THE LEVEL OF AGRICULTURAL DEVELOPMENT IN TRANSITION COUNTRIES
Agriculture in transition countries is no longer a major source of economic growth in developing countries. At the expense of agricultural provided, on average, only 7% of GDP, but the vast majority of the poor are still concentrated in the villages (in rural areas 82% of the poor).
In this group of countries, the typical representatives of which are India, Indonesia, Japan, Morocco and Romania, has more than 2.2 billion rural inhabitants. 98% of rural population in South Asia, 96% – in East Asia and Pacific region and 92% in the Middle East and North Africa – are residents of countries with transforming the economy.Also in this group traditionally includes countries in CEE (Central and Eastern Europe), the Transcaucasus and Central Asia, committing to the late 80′s, early 90′s transition from a command to a mixed economy. They arose in connection with the collapse of the world socialist system and, consequently, the elimination of Council for Mutual Economic Assistance (CMEA). The population of Central and Eastern Europe is 119 million. Combined GDP of approximately $ 636 billion, which represents 1.85% of global GDP.
The level of socio-economic development of almost all countries in Central and Eastern Europe belong to moderately. This is mainly industrial and industrial-agrarian country.
Although the development of agriculture of transition countries yielded only 7% growth in 1993-2005. It still makes up about 13% of the economy and takes 57% of the workforce. Despite rapid economic growth and reduce the percentage of poor in the total population in many of these countries, poverty remains widespread and is predominantly agrarian, as more than 80% of the poor live in rural areas. Natural resources are also experiencing strong pressure from the industries of agriculture, and competition over land and water exacerbated by urban growth and non-agricultural sectors.
A distinctive feature of the transition countries is deepening income gap between rural and urban residents. In China, from 1980 to 2001, reducing urban poverty than rural happened 2 times faster, and Indonesia – in 2,5 times faster than during the same period in Thailand, 3.7 times faster from 1970 to 1999
Non-agricultural sector now accounts for most economic growth. But the exodus of people from agriculture and rural development is not accompanied by transformation of the economy in non-agricultural way. In China, in connection with the existing long been the political obstacles to labor migration of rural population refrained from moving to cities, while urban economy expanded rapidly. In India, the inability to find work in a thriving service economy is mainly due to low levels and quality of education of most rural workers.
One of the adequate measures – is facilitating the accelerated removal of agricultural labor in the urban economy through investments in human capital and certain policies on the labor market, among the main areas which include:
1. Training on the most popular specialties.
2. The development of transport services.
3. Education related occupations.
But the scale of training people are significantly behind the needs. Moreover, these same measures make migration an attractive, expanding the circle of urban unemployed, leading to overcrowding in cities and the urbanization of poverty.
Growth in agricultural areas can contribute significantly to poverty reduction in transition countries. For example, a sharp drop in the 75-80% of poor population in China in 1980-2001 gg was the result of reducing poverty in rural areas. The same pattern was observed in Indonesia, where the preferred direction is the emergence of rural towns (“urbanization” no migration “).
Transition countries are the largest segment of the agricultural “peace.” Poverty in rural areas is massive (about 600 million. Live below the poverty line in the I dollars a day, or half the global total).
Transition countries demonstrate the highest growth rates: GDP growth in them during the period after 1990, over 6% per year, and in Vietnam, China and India in recent times was more than 8%. Engines of growth are, however, manufacturing and service industries. Growth of agricultural production fell in 1993-2005. to 2,9% in the year, although after the “green revolution”, he was in the 1970 and 1980. 3,3%.
Slower growth in agriculture, a rapidly growing non-farm sector and the labor market, firmly structured, depending on skill level – all these contributed to the increase in income inequality between rural and urban areas, increasing political pressure in favor of increasing investment in agriculture and rural development.
The rapid growth of incomes of the urban population and increasing demand for high-value products in these countries are the main drivers of accelerating agricultural growth and poverty reduction in rural areas, although a steady increase in production of major agricultural products requires constant attention. Markets high-value products growing rapidly: for example, at 6% a year in horticulture sector in India. Many of these markets have an impressive growth potential. Per capita consumption of vegetables in India is only 33 kg per annum against 66 kg in China and 76 kg in Japan. Production of livestock and aquaculture will also grow rapidly. Countries in this group could do much more to take advantage of growing global markets, benefiting from their intrinsic combination of advanced technology and cheap labor. Middle East and North Africa have a natural geographical advantage, and in those markets – agricultural production has grown here since 1993 at 4.4% per year.
In the past, done a lot of attempts to reduce rural poverty and to overcome the growing gap in incomes through the adoption of protectionist measures on agriculture, but often these attempts have had very limited success. The current call for provision of agricultural subsidies in low-budget security in transition countries are also unlikely to provide a reliable solution to the massive rural poverty.