1 Development, Agriculture and Periphery
The aim of this book is to provide a long-term perspective that allows a better understanding of the process of agricultural transformations and their interaction with the rest of the economy. During the 1950s and 1960s, most growth economists considered that agriculture played a negligible role in promoting economic development (Lains & Pinilla, 2009). This view, influenced by the impulse toward industrialisation in the global periphery, has only seldom been revisited, even though many recent studies have indicated the existence of positive relationships between agriculture and economic growth. These relationships derive from inter-sectoral links (Delgado, Hopkins, & Kelly, 1994; Hazell & Haggblade, 1993; Timmer, 2009) , the strengthening of domestic markets (Adelman, 1984), technological (Hayami & Ruttan, 1985; Ruttan, 2002) and organisational improvements, or simply the exploitation of comparative advantage in the rural setting. Of particular interest is the analysis of changes in agricultural production and productivity and their relationship to per capita income levels, in order to assess the possible contribution of agriculture to economic growth. Also of interest is the analysis of the relationships between agriculture and other economic sectors during this process, the use of resources (land, labour, capital) and the influence of institutional and technological factors in the long-run performance of agricultural activity.
The structural transformation process, both as an analytical concept and as a historical event, implies a sustained improvement in agricultural productivity (Hillbom & Svensson, 2013). As productivity grows, the economy creates conditions to process a real structural change in which the transference of resources to other sectors with higher productivity is possible, and the final consequence is an increase in the total factor productivity (TFP). This structural transformation requires a highly productive agricultural sector that employs a small proportion of the whole workforce (Timmer, 2009). Despite the fact that relative prices may, at certain times, deteriorate for the agricultural sector as a whole—an issue raised initially by Raul Presbich and Oscar Singer eight decades ago—productivity growth also offers an opportunity to increase farm household incomes and, in consequence, improve living conditions and poverty alleviation in rural areas.1
Obtaining higher productivity in agriculture—in individual crops or animal husbandry, as well as in the whole sector—allows for increasing incomes within agriculture and, at the same time, more resources allocated to other activities. There is a long tradition of studying agricultural transformation as a universal process, and numerous attempts have been made to model the various stages, with, so far, no great success (Federico, 2008). Specifically, the starting point for this book is that structural transformation is a process of great diversity (Hillbom & Svensson, 2013). An overall comprehension of the variety of trajectories leaves much still to be learned, especially concerning the drivers of change in regions with low levels of development, institutional restrictions, a variety of distance to the technological frontiers, and different modalities of participation in the international markets.
Geographical descriptions of the world make use of various metaphors: expressions such as centre–periphery, North–South, or First/Second/Third World have the capacity to characterise, rapidly and intuitively, the spatial organisation of the global economic system (Vanolo, 2010). Given the wide circulation of these concepts, they play a fundamental role in the building of our personal geographical images (Baudrillard, 1983), and these representations are often determinant in the comprehension of the evolution and performance of countries and regions.
The core–periphery metaphor—applied on a global scale—has referred to the unequal distribution of power in the economy, in society, and in the polity, stressing the domination/dependency relationships between different regions of the world (Rodríguez, 2006). Because that metaphor was developed in a structuralist scientific framework,2 the core–periphery approach emphasises the relational dimension of the spatial organisation of the economic scenario, which is the uneven power structure (sometimes expressed as polarisation) that reproduces differentiations in the economic role of territories (Vanolo, 2010). The understanding of modern economic growth, also from a core–periphery perspective, resurfaced in the 1990s from Paul Krugman in his seminal work of 1991 (Krugman, 1991), which was based on two initially identical regional economies, specialising respectively in modern (the core) or traditional (the periphery) activities in a scenario of sufficiently low trade costs, whenever manufacturing operates under increasing returns to scale, and the market for these goods is monopolistically competitive. The agglomeration of forces generates a mechanism of circular causation that produces an intense polarisation between both regions. The generalisatio...