The Politics of Agricultural Policies in Developing Countries in General
Jalbani, Amanat Ali, Economic Review
The objective of this paper is to review the previous work that has been carried out regarding the various issues of agricultural policies in the developing countries and to examine the level of government involvement. The paper begins with a discussion of the importance of agriculture in general before reviewing the agricultural policies in developing countries.
The Importance of Agriculture in General
In most developing countries of the world, the agriculture sector occupies the dominant role. Whatever yardstick we may apply, whether it be the number of people the sector employs, the amount of income originating in it, the amount of basic food it supplies, the size of its dependent population, or its export earnings, agriculture clearly occupies a position of prime importance and will continue to do so for a considerable time to come.
According to the World Development Report (1986, p.3) figures, agriculture is the basic industry of the world's poorest countries. It employs roughly 80% of the labour force in low-income1 developing countries and about 35 to 55% in middle-income2 developing ones. It is also a main source of GDP, accounting for 35 to 45% of GDP in low-income developing countries (table-I) The predominance of the agricultural sector is usually one of the main characteristics of developing countries in the sense that agriculture is not only the largest contributor to the national income but also the major source of employment and foreign exchange earnings. It is also the provider of food grain especially for the growing urban population and for the generation of a surplus for investment to finance development efforts.
The Bank report (Ibid) further confirmed that despite the dominant position occupied by the agricultural sector in a traditional economy, many parts of the developing world have consistently failed to pay adequate attention to agricultural and rural development. This has often led to a stagnant agriculture sector that, in turn, has resulted in large shortfall of domestic food production, balance of payment crises, and political instability.
[TABULAR DATA FOR TABLE I OMITTED]
Agricultural Policies in the Developing Countries
Agricultural policy in developed and in developing nations is a tangle of contradictions. Throughout the world, governments have 'one foot on the accelerator and one foot on the brake' - simultaneously encouraging and discouraging increased farm production. In the United States, the government is putting pressure on many farmers to leave good farmland unplanted - while paying other farmers bonuses of 50% over market prices to boost their production. In Europe, if farmers produce more than a government-set limit, they are penalised by reductions in their government set prices. While in many developing nations, governments refuse to pay farmers the true value of their crops, yet sell farmers fertilisers and seeds for far less than they are worth.
Knudsen and Nash (1991, p.49) argue that in many developing countries there is little recognition of the notion that a farmer's right to the fruits of his labour is no less important than those of the consumer. In the absence of such notions of inherent economic rights, the deck is stacked against agriculture, especially with respect to food pricing policies and exchange rate policies. Since producers - even numerically superior to urban interests - are poorly organised and usually lose battles with politically volatile consumers in the cities. Policies are analysed in terms of whether they meet certain objectives, such as income distribution, self sufficiency and export, rather than in terms of whether they erode or pressure the individuals' ability to make economic choices. Further, they say that in much of Africa, farmers have no right to market their crops on their own or to bargain with buyers for a fair price.
They (Ibid) further argue that the government buys their crops at less than world prices and then sells it for even less to relatively better-off urban dwellers. …