Presentation is loading. Please wait.

Presentation is loading. Please wait.

 “…an applied social science that deals with how producers, consumers and societies use scarce resources in the production, processing, marketing and.

Similar presentations


Presentation on theme: " “…an applied social science that deals with how producers, consumers and societies use scarce resources in the production, processing, marketing and."— Presentation transcript:

1

2  “…an applied social science that deals with how producers, consumers and societies use scarce resources in the production, processing, marketing and consumption of food and fiber products ”.

3  Here development means what happens over time  change, evolution, growth  it may be an improvement… or not.  We focus on what happens to the whole country  to the entire agricultural sector,  given overall economic development:  higher income, production and consumption  improved health and life expectancy  and many other changes…

4  A key change over time is that people get richer, so when we talk of “more” or “less” developed, what we usually mean is “richer” or “poorer”.  We will usually be descriptive, asking: › what happens over time,  as countries get richer? › what differs across countries  between rich & poor?  And sometimes we will be prescriptive, asking › what should be done,  to help people get what they want?

5  Development involves accumulation, that economists call “capital”: › physical capital (houses, roads, machines) › human capital (education, health) › institutional capital (“rules of the game”)  The accumulation of capital makes it more abundant and cheaper.  But accumulation doesn’t happen automatically.  To build up capital, people must save and invest from one year to the next.

6  Development also involves innovation, which economists call “technical change”: › new physical things (seeds, chemicals, etc.) › new ideas (crop rotations, etc.) › new institutions (futures markets, etc.)  Innovation makes it possible to produce more of what people want, from the resources they have.  But innovation doesn’t happen automatically.  To innovate, people must be able to change what they do.

7 Source: GW Norton and J Alwang, Introduction to Economics of Agricultural Development. New York: McGraw Hill, 1993.

8

9

10

11

12

13 YEARSSHARE OF AGRICULTURE (%)SHARE OF INDUSTRY (%)SHARE OF SERVICES (%) ,220,555, ,621,555, ,721,955, ,622, ,323,156, ,423, ,82556, ,224,957, ,325,156, ,625,957, ,325,957, ,126,557, ,826,557, ,526, ,326,658, ,427,757, ,758, ,728,159, ,427, ,427,958, ,127, ,728,557, ,729,356, ,629,957,5

14

15

16

17

18

19 Function 1: Provide food for humankind Malthus’ theory of the capacity of world to feed humankind: Geometric increase in human population vs. arithmetic increase in food poduction.

20  Function 2: Provide raw material for the industry  Function 3: Provide opportunity for rural lanscape  Function 4: Source for capital accumulation for development  Function 5: Source of labor for the industry

21  Inelastic income elasticity of demand for staple foods: as per capita income rises, declining proportion of household expenditure is devoted to food.  By Engel's law, as per-capita income rises, the proportion of income spent on food declines relative to other products.

22  As household demand for food declines in relation to other products, relative prices of foods decline, other things equal.  This in turn reduces returns to factors used in agricultural production, causing a net migration of labor and capital to other sectors.   Share of agriculturen declines over the economic development process..

23  Almost always, agriculture declines › In employment share › In share of GDP or GNP (national income) › In share of consumer expenditure  Do farmers get poorer?  Are there fewer farmers?

24  Policy is guiding principle leading to a course of action that is pursued by the government.  Policies and programs  Major forces for policy change: › Instability › Globalization › Technology › Food safety › Environmeny › Industrialization of agriculture › Politics › Unforseen events

25  A subset of public policy directed primarily but not exclusively at the farm and agribusiness sectors of society.

26  1. AGRICULTURAL INPUT MARKETS  USE OF LAND AND OTHER NATURAL RESOURCES  AGRICULTURAL CREDIT AND FINANCE  LABOR  INDUSTRIAL PRODUCTS  2. AGRICULTURAL OUTPUT MARKETS  PRODUCTION  CONSUMPTION  MARKETING  INTERNATIONAL TRADE

27 Read: Economic Importance of Economic Importance of Agriculture for Poverty Reduction Answer the following questions: 1. What is the role of agriculture in poverty reduction ? 2. What is the major research question in the paper? 3. What is the conclusion of the paper?


Download ppt " “…an applied social science that deals with how producers, consumers and societies use scarce resources in the production, processing, marketing and."

Similar presentations


Ads by Google