We know about the stages of agri. development. Most of the developing countries of Asia, Africa and Latin America are passing through stage I to stage II. They have to face a lot of problems in their agri. sector whereby agri. sector fails to contribute to their development. The economists present a lot of proposals whereby the agri. sector would be able to play its dynamic role in the development of poor countries. They are as:
(1) Improving Small Scale Agriculture – Technology and Innovation:
In this respect there is a need to improve the lot of small peasants. They should be acquainted with modern technology, the use of machinery on the farms be increased. It will have the effect of increasing the per acre yield. As it is said that the harvesting made by a combined harvester in an hour is equal to the harvesting of 100 labor. Thus the technological innovations can increase the production and productivity. But as far as UDCs are concerned the mechanized farming will replace human labor. The UDCs where there is a shortage of funds and the land parcels are small, and the labor is abundant, the introduction of heavily mechanized techniques will not only lead to create rural unemployment, but it will not also reduce the costs as such technologies are least suited to the poor countries. Moreover, the BOP deficit led poor countries will have to spend precious foreign exchange on the importation of this heavy machinery. Again, the wave of increasing the use of farm machinery may lead to expropriation of small holdings by landlords and money lenders.
Furthermore, the use of biological innovations like hybrid seeds, improved irrigations facilities, and the chemical innovations like use of fertilizers, pesticides and insecticides etc. are also furnished with a lot of problems. But the recent techniques show that these innovations yield better results than mechanical changes. As it is said that the improved seeds, advanced techniques of irrigation and crop rotation, increasing use of fertilizers, pesticides and herbicides, the new developments in medicines and animal nutrition represent major scientific advances in modern agriculture.
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.