What kind of people do you need to manage a farm?

Transforming traditional agriculture *( 1964)

American economist Theodore W. theodore schultz is the winner of the 1979 Nobel Prize in Economics. 1902 was born on April 30th in a small peasant family in Arlington County, South Dakota. 1930 graduated from the university of Wisconsin with a doctorate. 1934- 1943 Professor and Director, Department of Economics and Society, Iowa State College. 1943- 1972 is a professor of economics at the university of Chicago, 1946- 19 1 is also the head of the department of economics. He retired from 1952 to 1972, and was elected as Charles Hutchinson Professor of Special Contributions at the University of Chicago. 1972 was awarded the "Francis Walker Medal" by the American Economic Association, and was employed as an honorary professor at the University of Chicago after retirement. President of American Economic Association from 65438 to 0960. He is also a member of the National Academy of Sciences and the American Academy of Humanities. He has also served as an economic adviser to the United Nations Food and Agriculture Organization, the World Bank, the US Department of Agriculture, the Ministry of Commerce, the Federal Reserve Board and the US Congress.

His major works are World Food (1945), Agriculture in Unstable Economy (1945), Agricultural Economic Organization (1953), Capital Formed by Education (1960) and Human Resources. Transforming traditional agriculture (1964), economic growth and agriculture (1968), human capital investment (197 1), agricultural stimulus distortion (1978) and human investment-Schultz's main contributions are in two aspects. He put forward a famous point: traditional agriculture is poor but still efficient. If we want to change traditional agriculture, we must provide modern input for agriculture and invest in farmers' human capital. Second, in terms of educational economics and human capital theory. He put forward the theory of human capital investment in 1960, and thought that human capital investment was the key factor to promote economic growth. Therefore, people usually call Schultz the father of human capital theory.

This book is Schulz's most influential masterpiece, and it was included in the World Food Supply series by new york Times Press 1976. In the book, Schultz combines agricultural economics and human capital theory to study agricultural problems in developing countries. How to transform weak traditional agriculture into a high-productivity economic sector is the central topic of this book. Therefore, this paper analyzes it from three aspects: 1, what are the basic characteristics of traditional agriculture; 2. Why can't traditional agriculture be the source of economic growth? 3. How to transform traditional agriculture?

The book * * * has a chapter 12: asking questions; Characteristics of traditional agriculture; Allocation efficiency of traditional agricultural production factors; Zero agricultural labor force theory; The meaning of income stream price theory; The price of traditional agricultural income stream; Introduction to the profitability of investment; Farm scale, control and incentive; Factors of production hidden in "technological change"; Suppliers of new favorable factors of production; Farmers are the demanders of new elements; Invest in farmers.

Schultz said in the preface that the purpose of this book is to show that the basic feature of traditional agriculture is the low yield brought by the types of agricultural factor inputs used by farmers for generations. In addition, it is further explained that in order to transform this type of agriculture, it is necessary to develop and supply a set of more profitable elements and learn to use them effectively.

According to the original chapter, briefly introduce the following three aspects.

First, the characteristics of traditional agriculture and misunderstanding of traditional agriculture

The first and second chapters of this book mainly analyze the basic characteristics of traditional agriculture, and the third and fourth chapters reveal the characteristics of traditional agriculture from the side by refuting the misunderstanding of two traditional agriculture.

The first chapter puts forward some practical problems. The book points out that every country has an agricultural sector, and agriculture can be the source of economic growth in developing countries, even the largest sector. But the reality is just the opposite. In most developing countries, agriculture has become an obstacle to economic development. The problem is that in traditional agriculture, which is completely based on the factors of production used by farmers for generations, farmers cannot contribute to economic development, and only modern agriculture can become the source of economic development. In the first chapter, Schultz points out the central issue of the book, that is, how to transform weak traditional agriculture into a high-productivity economic sector through investment. At the same time, it is pointed out that three problems must be clarified: it is impossible for developing countries to greatly increase agricultural output by effectively allocating existing agricultural production factors; The great difference in the role of agriculture in economic growth in different countries mainly depends on the difference in farmers' ability, followed by the difference in material capital, and the difference in land is actually the least important; Only when farmers transform the traditional agriculture left over by their ancestors can agricultural investment under the condition of investment stimulation be effective.

In the second chapter, Schultz analyzed three basic characteristics of traditional agriculture: (1) the technical situation remains unchanged for a long time. In other words, the supply of production factors in traditional agriculture remains unchanged, and the production factors and technical conditions used by farmers remain unchanged. (2) The source and motivation of obtaining and holding income will not change for a long time. In other words, the demand of traditional agriculture for factors of production remains unchanged, and farmers have no motivation to increase traditional factors of production. (3) The supply and demand of traditional production factors are balanced by zero savings. Therefore, from these characteristics, traditional agriculture is a special type of economic equilibrium, which is essentially a long-term stagnant small-scale peasant economy with a long-term unchanged mode of production and basically simple reproduction.

In the third and fourth chapters, Schultz further refutes two far-reaching popular views on traditional agriculture. The first view is that the allocation efficiency of traditional agricultural production factors is low; The other is the famous theory of hidden unemployment.

People who hold the first view believe that farmers in traditional agricultural society are ignorant and backward, unable to respond normally to economic stimulus, irrational economic behavior and lower allocation efficiency of production factors. Schultz disagrees with this view in his book. Through the data of Panagasar in Guatemala and Senapur in India, he proved that farmers in traditional agriculture are not ignorant and backward, they can make rapid and correct changes in market prices, and they will haggle over every ounce and earn an extra penny. Through years of efforts, the existing factors of production have been optimized, and the redistribution of these factors will not improve productivity. In addition, foreign experts can't find any inefficiency in the existing allocation of production factors in these places. In other words: "In traditional agriculture, the situation under the allocation efficiency of production factors is relatively rare."

The theory of hidden unemployment, also known as "zero-value agricultural labor theory", basically holds that the marginal productivity of some people in traditional agriculture is zero. In other words, although these people are engaged in agricultural production, they actually have no contribution to production. This kind of employment is actually hidden unemployment. Keeping these people away from agriculture will not reduce agricultural output. This theory is widely circulated and has great influence. Arthur Lewis, a famous development economist, and others are all advocates of this theory. Schultz analyzed the historical origin and theoretical basis of this theory in detail. According to the fact that the Indian1919 flu caused the decrease of agricultural labor force, it is proved that the increase and decrease of agricultural output is closely related to the increase and decrease of agricultural population in traditional agriculture, and the decrease of agricultural labor force will inevitably lead to the decrease of agricultural output. Therefore, "it is a wrong theory that the marginal productivity of some agricultural workers in poor society is zero".

Second, the fundamental reason why traditional agriculture cannot be the source of economic growth.

After analyzing the basic characteristics of traditional agriculture and emphasizing the rational allocation of traditional agricultural production factors and the absence of hidden unemployment, this book specifically studies the root causes of the stagnation and backwardness of traditional agriculture in chapters 5 and 6.

Why does traditional agriculture no longer lag behind and become the source of economic growth? It is generally believed that traditional agriculture is short of capital under the savings rate and investment rate. The reasons for the savings rate and investment rate are that farmers have no habit of saving and saving, or lack entrepreneurs who can seize investment opportunities. Schultz believes that the root cause is not the lack of savings habits of farmers, nor the lack of entrepreneurs. However, in traditional agriculture, the incremental investment return rate of primitive production factors is low, so it lacks sufficient economic stimulus to savings and investment.

In order to clarify the above point of view, in the fifth chapter, Schultz put forward the "income stream price theory". He pointed out that income is a concept of flow, which consists of a certain number of income streams per unit time. In a certain sense, the increase in the number of income streams is equal to economic growth. In order to make the economy grow, we must increase the income flow. Income is produced by factors of production, so the source of income flow is also factors of production. The factors of production have prices, so the income stream also has prices. To study economic growth, we should study the price that determines the source of income flow, and then analyze it from the supply and demand that determine the price.

In the sixth chapter, Schultz pointed out that in traditional agriculture, the supply of long-term income streams remains unchanged because of the unchanged production factors and technical conditions. On the demand side, farmers' preferences and motives for holding and obtaining traditional agricultural income streams are unchanged, so the demand for long-term income streams is also unchanged. The stability of demand and supply makes the price of long-term income stream fixed. At the same time, the price of this income stream of traditional agricultural production is relatively high, that is to say, the return on capital of traditional agriculture is low. Then, Schultz proved the above conclusion through the fact that the return on capital of Panagasar in Guatemala and Senapur in India is below.

As mentioned above, the fundamental reason why traditional agriculture is stagnant and has little contribution to economic growth lies in investment, that is, the return on capital. In this way, it is impossible to increase savings and investment under the original circumstances. To change this situation, we must break the long-term high equilibrium price of the source of income stream. Therefore, it is necessary to find some cheap inputs of new production factors, change the higher equilibrium price of income stream sources, and obtain the growth of income stream. These new factors of production will bring about sustained economic growth. This is the way to transform traditional agriculture.

Third, how to transform traditional agriculture.

On the basis of the analysis of the first two parts, Schultz put forward that the key to transforming traditional agriculture is to introduce new modern agricultural production factors, which can reduce the price of agricultural income stream and make agriculture the source of economic growth. Then, how to transform traditional agriculture by introducing modern production factors? In chapters 7 to 12, Schultz put forward his own concrete ideas in the following three aspects:

(A) to establish a set of systems and technical support suitable for transforming traditional agriculture.

In the seventh chapter, Schultz put forward that on the one hand, there must be institutional guarantee, on the other hand, it is more important to need "technological change". As far as the system is concerned, there are two main ways: the command way and the market way. The former relies on state rights to organize agricultural production, distribution, exchange and consumption; The latter relies on the economic stimulus in the market to adjust the input of new agricultural factors. The latter is much more efficient than the former. As far as technology is concerned, it is the key factor to transform traditional agriculture. We should not only find special new production factors, but also find new production methods acceptable to traditional farmers. That is, we need to explore new modern agricultural production factors from both supply and demand.

In the eighth chapter, Schultz mainly analyzes the different influences and functions of different institutional ways on agricultural development. Schultz believes that factor efficiency is an important factor that determines the stagnation and backwardness of traditional agriculture. One factor that determines the efficiency of factors is the economic information and economic stimulus on which production decisions are based. Therefore, in the transformation of traditional agriculture, the important institutional guarantee is: to stimulate farmers through the price changes of agricultural products and production factors by using the market model based on economic stimulus; Instead of building large-scale farms, we should transform traditional agriculture through family farms that combine ownership and management rights and can adapt to market changes.

Another important factor that determines the efficiency of factors is the location of individuals and institutions that make production decisions, that is, "not in the form of ownership" (land owners don't live on their own land) and "residential ownership" (land owners live on their own land and operate in person). Schultz believes that engaging in modern enterprise production activities, producing modern inputs and making full use of information are the necessary ways to improve factor efficiency. Generally speaking, under the condition of "not in the form of ownership", the factor efficiency is relatively low because the absent party (land owner) can not obtain sufficient information, can not effectively deal with problems and effectively use economic stimulus. Although competition, land rent and other factors in market economy will improve the efficiency of "non-ownership form", it is still not enough. Therefore, Schultz advocates changing the inefficient "non-ownership form" in agriculture and implementing "residential ownership form".

In the ninth chapter, Schultz analyzed several problems about technological change. He believes that the sources of agricultural productivity can be divided into two parts: first, land, labor and capital; The other part is technological change. Technological change has become an important source of real income. Technological change will also change the optimal input ratio of other production factors in agricultural production.

(B) from the relationship between supply and demand for the introduction of modern factors of production to create conditions.

In the tenth chapter, Schultz analyzes the role and behavior of the supplier of new production factors. In his view, suppliers are those people and institutions (including for-profit enterprises and non-profit organizations such as the government) that discover, develop and produce new factors and enable farmers to obtain and use them. They play a vital role in transforming traditional agriculture. On the one hand, they should provide new factors of production, on the other hand, they should let traditional farmers accept and use these factors. The roles of profit-making enterprises and non-profit organizations can complement each other. Generally speaking, backward countries can introduce foreign capital and foreign technology through effective non-profit ways. Then encourage for-profit enterprises such as agricultural extension stations to effectively promote and distribute new elements.

In the following chapter 12, Schultz analyzes the role and behavior of the demanders of new production factors. He believes that after suppliers provide new factors of production, traditional farmers accept the conditions to see if they are favorable. This new technology is beneficial if the output of a subsistence crop increases after using new elements. Whether the new factor is beneficial depends not only on its "price and output", but also on the "tenancy system in which landlords and farmers share costs and benefits"

(C) Investment in farmers' human capital

It is very important for farmers to learn how to use the information after obtaining the information of new factors. In the last chapter of this book, Schultz proposed to invest in farmers' human capital. He believes that the introduction of new factors of production requires not only the introduction of hybrid seeds and machinery, but also the introduction of people with modern scientific knowledge who can use new factors of production. "All kinds of historical data show that there is a strong positive correlation between farmers' skills and knowledge level and their farming productivity. "Therefore, it is necessary to invest in the human capital of farmers. There are many forms of human capital investment, including education, on-the-job training and improving health. Among them, education is a long-term effective form and more important.

evaluate

This book has several good practical significance:

1. Before Schultz, agriculture did not receive much attention in economics. Agriculture even belongs to agronomy, not economics. But Schultz regards the development of agriculture as one of the sources of economic growth. Change the wrong tendency of economists and some developing countries to ignore agricultural development.

This book is mainly written for the agricultural situation in developing countries, emphasizing the role of the transformation of agriculture itself in economic development. This has a good reference significance for China and other developing countries to formulate economic development strategies. At the same time, some ideas in the book, such as making full use of the market mechanism, opposing blindly building large farms, and attaching importance to the role of people in agriculture, are also of great practical significance to the development of agriculture in various countries.

3. This book takes the lead in introducing human capital investment into the category of developing agriculture. Nowadays, the role of human capital in economic development is obvious to all. It can be said that the introduction of the concept of human capital plays a vital role in the long-term development of agriculture, and also points out an effective way for the long-term development of agriculture.