Characteristics of agricultural production in industrialized and developing economics

МИНИСТЕРСТВО СЕЛЬСКОГО ХОЗЯЙСТВА РОССИЙСКОЙ ФЕДЕРАЦИИ

ФЕДЕРАЛЬНОЕ ГОСУДАРСТВЕННОЕ ОБРАЗОВАТЕЛЬНОЕ УЧРЕЖДЕНИЕ

ВЫСШЕГО ПРОФЕССИОНАЛЬНОГО ОБРАЗОВАНИЯ

РГАУ-МСХА имени К.А. ТИМИРЯЗЕВА

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Реферат

на тему:

"Сharacteristics of agricultural production

in industrialized and developing economics"

Составила:

студентка 1-го курса

Гуманитарно-педагогического факультета

Иванищева Дария, 101 группа

Москва, 2013

Сharacteristics of agricultural production

in industrialized and developing economics.

Each individual farm has its own specific characteristics, which arise from variations in resource endowments and family circumstances. The household, its resources, and the resource flows and interactions at this individual farm level are together referred to as a farm system. A farming system is defined as a population of individual farm systems that have broadly similar resource bases, enterprise patterns, household livelihoods and constraints, and for which similar development strategies and interventions would be appropriate.

        The delineation of farming systems provides a useful framework within which appropriate agricultural development strategies and interventions can be determined, as by definition, they group farm households with similar characteristics and constraints. Only a limited number of systems are delineated within each region, leading inevitably to a considerable degree of heterogeneity within any single system. However, the alternative of identifying numerous, discrete, micro-level farming systems in each developing region would detract from the overall impact of the analysis.

The classification of the farming systems, including: (i) the available natural resource base; (ii) the dominant pattern of farm activities and household livelihoods, including relationship to markets; and (iii) the intensity of production activities. These criteria were applied to each of the six main regions of the developing world. The exercise resulted in the identification of 72 farming systems with an average agricultural population of about 40m inhabitants. Based on these criteria, eight broad categories of farming system have been distinguished:

•Irrigated farming systems, embracing a broad range of food and cash crop production;

•Wetland rice based farming systems, dependent upon seasonal rains supplemented by irrigation;

•Rainfed farming systems in humid areas, characterized by specific dominant crops or mixed crop-livestock systems;

•Rainfed farming systems in steep and highland areas, which are often mixed crop-livestock systems;

•Rainfed farming systems in dry or cold low potential areas, with mixed crop-livestock and pastoral systems merging into systems with very low current productivity or potential because of extreme aridity or cold;

•Dualistic (mixed large commercial and small holders) farming systems, across a variety of ecologies and with diverse production patterns;

•Coastal artisanal fishing systems, which often incorporate mixed farming elements;

•Urban based farming systems, typically focused on horticultural and livestock production.

1. Potential for agro-industry in developing countries

The potential for agro-industrial development in the developing countries is largely linked to the relative abundance of agricultural raw materials and low-cost labour in most of them. The most suitable industries in such conditions are indeed those that make relatively intensive use of these abundant raw materials and unskilled labour and relatively less intensive use of presumably scarce capital and skilled labour.

Many of the industries using agricultural raw materials have in fact those characteristics that make them particularly suitable for the circumstances of many developing countries. Where the raw material represents a large proportion of total costs, its ready availability at a reasonable cost can often offset such disadvantages as a lack of infrastructure or skilled labour. Furthermore, for many agro-industries, a small plant may be economically efficient, which is another important factor in developing countries where the domestic market is limited by low purchasing power and sometimes by the small size of the market itself.

The factors actually determining the most economic location for an agro-industry are complex. Generally transport is a main factor. Most agricultural products either lose weight and bulk in processing, meaning they can be transported more cheaply after they have been processed, or they are perishable and so can be more easily transported in processed form. The situation is also affected by labour supplies and the availability of power and other infrastructure, but industries based on these products can often be set up economically in the area where the raw material is produced. They can therefore contribute to the relief of the rural underemployment which is characteristic of developing countries.

There are, however, exceptions. For most grains, shipment of the raw material in bulk is frequently easier, while many bakery products are highly perishable and thus require production to be located close to the market. Oilseeds (except for the more perishable ones such as olives and palm fruit) are also an exception and can be transported equally easily and cheaply in raw form or as oil, cake or meal, so there is more technical freedom of choice in the location of processing. The same is true for the later stages of processing of some commodities.

Where there is a high degree of technical freedom in the choice of location, industries have frequently tended to be located in proximity to the markets because of the more efficient labour supply, better infrastructure and lower distribution costs in the large market centres. With production for export, this factor has often tended to favour the location of processing in the importing country. This tendency has been reinforced by other factors, including the need for additional raw materials and auxiliary materials that may not be readily available in the raw material-producing country; the greater flexibility in deciding the type of processing according to the end use for which the product is required; and the greater regularity of supply and continuity of operations that are possible when raw materials are drawn from several different parts of the world. However, with improved infrastructure, enhanced labour efficiency and growing domestic markets in the developing countries, there is increased potential for expanding such processing in the countries where the raw materials are produced. In addition, with growing liberalization of world trade, more developing countries will be able to take advantage of lower labour costs to expand their exports of agro-industrial products.

2. The specificity of agro-industry

Processing is only one link in a continuous chain between raw material production and final consumption. Crop and livestock production cannot be controlled with great accuracy and tends to vary sharply from year to year owing to the effects of weather and pests and diseases. For most crops production tends to be concentrated in a particular season. It can therefore be advantageous for processing enterprises, particularly those engaged in canning and freezing, to promote the production in a particular area of a suitable range of crops and varieties maturing in different seasons in order to keep processing facilities in operation for as long as possible.

        Evolution of the agroprocessing industry and developing countries

Because developed countries practically consume only processed food, as even fresh vegetables are variously cleaned, prepared and packaged when they reach distribution outlets, the development of agro-industries is increasingly becoming one with development of industrial agriculture.Even disregarding some of the more exceptional cases, agro-industry has been an important growth component in a great number of the better performing economies of the developing world. Econometric studies show that this new and integrated form of agricultural development is invariably based on productivity growth and technological development that are as rapid and spectacular as those occurring in the manufacturing sector. Many studies report higher growth rates of total factor productivity in the agricultural sector. One characteristic of the new agro-industrial development is the increasing importance of processing and marketing activities.

        Russia is a developing country.  Agriculture in Russia survived a severe transition decline in the early 1990s as it struggled to transform from a command economy to a market-oriented system. Following the breakup of the Soviet Union in 1991, large collective and state farms – the backbone of Soviet agriculture – had to contend with the sudden loss of state-guaranteed marketing and supply channels and a changing legal environment that created pressure for reorganization and restructuring. In less than ten years, livestock inventories declined by half, pulling down demand for feed grains, and the area planted to grains dropped by 25%.

        The use of mineral fertilizer and other purchased inputs plummeted, driving yields down. Most farms could no longer afford to purchase new machinery and other capital investments. After nearly ten years of decline, Russian agriculture has begun to show signs of modest improvement. The transition to a more market-oriented system has introduced an element of fiscal responsibility, which has resulted in increased efficiency as farmers try to maintain productivity while adjusting to resource constraints. The farming structure has changed, and the relatively small family farms that have emerged and grown stronger in the new market environment are now producing in aggregate value more than the total output of large corporate farms that succeeded the traditional collectives.