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Production Problems and Issues in Agricultural Development
Author(s) -
Mellor John W.
Publication year - 1966
Publication title -
american journal of agricultural economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.949
H-Index - 111
eISSN - 1467-8276
pISSN - 0002-9092
DOI - 10.2307/1237119
Subject(s) - agriculture , production (economics) , agricultural productivity , business , agricultural engineering , agricultural science , agricultural economics , environmental science , engineering , geography , economics , archaeology , macroeconomics
T HE prime economic objective of agricultural development is to contribute to increased per capita incomes. In most low-income countries, this objective is sought in an environment in which (a) the relative price of agricultural commodities tends to rise, and (b) capital forms drawn from the nonagricultural sector of the economy have a high opportunity cost. Upward pressure is placed on agricultural prices by the unprecedented rate of increase in population. In addition, the relatively high income elasticities of demand for agricultural commodities, characteristic of low-income nations, make growth in per capita incomes highly effective in increasing the demand for food. Such demand conditions provide a favorable environment for raising national income by increasing the supply of domestically consumed agricultural commodities. Demand conditions may be less favorable for nations oriented to production of commodities exported to high-income nations, with their low rates of population growth and highly inelastic demand schedules for most agricultural commodities.