Role of agriculture in development. Role of Agriculture in Development 2019-02-08

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Role of Agriculture in Economic Development

role of agriculture in development

Thus agriculture can make significant contribution to economic development by earning foreign exchange required for importing industrial raw materials and capital goods required for expanding industries. The people are able to get the basic necessities of life such as a good sanitary system, clean water, electricity, provision of health and educational facilities etc. The rising agricultural surplus caused by increasing agricultural production and productivity tends to improve social welfare, particularly in rural areas. Countries with the greatest comparative advantage in a good produce that good and sell it to other countries. It has been found that agricultural growth has a good employment potential provided a proper strategy of agricultural growth is pursued.


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What Is the Role of Agriculture in Economic Development?

role of agriculture in development

The Green Revolution has had major social and ecological impacts, making it a popular topic of study among sociologists Weber, 1976. Citizens can expand away from merely acquiring necessities and look to fulfilling wants and interests, including exotic foods, imported fibers, and other agricultural products from around the world. The widespread diffusion of new high-yielding technology in the rural economy of India will raise agricultural productivity as well as employment. There are many other industries, which depend on agriculture in an indirect manner. A good crop also brings a good amount of finance to the Government for meeting its planned expenditure. Economic Planning Agriculture is the backbone of the Indian economy and prosperity of agriculture can also largely stand for the prosperity of the Indian economy. The fourth section discusses the two main determinants of agricultural growth-technology and crop diversification, and reflects on the policy options available to poor countries to induce agricultural growth without causing domestic upheavals.


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Role of Agriculture in the Economic Development of a Country

role of agriculture in development

The Green Revolution allowed food production to enable, or keep pace with worldwide population growth. A committee headed by late Dr K. Purchase of industrial products such as pesticides, farm machinery etc. This essay sheds some light on the economic logic that drives the process and on the important role that agricultural productivity plays in it. Thus development of agriculture sector is also relevant on political and social grounds.


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Role of Agriculture in Economic Development

role of agriculture in development

According to an estimate, about 66 per cent of our working population is engaged in agriculture at present in comparison to that of 2 to 3 per cent in U. Significant negative contemporaneous relations between the agricultural and non-agricultural development current effect imply that the competition effects dominate the short-term relation between agriculture and other sectors in many regions. Many people engage in manufacturing, mining as well as other non- agricultural sector as the nation develops. This helps fulfill the agreement of global leaders at the 2005 United Nations World Summit that greater investment in agricultural and rural development is crucial for achieving the Millennium Development Goals. Increase in agricultural productivity leads to increase in the income of rural population which is turn leads to more demand for industrial products, thus development of industrial sector. At that time it was assumed that the necessary economical drivers must be modern industries, since agriculture was perceived as a traditional sector. The second possibility of increasing capital formation through reduced agricultural prices is also not feasible in early stages of development.

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The Role of Agriculture in African Economic Development: What Do We Disagree on?

role of agriculture in development

Therefore, the role of agriculture for the development of an economy may be stated as below: 1. Agriculture sector provides more employment opportunities to the labor force that reduce the high rate of unemployment in developing countries caused by the fast growing population. Improving Rural Welfare: It is time that rural economy depends on agriculture and allied occupations in an underdeveloped country. A better understanding of the determinants of agricultural output — both in microeconomic and macroeconomic terms — is essential if agriculture is to play an active role as a supplier of resources. Larger production of food and export crops not only conserve and earn foreign exchange but also lead to the expansion of the other sectors of the economy. These rural units fulfill merely local demands. Thus, whether African countries should develop agro-processing as the first step of industrialization or not, actually depends on agricultural productivity.


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The Role of Agriculture in Economic Development

role of agriculture in development

Lower agricultural prices are good for industry as it would get cheaper food and raw material, which would lower its cost of production and raise its profitability. Therefore, the key issue for Ghana is not whether it should develop its industrial sector, but that it must determine the role of agriculture in such development. Contribution to National Income: The lessons drawn from the economic history of many advanced countries tell us that agricultural prosperity contributed considerably in fostering economic advancement. The market for manufactured goods is very small in an underdeveloped country where peasants, farm laborers and their families, comprising typically two-thirds or four-fifths of the population, are too poor to buy any factory goods in addition to whatever little they already buy. Through all this multiplier effects agriculture is perceived to an engine of economic growth and development. Create Effective Demand: 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.

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Role of Agriculture

role of agriculture in development

Efforts at diversification and commodity stabilization can be successful only if undertaken under viable international agreements. When it comes to agriculture in economic development, countries with unique natural resources benefit from offering the resulting to other countries and regions. Agricultural growth and development require investment and technology. The estimated relation between the leading variable t+1 of the agricultural change and current t+0 non-agricultural change lead effect is negative in many classes. As Ethiopia is insulated from global markets and dominated by agriculture and a large rural population, when agricultural growth raises the income of farmers they spend disproportionately on domestically produced non-agricultural goods and services. India became one of the world's most successful rice producers, and is now a major rice exporter, shipping nearly 4.


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The Role of Agriculture in Economic Development

role of agriculture in development

Creation of Infrastructure: The development of agriculture requires roads, market yards, storage, transportation railways, postal services and many others for an infrastructure creating demand for industrial products and the development of commercial sector. The size of agricultural sector in developing countries is quite large as around 60 per cent of their population is engaged in it and therefore it can release a significant amount of labour to be employed in the industrial and other non-farm sectors. In other words, where per capita real income is low, emphasis is being laid on agriculture and other primary industries. Agriculture plays a critical role in the entire life of a given economy. This has however implication for pricing of agricultural products relative to the industrial goods, that is, terms of trade between agriculture and industry. While traditional food processing - often small-scale and informal - has long existed in Ghana, the consumption of foods processed by formal manufacturing industries has rapidly increased, spurred by rising incomes, urbanization and concomitant increase in the opportunity cost of women's time Reardon, 2009. 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.

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Agriculture's Contribution to Rural Development

role of agriculture in development

Extension of Market for Industrial Output: As a result of agricultural progress, there will be extension of market for industrial products. For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Michael P. The independent evidence from the lag and lead variables probably deserves more weight. The experiences of Japan, South Korea, Taiwan and Indonesia are used to illustrate the problem and the different ways each country has evolved to solve it. Considering demand for most imported foods is highly income-elastic, such imports are expected to continue to rise in the absence of competitive domestic production. Country-level assessments are therefore necessary.

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