Strategy for Agricultural and Rural Development:

These measures are technological scale neutral i.e., they can be applied equally effectively on largo and small farms. They neither require large capital, nor mechanized equipments. Therefore, they can more suitably be used as far as UDCs are concerned.

(2) Institutional and Pricing Policies - Providing the Necessary Economic Incentives:

As far as Third World countries are concerned they lack social institutions and govt. policies as well arrangements whereby the poor farmers could be provided the adequate amount of hybrid miracle seed varieties of wheat, corn, rice and increased water and chemical facilities. The govt. policy measures and socio economic factors are not scale neutral, they often serve the needs and vested interests of the wealthy land owners. The big landlords are in a position to get the greater advantages as they have greater access to the complementary inputs and support services, they can drive out the small farmers out of the market.

They get the facilities of low interest govt. credit whereas the small holders are bound to move towards money lender who charge exceedingly higher interest rates. Thus the gap between the poor farmers and the so-called progressive farmers' further increases. Therefore, if institutional arrangements do not favor the poor farmers the rural poverty cannot be alleviated. Thus the developmental policy should not aim at increasing the poverty.

There is an other field which requires major improvements in government policies relating to pricing of agri. commodities like wheat, rice, sugarcane and corn etc. in local markets.

In certain countries, in order to compensate the urban workers, or promote industrial development, the agri. prices are kept low. The farmers are paid prices lower than market prices. In such situation the farmers are disappointed and are not prepared to follow modern techniques of production. This would suppress incentives and the food supplies will go on lagging behind the demand. In such situation, the UDCs will have to import food which will have a negative effect on BOP.

Therefore, the economists suggest that to promote agri. development and rural uplift, there is a need to make institutional changes in the society which will not only provide sufficient supplies of inputs but the incentives amongst the farmers should also be created through proper support prices. Thus the Agri. strategy should comprise green revolution, support prices and agri. reforms.