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| E C O N O M I C DEVELOPMENT

AGRICULTURE
 Expect
What to
TOPIC OUTLINE
Agriculture and Economic Growth
Agricultural Transformation in Asia
The Microeconomics of Agriculture in Asia
Macroeconomics Aspect of Agricultural Development
Modernizing Agriculture and Rural Welfare
AGRICULTURE
LATIN ROOT AGRI "FIELD," CULTURA
"CULTIVATION."

The science or practice of farming, including cultivation of the

soil for the growing of crops and the rearing of animals to
provide food, wool, and other products.

Widely acknowledged as a crucial element in the process

of structural transformation.
AGRICULTURE Most developing countries must rely on

AND
their agricultural sector to produce the
food necessary to feed for their people.

ECONOMIC Farmers must produce food not only to feed

GROWTH
themselves, but also to feed a growing
urban population.

Agricultural sector is a rich source of factor

inputs to feed the growing industrial and
other modern sectors of the economy.
 LABOR
70 percent or more workforce in agriculture-based employment in
poor and medium-income economies

CAPIT AL
Agriculture can also be a major source of capital for modern economic
growth. Capital may build up to support the start of industries.

FOREIGN E X C H A N G E
In the early stages of growth, agricultural products serve as the
FACTOR
INPUTS

principal source of foreign exchange.

RICH MAR KE T FOR THE OUTPUT OF M O D E R N

URBAN S E C T O R
If a large rural market exists, local industries can continue to grow after the urban sector
market has been saturated, until such time that the industries are better able to compete in
foreign markets.
AGRICULTURAL In Asia, the strong relationship between sectoral
TRANSFORMATION and overall growth is borne out by evidence from

IN ASIA the postwar period. At the beginning of the

postwar era, all economies in Asia were primarily
dependent on agriculture.

Typically, between 70 and 80 percent of the

labor force was employed in agriculture and
more than half of value-added was created by
the sector.
 Agriculture absorbed the majority of the
T AI W AN E M P L O Y M E N T SHARE OF Taiwanese workforce in the early years.
THE M A J O R S E C T O R S This share casually diminished overtime to
( 1995 - 1998 ) as low as 10% in recent times.
 Agriculture
Industry
Services

SECTORAL CONTRIBUTION TO GDP FOR

SELECTED COUNTRIES (1980-2000)
 PRODUCTIVITY
Productivity measures the quantity of output
IN produced with a given quantity of inputs. Long
AGRICULTURE term productivity growth reflects improvements
in farmers' production efficiency and
technological progress.

Improving productivity on farms contributes to

RELATIONSHIP BETWEEN
profitability and competitiveness because it allows
AGRICULT URE AND INDUSTRY
farmers to produce more output.
Industry is not the substitute of agriculture,
rather they are complementary to one
another.
The development of one sector depends on
the growth and performance of the other
sector. https://www.yourarticlelibrary.com/agriculture/relationship-between-agriculture-and-industry/42559
AGRICULTURAL TRANSFORMATION IN CHINA

Agricultural sector in China is significant because

it currently employs 60% of the domestic
workforce and feeds 25% of the world population

Further relaxation of government regulations on

permitted food production (grain products)
allowed farmers to diversify into the production
of other food crops (sugarcane, vegetables and
fruits)
However, owing to rising Industrialization,
Agriculture's share of GDP shrank. Challenges
arising from China's entry into the WTO include
how to face productivity and remain competitive.
Sector unemployment is also another thing to be
dealt with.
AGRICULTURAL TRANSFORMATION IN CHINA

Hence, measures undertaken by China's

Agricultural sector include greater development
and adoption of high development techniques -
particularly through bio-technology development
and genetically modified (GM) crops - and
implementation of farm product processing to
slash costs and increase productivity
It is also interesting to note that agricultural productivity growth was
also very high in the richer countries of the region, such as Korea and
Japan. This is one reason that the Industrialization experience that
began in Japan and continued after the war in East Asia, in Korea and
Japan, served as a model for the development of the other
economies in the region.
Agricultural productivity, particularly in
rice yields, was also very high as early as
the 1950s and this helped to create a
surplus that could be used to fund in
Industrialization. It also served as a
yardstick to judge the performance of
Agriculture in other countries in the
region.

Table 5.4 shows that from period 1965

to the early 1970s, annual growth in rice
production was extremely high.

Production growth rate reached 3.2% and

3.4% respectively, in India and Philippines,
and went as high as 4.8% in both Indonesia
and Sri Lanka.
AGRICULTURAL DEVELOPMENT IN MONSOON ASIA
Asia receives much more rain on average than
other regions of the world and also much greater
yearly variation in the level of rainfall.
In much of Asia, the monsoon nature of the
weather cycle lead to reliance on rice
production, which is well adopted to growing
where there are large amounts of rainfall and
flooding.
Rice was the staple food crop, and much of the
land and labor were devoted to its cultivation
in most of Southeast Asia
Because of seasonal nature of the demand for
labor, peasants looked for off-farm employment
during the dry or slack season, and also during
the dry season between planting and harvesting.
(Growing secondary crops, multiple cropping
(limited), small family farms complemented by
small and flexible labor-intensive workshops and
factories, often employing women as well as
men)
AGRICULTURAL DEVELOPMENT IN MONSOON ASIA

How then did the shift from Agriculture to

Industry takes place in Asia?

(1)Irrigation. More extensive irrigation helped

to regulate the level of water in the fields
and also allowed farmers to plant two or
three crops with a concomitant increase in
income with the same number of workers.

(2)The higher yielding rice varieties were

designed for a more stable water level,
having a shorter stem and more fruit per
plant, and were therefore more suitable for
irrigated land.
WHY DO PEASANT FARMERS
RESIST I N N O VAT I O N AND
M O DE R N I Z A T I O N ?
Traditional farming systems in many
societies define the role of individuals in
the family. The pattern and timing of
the usual tasks would change, as well as
individual roles and ways of relating to
other family members and the
community.
Change may be accompanied by
uncertainty. When risk and uncertainty is
high, farmers are reluctant to shift from
traditional technology and crop pattern
that has served them well over the
years.
THE
MICROECONOMICS
OF AGRICULTURE IN
ASIA

in this section, we look at three aspects of

modern agriculture that have served to increase
agricultural productivity.

Three aspects
that worked
A PP L IC AT IO N OF
FERTILIZERS, PESTICIDES,
AND HERBICIDES
They stimulate crop's growth with
greater yield, help in irrigation,
crop protection, control pests, kill
weeds, prevent diseases, and
protect food and much more.
IRRIGATION
Artificial application of water
to the soil through various
systems of tubes, pumps, and
sprays.
Irrigation is usually used in
areas where rainfall is irregular
or dry times or drought is
expected.
GREEN
REVOLUTION
Great increase in production of
food grains (especially wheat and
rice) that resulted in large part
from the introduction into
developing countries of new, high-
yielding varieties, beginning in the
mid-20th century
 The first thing to recognize when considering
macroeconomic policies is that agriculture in
MACROECONOMICS Asia is primarily intensive rather than extensive.
ASPECT OF Therefore, it is important to employ
proper appropriate labor-intensive
AGRICULTURAL technology.
DEVELOPMENT As labor moves from the rural areas to the cities
and income grows, the introduction of more
extensive capital-intensive could be introduced.
Nevertheless, throughout most of the postwar
period and particularly at the beginning phases of
industrialization, it was important to keep the
currency exchange rate at an appropriate level
to discourage inappropriate use of capital for
technology.
MODERNIZING
Mechanization and the Demand for Labor
AGRICULTURE
AND RURAL Technological Transfer, Growth, and
WELFARE:
Equity Genetic Engineering
LESSONS AND POLICIES
ISSUES
Zero
Tillage

Food Prices and the Linkages to Energy

International Trade and Resource

Transfer Shifts Out of Primary Grain

Production
 Agriculture today continues to impact
the lives of millions. Understanding the
issues affecting the agricultural sector is
crucial to finding ways to improve the
lives of the people in the rural areas.

(1) In order to raise the incomes of poor

farmers, an increase in productivity is
required.
(2) Rapid population growth and the lack
of opportunities for migration and/or off-

Summary and
farm employment are deterrents to
poverty reduction.

Conclusions
(2.1) However, if the multiplier effect of new technology
on non-farm employment are strong, a major reduction in
poverty can occur
(3) Investment in agricultural research and
knowledge play a key role. In a high investment
scenario, more aggressive investments in and better
management of agricultural research and knowledge
would lead to significant improvements in food
security and result in higher productivity and lower
food prices.
(3.1) When combined with complementary investments
in irrigation, water access, efficient water usage,
better rural roads, and education for girls, even
greater increases in crop yields and livestock can be Summary and
Conclusions
achieved. Without such changes, food prices will
continue to rise and agricultural productivity will
stagnate.
QUESTIONS?
THANK YOU!