The over-all purpose of this study is to investigate the inter-relationships between the agricultural and nonagricultural sectors during the process of economic development, with some particular attention to the effects of food aid. The major portion of the study is devoted to a theoretical analysis of these intersectoral relationships. A five-sector, optimizing model of an underdeveloped, dual economy is formulated and extensively analyzed. The five sectors include subsistence or traditional agriculture, commercial agriculture, manufacturing goods production, capital goods production, and a government sector. Three products are produced: agricultural goods, which can only be consumed, manufacturing goods which can either be consumed or used as nondurable factors of production, and capital goods, which can only be used as durable factors of production.