ROLE OF AGRICULTURE IN ECONOMIC-DEVELOPMENT REVISITED

While both Malthus and Ricardo viewed agriculture as impediments to economic progress, Mill and Marshall argued that the effects of diminishing returns to land could be offset. Mill emphasized that the progress of civilization, such as roads that reduced the cost of bringing products to market, and policy improvements, such as abolition of the com laws, provided substitutes for farm inputs. Marshall argued that population growth could for a long time, through growth of organization and knowledge, offset the effects of diminishing returns. Had the insights of Colin Clark dominated the policies of developing countries rather than the implications drawn from the dual sector models and the pessimistic views of Prebisch, agriculture's contribution to economic development would have been enhanced. The efforts to tax agriculture to support import substitution policies reduced rather than increased economic growth. Agriculture has important contributions to make to economic development, but must receive even handed treatment if the possible contributions are to be realized. A major failure of all governments has been the unwillingness to recognize that agriculture is a declining industry and to adopt policies that would assist farm people to adjust to the decline in demand for farm labor.