Lester Brown, Seeds of Change, Praeger, 1969. Chapter 7
Prior to World War II, most
agricultural research in the
This process will most likely extend to poor countries as farm production depends more on purchased inputs and the portion of farm production marketed increases. The technology transfer can occur in the form of products, trained personnel, or most importantly, through Fertilizer Production.
The Fertilizer Breakthrough
In the early 1960s, M. W. Kellogg Company of
The new technology promised lowered fertilizer costs allowing poor
countries that can purchase new imports of fertilizer alone or with aid funds,
to benefit. “During the mid-1960,
several countries, including
Supplying Farmer’s Needs
Once profitable to use, modern
technology can increase the demand for many different farm inputs used. Agribusiness can provide the necessary
inputs needed, giving them an interest in the agricultural revolution. In the
The increase in farm equipment can be tied to advances in development. The use of new seeds created a massive increase in demand for irrigation pumps and tube wells. The use of pesticides has increased to protect the investment in high yield crops; this increase requires the use of more chemical sprayers. Early maturing rice that matures during the monsoon requires mechanical drying.
Equipment and maintenance needs of farmers are often unmet by the government due to main reasons: “First, farm equipment is spread so thinly that the cost of maintenance is often inordinately high. Secondly, governments have aggravated this already bad situation by permitting the import of farm equipment from several sources. This makes it virtually impossible to establish maintenance systems and stock spare parts for the many different makes and sizes of tractors and attachments.”
Developing countries can overcome this by selecting several farm-equipment manufacturing firms to generate competition in building a local supply and service organization. This organization could lay the groundwork for farm-equipment assembly and even a manufacturing industry.
Processing Farm Products
New investment is to be had in the processing of farm products or through their use as raw materials. “A lack of processing industries often imposes unnecessary constraints on a country’s agricultural development…Developing countries can obtain the necessary technological and marketing know-how by encouraging multinational agricultural processing and manufacturing firms to invest locally”
Example: The Overseas
Agricultural Development Corporation was formed in
Similarly, a Japanese-Indonesian agreement was reached to improve the
quality of corn and associated techniques like drying, warehousing, transport,
and shipping. A Sino-Japanese meat
processing plant in
Nationalism and the Multinational Firm
Foreign private investment is growing rapidly. “According to the “Survey of Current business, American”, American private investment abroad totaled $17 billion in 1930 and had reached only $19 billion by 1950 but then began to climb rapidly, rising to $50 billion in 1960 and $87 billion in 1966.” Overseas investment of European and Japanese firms is rising, as is the portion of total investment going to poor countries. Investment is going more into manufacturing than extractive industries. “Sales of farm inputs and opportunities for new invest in food processing and related activities are increasing in the poor countries in close relation to the acreage planted to high-yielding varieties.”
The challenge lies in the multinational having to demonstrate an interest in the local economy, showing a willingness to invest for the long term. For poor countries, poor countries must look at multinationals as an efficient means of technology transfer.
Summarized by: Donald Ripley