Accelerated growth in the agricultural production of low-income countries may sharply increase the transfer of resources between agriculture and other sectors of the economy. Such changes affect relative rates of capital formation and income growth in various sectors, the structure of growth, and overall rates of growth. Recent technological breakthroughs in agriculture give current relevance to these relationships. This paper deals with conceptual and empirical aspects of (a) the magnitude of resource flows between the agricultural and nonagricultural sectors under various conditions of economic growth; (b) the changing role of economic and institutional devices in transferring resources among sectors; and (c) the relationship between such resource flows and technological change in the agricultural sector. Detailed comparisons are made for Taiwan and India, while brief note is taken of the experience of Japan, Britain, and France. There is controversy as to the timing and direction of net resource flows between agriculture and other sectors in early stages of economic development. One argument holds that net capital transfers to agriculture are needed so that agricultural production may be increased to meet the greater demand for food which accompanies industrial development. It is further argued that these capital transfers are large because of the high capital-output ratios associated with the agricultural sector-perhaps due to the diminishing returns traditionally associated with agriculture.' * The data for this paper are drawn from a series of studies conducted under my direction at Cornell University as part of an AID-financed study of agricultural prices as they affect intersectoral resource flows. I am most indebted to T. H. Lee for the intersectoral study of Taiwan which I have used extensively in this paper. In addition, I have made substantial use of the work of Uma Lele, G. M. Desai, Ashok Dar, U. S. Bawa, and Sheldon Simon. I am particularly grateful to Uma Lele for suggesting major improvements in this paper. 1 This argument is developed in Maurice Dobb, Some Reflections on the Theory of Investment Planning and Economic Growth, in Problems of Economic Dynamics and Planning; Essays in Honour of Michal Kalecki (Warsaw: Polish Scientific Publishers, 1964), pp. 107-18, and in A. K. Sen, Some Notes on the Choice of CapitalIntensity in Development Planning, Quarterly Journal of Economics 71 (November 1957): 561-84. It receives support from the argument that rapid growth in agricultural
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Dec 1, 1975
H B Enderton 
Open Access