The Economics of Agricultural Development: What Have We Learned?

Agricultural development thinking has gone through several stages of fad and fancy, often without an understanding of previous fallacies. Its current doldrums are unfortunate given the unrivaled importance of agricultural development for poverty reduction in most development countries. After reviewing several policy and program areas, lessons are synthesized, and a forward-looking research framework suggested, especially regarding role of specialization in the evolution of economic organization. The corresponding role of government is seen to be the facilitation of economic cooperation, rather than social engineering. JEL Classification: Q12, Q15, O12, L23 Corresponding Author: James Roumasset, Department of Economics, University of Hawaii at Manoa, 2424 Maile Way, Honolulu, HI 96822. Phone: (808) 956-7496. Fax: (808) 956-4347 1 The Economics of Agricultural Development: What Have We Learned? by James Roumasset Abstract: Agricultural development thinking has gone through several stages of fad and fancy, often without an understanding of previous fallacies. Its current doldrums are unfortunate given the unrivaled importance of agricultural development for poverty reduction in most development countries. After reviewing several policy and program areas, lessons are synthesized, and a forwardlooking research framework suggested, especially regarding role of specialization in the evolution of economic organization. The corresponding role of government is seen to be the facilitation of economic cooperation, rather than social engineering. Agricultural development thinking has gone through several stages of fad and fancy, often without an understanding of previous fallacies. Its current doldrums are unfortunate given the unrivaled importance of agricultural development for poverty reduction in most development countries. After reviewing several policy and program areas, lessons are synthesized, and a forwardlooking research framework suggested, especially regarding role of specialization in the evolution of economic organization. The corresponding role of government is seen to be the facilitation of economic cooperation, rather than social engineering. JEL codes: Q12, Q15, O12, L23. Introduction At the 1995 UN Social Summit, 117 countries pledged to adopt programs to rid themselves of extreme poverty; the UN Millennium Summit agreed to halve global poverty by 2015. According to the International Fund for Agricultural Development (IFAD, 2001), these targets are not being met. Thirty million people a year should have been released from poverty for the 2015 target to be met. But, says IFAD, the figure is no more than 10 million a year, a rate of progress that makes the target unattainable. Since 75 per cent of extreme poverty occurs in rural areas, IFAD says that the whole question be looked at in the context of the rural world. "Current development efforts grossly and increasingly neglect agriculture and rural people," says Dr Michael Lipton, Director of the Poverty Research Unit at Sussex University, who coauthored the report. Between 1987-98, for instance, agricultural aid to low-income or least developed countries, which account for over 85 per cent of the world's poor, shrank by two-thirds. Since the 1980s, however, the economics of agricultural development has arguably been in decline. Donor agencies have often found agricultural development contrary to the precepts of the Washington Consensus and even less worth in the face of low agricultural prices. Development economists and economists generally often leave agricultural issues to the agricultural economics profession. But development is not a high status enterprise in departments of agricultural and resource economics. This leaves agricultural development twice marginalized in the academe, and non-academic institutions may be hard pressed to fill the void, despite the heroic efforts of a few stalwart crusaders and organizations such as IAAE. The following review of agricultural development thinking is offered in the spirit that understanding of previous thinking may help to identify new frontiers that today’s researchers will find suitably promising and challenging. Professor of Economics, University of Hawaii, Manoa. This paper draws on “Agricultural Development Thinking: Fads, Fancies, Fallacies and Frontiers,” presented at “Agricultural and Rural Development in Asia: Ideas, Paradigms, and Policies Three Decades After,” Manila, November 2005. Thanks to Kim Burnett, Sittidaj Pongkijvorasin, Sean D’Evelyn, and Geri Mason for assistance.