Economic aspects of low labour-income farming

Conflicting views on the relevance of economic theory, as developed in the West, to low-income peasant societies had been advanced ever since Boeke's time.

Recent literature pointed out that available economic theories did not seem to fit the behavioral motivation, assumed in economic logic. The value was. questioned of the tenet of profit-maximization and the usefulness of marginal analysis, especially with redundant labour and disguised unemployment in lowincome farming. The productivity of labour as a determinant of wage formation was emphasized. After a review of wage theories, a theoretical structure was presented of the border line of underemployment and its impact on the level of remuneration in low-income farming.

Relevant hypotheses were tested by multiple regression analysis, using the Cobb Douglas production function. Field studies were carried out among peasant farmers in Northern Nigeria and in Surinam. The indication was that labour's remuneration was in accordance with its productivity. Absorption of labour into the agricultural economy was shown to be crucial in developmental strategy. For each area of study such a strategy was designed with estimated production functions.