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electronic Journal of Agricultural and Development Economics
Agricultural and Development Economics Division (ESA) FAO available online at

Vol. 1, No. 1, 2004, pp. 1-5

special edition on Agriculture’s Contributions to Economic and Social Development
Randy Stringer and Prabhu Pingali
Agricultural and Development Economics Division The Food and AgricultureOrganization

This inaugural edition of e-JADE presents a set of seven articles that shed new light on one of the oldest issues addressed by agricultural economists: How does agriculture contribute to economic and social development? These e-JADE articles argue that investments in agriculture contribute to more than increases in production. With the properpolicies and incentives, agricultural sector investments improve food security, lower rural and urban poverty, reduce inequality and enhance environmental outcomes. Development economists in general and agricultural economists in particular have long focused on how agriculture can best contribute to overall growth and modernisation. Many early analysts (Rosenstein-Rodan 1943; Lewis 1954; Scitovsky1954; Hirschman 1958; Jorgenson 1961; Fei and Ranis 1961) highlighted agriculture because of its abundance of resources and its ability to transfer surpluses to the more important industrial sector. Agriculture’s primary role in the transformation of a developing economy was seen as subordinate to the central strategy of accelerating the pace of industrialisation. This conventional approach to theroles of agriculture in development concentrated on agriculture’s important market-mediated linkages: (i) providing labour for an urbanised industrial workforce; (ii) producing food for expanding populations with higher incomes; (iii) supplying savings for investment in industry; (iv) enlarging markets for industrial output; (v) providing export earnings to pay for


Vol. 1, No. 1, 2004, pp. 1-5

imported capital goods; and (vi) producing primary materials for agro-processing industries (Johnston and Mellor 1961; Ranis et al. 1990; Delgado et al., 1994; Timmer 2002). There are good reasons for why these early approaches focussed on agriculture’s economic roles as a one-way path involving the flow of resources towards the industrialsector and urban centres. In agrarian societies with few trading opportunities, most resources are devoted to the provision of food. As national incomes rise, the demand for food increases much more slowly than other goods and services. New technologies for agriculture lead to expanding food supplies per hectare and per worker and the increasingly modernising economies use more intermediate inputspurchased from other sectors. This decline in agriculture’s GDP share is partly the result of post-farm gate activities, such as taking produce to market, that become commercialised and are taken over by specialists in the service sector, and partly because producers substitute chemicals and machines for labour. Producers receive a lower price and, in return, their households spend less timemarketing. As a result, value added from the farm household’s own labour, land and capital, as a share of the gross value of agricultural output, falls over time as purchased intermediate inputs become more important. Farmers’ increasing use of purchased intermediate inputs and off-farm services adds to the relative decline of the producing agriculture sector, per se, in terms of overall GDP andemployment (Timmer 1988, 1997; Pingali 1997). A number of development economists attempted to point out that, while agriculture’s share fell relative to industry and services, it nevertheless grew in absolute terms, evolving increasingly complex linkages to non-agriculture sectors. This group of economists (including Kuznets 1968; Kalecki 1971; Mellor 1976; Singer 1979; Adelman 1984; de Janvry 1984;...
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