Outline the theoretical background to the New Agricultural Strategy.

The theoretical background of the new strategy is to be traced to the Chicago School Thesis, which stated that ‘farmers are everywhere capable of producing the right things in the right amounts at low costs if they receive the proper economic signals. The crux of this thesis is that farmers are efficient and economically rational. They are profit maximisers, can allocate resources efficiently and respond to market signals appropriately.

A lucid explanation of this thesis, in the context of traditional agriculture, was provided by the Chicago economist, T.W. Schultz in a seminal book published in 1964. Citing various pieces of empirical evidence, Schultz argued that farmers in traditional agriculture allocate _____ ______ ____ _______ _______ _____ ____ ______ _______ ________.
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