Econ 313 ch.9 Reading Summary

Econ 313 ch.9 Reading Summary - Econ 313 Reading Summary...

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Econ 313 Reading Summary Ch.9 Part 2 p.453-473 Agricultural Transformation and Rural Development -often times, women are encouraged to play their traditional roles of cooking, cleaning, sewing etc. -cuz the active participation of women is critical to agricultural prosperity, policy design should ensure that women benefit equally from development efforts 3 Broad Stages in Evolution of Agricultural Production 1)low-productivity, mostly subsistence-level peasant farm, still present in Africa 2)Diversified or mixed family agriculture-small part grown for consumption and a significant part for sale to the commercial sector, as in much of Asia 3)Modern farm-exclusively engaged in high-productivity specialized agriculture geared to the commercial market- found in developed and highly urbanized developing countries -the transition from peasant subsistence to specialized commercial farming requires in addition to adapting the farm structure to meet demand for increased production, profound changes affecting the entire social, political, and institutional structure of rural societies Stage 1 – low productivity subsistence farming -few staples goods chief sources of nutrition -simplest traditional methods and tools are used -capital investment is minimal; land and labour are principle factors of production -law of diminishing returns is in operation as more labour is applied to shrinking parcels of land -the traditional 2-factor neoclassical theory of production in which land and capital are fixed, labour is the only variable input and profit is maximized -unfortunately this theory does not explain why small-scale farmers are often resistance to tech change -given price uncertainty, peasant farmers often face price bands (wide ranges) rather than a single input price -fig 9.5-MCR-Min Consumption Requirements MDLC- Min Desired Consumption Level -if a farmer’s outputs are very close to MCR, then he is barely getting by and has a greater incentive to minimize risk and thus not likely to innovate and be open to change. This will likely result in the farmer staying poor -in parts of Asia and Latin America where agriculture has performed poorly, a closer examination of why peasant farmers have apparently not responded to “obvious” economic opportunity will often reveal: 1)the landlord secured much if not all the gain 2)the moneylender captured the profits 3)the gov’ts “guaranteed” price was never paid
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Econ 313 ch.9 Reading Summary - Econ 313 Reading Summary...

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