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CHAPTER OUTLINE
I. As the previous chapter discussed the role of agriculture in economic develop-
ment, the current one opens by addressing the concern of what policies and
institutions are needed to maximize those contributions. It explores what kind
of agricultural policies governments should promote, what kind of invest–
ments are most effective, and what institutions and rules are most critical for
effectively implementing and maximizing the investments and policies pur-
sued. The opening section also provides an overview of recent agricultural
developments and a review of the major type of agricultural systems.
II. The next section explores the various constraints to agricultural development.
The Mosher framework is introduced and serves as the basis for further
analysis of these constraints. The discussion progresses to examine what can
be done to raise the technical ceilings in agriculture— which is in part deter–
mined by the agroecological and agricultural potential of different areas. The
section then goes into more detailed study of the Green Revolution and its
impact on parts of the developing world. It examines why some developing
nations have succeeded by embracing the Green Revolution while others have
made little progress since it gained momentum during the 1960s.
III. This section of the chapter examines raising the economic ceiling. In Mosher’s
framework, the economic ceiling was determined by a combination of eco-
nomic incentives— infrastructure, access to markets, and institutions. The
authors make central the dilemma of pricing: producers and consumers both
have con icting interests. This has been labeled by Timmer, Falcon, and Pear–
son the policy food dilemma. The production possibility frontier and isorev–
enue (Figure 17– 8) are utilized to help explain a government trying to nd the
optimum combination of two agricultural goods to produce for the bene t of
Agricultural Development:
Technology, Policies,
and Institutions
CHAPTER 17
120 | Chapter 17
society. Following this, the text explores farmers’ decisions regarding what
togrow. At the heart of the discussion: nding the least cost combination of
inputs needed to produce a given quantity of output— and this is not easily
solved— as illustrated in Figure 17– 9.
IV. The next problem facing the farmer is how much to produce. A production
function (Figure 17–10) is utilized to examine inputs— which help illustrate
at one point maximum output would occur along with diminishing marginal
returns. Farmers also face the challenge of the supply response. The goal for
the farmer would arguably be to produce the pro t maximizing rate of output.
Finally, a discussion of improved infrastructure provides a good comparison
between poor farmers who are remote from their markets and those who are
close to market centers— and do better.
V. The nal section of the chapter takes a fresh look at institutions for agricul-
tural development. Formal institutions that construct the rules, laws, and con-
stitutions of each country must be examined carefully. A signi cant discussion
takes place on the subject of land rights. The most common forms of land
own ership (in the agricultural sector) are discussed. The strengths and weak–
nesses of each one are revealed. This section draws to a close by discussing
the need for land reform. Finally, the authors offer their nal word on the
causes of the food crisis of 2005– 2008.
Boxed Examples
Box 17– 1: A Model of Induced Technical Change in Agriculture
Box 17– 2: Fertilizer Subsidies in Malawi
Box 17–3: Cell Phones and Agricultural Development
There are three case studies in Chapter 17. The rst is an examination of induced
2007. The third case study looks at cell phones and the role they play— primarily
in providing rural farmers with access to markets and marketing information.
In the New Edition
This new chapter builds on the broad discussion of agriculture and development in
the previous chapter, concentrating on policies and institutions to promote agri-
cultural development. Speci c topics introduced in this chapter include a typol-
ogy of agricultural systems common in developing countries, a broad framework
for analyzing constraints to agricultural production growth, the role of technical
Agricultural Development: Technology, Policies, and Institutions | 121
change and the Green Revolution, the role of institutions and land reform in agri-
cultural development, and a review of the global food price crisis of 2005– 2008.
Class Notes
Students should be given an overview of the progress in agriculture since the post–
World War II era. It might be useful to discuss the transformation of the agricul-
tural sector in the developed nations and then proceed to the dif culties still facing
the developing nations of the world in this sector. To be sure, this is a section
where you will need to explain different types of land own ership, infrastructure,
and rules (laws, etc.) that affect the ability of farms in some developing countries
to advance while others, particularly in sub- Saharan Africa, lag considerably
behind.
It is important to reference the graphs provided in this chapter. For nonmajors,
a general review of the production possibility frontier and isoquant curves would
enhance all students’ understanding of critical discussions, which are well-
illustrated. Figures 17– 8, 17– 9, and 17– 10 are especially worth examining and
discussing with students as they back up and support core issues dealt with in
this chapter.
Time should also be spent reviewing countries that have already undertaken
some type of land reform. Most nations that have done so, under varying circum-
stances, have experienced improvement in their agricultural output— with the
notable exception of Zimbabwe. The chapter ends with a review of the food crisis
of 2005– 2008—a crisis felt in the onset of rising prices around the world. Exam-
ine the reasons for this crisis and discuss not only how it impacted the developing
nations but also how it might have affected prices of agricultural goods in the
developed world.
QUESTION BANK
Concept Map
Agricultural Development
Characteristics of Traditional Agriculture and Agricultural Systems
Agricultural Systems
Diagnosing the Constraints to Agricultural Development
The Green Revolution
Recent Trends in Agricultural Productivity
Raising the Economic Ceiling
How Much to Produce?
122 | Chapter 17
Multiple- Choice Questions
1. Before the 1950s, agriculture in nearly all developing countries relied on:
a. hybrid crops and irrigation.
b. traditional technologies and crop varieties.
c. the new and emerging Green Revolution.
d. grants and charity provided by the developed nations of the world.
2. By the 1960s, large public investments in crop science had begun to pay off
in the form of:
a. crop rotation and drip irrigation.
b. the move toward organic farming.
c. seeds for improved crop varieties and packages of complementary inputs.
d. making barley and maize the new main staples at the dinner table.
3. The Green Revolution has had the least impact thus far in:
a. East Asia.
b. Latin America.
c. West Asia.
d. sub- Saharan Africa.
4. The months preceding the next harvest, when prices are at their highest, are
known as the:
a. drought.
b. lean season.
c. anticipatory season.
d. season of hope.
5. The problem with the practice of shifting cultivation is that it has been linked to:
a. price distortions in the marketplace.
b. increased reports of farmers suffering from “spatial dislocation.”
c. soil erosion.
d. outbreaks of various disease strains.
6. It is currently estimated that for the time period ranging from 1997 to 2020,
cereal demands in developing nations will rise:
a. 15 percent.
b. 35 percent.
c. 40 percent.
d. 50 percent.
7. Which economist compared the actual per for mance of agricultural produc-
ers with their potential per for mance?
a. Arthur Mosher
b. Angus Deaton
c. Esther Du o
d. Simon Kuznets
8. The distribution of yields that are possible when all farmers maximize their
pro ts given the opportunities available to them in a given environment is
known as:
a. excess pro t.
b. producer surplus.
c. allocative ef ciency.
d. economic ceiling.
9. Agronomist Norman Borlaug is often referred to as the father of:
a. economic development.
b. the Green Revolution.
c. the World Bank.
d. radical land redistribution.
10. By the year 2002, what percentage of cropland in sub- Saharan Africa was
irrigated?
a. 4 percent
b. 12 percent
c. 15 percent
d. 22 percent
11. Since the 1980s, the growth rate of yields in the world’s major cereal crops has:
a. trended steadily upward.
b. been mostly consistent and remained the same over the past 30 years.
c. trended strongly downward.
d. uctuated radically because of the objectives of different governmental
policies around the world.
12. The food policy dilemma, as de ned by Timmer, Falcon, and Pearson, refers to:
a. the continual battle within governments over what is to be grown in the
agricultural sector.
b. the push to move agricultural laborers to industrial jobs in the urban areas.
c. the production of agricultural goods for domestic consumption vs. for
export.
d. con icting interests of producers and consumers in regard to food prices.
13. What is the margin between farm- gate price and retail price called?
a. marginal return
b. net pro t
c. marketing margin
d. base price
14. Share cropping is the dominant farming contractual arrangement in:
a. South Asia.
b. Latin America.
c. the Middle East.
d. sub- Saharan Africa.
15. Economists Derek Headey and Shenggen Fan have concluded that 60 percent
to 70 percent of the increase in corn prices is due to:
a. the use of corn as improved feed for cattle to avoid future outbreaks of
“mad cow” disease.
b. the increasing cost of transportation.
c. the substitution of corn for higher pro t- oriented crops.
d. the diversion of corn for biofuels production.
Agricultural Development: Technology, Policies, and Institutions | 125
IDs and Paired- Concept Questions
These terms can be used individually as short- answer identi cation questions, or
they can be used in pairs. In the latter case, ask students to explain (1) the meaning
and signi cance of each of the two terms and (2) the relationship between them.
2. Planting and harvesting time, the lean season
4. Pastoral nomadism, settled agriculture
6. Perennial crops, livestock systems
8. Technical ceiling, technology diffusion
10. Intercropping, optimal crop mix
12. Supply response, nonprice constraints
14. Fixed- rent tenancy, share cropping
16. Supply shocks, demand shocks