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Introduction to International Agriculture

by: Jazmin Tromp

Introduction to International Agriculture INTAG 100

Marketplace > Pennsylvania State University > Agricultural & Resource Econ > INTAG 100 > Introduction to International Agriculture
Jazmin Tromp
Penn State
GPA 3.52


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This 0 page Class Notes was uploaded by Jazmin Tromp on Sunday November 1, 2015. The Class Notes belongs to INTAG 100 at Pennsylvania State University taught by Staff in Fall. Since its upload, it has received 17 views. For similar materials see /class/233085/intag-100-pennsylvania-state-university in Agricultural & Resource Econ at Pennsylvania State University.

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Date Created: 11/01/15
Economics of Peasant Agriculture Key Topics in Agricultural Modernization Technology Transfer Nature of PeasantTraditional Agriculture Effectuating change in PeasantTraditional Agriculture Underlying Factors 959 who makes decisions what are their objectives Farm Structure Needed Focus for Agricultural Rural 1quot 39 Todaro Small scale mixed farming practices which will Raise farm incomes Raise average yields and Absorb rural labor By using Labor Intensive farming practices Peasants Families or individuals who farm Small plot of land manageable by a family Grow most of own food Not in falming for a business it is their life and livelihood Primarily use traditional technology and methods 1 Two 3 Zuestio ns Why don t small farmers produce more 2 Are they too backward or traditional to respond to economic incentives Schultz s answer to 2 NO It s an investment problem WP the form of the investment the form that will make it PROFITABLE to invest Institutional Assumptions Farmers have some control over land Decentralized market system Political and social system allowing free participation in the economy Schultz s Key Questions How much additional production from improved allocation of production factors currently available What factors primarily responsible for large differences among countries in contribution of agriculture to growth Under what conditions does it pay for a peasant to invest in agriculture What Limits Traditional Agriculture Current production factors already efficiently allocated Low marginal return to new investment in traditional agriculture Marginal productivity of existing labor and capital too low Reasons for Low Retums Technology constant Desires for assets constant Prices of traditional inputs high Returns to traditional inputs low Thus incentives to invest low Schultz s Basic Hypothesis There arefew in the quot of the factors of production in traditional agriculture Relative Product and Factor Prices Senapur India Product or factor Relative barley Adjusted to the barley Actual market price price in rupee price Barley md 100 985 985 Wheat md 1325 1305 1420 Pea md 943 929 1040 Gram md 828 816 1085 Land acres 4424 4357 830 Bullock time hrs 0774 762 na Labor his 0086 085 068 Irrigation water 750 gals 0325 321 na Relative Input Prices Senapur India Land 57 times oxen price acres hours Land 514 times labor price acres hours Land 136 times water price acres 750 gals A of new input or 39 39 Depends on pro t and costs Pro t MR MC where MC cost risk uncertainty search costs learning costs Components Determining Pro tability of New Technology for Peasants Yield In the community Price of the new input In the community Risk and uncertainty Farm tenure arrangements Other costs Search costs 1 isolated community 2 socialethnic class barrier 3 language barrier 4 literacy Learning costs Biological easiest Mechanical 2nd New livestock breeds hardest


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