Transforming traditional agriculture schultz pdf

For instance, by his very definition of traditional agriculture, he has concluded that there is no factor of production lying unused in traditional agriculture. Land and labour and other capital assets are fully utilized in traditional agriculture.

In the same way he has concluded that resources in agriculture are always perfectly allocated. There is no misallocation of resources and therefore there is no possibility to increase production in a traditional agriculture, by further improving the resource allocation. So Schultz is left with only one way to increase production in a traditional agriculture i.

Before we discuss in detail. By market approach, Schultz, implies that no factor of production should be imposed on the farmers. The farmers should be left free to decide whether to use a particular factor of production or not. Let them see for themselves the profitability of a given factor and decide about its adoption. The adoption in other words should be guided by the market forces.

The only responsibility of the government in this case should be to ensure that there is an easy availability of the factor of production and there is a good publicity about it and that necessary skills for the use of new inputs are properly developed. By command approach, Schultz means system on which the government supplies a new factor production to the farmers and that direct them to use it irrespective of its profitability.

Schultz prefers market approach to command approach, He feels that if a factor of production is voluntarily adopted by the farmer its adoption will be wide spread and with full enthusiasm.

On the other hand forced adoption not only, in many cases, ignores the problems faced by the farmers at the local level, but also at times, spoils the skills and enthusiasm of the farmer, Schultz feels that the situation in a command approach can be compared to an absentee landlordism where the land lord knows nothing about the problems and difficulties of the actual cultivators but insists upon a good harvest.

In a market approach, ultimately the supply and demand for the factors of production will govern the actual use. So Schultz discusses in detail the factors that influence the supply and demand for such factors. We may in the first instance discuss the problems faced in the supply of new factors and the suggestion that Schultz, makes to overcome these problems. Science and Technology, according to Schultz, play a very important role in the transformation of traditional agriculture.

As the art of cultivation in a traditional agriculture has been static for long time it may not be possible to develop technologically superior factors of production from within the country.

So what he suggests is that in the first instance, these factors may be imported from some foreign country and then this factor should be subjected to further scientific analysis so that it is finally adapted to the physical environments of the importing country. This will be least costly method of developing a new factor of production.

With regard to the provision of scientific facilities for research, development and adaptation of a new factor of production Schultz raises an important question. It is as to who should provide facilities for such a job: The Government or the Private persons? According ta Schultz, a private person will hesitate to undertake this research work not only because it is costly but also because its results may appear after a long time and same times may even be totally disappointing.

Secondly, the benefits of a successful research are not gaing to accurue solely to the private person. Other members of the community will also benefit from this research. This may make the private person hesitate to take up the research wark. On the other hand, the concept of benefit or profit is totally different for the government. It is rather very broad when compared with that of a private individual.

The Govt. So, Schultz feels that so far as research and development of factors of production suitable for the agriculture of a country are concerned.

It should invariably be undertaken by the Govt. After the new inputs have been developed and technology for their mass scale production has been perfected a question arises: Who should produce and distribute these inputs? Schultz himself answers this question. In the beginning when the new inputs are still untested by the farmers, no private person will take the risk of producing and distributing these inputs.

There is a cost of entry into the market and this may be quite high in the beginning. This will involve some expenditure,.

In a non-traditional agriculture where the level of literacy is generally high the print media like technical journal etc. However, the print media cannot be very useful in an illiterate society. Here distributors will have to contact the farmers personally or in groups which may be beyond their capacity,. People so far supplying the traditional input are vehemently oppose to the introduction of new inputs. Some expenses will have to be incurred to overcome their opposition.

Due to these difficulties faced by the private agencies in the beginning. Schultz, suggested that initially the job of production and distribution of new inputs should be carried on either by the Government agencies like Food Foundation etc.

After sometime when the demand for the new inputs has been generated and has stabilized, the task of distribute n of new inputs can be passed on the private agencies,. Availability of new input is not sufficient. Necessary skills for its use are also to be developed.

This may be done through well-developed extension services. Extension services are essential even when new agricultural practices are to be introduced. Here Schultz again feels that the cost of extension services is rather high and therefore, such services should be provided by the Government:.

Thus, on the whole, Schultz suggests that so far as the supply of new inputs are concerned the Govt. However, at a later stage the government can offer to the private agencies, the task of production and distribution of new inputs. Supply of new factors is of no use if the farmers do not demand them. Schultz, therefore analyses the factors which should be kept in view while trying to ensure that a demand is generated for the inputs.

In the first instance, Schultz tries to dispel a few misconceptions about the attitude of the farmers in a traditional agriculture towards the new, inputs. He points out that it is wrong to assume that a farmer in traditional agriculture is conservative and non-progressive and as such will refuse to adopt the new inputs.

According to him, whether he is a farmer in traditional agriculture or a non-traditional one, he always goes by the economic motive. In this case, the economic motive is governed by profitability of the new inputs over a long period. If the new inputs profitable the farmer will accept it and substitute it for an old input. Profitability of a factor, according to Schuitz depends upon two factor. These are a the prospective yield and b the supply price of the new input.

We describe these two factors in the paragraphs that follow. Schultz uses this concept to bring the future yield of the input into the picture. The inputs are totally new and how their yield behaves in the future is uncertain.

The farmers are ignorant about the fluctuations in its future yield, but somehow or other this factor is to be considered by the farmers while deciding to accept the new input. Schultz feels that if the present yield of the input is extremely high farmers are likely to accept the input even if they discount the future yield at a high rate. For estimating the profitability of the new inputs, the farmers has to consider other factor also.

It is the supply price of the new input. The farmer will discount the yield from the inputs over its life span and then compare it with its supply price. If discounted value of the prospective yield is more than its supply price the farmers will consider it profitable to accept the input.

So Schultz suggests that whereas the prospective yield from the input should be quite high its supply price should be quite low. He in-fact suggests that in the initial stages, it may be desirable to subsidise the new inputs so that they appear profitable. In the same vein, he suggests that if the tenurial arrangements are good, acceptance of new-inputs will be easy. For example, if a tenant shares the gross produce but bears will the costs himself, he will be more hesitant to accept the new input as compared with the situation when besides sharing the output He also share the costs on the same grounds he advocates peasant proprietorship as an arrangements conducive to transformation of traditional agriculture.

Supply of new inputs is essential for transformation of agriculture. However additional knowledge and skill is also needed to use them. True, in some cases, special training may not be needed to use these inputs. However, if the new inputs are technically, far superior to the old input imparting of special knowledge to the farmers becomes very important.

Schultz considers three methods which can be used for imparting such a knowledge. These are 1 trial and error method 2 on the job training through demonstration, short term courses etc. According to him, the other two methods are slow and limited in effects. He feels that general education at the school level will equip the farmers with capabilities to handle all types of inputs involving technical intricacies.

He considers this as an investment in human capital and quotes the examples of Israel and Japan to prove that schooling has contributed a lot to the Increase in agriculture production in these countries. We have already critically examined the definition of traditional agriculture as given by Schultz and also its implications namely the poor but efficient hypothesis perfect allocation of resources and the non-existence of disguised unemployment in a traditional agriculture.

Some of his other assertions also suffer from infirmities. For example, his too much emphasis on market approach is not correct. In a situation of shortages, too much emphasis on freedom to buy and sell can lead to an allocation of resources which may not be optimum from the social point of view.

Social interests are likely to be sacrificed in favour of private interests if a total market approach is followed. Further his suggestion -that only use of modern inputs will transform the traditional agriculture is inaccurate. Traditional inputs like conservation of soil, irrigation etc. Further, Schultz has totally ignored the differences in factor endowment of different poor economies. These differences do effect the pace at which the new inputs can be used.

Difference in the availability of infrastructure in administrative efficiency in the degree of commercialisation, in the extent of monetisation etc. However, despite these infirmities, one must accept his basic suggestion that transformation of traditional agriculture cannot take place unless new production with improved output-input ratios are adopted.

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