Population pressure has created five conditions necessary for structural transformation and these conditions are related to functions and scale. First, spatially and over time, increase in the number of child rich households led to the culture of efficient use of resources. Agriculture has qualitatively developed from a simply backyard and livestock activity into a standard of small holder subsistence activity. Secondly, relative factors of scarcity have created a capacity how to take advantage of the agro-ecological opportunities and this has diversified the land based economy into food and cash crop components. Third, as a consequence of diminishing returns to land and increase in labour surplus, the land based economy (subsistence) has changed into an employment based economy (self and hired wage employment). Fourth, population pressure has led to the integration of input and output markets and transformation and development of the rural market functions (manufacture, trade and service). Fifth, population pressure has scale effects (increasing producers and consumers). Without population pressure economic structural transformation takes long time (may be centuries depending on speed and size). In that case transformation is mainly a result of gradual institutional and market reforms rather than an outcome of population pressure incidence.
2009. , 34 p.