World food security is a concern in many contributions to this volume, some focused at the local level, and some at the national level. This concern incorporates the "people" dimension into discussion of problems usually framed in biophysical terms. However, I would note that many if not most of these presentations regard the essence of the food security problem as a matter of production. We learned long ago that famine and malnutrition are mainly results of poverty, rather than production shortfalls per se. In fact, Sen's famous analysis (1981) of the classic famines of China and India showed that during the most dire part of the famines, local food prices actually declined. Demand dropped under desperate circumstances, so that those with purchasing power could get food more cheaply — but most lacked purchasing power.
This observation in no way diminishes the importance of agricultural modernization and its contribution to alleviating poverty. However, it does provide an important perspective on how such modernization contributes to poverty alleviation. The contribution occurs through broad-based increases in consumers' real incomes rather than through an effect on producers as is commonly assumed. That becomes clear once one takes into consideration the general equilibrium effects of agricultural modernization (Schuh 1999).
Understanding the contribution of agricultural modernization to poverty alleviation in society directs increased attention to rural development. The modernization of agriculture makes it almost inevitable that much rural labor has to leave the agriculture sector if the per capita income of that labor is to keep pace with that in the nonfarm sector. That makes the exit of labor from agriculture a measure of policy success, assuming that such movement results from the "pull" of urban opportunity rather than the "push" of rural immis-eration.
Because gainful employment outside of agriculture typically entails migration to alternative employment at long distances, the labor market becomes very imperfect, with wide disparities in wages for quality-equivalent labor. One way of promoting mobility is to promote expansion of nonfarm employment in rural areas, which is understood by the term "rural development." Ironically, the natural process of selection of migration and most of the policy measures implemented to promote economic development operate on the opposite development. The process of migration is highly selective of human capital, and thus drains this most important resource from the part of the economy where it is much needed. Similarly, policy measures tend to concentrate on subsidies for the expansion of the nonfarm sector in urban areas. This has the effect of imposing negative externalities in both the supplying and receiving region.
Our consideration of how different measures can deal most effectively with the challenge of global warming to food security would have benefited from more serious consideration of rural development policies. No matter what is done about climate change itself, we need to design more effective institutional arrangements that will not just mobilize the agricultural surplus generated by agricultural modernization, but will use it to generate an expansion of nonfarm activities in rural areas.
Much of the discussion of agricultural modernization has appeared misguided, as it has focused on raising the productivity of land — for instance, this perspective underlaid the Green Revolution in Asia. However, raising the productivity of land may contribute little to raising labor productivity, and this is what is critical to increasing the per capita incomes of rural people.
Hayami and Ruttan (1985) made the important point long ago that the adoption of new technology follows the relative resource scarcity prevailing in the agricultural sector. In land-scarce Japan, the beginning of technological progress was built on technological innovations that enhanced land productivity, the most limiting factor. Conversely, in labor-scarce United States, the process was the opposite, with labor productivity-enhancing technological innovations emphasized in the beginning. Moreover, later when the conditions of resource scarcity reversed themselves, the processes of technological innovation reversed themselves in both countries. That analysis, supported by extensive empirical evidence, implies that the subproduction functions underlying the land and labor sides of the basic production functions are separable. What happens on one side of the production function is largely independent of the other.
The work of Hayami and Ruttan has provided important guidance to policymakers all around the world. It is sad that both policymakers and policy analysts have ignored this central part of their analysis. In Sub-Saharan Africa in particular, labor is the relatively scarce resource. Policy needs to be directed to raising labor productivity at this stage of economic development, not primarily to raising land productivity.
To conclude this section, I should underscore the need for greater emphasis on rural development and a more rational science and technology policy if the productivity and the per capita incomes of rural people are to be raised and their food security problem addressed. Increases in per capita income are critical to addressing the food security problem, as most of the poverty in the developing countries is found in rural areas.
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