Economics%20116%20-%20Lecture%2018%20-%20Final

Economics%20116%20-%20Lecture%2018%20-%20Final - Economics...

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Unformatted text preview: Economics 116: Economic Development UC San Diego, Spring 2009 Prof. Karthik Muralidharan Department of Economics Lecture 18 Lecture Outline (5/28/09) Agricultural Productivity by Geography Agricultural Productivity by Farm Size Share cropping Land Reform Famines and Starvation Agricultural Productivity by Geography As weve seen repeatedly, a major difference between developed and developing countries is in the levels of agricultural productivity Ag. Productivity is much lower in LDCs both in terms of output per worker and output per unit of land In which measure is the difference likely to be larger? Why? So what explains the differences in productivity? In particular, how much of the difference can be explained by geography and climate? Table 1 (page 389) shows the differences in productivity by Koppen eco-zones Crop yields are lower in tropical areas relative to temperate areas Why is Agriculture Productivity Low in the Tropics? Maybe it is just the large population, which leads to low wages and many workers on the field, which reduces marginal productivity But, the result is true even after controlling for income Labor productivity is still much lower in tropical countries Why might this be the case? Many more dry areas Climate less suited to cereals than to non- staples like rubber, cocoa, and palm oil (except bananas) Is Geography Destiny? It is true than many aspects of modern variation in incomes can be explained by geographic factors (see Jared Diamond Guns, Germs, and Steel) But, there are also other contributing factors for the divergence in agricultural productivity over the years The most important is that agricultural research (to improve yields and resistance of seed varieties) is mostly directed at the needs of the developed temperate countries A lot of this research is not directly applicable to tropical areas The entire research & development budget of the CGIAR is less than half that of one MNC (Monsanto) CGIAR (Consultative Group on International Agricultural Research) Lecture Outline (5/28/09)...
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Economics%20116%20-%20Lecture%2018%20-%20Final - Economics...

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