ABSTRACT
Absorptive capacity is a concept widely used in discussing development planning as a whole and the contribution of foreign aid in particular. All governments have recognized the need for intervention in sectors where the social return to capital is markedly higher than the commercial return, which is itself too low to attract private investment. Absolute increases in public revenue are dependent on economic growth itself, though improvements in tax administration may squeeze an extra margin from existing levels of national income. Structural change has been an evolutionary feature of agriculture dominated by the unique relationship of the industry to land as a factor in production. Optimizing the combination of enterprises by relating the available farm resources to market opportunities is a feature in the management of sophisticated production systems in advanced agriculture.
