| Abstract: | This paper uses national, regional and sub-regional time series and cross-sectional data to show that the direct statistical relationship between agricultural and industrial growth is weaker than would be expected. To explain the gap between theoretical expectations and empirical results, the roles of lagged responses, the terms of trade effect, wage-price movements, initial agricultural productivity, income distribution and some non-agricultural factors as determinants of industrial growth are assessed. Adequate agricultural growth is important for price stabilization policy and has direct welfare implications for poorer segments of the population. Further, an appropriate policy towards non-agricultural determinants of industrial growth is needed in order to maximize the impact of agricultural growth on industrial development. |
