A deficiency of capital poses a major constraint to development for LDCs. If foreign aid is limited, to embark upon its industrialization programme a State has little choice but to fall back upon agriculture to provide surplus and foreign exchange. Transformation of this surplus into foreign exchange implies that resources have to be reallocated from the cultivation of subsistence crops to that of export crops. However, this strategy leads to food shortages. Attempts at solving this problem have consisted of increasing food imports, which often resulted in the country not only having no surplus of foreign exchange left for industrialization, but also becoming heavily dependent on food imports. This is illustrated with the case of Egypt. The first part of the paper examines how the Egyptian State extracted a surplus from agriculture and earned foreign exchange by a systematic policy of promoting growth along a certain cropping pattern and forcing cultivators to produce export crops. In the second part it is shown how this cropping pattern was responsible for the food crisis in Egypt. Bibliogr., note, ref.
