Introduction the Relationship between Agricultural and Nonagricultural Growth

"The faster agriculture grows, the faster its relative size declines." That quotation from The Economics of Agricultural Development (Mellor 1966) still captures the essence of agricultural growth and its causal relationship to the structural transformation and aggregate growth of an economy. The quotation suggests that agriculture has a potential for accelerated growth. This suggestion arises from the concept that technologies capable of increasing agricultural yield can also defeat the debilitating effects of a growing population and income where the land area is fixed. It implies a relationship, rooted in Engel's Law, whereby the proportion of total expenditure on food declines with rising income even while total food consumption and the proportion of expenditure on important subclasses of food increases. The underlying assumption here is that agriculture is a large component of economies in their early stages of development. To achieve structural transformation in such economies, it is necessary to increase agricultural income and expenditure and rapidly increase labor productivity in agriculture, which will further accelerate structural change in the employment distribution of the labor force. These processes by which agriculture becomes less dominant yet paves the way for development are the primary concern of this volume.