Agricultural Versus Industrial Development

Summary

The object of this paper is to examine the nature of the factors affecting the relative priority of agricultural investment in a programme of economic development. The analysis deals with over-populated under-developed countries. The demand for and supply of agricultural commodities is examined from the point of view of the pressures created during a programme of increased investment outlay. Section II broadly distinguishes agricultural investment from investment in other fields and poses the crucial problem of the choice of the investment pattern. Section III discusses the various points of view regarding the rôle of agricultural investment. Section IV analyses the way in which interdependence between agriculture and the rest of the economy will be affected during periods of increased investment. Section V examines the conditions determining the supply responses in agriculture to an increased aggregate demand for agricultural products. Section VI makes out a case for accelerated agricultural investment with a view to maximizing the rate of transformation of unproductive labour into productive labour. Section VII examines the effects on the economy of varying rates of agricultural development. Section VIII emphasizes the need for concentrating upon agricultural investment as the initial factor in economic development. Section IX examines the implications of rapid capital formation for the economy in general and for the agricultural sector in particular. Section X points out the reasons why agricultural investment may tend to be secularly neglected. The Appendix to the paper draws attention to certain points of view current in India which influenced the First and the Second Five Year Plans.