Agriculture and transition: educating economists when markets matter icon

Agriculture and transition: educating economists when markets matter

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Lehman B. Fletcher

Professor of Economics Emeritus

Iowa State University

Ames, Iowa, USA


Transitions are profoundly transforming the economic systems of the former socialist countries: Privately owned enterprises dominate production in most industries. Farms are smaller, owned privately by individuals or groups, and operated by owners or corporate-type managers. Inputs are supplied by private firms and financed by private lenders. Farm products are sold to private buyers in markets, processed in privately-owned agribusiness enterprises, and distributed by private wholesalers and retailers. Governments have largely withdrawn from production and marketing to concentrate on policy-making, regulation and service provision. While neither complete nor replicative across the economies, these transitions are creating recognizable variants of a market capitalist system in the countries involved.

Agricultural higher education is also changing in order to better meet the needs for human capital in the new economies of the transition countries. The pressures for educational reforms are especially strong in the economics and management disciplines of the agricultural universities. These pressures concern the content of the education provided but also the fundamental objective of the education itself. The purpose of this discussion is to identify why reforms are needed, describe the reforms that are underway, and comment on directions for further reforms in the economics faculties.

^ Economics and Management Education in the Socialist Period

Agricultural higher education was extensive, well-developed and free in the socialist countries. Specialized agricultural universities and institutes trained graduates for specific jobs in the state-owned and operated production-distribution system. These educational units were often under the control of agricultural ministries rather then higher education authorities. Degree requirements were spelled out in great detail in terms of hours of instruction and approved by higher agricultural and educational officials. Students were admitted directly into a specific faculty and specialization, and a given cohort moved in lock-step through the prescribed program of study.

Most first-degree (specialist) programs required five years, after a full twelve years of primary/secondary schooling. Virtually all the training was delivered in the faculty in which students were admitted. Changing specializations was difficult and changing faculties was rare.

Graduates were given the jobs on which the degree programs and specializations were predicated. The graduates provided new managerial and technical staff for the collective/state farms and the state-owned agribusiness units.

Most graduates remained indefinitely in the career path dictated by their degree specialization. Economic returns to the higher education were positive but low due to relatively narrow earnings differentials across specializations, levels of responsibility and years of service. Job security and stability were high throughout the employment lifetimes of the graduates.

Higher degrees were also offered. The candidate degree followed the specialist degree. It was research-based, in the European tradition, and provided new staff for the university faculties, research institutes, and government units. Still higher degrees and academy membership were conferred in recognition of scientific achievements and scholarly publications.

The five-year specialist degree, following sound secondary preparation in basic sciences and mathematics, and coupled with the detailed curricular requirements, produced graduates that were highly trained for their intended career tracks. But the economics content was Marxian and highly ideological. It was weak on the nature and operation of market economies and did not emphasize development of creative problem-solving capacities of the students. The practical job preparation and skills focus of the education was intensified by the close supervision exercised by the agricultural ministries.

^ Directions and Dynamics of Reforms in

Economics/Management Degree Programs

Many of the agricultural universities were themselves reorganized in the early transition years: Some became autonomous while still publicly funded and needing external approval for internal changes. Others were integrated into the country’s higher education system and given a broader educational mandate. Most have faced budget pressures from reduced public funding and have looked to student fees, tuition and revenue-generating research and outreach programs for budget relief.

With political liberalization and international opening, the universities began to measure themselves by similar institutions in other countries, especially in Europe and the United States. They found not one but many models for comparisons. Some countries offered three-year programs for the first degree, the US model was a basic four-year baccalaureate, and most of Europe required five years for the first degree. In the later case, many countries considered the degree to be if not the equivalent of a US master’s degree at least more than the four-year US degree. Certainly five years of faculty-based, specialized education results in more narrow and intensive disciplinary training than the typical four-year US baccalaureate with its emphasis on general and liberal education as well as on a disciplinary major subject.

Adoption of standardized courses and credits were among the early reforms to make curricula and degree programs more comparable to the US/European models. But changes in actual course content and the nature of the education occurred much more slowly. After all, most of the new three and four credit courses had basically the same content, and were usually taught by the same professors, as the previous instructional units.

Another important issue was whether or not to shift to a basic four-year first degree. In some cases new four-year baccalaureate programs were designed but the five-year specialist degree programs were retained. In addition, some institutions added a master’s degree to the degree menu. This gave students maximum flexibility to choose four, five or six year degrees. However, there are some problems that arise from this array of degrees: In the longer term the market is unlikely to reward the choice of degree in proportion to the time required to complete it. In this case the four year degree is likely to become more attractive to students over time than the five-year degree. Also, it is very difficult to design a fifth year that is at the same time the terminal year for a five-year degree and the first year for a master’s degree.

Choices of these types in all of the agricultural universities need to be informed by a consensus on the fundamental objectives of the education. The first degree, whether of four or five years in duration, should concentrate on basic and general education to prepare graduates for life and work. In the new economies graduates will usually engage in a variety of jobs over their productive life spans. These may include jobs in sales, management, marketing, finance or other job categories in agricultural and agribusiness enterprises. Changing jobs several times will become the norm in the lives of many graduates. For this reason the education provided needs to become less job-specific.

While the majors may be in economics or management, the education does not produce high-level professionals: a first-degree economics major does not make a professional economist. Rather, good performance in the first-degree program should signal potential employers that the student has the intellectual and personal qualities, and academic preparation, to make him a successful and productive employee.

It can be expected that a more distinct demarcation will evolve between the first degree and higher-degree programs. Courses at the undergraduate level provide basic disciplinary knowledge and a foundation for further study but can’t replace graduate-level courses. This also implies more emphasis on formal courses in master’s and doctorate programs, which has not been the case for research-based higher degrees. The changing nature of higher-degree programs has advanced more rapidly in newly established programs, often organized in collaboration with a foreign partner university, than in the reforms of graduate degrees within the traditional agricultural universities.

^ Extending the Reforms

Most of the agricultural universities are offering, or will evolve, a first-degree program with a selection of specializations that give graduates access to jobs in the emerging market economies of the home country. These graduates will very likely enjoy less security and stability of employment during their working lives than did the graduates of the socialist period. They will also encounter larger earnings differentials reflecting personal qualities, work effort, productivity, overall and sectoral economic conditions, and luck. These graduates will be benefited more by broader general education, and emphasis on enhancing problem-solving and creative abilities, than by narrow job-related skill training. Understanding how the market economy works, and how to continuously upgrade technical capacity and access job-related knowledge, will serve graduates better then specific job skills. Many employers prefer to teach those job skills through firm-specific on-the-job training.

The reformed graduate programs (master’s and doctorates) will be the means to educate professionals for teaching, research, and public policy analysis. These programs should equip graduates to analyze a wide range of emerging issues concerning food and agriculture in modern, globalizing economies. These issues include monetary, fiscal and exchange-rate policies affecting agriculture; rural development and poverty alleviation; land and water resources and the environment; price and income levels, instability and risks; and competitive organization and firm behavior in agribusiness industries.

In terms of the content and orientation of the undergraduate and graduate degree programs, and the research by the newly trained professional economists, the agricultural universities of the transition countries have an opportunity to exercise leadership for the collaborating European/US institutions and especially for the developing countries. Analysis of the growth experience in the transition and developing countries is showing that institutions are the fundamental determinant of successful growth outcomes. While high growth can be correlated to economic variables (e.g., high investment) and to good policies (e.g., openness to trade), these proximate determinants of growth have been shown to succeed only when a country has an adequate institutional framework. This understanding leads to the conclusion that creation and improvement of institutions should precede privatization and reliance on decentralized decision-making in markets. In fact, this lesson is being rediscovered in relation to privatization, deregulation and environmental protection in the advanced economies. Some recent attempts to create new markets for products such as electricity, without taking full account of the nature of the product and the structure of the market, show what poor market outcomes can occur when market forces operate in an inadequate institutional framework. The transition countries have demonstrated the need to give priority to the institutions required to support, guide and regulate market processes, and their example offers crucial guidance to the developing countries.

Other reforms will change the way that the economics faculties relate to technical academic units in the agricultural universities. Rather than implementing the programs of study completely within the faculty, curricula will increasingly include courses offered by faculties in which the discipline is based. For example, rather than including a given number of hours to study biology or philosophy, or another subject of general education, the students will be sent to the other faculties to take standard courses offered in the faculty concerned. This pattern will increase efficiency in use of instructional resources across all the faculties of the institutions.

In relation to the change just discussed, economics and management faculties will experience an increase in demand for courses to be taken by students in technical fields. Many of the other faculties will recognize the importance of basic economic knowledge as an important element in the general education of their students. The students in other fields will increasingly recognize that their careers may lead them into management positions after working for a period in a technical specialization. This new demand can be met most effectively by offering standard courses open to students in any discipline, and having those course adopted in the curricula of the other faculties.

Concluding Comments

While faculty organization, curricula and degrees must be chosen by each university in light of its history, national role, and institutional circumstances, common pressures on the economics and management faculties of the agricultural universities are leading to similar trends in the transition countries. Some of these pressures and trends have been identified in this discussion. The emerging reforms are resulting in academic programs that will better equip graduates to contribute to, and benefit from, the new market economies and that will provide the professional economists needed for research, analysis and policy formulation in the new economic environments of the transition countries.


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