Course on national development and regional planning: area development of agriculture as a means of promoting agricultural diversification

UNITED :NATION S ' Et

I

D

EP /

ET/CS

/ 2122-21 A.FRICAN INSTITUTE FOR ECON O

LIC

r D

EVELOPMENT

AND

PLANJITING

\

DAKAR

-7 OCT.

COURSE ON NATIONAL DEVELOPMENT

AND

REGIONAL PLANNING

AREA

DEVELOPMENT OF AGRICULTURE AS

A

rmAl'JS OF PROMOTING AGRICULTURAL D

IVERSIFICATION

by

Mr

.

E.A

.

OKWUOSA

D

ECEMBER 1968

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IDEP jET/CS/ 2122-21 Page 1.

.AREA DEVELOPMENT OF AGRICULTURE AS A r.m.J\NS OF PRŒWTING AGRICULTURAL DIV:SRSIFICLTION

Area development of agriculture on the basis of resource potontial may lead to monooul ture or èul ti va tion of very fe>v o:;:oops if the country is homogeneous.iri natural rosouroes or nearly so. While ·this may lead to maximisation of net national product, the uncertainty of external markets, the dependance of agriculture on weather and on pests andsuch political f'aqtors as need for self-sufficiency in certain products all wake the

approach unsuitablc in such countries with near homogeneous natural resources • .Area development will in such cases provide a means for promoting agricul-

tural diversification.

In this case, not only are agricultural areas classifi0d according to their resource potentials but suitable products in each aroa are classified in descending order of suitability. Production is then allocated to arcas on the basis of comparative oost advantage. Since sor:1e :treas may thus not be allowed to produce the crops for which they are mo:3t sui ted a question arises as to whether the Government should pay sornG cot1pens8tio:1. to tho peasants in such areas.

If a country alrGady bas monoculture economy ths :neasures for diver- sification may be any or a combin·él:ticn

of

the folloHing

(a) lower producer priee for the product, (b) removal of any special incentives,

(c) granting compensation to the producers of tho crop,

(d) giving special assistance to the producers for the pro~uction

of oth er crops.

In this regard, specifie Iileasures should be tak:en to provid.e employ- rnent for the displ<1.ced agricultural workers and caro should be taken to ensure that the compensation or special assistance granted to the ~roducers

does not lead mal-distribution of the national incomo •

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+~/ET/CS/2122-21 Page 2.

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The _.ifi30b.}:;em~...::-~})~_"!;. ÇJ,_;r.it?.ê_.include _:.the: . ...î.o.I.lo:w:~-· :.; . .;;...

(à) Unav~j)~~~!:l:.:liY.::::.:.C?f. .. :fillaric~.i'&~...:c.omp~nS:ation- and/ or for grants for the production of alternative- crop_s e$pecially

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(b)

as ther~ cou.ld be sorne. l_oss ~f;. revenue frol!f G;xport tax.~.on. · the. crop. rlbe;_e

ma.:y, .

^~ow:ever, be savings frorp th.e ma-intenance of previo~s :r.eserves and, addi tional or higher tax than be:fore may be levied, on the pro(.luc~ •.

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There-may not be a sufficiently prbfitable alternativ~ crop- . . for the n.rea concerned.

{e).It may be difficult to provide alternative employment for the displaced workers.

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