2. First Development Decade 1960 - 1970

The period from 1960 to 1970, the so-called first development decade, brought about considerable changes in the development concepts. It began with the growth-by-industrialization concept but soon there were bitter disappointments. The industrial countries granted less development aid than expected. In 1962, instead of 0,7 % of the gross national product, only 0,5 % and, in 1976, even less, 0,3 %, was granted. The first UNCTAD conference showed that the industrial countries were not prepared to make trade concessions to the poor countries, and moreover, during that period, a deterioration in prices on the world market was ascertained for products from developing countries as compared with industrial products.

Of still greater importance was the fact that new concepts on the role of agriculture in economic development were suggested. In 1961 Jorgenson (17) as well as Ranis and Fei (29) pointed out the interdependencies between agricultural and industrial growth. The increase in non-agricultural employment depended upon the rise in agricultural surplus. If there were a lack of food in the cities, the labour supply would become inelastic. Therefore, it was not unlimited as forecast in Lewis' (21) hypothesis in 1956.

As early as 1961 Johnston and Mellor (16) went even further. They saw, in agriculture, a moving power in the process of economic growth which should actively provide important contributions. It should supply labour, capital and food for the growing industrial sector, serve as a market for the sale of local industrial products and, from the proceeds of agricultural export, provide foreign currency for developing the economy. Kuznets (19) expressed similar views in the same year.

Thus, agriculture was no longer negligible, but was assigned great importance for the development of the Third World. The experience made hitherto with rural development began to be worked up. Two aspects were thereby perceived: There are structural and institutional obstacles to the producers' adopting a new attitude and to an increase in agricultural production. Considering the prevailing conditions as far as power and property are concerned, institutional reforms are a prerequisite for a rapid rural development.

Farmers in developing countries react to economic incentives. The myth of farmers bound to tradition is a misjudgement. The only point is that the incentives should be profitable under the farmers' conditions.

In two PhD-dissertations (Hopper. 12, and Raj Krishna, 18) it was examined what the farm organization of two regions in India should be like if it were planned according to the methods of modern agricultural economics. The result was that, under the prevailing framework conditions, it would be exactly the same as practised by the Indian farmers for a long time. It is not the traditional, uneconomic attitudes that are the cause of the situation prevailing in agriculture but the institutional conditions and the lack of profitable packages of technological innovations.

In his book "Transforming Traditional Agriculture" (1964) Schultz (34) demands, as a result, that investments should be made into agrarian research and human capital should be provided, i. e., education and training, so that extension should also have something to offer.

Schultz was proved to be true more quickly than he could have dreamed of. In the middle of the decade, as a package of innovations involving rapid and important profits became available within the framework of the so-called 'Green Revolution', neither extension nor even credit arrangements were necessary to encourage farmers to adopt them.

The 'Green Revolution' had a great influence. A ..strategy of agricultural growth" developed. This concept tried to achieve a rapid success in increasing food production by applying yield-increasing farm-inputs on large farms. By intensifying (part of) agriculture, thus, food shortage was remedied, wage goods produced for non-agricultural workers and productive employment initiated in the sectors producing and processing basic materials. In the course of time, it was recognized that the 'Green Revolution' was not entirely a blessing. Indeed, it had been possible to reduce food shortage, but at high social costs. The rich became richer, regional differences greater, and the beginning oil crisis caused questions to be posed as to the suitability of an agrarian strategy based on a high utilization of farm inputs.

If the first half of the first development decade was characterized by some new concepts., developed by scientists, after 1965 the impulses came from the political field. The students' riots in Paris, followed by similar movements in Germany, called in question our own socio-economic objectives for the first time after World War II. Can the pursuit of more and more income and consumption really be society's objective? The more this question was discussed, the more it overlapped the discussions on development policy. The concept of a harmonious international development, in the course of which the rich assume the leadership while the poor follow the way lost its attraction. Samir Amin (1) considered the development of industrial countries and the underdevelopment of agrarian countries to be one historical process, in which the former's progress resulted in the letter's backwardness. From this point of view, developing countries were not lagging behind but had been caused to undergo a downward development. Andre Gunnar Frank (8) spoke of unequal partners having different interests, whereby the poor are exploited by the rich. Marx' terms entered into the discussion of development policy.

Such concepts, which found the strongest support in Latin America, led to the development of the Dependencia School. Underdevelopment is not a stage of development but the result of extending the capitalist system over the world. Integration into that system brought about pauperization. Santos (33) spoke of dependence as a situation in which the economy of many a country is influenced by the other countries' expanding economy. The dependence concerned is of a technological-industrial nature. The industrial countries promote the exportation of raw materials from developing countries and then influence the prices to their advantage. The deformation of the economic and social system leads to structural heterogeneity: rich elites beside marginal masses, whereby a reform is prevented by the rich people's similar interests in the central place and in the periphery.

The role of agriculture in this new way of thinking is somewhat hazy due to the high degree of abstraction. Underlining local needs and retaining traditional economies mean, finally, supporting the rural regions. However, it is not said how the relations between the central place and the periphery, which also exist within the developing countries, should be changed. Just as little consideration is given to the technological innovations and the particularities of the agrarian production process.

Towards the end of the first development decade, a scientist developed a new trend of thought which was to become the core of the second development decade. Ishikawa (14) said in 1968 that the industrial countries' past experiences could not be a doctrine for today's developing countries because the framework conditions were totally different. He particularly emphasized the population increase and the demographic pressure in several countries. These aspects had actually been neglected hitherto. The efforts towards development made until then had, of course, not remained without success: from 1950 to 1965, the developing countries could quote an annual increase of 1.2 to 1.4 % of their per capita income. This was no poor achievement in comparison with England, where the increase from 1800 to 1950 had been 1,2 % on the average. Food production had also increased considerably. The significant cause of disappointment as to the success of development was not the false objectives but the failure to consider the population increase. Moreover, the one-sided objective of growth turned out to be questionable.

If Dovring (7) had, as early as 1954, pointed out the fact that, in the case of a considerable population increase, rapid industrialization would also cause an increase in the number of agricultural workers, Ishikawa (14) now posed the question: How can these people be productively employed? It is no longer a question of removing a 'surplus' as postulated by Lewis (21) and Nurkse (27). The question is no longer how can an area be cultivated by a few workers but rather how can more workers work productively in that area.

The first development decade brought little to the really poor. It is true that the .Green Revolution' prevented, through an additional supply, a further increase in the prices of staple food. However, agricultural development was still understood in terms of production increase by small and medium farms. Thus, the really poor were excluded. There is no doubt that small farm owners often live in very straitened circumstances. However, the real poor, the landless casual labourers and small tenants, to whom no resources except their working capacity are available, live below that level.