importance of agriculture economics

If the agricultural sector does not grow at a faster rate, it may result in the growing discontentment amongst the masses which is never healthy for the smooth running of democratic governments. Rural development has traditionally centred on the exploitation of land-intensive natural resources such as agriculture and forestry. Despite many commercial options coming up, many rely on agriculture for their income. This is already resulting in the slowdown of capital investment in the agricultural sector which would eventually trickle to naught and may trigger capital outflow from this sector. Some of the major role of agriculture in economic development of a country are as follows: Agricultural sector plays a strategic role in the process of economic development of a country. It is important to improve agriculture sector because it create job opportunities for its citizens. The need for rural communities to approach development from a wider perspective has created more focus on a broad range of development goals rather than merely creating incentive for agricultural or resource based businesses. Privacy Policy3. Agricultural Economics Food crises, commodity price booms and busts, environmental concerns and trade tensions are just some of the focuses of the analysis undertaken in agricultural economics. Disclaimer Copyright, Share Your Knowledge The living standard of rural masses rises and they start consuming nutritious diet including eggs, milk, ghee and fruits. Although international trade is important, local communities typically feel the effects of agriculture in economic development long before the effects become evident on a national scale. Bugs, rodents or molds can harm grains. 12. Inputs to agriculture production such as capital and labour will continue to be constrained in response to demand for these very same inputs by Malaysia’s fast expanding manufacturing sector. The NAP called for agricultural-industrial linkage through the expanded development of agro-based industries, mainly in processing, storage and handling of agri… Externally, the price of agriculture commodities will continue to be exposed to swings and shifts in demand due to the interplay of substitutionary and complementary products. Share Your PPT File, Land Reforms in our Country (5 Importance). Moreover, the sector continues to be the largest source of employment in the country. All work is written to order. Agricultural advancement is necessary for improving the supply of raw materials for the agro-based industries especially in developing countries. Agriculture was the primary source of the economy prior to the industrial revolution. There also important in especially in diversification to improve the economy activity in Malaysia. The contribution of agriculture in the national income in India is more, hence, it is said that agriculture in India is a backbone of Indian Economy. Employment Opportunities for Rural People: Agriculture provides employment opportunities for rural people on a large scale in underdeveloped and developing countries. Importance of agriculture is a vital part of agricultural science that is important for human existence; and at the same time, all aspect of it help in the economy sustenance of a country. In agricultural markets, the forces of supply and demand are at work. Raising supply of food by agricultural sector has, therefore, great importance for economic growth of a country. It has already made a significant contribution to the economic prosperity of advanced countries and its role in the economic development of less developed countries is of vital importance. A positive balance is known as a trade surplus if it consists of exporting more than is imported; a negative balance is referred to as a trade deficit or, informally, a trade gap. Agricultural economics - Agricultural economics - Land, output, and yields: Only a small fraction of the world’s land area—about one-tenth—may be considered arable, if arable land is defined as land planted to crops. It will impede the growth of the country’s economy. It should not be treated as authoritative or accurate when considering investments or other financial products. No plagiarism, guaranteed! In a country which is predominantly agricultural and overpopulated, there is greater inequality of income between the rural and urban areas of the country. (iv) labour in disguised unemployment, largely confined to agriculture, is viewed as a source of investible surplus. Agricultural economics concerns itself with the study of the production and consumption of food in both developed and developing countries along with analysis of the policies that shape the world’s largest … 12th Jul 2018 Due to this, large developing countries like India (having potentialities of industrial development) are trying to diversify their production structure and promote the exports of manufactured goods even though this requires the adoption of protective measures in the initial period of planning. The history of England is clear evidence that Agricultural Revolution preceded the Industrial Revolution there. Agriculture plays a critical role in the entire life of a given economy. Agriculture sector provides funds for capital formation in many ways as: (iii) collection of agricultural products at low prices by the government and selling it at higher prices. A critical assessment the contribution of agriculture sector in the growth of the Malaysin economy. But looking at the vast importance of agriculture, the sector is expected to contribute much more to the development of the economy. “Increase in agricultural production and the rise in the per-capita income of the rural community, together with the industrialisation and urbanisation, lead to an increased demand in industrial production”-Dr. (3) By providing investable surplus in the form of savings and taxes to be invested in non-agricultural sector. Agriculture is the backbone of the economic system of a given country. In this article, I have used Nigeria as the case study; but, the article can be related to every single country that value agriculture and its benefits. 14. Agriculture is the basic source of food supply of all the countries of the world—whether underdeveloped, developing or even developed. Evolution of Malaysian Agricultural Development. Share Your Word File Study for free with our range of university lectures! Importance of agricultural sector in a country’s economic development. It has already made a significant contribution to the economic prosperity of advanced countries and its role in the economic development of less developed countries is of vital importance. Welcome to EconomicsDiscussion.net! The sector contributed not only as a supplier of raw material to the resource based industries, but also in term of food production. Generally, landless workers and marginal farmers are engaged in non-agricultural jobs like handicrafts, furniture, textiles, leather, metal work, processing industries, and in other service sectors. Before publishing your Articles on this site, please read the following pages: 1. 8. Industrial commodities under Ministry of Primary Industries (KPU) provision is responsible in ensuring high quality production of pepper, palm oil, rubber, cocoa and wood and timber. In underdeveloped countries, it is well known that the majority of people depend upon agriculture and it is they who must be able to afford to consume the goods produced. Economic Planning . Importance of Agriculture in the National Economy It’s no secret that the agricultural sector is the backbone of almost all economies in the world. As a matter of fact, if the process of economic development is to be initiated and made self-sustaining, it must begin for agricultural sector. Therefore, the role of agriculture for the development of an economy may be stated as below: The lessons drawn from the economic history of many advanced countries tell us that agricultural prosperity contributed considerably in fostering economic advancement. Internally, the agriculture sector continues to face inefficiencies arising from structural defects such as land fragmentation, labour shortage and increasing cost of inputs. Importance of agriculture in the National Economy: Indian is an agricultural country, where 70 per cent population is dependent on agriculture. As a result, it helps to create proper atmosphere for general economic development of the economy. 2 stand for Income Elasticity of Demand for Agricultural Products. also provide boost to industrial dead out. The development of agricultural sector would tend to increase the purchasing power of agriculturists which will help the growth of the non-agricultural sector of the country. It is an important source of livelihood. The availability of adequate foreign exchange with which to pay for imports. Agriculture is an important sector to the country’s economic development. TOS4. The flour mills, rice shellers, oil & dal mills, bread, meat, milk products sugar factories, wineries, jute mills, textile mills and numerous other industries are based on agricultural products. According to Dr. Reference this. The remainder is either in forests or is not being used for agricultural purposes. It provides the basic ingredients mankind needs and the raw materials necessary for industrialization. (2) By creating demand for goods produced in non-agricultural sectors, by the rural people on the strength of the purchasing power, earned by them on selling the marketable surplus. It is the relationship between a nation’s imports and exports. It is seen that increased agricultural output and productivity tend to contribute substantially to an overall economic development of the country, it will be rational and appropriate to place greater emphasis on further development of the agricultural sector. The development of agricultural sector has minimized the burden of several developed countries who were facing the shortage of foreign capital. Economic importance of agriculture A n environment conducive to equitably shared economic growth is essential to reduc-ing poverty and enabling each and every person to have access to food. Agricultural economics, study of the allocation, distribution, and utilization of the resources used, along with the commodities produced, by farming. Copyright © 2003 - 2021 - UKEssays is a trading name of All Answers Ltd, a company registered in England and Wales. As a result of government intervention in price setting and distribution, structural defects have become institutionalized and resistant to change. Since the era of British colonial government, agriculture has assumed the important role of being the backbone and driving force behind the strength and success of the Malaysian economy. We've received widespread press coverage since 2003, Your UKEssays purchase is secure and we're rated 4.4/5 on reviews.co.uk. 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