Agriculture in the contemporary world
Most contemporary debates around agriculture lack any sort of historical
perspective. Some argue for a big pro-agricultural push, boosting infrastruc-
ture investment, agriculture-relevant R&D in bio-technology and fertilizer,
expansion of rural credit, seed distribution and electrification. Some propose
direct policy intervention such that agricultural growth benefits small poor
farmers. Such policies are often implemented through Fair Trade organiza-
tions, and might include the provision of seed and credit to small farmers, and
support services such as marketing and cold-storage facilities.
Others argue that amalgamating small plots to permit large-scale commer-
cialized and mechanized agriculture is the only way to sustain growth. The
increasing size of supermarkets in developed countries means that small farm-
ers have to provide standardized quality, appearance and detailed product
labelling often beyond their resources. Related to this view is the perception
that structural change will continue to be the dominant trend, and governments
and NGOs should act to facilitate the movement of people out of agriculture
into industry (and possibly services) through rural to urban migration and
education, rather than trying to preserve a picturesque and photogenic small-
scale agriculture. This rather bleak (if realistic?) picture sees the loss of rural
livelihoods as a pre-condition to gaining better-paid urban jobs. This is
discussed in Chapter 10 in the section relating to ‘accumulation by disposses-
sion’. Yet other scholars, citing high prices of foodstuffs and other agricultural
products in world markets over recent years, suggest there are now long-term
profit-making opportunities in farming and more sustainable livelihoods in the
sector.
The role of industry in structural change
A shift from agriculture to industry has been a characteristic feature of many
contemporary and historical stories of growth and development, though dein-
dustrialization is now common among the most developed countries; examples
include Latin America in the 1980s and Russia in the 1990s.
Much of the early work on economic structure was conducted by Hollis
Chenery. Chenery (1960) conducted empirical work on 38 countries between
1950 and 1956. He found that for every 1 per cent increase in GDP, output in
the manufacturing sector grew by 1.44 per cent. As per capita GDP rose from
$100 to $1,000, his data showed that industry’s share of total GDP rose
from 17 per cent to 38 per cent, while primary production (agriculture, forestry
and mining) declined from 45 per cent to 15 per cent. The pattern of industrial
output also changed over time. When GDP was $100 per capita Chenery found
that 68 per cent of manufacturing output consisted of consumer goods and only
12 per cent investment goods and by the time income levels had reached $600
the figures were 35 per cent and 43 per cent respectively. Chenery and Taylor
172 Patterns and Determinants of Economic Growth