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Abstract(s)
The economic development of societies has been, in general, from the agricultural
to the services sector, making economies less real and more dependent on the
intangible sectors. Agriculture was an important component of economic
geography through the 1950s. But with the rise of model-building and quantitative
methods, especially after the 1960s, the focus shifted to studies of industry. Most
of the first studies about farming were in the sub-field of agricultural geography.
‘The result was that studies of agriculture within geography were cast either as
old fashioned and backward looking or derivative of industrial geography (…)
In any case, the secondary status of agriculture within economic geography was
cemented into place’ (Page, 2000 [2003]).
From the late 1970s, regional development theories became most oriented to
the high technology industries. Economic theory was particularly concerned to
explain the uneven income distribution between regions and the apparently better
propensity of some regions to develop high-tech economic bases (Storper, 1997),
related to both industry and the services sector. At the same time, associated with
these tendencies, the economic theories that studied this evolution became more
urban and less rural. In this sense, it is possible to say that, nowadays, there seems
to be a kind of dogmatic position in economics that the evolution of societies
should be made from the agricultural to the services sector.
As a consequence, we see that the majority of the main economic theories
that are available in the literature, and that can be heard in presentations made at
international conferences, are dealing with the manufacturing or the services sector,
while only a few theoretical papers in economics are dedicated to agriculture or
primary sector activities.
The 1990s saw the emergence of the New Economic Geography (NEG). NEG is
mainly a ‘theoretical body of knowledge’ (Krugman, 1991b) – in the ‘new’ wave of
economic theories – that asserts that the world is divided between a certain number
of ‘centres’ and a huge number of ‘peripheral regions’ that surrounds these ‘centres’.According to the principles of NEG, it may be argued that the agricultural
activities represent a burden for the regions, once the NEG’s authors were able
to show, through the development and use of complex mathematical models,
that the development dynamics of regions, heavily dependent on agriculture or
agriculture-related activities –, even if we are talking about industries with the
same characteristics as agriculture – will push them to the peripheral condition of
less developed regions in contrast with any developed centre.
The present financial and economic crisis that is affecting most of the world
economies has increased the relevance of transaction costs as determinants of
economic development and, at the same time, has thrown into question economic
development patterns. We believe that this change will make the primary sector
a vital sector in future economic development of each country and in particular it
will be crucial in terms of the development of certain regions where these activities
are more predominant.
In accordance with this train of thought, in this chapter we try to explain a
different possible view of development. We propose that, under certain conditions
and armed with an adequate theoretical framework, it may be possible to see an
alternative path of development for regions dependent on agriculture.
This chapter is divided into four sections. Section 5.2. presents a brief overview
of the evolution of economic theories explaining growth and development. In
this section, we aim to show how the development of economics has led to the
emergence of the NEG body of knowledge.
Section 5.3. is dedicated, in particular, to the NEG’s ‘body of knowledge’.
We start by briefly presenting NEG theory and its principles. Knowledge about
the principles of NEG is very important in order to understand our view that the
conclusions of NEG about the agricultural sector are of limited relevance if we
take into consideration, first what should be the real importance of agriculture
for societies in the near future; and, second, the impacts of introducing strategy
(considered from the point of view of the individuals, the enterprises, the regions,
or the country as a whole) into our analysis of rural development. This job is done
in Section 5.4, where we analyse what we call the pitfalls of NEG concerning
agriculture and their consequences regarding the conclusions of rural development
theories. In Section 5.5, we explain the limitations of the present theories, and
present a possible new framework for economic analysis of agricultural and rural
regions that might leverage these new insights. To this end we propose the new
concept of Agricultural District.
Description
Keywords
New economic geography Corporate strategy Rural development European Union Agricultural district Transaction costs
Citation
Publisher
Ashgate Publishing Company