Production Structure: plantation/latifundio, sharecropping, minifundio, family farms, and
Issues: technical efficiency, allocative efficiency, financial incentives, economics of uncertainty,
incentives to produce for local needs, distribution, values of modernity, contributions to the modern
sector, and delivery of social services.
Some evidence suggests that successful agrarian systems as diverse as those in South Korea, Taiwan, and
China have been converging toward a hybrid, with family farming and cooperative features.
Farming in South Korea is among the most efficient in the developing world, and its Saemaul Undong
(“new village movement”) rural development program makes for an excellent discussion. (Information
can easily be found online. For example, Edward P. Reed’s “Is Saemul Undong a Model for Devleoping
Countries Today?” The program aims to create a “development climate” through a philosophy of
“diligence, self-help, and cooperation,” by maintaining individual family private ownership of land while
at the same time emphasizing the role of collective action of villagers in developing infrastructure and
raising income and welfare. The efforts to privatize and deregulate the ejidos (commons) sector in Mexico
is also a good and lively discussion topic.
The development of the agricultural sector in the current less developed countries can be compared to the
now developed countries in their earlier stages when productivity in agriculture kept pace with the industrial
revolution, and land reform often occurred. This can be a good lead for a land reform discussion. The external
benefits of being a big landowner often explain why land reform is politically hard to implement. At the
same time, the experience of Brazil shows that the lack of land reform is leading poor farmers to attempt to
occupy land owned by latifundios.
The discussion on low versus high productivity agriculture can be made more technical depending on the
background of the students.
Students with intermediate micro may find interesting a Tobin-Markowitz indifference map diagram to
illustrate the choice of a low-yield variety “Indica rice” over a new high-yield variety “super-rice,”
and an illustration of under-utilization of intermediate inputs and capital on a factor productivity
diagram from an expected utility maximization perspective.
The importance and impact of an increase in the quantity of capital and/or technology can be
reviewed. You may start with the Malthusian model where labor is the only factor and discuss the
subsistence level of living concept. Appropriate technology can also be discussed.
Policy options are numerous and include the provision of public capital infrastructure, research and
development, extension services, input access, transportation, marketing, and storage, and price and
exchange rate policies. Some of these are discussed in the case study of women farmers in Kenya at the
end of the chapter. For example, an overvalued exchange rate can hurt agricultural exports. With respect
to price controls, note that price plays three important roles: crop choice, urban cost of living, and farm
income. Access to information may also be discussed. There may be many opportunities that poor peasant
farmers are not aware of, such as growing high-end organic products for the developed countries.
Additional sources of lecture material are:
Pranab Bardhan. Land Labor and Rural Poverty. Oxford 1984 (for example his chapter on
interlocking factor markets).
Ester Boserup. Population and Technological Change, University of Chicago Press, 1981.
Ester Boserup. The Conditions of Agricultural Growth, George Allen and Unwin Ltd
Ghatak and Ingersent. Agriculture and Economic Development. Johns Hopkins 1984.