The macroeconomic linkage between the agricultural sector and industrial growth has been one of the most widely investigated in the development literature. In the early stages, researchers paid great attention in studying the relationship between the agricultural and industrial sectors, and how these sectors were inter-related. They argued that agriculture only plays a passive role; which is to be the most important source of resources (food, fiber, and raw material) for the development of industry and other nonagricultural sectors (Rosenstein-Rodan, 1943; Lewis, 1954; Ranis and Fei, 1961). Many of these analysts highlighted agriculture for its resource abundance, and its ability to transfer surpluses to the more important industrial sector (Subramaniam 2010: 26).

This paper reviews one chapter of a book, one article and one report. They are “Agriculture during Industrialization” in “The economic Development of Japan” by Ryoshin Minami (1986), “Trends in Agriculture-Industry Interlinkages in India: Pre and Post-Reform Scenario” by Dilip Saikia (2011) and “Joint ventures in agriculture: Lessons from land reform projects in South Africa” by Edward Lahiff, Nerhene Davis and Tshilili Manenzhe (2012). This paper first shows the analysis of their theoretical frameworks, and then how those articles define the linkages of agriculture and other sectors.

Economic development in Japan

Minami (1986:82-84) starts his analyze of the relationship between agriculture and industry in Japan by answering three questions. First, he looks at the agricultural growth rate before industrialization (Minami 1986: 82-83). He emphasizes that the beginning of stable growth in agriculture in Tokugawa Period (1603-1867) can be verified and continued to the Meiji period and that “agriculture before industrialization could hardly be described as stagnant” (Minami 1986:83). Second, he mentions about the agricultural productivity before industrialization (Minami 1986: 83-84). Third, it refers to the agricultural growth from 1886 to 1920, the early period of industrialization (Minami 1986: 84). He does not clearly answer the second and third questions, but what he wants to emphasize through answering those three questions is that “[a]griculture had expanded considerably before industrialization began and that growth continued into the early period of industrialization; this was the key to its success” (Minami 1986: 84). Minami (1986:89-99) continues to argue how agricultural surplus contributed to industrialization in Japan. Minami also mentions the role of government in terms of tax and expenditure on different sectors (1986: 97-98). The surplus of agriculture contributed well to the industrialization because the tax extracted from agricultural sector was spent to industrialization (ibid.).

He refers to three points of how agriculture contributed to industrialization (Minami 1986: 99).

First, it provided an abundant supply of foodstuffs. This prevented an increase in the relative price of agricultural products and the occurrence of a pattern of rising wages inducing reduced profits, and in turn leading to a falling growth rate. Second, its contribution to exports helped provide the necessary foreign currency. Third, the agricultural surplus was an important source of funds for the non-agricultural sector. These funds were transferred via two channels: farmers’ savings and taxes on farmers. The former do not seem to have been as great as has been believed in the past. (99)

Minami (1986) concludes this chapter by emphasizing that the agriculture-industry linkage was not one-sided at all (99). It is because “industry provided large amounts of increasingly cheap fertilizers and reduced the prices of agricultural machinery and implements” (Minami 1986: 9). From labour market perspective, industry “also drew more and more labour away from agriculture” (ibid.).

Agriculture-industry interlinkages in India

Saikia (2011) argues the growth of the economy in India through three sectors; agriculture, industry and service sectors. He says that the studies in India have done through only agriculture-industry linkages, and the services sector had been kept away from analysis, but since the three sectors are interrelated to each other in the real world, he claims the importance of considering about services sector (Saikia 2011:2-3). Saikia starts his argument with reexamining the agriculture-industry linkages. He says that “agriculture and industry being integral component of development process due to their mutual interdependence and symbiotic relationship, the contribution of agriculture to the economy in general and to industry in particular is well known in almost all the developing countries” (Saikia 2011: 4). It was also the same in Japan. Saikia also points out that the level of how much they depend on each other may change over time (Saikia 2011: 4). Then, he overviews the theoretical literatures of early writers, which mainly emphasized the importance of increase in agricultural productivity for modern economic growth from supply-side, or production linkages, and other literatures after mid-1970s, which argued that agriculture’s possibilities of creating sufficient demand to stimulate industrialization (Saikia 2011: 5-6), and he pointed out that those scholars have mostly looked at only one side of the agriculture-industry linkages, and that considering both sides was important since the supply-side and demand-side linkages both work together (Saikia 2011: 6).