Schultz's Theory of Traditional Agriculture
                     SCHULTZ'S 
THEORY OF 
TRADITIONAL 
AGRICULTURE
INTRODUCTION
The development of agriculture is important 
for over- all development of an economy. 
Therefore,  many  economists  have  
developed various  theories  suggesting ways 
and  means for development of agriculture in 
underdeveloped countries. In this regard, T.W 
Schultz has made a significant contribution
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TRANSFORMING  
TRADITIONAL  
AGRICULTURE
Schultz,  in  his  books  ‘Transforming  Traditional  
agriculture  which  was  published  in1964,  has  
suggested  various  ways   and  means   to   develop   
traditional   agriculture.  
In   his theory, he discusses some important aspects of 
the problem of transformation of traditional agriculture. 
 Schultz’s  theory  of  agricultural  transformation  can  
be  discussed  under   the following heads.
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TRADITIONAL 
AGRICULTURE
The  definition  of  traditional  agriculture  
given  by  Schultz  is  different  from  the  
definition given  by  other  economists. 
According to Schultz, traditional agriculture 
is  one which is static and non-dynamic. 
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ART OF 
CULTIVATION
Agriculture can be capital intensive as well as 
productive yet it can be traditional in 
character, if its art of cultivation is static and 
further development does not take place. In 
that sense, even the agriculture of developed 
countries like America can be traditional  if  
the  art  of  cultivation  does  not  change  and 
 become   stagnant.
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CAPITAL 
INTENSIVE 
AGRICULTURE
To   Schultz traditional agriculture is not  
necessarily a backward and labour intensive 
agriculture. He wanted that even capital 
intensive agriculture can assume traditional 
character in the long period and eventually 
arrive at the equilibrium where the art of 
cultivation comes to a halt that characterizes 
traditional agriculture. 
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CHARACTERISTICS 
OF TRADITIONAL 
AGRICULTURE
After defining the traditional agriculture in 
his own  ways, Schultz discusses the two 
important characteristics of traditional 
agriculture which are as follows:
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PERFECT 
ALLOCATION 
OF 
RESOURCES
According to Schultz,  there  is  perfect  
allocation  of resources in traditional 
agriculture. The static art of cultivation 
enables the farmers to know, by long 
experience, about the returns to various 
factors of production.
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NO ZERO  
VALUE  
LABOUR
Many  economists  have  argued  that  in   
traditional agriculture marginal productivity 
of labour is zero. However, Schultz is of the 
view that there is no zero value labour in 
traditional agriculture.
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SCHULTZ’S 
SUGGESTIONS 
FOR 
TRANSFORMING 
AGRICULTURE
Traditional  agriculture,  according   to 
Schultz,   is in  equilibrium  with  static  art  
of cultivation. The traditional agriculture 
can be transformed by introducing new 
factors which are more productive than the 
existing ones.
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THANK 
YOU