Agriculture Economics

Agriculture Economics: It is that branch of economics which deals with problems of the farmer e.g; what to produce? How to produce? What should be sold? And how it should be sold? (professor Taylor) Or Agriculture economics is the application of economic law and values (to agriculture).

Scope of agriculture economics: the concepts of demand and supply, price, elasticity of demand, elasticity of supply, price controls, support prices, and subsidies are well applicable in case of agriculture economics. Statistical tools are, also, applied in agriculture economics

Scope of agriculture economics: Agriculture Credit Marketing of farm products Farm policies and programs International agriculture trade Economics of agriculture production

Economics of agriculture development: Three stages of agriculture development Stage 1: Subsistence Farming Stage 2: Mixed and Diversified farming Stage 3: Modern commercial farming

Subsistence Farming: Most of the output for family consumption few staple food Traditional tools and methods Land and labor only inputs, capital is minimal worry about inadequacy of rain labor fully employed during harvesting and planting seasons while free during most of the year

Subsistence Farming: Technological limitations, rigid social institutions, fragmented markets and reduced communication network between rural and urban centers is barrier to increased production Resistance to new techniques and innovation

Mixed and Diversified Farming: First step to commercialized farming Cash crops like vegetables, fruits, tea, coffee, cotton etc are grown apart from staple food agri. Labor are busy round the year Introductino of new techniques and technology Innovation and risk taking attitutdes

Modern Commercialized farming: Prevalent in advance industrial nations Profit is the motive of the farmers Farmers acquainted with scientific inventions, harvesters, modern fertilizers, cropping techniques, marketing trends etc Economies of scale at play Single crop is produced Capital-intensive technology is used MNCs start to take part in agriculture to reap profits

Strategies for agriculture and rural development: Improving small scale agriculture Institutional and pricing policies Research and development Micro finance schemes aimed at agri businesses Specialized training Knowledge exchange between advanced and subsistence economies

Role of Agriculture sector in economic development: Availability of food Increase in demand for industrial products Foreign exchange earnings Mobilization of capital Employment opportunities Higher standard of living of the rural class