Factor utilization and substitution in economic development: A green revolution case study

Abstract

The onset of the green revolution in Asia and other parts of the world has brought about a recent shift in development strategy in favour of a renewed emphasis on agriculture. Previously, development policies emphasized heavy industry, import substitution in industry under protective tariffs, low food prices for urban consumers, and a direct or indirect subsidization of the industrial sector at the expense of agriculture. The dynamic role in terms of increasing both output and employment was assigned to the industrial‐urban sector. The policies which assign a relatively minor role to agriculture are being reconsidered. Among the reasons for disenchantment are: growing food crises with their consequent impact on domestic prices and imports; a higher rate of growth in the labour force than expected; and a growth rate of employment and output in the industrial sector far less than needed to prevent growing unemployment. Moreover, the advent of the green revolution with its possibilities of high rates of growth in predominantly agricultural economies has brought about a renewed interest in agriculture in development policies and in the development literature [Healey, 1972.]