Agricultural Transformation for Small (Island and Developing) States

Abstract

Agriculture in the development literature has been postulated as providing impetus for urban industrialization through its role in capital accumulation. While large states with concomitant large export potential of agricultural surpluses may subscribe to this paradigm and may also allow growth of a rural agricultural sector in parallel with an urban industrial sector, small states find it difficult to use the agriculture sector as a springboard toward national economic growth by virtue of size limitations. Small states require alternate capitalization modalities to grow their economies, and some have sidelined agriculture in favor of urban activities, such as manufacturing, finance, banking, and tourism. It is plausible, based on demonstrated successes like Singapore, that structural transformation may take a path in which the agriculture sector is initially sacrificed in favor of more high value urban activities. Since its independence in 1965, Singapore made policy decisions to focus on developing its non-agriculture sectors such as finance, banking, and entrepôt trade. In 1983, the country even reduced its agricultural activities to less than one percent of land area located in six agrotechnology parks. Capital accumulation through the non-agriculture sectors proceeded to consequently make its GDP per capita one of the highest in the world. However, the country did a “U-turn” in the 2010s to re-invest in agriculture, but through high-tech farming, such as indoor plant factories, indoor aquaculture, and alternative (novel) proteins. The increased level of food self-production is strongly augmented by importing food from over 170 countries in diverse geographic regions, so as to confer supply resilience. This alternate development pathway, which emphasizes urban industrialization, may serve as a “leapfrogging” model for small cities and small developing states in a contemporary, technology-enabled landscape.