C H A P T E R. 1. AGRICULTURE : ECONOMICS AND POLICY. Chapter Outline:. Agricultural Economics and its Scope. 1. 2. Why Agricultural Economics. Industrial Vs Agriculture Economics ?. 3. Agriculture Sector:. The agriculture sector has the following main areas: Crops Production
Agricultural Economics and its Scope
Why Agricultural Economics
Industrial Vs Agriculture Economics ?
The agriculture sector has the following main areas:
Fruits Production (Pomiculture)
Bees Keeping (Apiculture)
Agriculture Economics can also be defined as the knowledge and art of cultivating the soil of the land”
According to Goodwin, “Agriculture Economics is the study of the allocation of scarce resources among those competing and alternative uses found in the production, processing, distribution, and consumption of agricultural commodities.
The scope of agriculture economics is extended to the following:
1. Economics of Agriculture Production:
In agriculture economics we study about the agricultural Produce. In this respect we study the following:
Agriculture economics study the economics of land protection. We observe why the lands are pray to water-logging and salinity and that how they can be protected.
2. Problems of Agri. Sector and Remedial Measures:
In agriculture economics, we will study in detail the problems in the various areas of agriculture sector like why the per acre production of the crop is low; why the share of forest is declining; why fisheries is contributing low to GDP; what are the problems of livestock etc.
Moreover, we will suggest remedial measures for the various problems of the agriculture sector in order to increase the agriculture production to increase its contribution to GDP
3. Agricultural Credit:
In case of developing countries the peasants are mostly poor. They are in need of finance both for consumption and production, therefore, in agriculture economics we study agri. loans, their nature, their use, their need, their sources and their proper utilization etc.
4. Agricultural Marketing:
In agriculture economics, we study the kinds of markets, the prevailing methods of sale in agriculture markets, the functions of agri. Markets, problems of agricultural marketing, the standardization of agri. products and transportation of agri. products. Moreover, we also study the role of cooperatives and govt. to deal with the problems of agri. markets.
5. Demand, Supply and Prices of Agriculture Goods:
In agriculture economics, we analyze the demand for, supply of and prices of agri. goods. In other words, all the economic concepts of economic theory like demand, supply, price, elasticity of demand, elasticity of supply, price controls, support prices and subsidies are well applicable in case of agriculture economics.
In addition to these, we analyze the statistics regarding economic variables and trends concerning the production of crops, livestock, size of farms and volume of population etc as they influence the demand and supply of agri. goods etc.
6. Agricultural Policies and Programmes:
There exists a greater uncertainty in agri. sector as there are big fluctuations in the output and prices of agri. Products. This badly affects the poor peasants and small farmers. In such state of affairs govt. devise policies regarding farms. As the government set minimum procurement prices for agri. Products. The government purchase agricultural goods. The farmers are provided with subsidies. The seeds, fertilizer and water are provided at lower prices.
7. Tax on Farm Productivity:
Govt. is desirous of getting something from farmers in the form of taxes because the rise in prices of agri. goods had led to increase the incomes of the big farmers. Therefore the big farmers are required to pay some taxes. Thus, in agriculture economics we study agri. Taxes and their effects on farm productivity.
8. Agriculture and World Trade:
Food is basic requirement of human being but the climatic conditions of the world do not remain alike. Sometime there is drought while on the other occasions, there may be floods. In such like situation situations the agri. Sector in so many countries fails to meet the requirements of rising population. Accordingly, the food and other agri. Products are obtained from other countries. With this the foreign trade of agri. Goods come into being.
Now the question arises as to what are the determinants of world agri. Trade; how the international specialization of agri. Goods will come into being; and what will be the effects of such specialization. These like issues are discussed in agriculture economics.
9. Rural & Agricultural Development:
The last part of agriculture economics is concerned with the problems of life in the rural area and with the policies and steps that can help in the development of the rural area which will have a direct and positive effect on the agriculture development.
Agriculture sector is different than industrial sector in various ways. In the coming slides we will compare the agriculture and Industrial sector which lead us to the conclusion that agriculture economics should be studied as a separate discipline.
Moreover, now-a-days agriculture has attained the status of industry. As the agri. Product is produced at a large scale on the farms. The efficient farm managers manage the agri. Farms. They calculate revenues and costs. The marketing of agri. Produce is made. The store and warehouses are setup in agri. Farms. The agri. goods are produced on commercial basis.