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
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.