultural output grow at 2.6% annually,
outpacing the developed world’s 0.9%.

• By 2004, the developing world’s share of global agricultural GDP rose from 56% to 65%, showing
agriculture’s critical role in these economies.

2. Key Successes in Agricultural Innovation:

The rise in agricultural productivity in developing regions is due to a series of targeted programs and
technological innovations, such as:

• The Green Revolution in Asia.

• Pest-resistant cassavas in sub-Saharan Africa.

• Shallow tubewells in Bangladesh.

• Hybrid rice and mung beans in East Asia.

• Dairy marketing programs in India.

• Land tenure reforms in China and Vietnam.

• Cotton sector reforms in Burkina Faso.

These localized innovations demonstrate that agriculture-led strategies can reduce hunger and
improve livelihoods when well-designed and region-specific.

3. Regional Differences in Agricultural Growth:

• Asia and Latin America have seen strong increases in yields and reductions in hunger.

• China made significant gains, although India has seen a recent rise in hunger despite good
agricultural output.

• Sub-Saharan Africa, however, lags far behind, with cereal yields increasing only about one-
third since 1960.

This is due in part to land degradation (from overuse of slash-and-burn methods), lack of access to
modern inputs, and a poverty trap, where farmers can’t afford the improvements needed to boost
productivity.

4. Structural Problems in Agriculture:

• In many developing countries, a large share of the labor force (up to 90%) is still in agriculture,
but their contribution to GDP is disproportionately low—indicating low productivity.

• Migration out of agriculture is happening even without rising incomes, showing that rural
stagnation is pushing people toward cities, often into informal urban sectors.
China is a unique case: even with rapid economic growth, agricultural employment fell slowly due to
migration restrictions. This underscores the importance of policy environments in shaping development
paths.

What it means:

• China’s rapid economic growth over recent decades is well known. The country experienced
massive industrial expansion, urbanization, and increases in GDP.

• However, unlike many other countries undergoing similar economic booms, the percentage of
people working in agriculture didn’t drop quickly in China.

• Why? Because the Chinese government restricted rural-to-urban migration through a policy
system known as the hukou (household registration) system. This system made it difficult for rural
residents to permanently move to cities and access urban services like healthcare, education,
and housing.

• As a result, millions of rural people stayed in agriculture, even though non-agricultural jobs
were growing faster and paid more.

Why it's important:

• This situation highlights a key point: economic development doesn’t happen automatically or
uniformly.

• The “policy environment”—the rules, laws, and institutions a government puts in place—shapes
how development unfolds.

• In China’s case, policies slowed the shift of workers out of agriculture, even when economic
conditions were favorable for such a shift.

Even if an economy is growing fast, like China’s, government policies can significantly affect how that
growth is distributed and how different sectors (like agriculture) change. China’s experience shows that
development is not just about economics—it’s also about political decisions and institutional design.

5. Persistent Hunger and Famine in Africa:

• Africa has faced recurring famines—notably in the Sahel, the Horn of Africa, and countries like
Ethiopia, Malawi, Zimbabwe, and Mozambique.

• Over 270 million Africans suffer from malnutrition, showing that food production alone is not
enough—access, distribution, and affordability are equally crucial.

6. The Case for a Green Revolution in Africa:

• Africa needs its own Green Revolution, which would require both technological breakthroughs
(like drought-resistant crops) and institutional change (land reform, infrastructure, women’s
inclusion).

• Initiatives like AGRA and CAADP aim to drive this transformation by:

o Allocating 10% of national budgets to agriculture

o Targeting a 6% annual growth rate in the agricultural sector.

7. Food Prices and Global Vulnerability:

• Historically, food prices fell by 1% annually in the 20th century, but they’ve been rising in the
21st century, especially during crisis periods (2007–2008 and 2011).

• Causes of rising food prices include:

o Biofuel production diverting crops.

 o Increased meat consumption in emerging economies (more land- and resource-
intensive).

o Climate change, energy prices, land scarcity, and slowed productivity growth.

o Trade restrictions by food-exporting nations (e.g., Egypt, Russia, Vietnam) in times of

crisis.

Food prices remain volatile, and national self-sufficiency in food is a top priority for most countries due
to security concerns.

8. Future Challenges:

• By the 2040s, the world must feed over 9 billion people.

• Solutions must go beyond boosting production—they must include trade cooperation, price
stabilization, environmental protection, and resilience-building.

• One proposed but largely unrealized solution is an international treaty to avoid panic trade
measures during food price spikes. Cooperation remains a challenge.

Key Takeaways:

• Agricultural growth in the developing world has been impressive, but Africa remains behind,
facing deep structural issues.

• Food security is not only about production—it’s about access, equity, and risk management.

• Technological fixes must be paired with social, policy, and institutional reforms.

• Future agricultural strategies must address climate change, price volatility, and the complex
relationship between rural stagnation and urban migration.