4 Consequences for Agriculture and Rural Development Policy

Over the last forty years, a number of factors have caused a. socioeconomic differentiation within agriculture. Agriculture today takes place in a variety of different ways of life that are only partly determined by agriculture. Depending on these characteristics, each requires a different policy and a prerequisite for an effective policy is the exact definition of target groups. Some examples may illustrate this statement.

  • Larger commercial farms are organized along economic principles. Their
    requirements for support by the public centre on plant breeding, credit
    facilities, provision of import facilities for spare parts and price policy to
    their advantage. Otherwise, it is in their interest if government reduces
    its interference in the economy to a minimum.
  • Medium farms are often intensively managed along modern lines but fam
    ily circumstances and subsistence requirements play a role for labour econ
    omy as well as cropping pattern. For their activities, support by an ef
    fective extension service is of great importance and they are the main
    beneficiaries of co-operatives if these exist because they meet the urgent
    requirements of this group. This includes easier access to credit. The
    same applies to a lesser degree to the small farmers.
  • Marginal farms often live or at least try to live on a combination of agricul
    tural and non-agricultural income. The more the latter are in the forefront, the more they influence the organization of land cultivation. Income maximization is only one of several possible goals of these households. Not the highest yield or income from agriculture is the target but for instance low labour requirement so that much time is left for the non-agricultural job. Or one attempts a cropping pattern with short peaks in labour requirements during which man takes leave or during which all relatives are called for help. Price policy is of limited importance because most products are consumed at home. On the market, these households sometimes act as producers, sometimes as consumers. Cooperatives as well as extension service are not frequented much, and credit is dangerous for this group. Provision of non-agricultural jobs and training for non-agricultural jobs are of much greater interest.

Households of the aged with land are hardly influenced by measures of agricultural policy. In the absence of other means to support them, they continue cultivation as long as they can in an extensive way. With reducing ability to work, more,and .more tilling is given on custom hire or more of the land is rented out. Living in familiar surroundings together with other aged people is part of their way of life. Measures of social policy are called for to help these persons while agricultural policy hardly meets their needs.

The examples - which could be extended and specified - show that different parts of what is traditionally called 'agriculture' require different policies. With agricultural policy alone, one does not meet the whole variety of circumstances.

The primary goal of most people is to make the ends meet by a sufficient income and increase this standard. Secondarily, it may be the desire of persons to reach this goal by cultivating land. But for the majority - and varying from location to location -, agriculture today is one of several opportunities. They select the occupation or the occupations which offer the optimum total income possibilities.

The focus of public policy under such circumstances - widespread multiple employment and many holdings of the aged - should not be so much agricultural policy proper but rather regional development policy, i.e. the promotion of agricultural and non-agricultural activities and their basis. Naturally, even within this framework, agricultural policy has its place, but among other policies and often of different content than that for commercial farmers.

Important parts of this regional development policy are structural policy, price policy and social policy. The structural policy has to further and strengthen those parts of the economy which are vital but facilitate at the same time transitions. Migration out of agriculture, sometimes even out of the rural areas, is necessary to make an income comparable to that of other regions possible. The price policy - especially if the state interferes more strongly in the economy - has to offer security for the producer and thus incentives to produce and to invest. Naturally, the justified interest of consumers are part of the decision process.

The social policy has to be extended to safeguard the rural population against risks of sickness, invalidity and old a,ge because for an increasing part of the rural population, the farm and the family cannot absorb these risks any more. Public measures should be subsidiary, in line with the paying possibilities of the people and take into consideration the still strong feeling of coherence among family members.

Since the beginning of efforts, the small farm, the peasant has been the main target in development plans and in speeches of politicians. The fact that agricultural development policy hitherto did not take notice of the socio-economic differentiation between households engaged only in agriculture, and those which combine agricultural and non-agricultural activities, has led to suboptimal results of policy measures. While the target group -at least in declarations - usually has been the small farmers, nearly always, the large farmers could secure the lion's share of the support measures. This state of affairs calls for a review of the theory of agriculture.