Thursday, August 13, 2009

Agricultural development in low income countries

Components of economic growth through producti...


It is widely acclaimed that agriculture is a strategic option to tackle poverty in  the low income countries. 
Agricultural productivity depends on mainly two sources- first is the input intensification and the second is the total factor productivity. Factor productivity also depends on the efficiency change and technological change.
Input intensification- do low income countries able to increase the input  use so that it will play a significant role in the production increment?
problem----
1. LIC has to import major inputs like fertilizer, machines and others
2. Poor farmers in LIC may not be able to invest on such input
3. Inputs can be intensified only in the potential production area. It is entirely not appropriate to assume that input use will be increased in the area where basic social infrastructures are inadequate.

So, the poor farmers living in geographically difficult area will be left outside the mainstream of input increment process.
4. Different agricultural inputs should  be used  in combination to complement each other to create a net impact. Its not possible to increase yield only through increasing fertilizer but it has to be combined with irrigation and other inputs so that  the effect will be much higher. How come poor people in LIC would be able to manage the optimum combination of all such required inputs. There might be investment problem, there might be availability problem and so and so.
5. Agricultural credit is poorly working in rural areas of LIC

Technology change-
Many of the LICs have very poor investment in agricultural research. Technology change  in  LIC heavily depends on the borrowed technology from economically advanced country. These borrowed technologies are location and climate specific and sometime may not fit in the local environment.
So government of LIC should seriously think about the investment on R&D.
Efficiency change-
Efficiency change depends on the institutional structure, social infrastructure, market infrastructure. So, if government fails to accomplish technological change, and input intensification, it has at least this option to increase production. What government need to do is to change the institutional hurdles that impede efficiency increment. So, this could be a cheap strategy for the LIC to increase the production if it fails in previous two.

However, many past research on agricultural productivity in LIC indicated that factor productivity decreased in LIC compare to that of developed country and technological regression was given a prime reason for deteriorating factor productivity. Thus, it is equally important that government of LIC give emphasis on technological change in agricultural. Many of the developing countries have scarce land resource. Due to ever increasing population pressure on limited land resource, increasing land productivity is the only option remained.
For this, Technological change is the important agenda in LIC.

A documentary on Upland Rice farmers in Nepal

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