Post on 22-Dec-2015
Traditional AgricultureTraditional Agriculture
Dr. George NortonAgricultural and
Applied EconomicsVirginia Tech
Copyright 2009
AAEC 3204AAEC 3204
Objectives Objectives
1. Consider common characteristics 1. Consider common characteristics of traditional agricultureof traditional agriculture
2. Identify the multiple roles of 2. Identify the multiple roles of livestock on traditional farming livestock on traditional farming systemssystems
3. Implications of characteristics of 3. Implications of characteristics of traditional agriculture for agricultural traditional agriculture for agricultural developmentdevelopment
Characteristics of Traditional Characteristics of Traditional AgricultureAgriculture
Intermixing of farm and family Intermixing of farm and family decisionsdecisions• Why? Why?
• Implications?Implications?
Characteristics of Traditional Characteristics of Traditional AgricultureAgriculture
Small farms with family & hired laborSmall farms with family & hired labor
Characteristics of Traditional Characteristics of Traditional AgricultureAgriculture
Low productivity but high efficiencyLow productivity but high efficiency• ““poor but efficient”. Why? Implications?poor but efficient”. Why? Implications?
Qty. of input #2(e.g. machinery)
Qty. of output(e.g. rice)
Qty. of input (e.g. labor)
Qty. of input #1(e.g. labor)
Highest-profit point along the production function
line whose slope is P(labor)/P(rice)
line of slope - P(machines)/P(labor)
Lowest-cost point along the isoquant
Allocative (Price) EfficiencyAllocative (Price) Efficiency
Output efficiency, given the technology and Output efficiency, given the technology and resource baseresource base
Quantity of Beans per farm
Revenue (and profits) are highest; where the iso-revenue line is tangent to the PPF
Iso-revenue linePB/PC
Production PossibilityFrontier (PPF)
Quantity of corn per farm
Characteristics of Traditional Characteristics of Traditional AgricultureAgriculture
Rational but risk adverse Rational but risk adverse (conservative)(conservative)• Joint & extended families, intercroppingJoint & extended families, intercropping
Characteristics of Traditional Characteristics of Traditional AgricultureAgriculture
Livestock important in most casesLivestock important in most cases
Roles of livestock in traditional Roles of livestock in traditional agricultureagriculture
Buffers and extenders (meat, milk, eggs)Buffers and extenders (meat, milk, eggs) FertilizerFertilizer FuelFuel Hides and hairHides and hair PowerPower TransportTransport Social and culturalSocial and cultural Capital (savings bank)Capital (savings bank)
Implications of Traditional Farms for Implications of Traditional Farms for Agricultural DevelopmentAgricultural Development
Must increase their productivity to Must increase their productivity to reduce poverty, especially in Africareduce poverty, especially in Africa
Risks must be reduced through new Risks must be reduced through new institutional arrangementsinstitutional arrangements
Even traditional farmers are Even traditional farmers are integrated today in the marketintegrated today in the market
ConclusionsConclusions
• Farmers are rational and relatively Farmers are rational and relatively efficient efficient
• Traditional farming systems are Traditional farming systems are inevitably changing as many inevitably changing as many technical and institutional factors technical and institutional factors drive these changesdrive these changes