 Hi, welcome to video lecture 7. This is the first lecture of the third module agriculture land reform and rural livelihoods in the 21st century. This video lecture will talk about agriculture and rural livelihoods in the 21st century. Now the first thing we will talk about is the role of land and land reform. Now before we go into what land reform is let's just talk about how agricultural land is structured. Now you know that land in agricultural setting is used to produce food crops, cash crops, raise cattle and you know undertake other agricultural activities. Now land is obviously critical to the agrarian economy. The process of land reform talks about how the distribution of land happens. Whether land reform is a system whereby land is distributed amongst people so that there is no concentration, there's little concentration of land and so that most people have some form of land ownership in the rural areas. Now that process is called land reform whereby you distribute excess land from large landowners and give it to small owners, small farmers or landless peasants who own no land at all. Now Griffin Khan and Iqovets who are one of the leading thinkers on this subject have a very inspiring quote saying land reform is a many splendor thing. It has several advantages which this lecture will talk about. On the other hand, Mushta Khan says the argument for land reform is most persuasive when the proposed reform policy is not only improve distribution but also increase growth and efficiency. Since the market theory does not always work in the way economists look for different types of market failures to identify the causes and effects of the inefficient allocation of land. So basically Khan is analyzing the role of land reforms and increasing efficiency and economic growth and whether you know what kind of land ownership is better suited for high growth is the question that we are going to talk about. But before that what is the rural, how is the rural economy different from the urban economy? Lipton came up with this phrase called urban bias says the most important class conflict in poor countries of the world today is not between labour and capital nor is it between foreign and national interests it's between the rural classes and the urban classes. The rural sector contains most of the poverty and most of the low cost sources of potential advance but the urban sector contains most of the articulate-ness organization and power. So the urban classes have been able to win most of the rounds of the struggle with the countryside. So this is what Lipton has sort of in his thesis identified as the urban bias. One of the ways to think about the urban bias is this picture where I've picked up two countries named Montenegro and Mongolia in the left-hand side of the panel where you can see the rural poverty gap between 2006 and 2014 and you can see how the rural poverty for Mongolia for Montenegro is so much higher than the corresponding figure for Montenegro in terms of urban poverty gap. Mongolia is a different setting in terms of urban poverty and rural poverty and that's why I've put them here but in general what we see is that there is a higher rural poverty in most developing countries than there is urban poverty which is partly because most developing countries have large sections of their populations living in the rural areas but in general the poverty gap is higher in rural areas and this is what Lipton meant by the urban bias that policies and systems are more centered to cater to urban needs. But why is the rural economy important? It provides livelihoods to the bulk of workers. It generates food and cash crops which are necessary for industrialization and trade. It ensures cheap availability of food and labor for industry and it compensates for the slow growth of industry by absorbing labor. Now this process is going to be spelt out in a lot of detail during this presentation but a short intro is what I'll provide in this video lecture. Now the dual economy thesis of Arthur Lewis published in 1950. Again Arthur Lewis is a Nobel laureate in economics and he sort of gives a framework to analyze the rural economy in present-day developing countries and how it's different from the urban economy. So you can think of an economy of a developing country to consist of two sectors a small and relatively modern industrial sector and a large and traditional agricultural sector. And then Lewis says development involves a transfer of workers from the traditional agricultural sector to the modern sector. At early phases of development the traditional sector enjoys unlimited supplies of labor. Now what does he mean by unlimited supplies? What does he mean transferring workers from the traditional sector to the modern sector? What will happen to the traditional sector? How will the modern sector grow? What are the terms on which this transfer can take place as some of the most critical features of a rural economy? And these are questions that this presentation is going to deal with. Next this presentation is going to talk about institutions of land ownership, institutions of credit, institutions of labor and how they are different from your traditionally seen rich country experiences and land labor and credit. It will talk about specific forms of sharecropping, a fixed rent contract or a pure wage contract and say which labor settling arrangement is best suited for economic growth and what are the what are the deficiencies in each of these systems and more importantly why do these systems persist and have persisted over time. So for all those questions I would urge you to please go through the rest of this presentation and you know as always if you have any questions please let me know. So I will end this short video here. Thank you so much for listening.