AEC 861: AGRICULTURE IN ECONOMIC DEVELOPMENT (3 credits)

1. COURSE OBJECTIVES
   1. Examine the relationships between agriculture and other sectors of the economy during economic development.
   2. Examine various theories of agricultural and rural economic development.
   3. Analyze policy issues in the food and agricultural systems of low-income countries, as well as the policy process.
   4. Analyze how to accelerate agricultural and rural economic development.
   5. Discuss the role of the government, private sector and NGOs in agricultural development.
   6. Analyze case studies of regions.

The course is a survey of agricultural development issues, primarily from a policy perspective. Although in analyzing policy the course draws heavily on basic concepts from economic theory, the course gives relatively little emphasis to formal analysis of economic growth models.

2. BACKGROUND FOR THE COURSE

Students should have a background in both microeconomics, equivalent to that provided by intermediate (300-level) courses, as well as some familiarity with application of economic analysis to development issues. Students lacking this background should consult with the instructor. Appropriate background material is given in M.P. Todaro, Economic Development in the Third World, 5th ed., 1994.

3. COURSE REQUIREMENTS

1. READINGS

The required text (available at student bookstores) is:

Carl K. Eicher and John M. Staatz, eds., International Agricultural Development, 3rd Edition. Baltimore: Johns Hopkins University Press, 1998, $24.95.

In addition, selected readings will be given to students at the start of the semester and some may be added or changed during the semester. Students are expected to have read required items prior to the class in which they will be discussed.

2. RESEARCH PAPER

Students are required to write a term paper. To gain a broad understanding of a significant topic in international agricultural development, I recommend that you focus your research paper on a country other than your home country. However, with prior approval of the instructor, you may use your home country as the focus of our research paper. You should review the literature on the topic, identify several unresolved issues and current controversies, and bring historical and contemporary evidence to bear on the issues as you prepare your paper. Students with their own data sets may wish to develop a conceptual framework, state and test hypotheses, and prepare a working paper or draft journal article. Your analysis may focus on the historical experience of one country or on a comparative analysis of several countries drawing on the global literature, focusing on a cross-cutting theme. It is assumed that additional reading (beyond the required reading for this course) will be required for the preparation of your paper. The topic should relate to some theme or aspect of the course.

Your paper must be typed with an upper limit of 30 pages, double-spaced with 1 inch margins, including footnotes and references. Follow the standard practice of citing the work of authors, including the use of quotation marks for direct citations, as well as citing material that you have paraphrased. For style guidelines, review one of the standard guides to the preparation of research papers, such as Kate Turabian, A Manual for Writers of Term Papers, Theses, and Dissertations.

Please feel free to discuss your paper topic with the instructor. You are required to submit a draft of a one-page outline to Reardon by October 26th (Friday). SEND by EMAIL (reardon@msu.edu). The outline should include the specific problem/issue you are addressing, the questions you address, the approach taken, and the material/data you will draw on to answer the questions.

4. GRADING

Grades will be determined on the following basis:

5. COURSE PERSONNEL

Tom Reardon, 211F Agriculture Hall, 5-1521, reardon@msu.edu, Office Hours: Tu/Th. 3-5 PM (or by appointment set at class-time or by email)

SCHEDULE AND READING LIST

I. INTRODUCTION

1. Tuesday, August 28 Objectives of Course; Food and Agriculture in Developing Countries, Global Food Outlook

• Introduction to Part I in Eicher/Staatz, 3d ed. (referred to as E/S)
• Staatz, J.M. & C.K. Eicher, "Agricultural Development Ideas in Historical Perspective," Ch 1 E/S.
• McCalla, A., "Agriculture and Food Needs to 2025: Why We Should Be Concerned," Ch 2 E/S.

2. Thursday, Augut 30 Role of Agriculture in Development

• Eicher/Staatz, Introduction to Part II E/S.
• Mellor, J., "Foreign Aid and Agricultural-led Development," Ch. 3 E/S.

II. THEORIES OF DEVELOPMENT AND AGRICULTURAL GROWTH

3. Tuesday, September 4 Theoretical Overview; The Ricardian Food Bottleneck

• Reynolds, L.J., 1977. "The Tradition of Development Theory," In Image and Reality in Economic Development. Yale Univ. Press, pp. 20-53. (Handout)
• Timmer, C.P., "The Agricultural Transformation." E/S Ch 7.

4. Thursday, September 6 Dynamic Dual-Sector Models and their Derivatives; Concept of Linkages

• Hirschman. A., 1992. "Linkages in Economic Development," In Rival Views of Market Society and Other Essays. Cambridge, Harvard Univ. Press, pp. 56-76. (Handout)
• Mellor, J.W., "Agriculture on the Road to Industrialization," Ch 8 E/S.

5. Tuesday, September 11 Models of Agricultural Development

• Ruttan, V., "Models of Agricultural Development." Ch 9 E/S.
• Ruttan, V. & Y. Hayami, "Induced Innovation Model of Agricultural Development." Ch 10 E/S.

6. Thursday, September 13 Induced Innovation with Applications Agricultural Sustainability

• Norton, G.W. & S.M. Swinton, 2000. "Precision Agriculture: Global Prospects and Environmental Implications", Paper prepared for the 24th conference of the International Association of Agricultural Economists, Berlin, Germany, August 13-19. (Handout)

7. Tuesday, September 18 Induced Innovation continued

• Adesina, A.A., Mbila, D., Nkamleu, G.B., and Endamana, D., 2000. "Econometric analysis of the determinants of adoption of alley farming by farmers in the forest zone of southwest Cameroon," In Agriculture, Ecosystems & Environment. Elsevier Science B.V., pp. 255-265.
• Optional: Aust-Sterns and Reardon (handout)

8. Thursday, September 20 Environment and Agricultural Development

• Ruttan, V.W., "Constraints on the Design of Sustainable Systems of Agricultural Production." Ch 26 E/S.
• Reardon, T. "African Agriculture: Productivity and Sustainability Issues." Ch 27 E/S.
• Pingali, P.L. "Confronting the Ecological Consequences of the Rice Green Revolution in Tropical Asia." Ch 29 E/S.

III. FOOD AND AGRICULTURAL POLICY ISSUES

9. Tuesday, September 25 Agriculture in a Macroeconomic Environment

• Introduction to Part III E/S.
• Timmer, C.P., "The Macroeconomics of Food and Agriculture," Ch 11 E/S.

10. Thursday, September 27 Food Security, Food Policy Analysis, and Price Policies

• Sen, A., "Food, Economics and Entitlements." Ch 15 E/S.
• Schiff, M. & A. Valdés, "The Plundering of Agriculture in Developing Countries," Ch 13 E/S.
• Mellor, J., "Food Price Policy and Income Distribution in Low-Income Countries," Ch 10 E/S, 1990. (Handout)

11. Tuesday, October 2: Market and trade regime policies

• Stiglitz, J., "Markets, Market Failures and Development," Ch 6 E/S.
• Smith, L.D. "Malawi: Reforming the State's Role in Agricultural Marketing." Food Policy 20(6), 1995: 561-571. (Handout)
• Dibley, D., T. Reardon, & J.M. Staatz. 1996. "How Does a Devaluation Affect an Economy? Lessons from Africa, Asia, and Latin America", Sahelian Studies and Research, no. 0, July-December, 1997

12. Thursday, October 4: Rural Industrialization and Agroindustrialization

• Tomich, Kilby, & Johnston (eds.), 1995. "Links Between Agriculture and Industry," Ch. 6 In Transforming Agrarian Economies, (Handout)
• Reardon, T. and C.B. Barrett. 2000. "Agroindustrialization, Globalization, and International Development: an overview of issues, patterns, and determinants," Agricultural Economics. 23: 195-205
• Liedholm, C., "Micro and Small Enterprises and the Rural Poor." Ch 25 E/S.

13. Tuesday, October 9:Farm Household Income Diversification and Livelihoods

• Haggblade, S., Forthcoming. "Alternative Perceptions of the Rural Nonfarm Economy" in Haggblade, Hazell, and Reardon (eds.), Strategies for Stimulating Growth of the Rural Nonfarm Economy in Developing Countries, Oxford University Press. (Handout)
• And at least one of the following articles:
• Reardon, T., J. Berdegue, and G. Escobar, 2001. "Rural Nonfarm Employment and Income in Latin America: Overview and Policy Implications" World Development, 29(3), March, pp. 395-409. (Handout)
• Reardon, T. 1997."Using Evidence of Household Income Diversification to Inform Study of Rural Nonfarm Labor Markets in Africa", World Development, 25 (2). (Handout)
• Rosegrant, M.W. and P.B.R. Hazell 2000. "The Rural Nonfarm Transformation", in Rosegrant ant and Hazel (Eds.) Transforming the rural Asian Economy: The Unfinished Revolution. Hong Kong: Oxford University Press.

14. Thursday, October 11: Discussion (relating areas of research: environment and development, agribusiness and development, agribusiness and markets and development; and rural nonfarm sector and development) and review.

15. Tuesday, October 16: MID-TERM EXAM

IV. ACCELERATING AND SUSTAINING AGRICULTURAL DEVELOPMENT
IN DEVELOPING COUNTRIES

16. Thursday, October 18: Prime Movers of Agricultural Development

• Introduction to Part IV E/S.
• Bonnen, J.T., "Agricultural Development: Transforming Human Capital, Technology, and Institutions." Ch 16 E/S.
• North, D.C. 1997."Some Fundamental Puzzles in Economic History/Development". In Author, Durlauf, and Lane (eds.), The Economy As An Evolving Complex System II. Addison-Wesley. (Handout)

17. Tuesday, October 23: Agrarian Structure: Size of Farm, Land Tenure, Land Reform & Settlement Schemes

• Hayami, Y., "The Peasant in Economic Modernization." Ch 18 E/S
• Binswanger, H.P. & M. Elgin, "Reflections on Land Reform and Farm Size." Ch 19 E/S

18. Thursday, October 25: Human Capital, Women in Development, and Social Capital

• Schultz, T.W., "Investing in People." Ch 20 E/S
• Buvinic, M., "Projects for Women: Lessons From Their Misbehavior," Ch 21 E/S
• Woolcock, M and D. Narayan. 2000. "Social Capital: Implications for Development Theory, Research, and Policy," World Bank Research Observer, 15(2): 225-49. (Handout)

19. Tuesday, October 30: Increasing Rural Production and Reducing Rural Poverty: CD, IRD, Green Revolution, NGO, and LISA Approaches

• Binswanger, H.P., "Agricultural and Rural Development: Painful Lessons," Ch 17 E/S
• White, R. and C.K. Eicher. 1999. NGOs and The African Farmer: A Skeptical Perspective." Department of Agricultural Economics Staff Paper No. 99-01, Michigan State University. (Handout)

20. Thursday, November 1: Agricultural Credit and Microfinance

• Besley, T. "How Do Market Failures Justify Interventions in Rural Credit Markets?," Ch 23 E/S. Robinson, M.R. "Microfinance: The Paradigm Shift From Credit Delivery to Sustainable Financial Institutions" Ch. 24 E/S

21. Tuesday, November 6: Agricultural Research Policy Issues, The CGIAR Paradigm and Global Agricultural Research Strategies in the 21st Century, Private Sector Research

• Bernsten, R.H. and G.L. Johnson.1994. "International Agricultural Research" in Encyclopedia of International Agricultural Research, Vol.2., Academic Press, pp. 579-89. (Handout)
• Eicher, C.K., 1994."Building Productive National and International Agricultural Research Systems." In Agriculture, Environment, and Health: Sustainable Development in the 21st Century. V.W. Ruttan (ed.), Minneapolis: Univ. of Minn. Press, pp. 77-103. (Handout)

22. Thursday, November 8: Technology Development and Diffusion Strategies

• Morris, M. & D. Byerlee, "Technical Change in the Post-Green Revolution Era in Asia," Ch 28 E/S
• Antholt, C., "Agricultural Extension in the 21st Century," Ch 22 E/S

23. Tuesday, November 13: Technical Change: Who Gains and Who Loses?

• Timmer, C.P. "Choice of Technique in Rice Milling on Java; Comment" and Reply". Ch 30 E/S.
• Pinstrup-Andersen, P. and P. Hazell. 1985. "The Impact of the Green Revolution and Prospects for the Future". Food Reviews International, 1(1), pp. 1-22

V. LESSONS FROM ECONOMIES IN TRANSITION

Case Studies of Changing Food Economies

24. Thursday, November 15: Asia except China

• Byerlee, D., "Modern Varieties, Productivity, and Sustainability: Recent Experience and Emerging Challenges." World Dev. 24(4),1996:697-718. (Handout)
• Timmer, C.P., "The Political Economy of Indonesia's New Development Model," Ch 32 E/S.
• David, C.C. & K. Otsuka, 1994. "Modern Rice Technology: Emerging Views and Policy Implications," Ch 12 In Modern Rice Technology and Income Distribution in Asia. C.C. David & K.Otsuka (eds.), Boulder: Lynne Rienner Pub., pp. 411-449. (Handout)

25. Tuesday, November 20: Soviet States and Eastern Europe

• Brooks, K. "Agricultural Reform in the Soviet Union," Ch 29 in E/S 2nd ed, 1990. (Handout)
• Swinnen, J., "Agricultural Reform in Central and Eastern Europe." Ch 35 E/S

26. Thursday, November 22: Thanksgiving Holiday

27. Tuesday November 28: China

• Lin, J.Y., "Agricultural Development and Reform in China,." Ch 31 E/S
• Shenggen, F. and M.J. Cohn. "Critical Choices for China's Agricultural Policy", 2020 Vision, Brief 60, IFPRI. (Handout)

28. Thursday, November 30: Eastern and Southern Africa

• Eicher, C.K. 1995. "Institutions and the African Farmer," CIMMYT, January 15. (Handout)
• Byelee, D. and P.W. Heisey. 1997. "Evolution of the African Maize Eonomy", In Byerlee and Eicher (eds.), Africa's Emerging Maize Revolution, Lynne Rienner. (Handout)

29. Tuesday, December 5: Western Africa

• Matlon, P. & A. Adesina, 1997. "Agricultural Growth and Sustainability--Prospects for Semi-arid West Africa," Ch 16 in Vosti and Reardon (eds.), Agricultural Sustainability, Growth, and Poverty Alleviation: Issues and Policies. Baltimore: Johns Hopkins Univ. Press, pp. 229-245. (Handout)
• Reardon, T, et al. "Promoting Sustainable Intensification and Productivity Growth in Sahel Agriculture After Macroeconomic Policy Reform," Food Policy, 22 (4), 1997:317-328. (Handout)
• Dembele, N.N. & K. Savadogo, 1996. "The Need to Link Soil Fertility Management to Input/Output Market Development in West Africa: Key Issues." Paper presented at the Int. Fert. Dev. Center Seminar, Lome, Togo, Nov. 19-22. (Handout)

30. Thursday, December 7: Latin America

• Introduction to Part V E/S.
• de Janvry, A., N. Key & E. Sadoulet, 1997. "Agricultural and Rural Development Policy in Latin America: New Directions and New Challenges." Working Paper No. 815. Berkeley, CA: Dept. of Agric. & Res. Econ., Univ. of California, Berkeley. (Handout)

FINAL EXAM: Friday, December 14, 2001, 10:00 am-Noon