Growth, specialization, and organization of world agriculture

Introduction Agriculture has been the main source of livelihood for the overwhelming majority of the world’s population for thousands of years, from the first production of crops some 8,000 years ago to the start of worldwide industrialization in the nineteenth century. At the dawn of agricultural civilization, farms were self-sufficient production and consumption units, but the development of cities changed all that. Indeed, cities could not have developed without the commercialization of agriculture. They depended for their survival on a growing inflow of food and agricultural raw materials, and on the farmers’ willingness to take manufactures in exchange. This exchange was made possible by the development of markets for agricultural products and credit, which, in turn, required the development of institutions to provide capital to farmers. It also required property rights which were secure enough to encourage farm investment. However, many cities did not trust the invisible hand to supply their needs and thus replaced it with market regulation, backed by political control of the countryside. In short, “capitalist” institutions and market intervention predated the industrial revolution. But the joint effect of the sixfold increase in the world population from 1800 to 2000, rising per capita incomes, and urbanization, all served to present a huge challenge for agriculture.