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Agriculture is the backbone of the economic system of a given country. 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. “Thus industrial and agricultural developments are not alternatives but are complementary and are mutually supporting with respect to both inputs and outputs.”. Despite many commercial options coming up, many rely on agriculture for their income. If foreign capital is available with the ‘strings’ attached to it, it will create another significant problem. We're here to answer any questions you have about our services. Agriculture plays a critical role in the entire life of a given economy. Do you have a 2:1 degree or higher? Agricultural economics is a branch of applied economics that takes the tools of both micro and macroeconomics and uses them to solve problems in a specific area. According to Prof. Kinderberger, Todaro, Lewis and Nurkse etc., agriculture makes its contribution to economic development in several ways, viz.,: (1) By providing food and raw material to non-agricultural sectors of the economy. Less than one-fourth of the world’s land area is in permanent meadows and pastures. It is important to improve agriculture sector because it create job opportunities for its citizens. 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. The availability of adequate foreign exchange with which to pay for imports. For economic development, it is necessary to minimize political as well as social tensions. Agriculture is an important sector to the country’s economic development. The rising agricultural surplus caused by increasing agricultural production and productivity tends to improve social welfare, particularly in rural areas. These products contribute 60 to 70 per cent of their total export earning. Food production processes benefit from continual advancements in agricultural technologies and practices; in fact, a population now nearly twice as large has more food available per capita than 40 years ago. 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. According to the Food and Agriculture Organization of the United Nations or FAO. It play a role in diversifying and shielding the economy from external shock. In case the majority of the people have to be kindled with the hopes of prosperity, this can be attained with the help of agricultural progress. 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. Employment Opportunities for Rural People: Agriculture provides employment opportunities for rural people on a large scale in underdeveloped and developing countries. As development gains momentum, however, the relative importance of agriculture declines sharply while that of industry increases. All work is written to order. 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. Paddy farming continues to face chronic inefficiencies arising from the Government’s policy to continue guaranteed minimum price for paddy and structural defects. In the initial stages, the diversion of labour from agricultural to non-agricultural sector is more important from the point of view of economic development as it eases the burden of surplus labour force over the limited land. Looking for a flexible role? This website includes study notes, research papers, essays, articles and other allied information submitted by visitors like YOU. (2013, September 30). There is some of importance of economic in agricultural sector: Agricultural is consideration a vital to the economy of Malaysia. But looking at the vast importance of agriculture, the sector is expected to contribute much more to the development of the economy. Today, marketing, processing, distribution of agricultural products etc. Agriculture is the backbone of the Indian economy and prosperity of agriculture can also largely stand for the prosperity of the Indian economy. Mustapha. Bugs, rodents or molds can harm grains. Agricultural exports such as rubber, oil palm and cocoa are a major source of export earnings and have significantly contributed to the development of the agricultural sector and the economy as a whole. It provides the basic ingredients mankind needs and the raw materials necessary for industrialization. Between 1965 and 1980, agricultural output grew by 4.2% (World Bank, 1989). We've received widespread press coverage since 2003, Your UKEssays purchase is secure and we're rated 4.4/5 on reviews.co.uk. In U.S.A. and Japan, also agricultural development has helped to a greater extent in the process of their industrialisation. In the initial stages of economic development, it is agriculture that constitutes a significant source of capital formation. “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. 14. 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. The Second Malaysia Plan hoped to achieve greater reduction in poverty and increase the involvement of the Malays in the private sector by imposing certain restrictions on private firms that would benefit Malay employment and economic ownership. Agricultural advancement is necessary for improving the supply of raw materials for the agro-based industries especially in developing countries. Moreover, the sector continues to be the largest source of employment in the country. Agricultural produces after getting spread to the people of the country are also exported to other countries which are lacking in some products and turn, a considerable amount of income is also gained. It should not be treated as authoritative or accurate when considering investments or other financial products. Serdang. Thus development of agriculture sector is also relevant on political and social grounds. Free resources to assist you with your university studies! On another note, Ministry of Agriculture and Agro-based Industry (MOA) must oversee crop production, livestock and fisheries activities. There also important in especially in diversification to improve the economy activity in Malaysia. Of course, the claim that agriculture is the engine of economic growth is not based solely on the growth accounting arithmetic. For any economy, trading brings in a certain amount of revenue that adds to the prosperity of the nation. Importance of agricultural sector in a country’s economic development. In a country which is predominantly agricultural and overpopulated, there is greater inequality of income between the rural and urban areas of the 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. Similarly improvement in the productivity of cash crops may pave the way for the promotion of exchange economy which may help the growth of non-agricultural sector. Economic Planning . Increasingly tourism, niche manufacturers, and recreation have replaced resource extraction and agriculture as dominant economic drivers. 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. 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. are all accepted as a part of modern agriculture. Underdeveloped and developing countries need huge amount of capital for its economic development. The journal serves the IAAE by disseminating some of the most important research results and policy analyses in our discipline from around the world. The sector contributed not only as a supplier of raw material to the resource based industries, but also in term of food production. Company Registration No: 4964706. In the early stages, agriculture is of crucial importance as the employer of 50% to 75% of the labour force and also as the source of more than half of the GDP. Copyright © 2003 - 2021 - UKEssays is a trading name of All Answers Ltd, a company registered in England and Wales. The crop protection industry’s primary aim is to enable farmers to grow an abundant supply of food in a safe manner and prevent costs from increasing. 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. 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. Agriculture occupies a dominant position in the Malaysian economy. Agricultural sector plays a strategic role in the process of economic development of a country. The agricultural sector has contributed to the growth and major contributors to national income and export earnings. 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. The progress in agricultural sector provides surplus for increasing the exports of agricultural products. What remains a challenge however, and perhaps not surprisingly … From simple essay plans, through to full dissertations, you can guarantee we have a service perfectly matched to your needs. Even developed countries lay emphasis on agricultural development. Arshad et Al. 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 … Content Guidelines 2. These rural units fulfill merely local demands. Agriculture is known as the backbone of the developing countries. It accounted for … In most parts of the world, agriculture is an important source of livelihood. The development of agricultural sector has minimized the burden of several developed countries who were facing the shortage of foreign capital. This forms the main source of income. VAT Registration No: 842417633. One of the major thrusts of the Malaysian economic development since her Independence in 1957 has been and continues to be the rural development programmes. As a result of government intervention in price setting and distribution, structural defects have become institutionalized and resistant to change. also provide boost to industrial dead out. In the earlier stages of development, an increase in the exports earning is more desirable because of the greater strains on the foreign exchange situation needed for the financing of imports of basic and essential capital goods. Agricultural progress permits the shift of manpower from agricultural to non-agricultural sector. Note that, purely in terms of the arithmetic of growth accounting, agricultural sector growth will be a more important driver of overall growth in countries where its sector share is large. Bright Singh, “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.” In this way, agricultural sector helps promote economic growth by securing as a supplement to industrial sector. Below are the importances of agriculture: Source of Livelihood Study for free with our range of university lectures! It is an important source of livelihood. In agricultural markets, the forces of supply and demand are at work. Helpful in Phasing out Economic Depression: During depression, industrial production can be stopped or reduced but agricultural production continues as it produces basic necessities of life. 12th Jul 2018 The agricultural sector initially derived from increase production of livestock, fisheries and other miscellaneous crops. It is time that rural economy depends on agriculture and allied occupations in an underdeveloped country. In order to avoid directly hurting Chinese economic interests, the plan focused on huge economic growth, with the goal of expanding both the Malay and non-Malay shares of the economy in absolute terms, while increasing the Malay share in relative terms as well. 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. In India, still 28% of national income comes from this sector. 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. Registered office: Venture House, Cross Street, Arnold, Nottingham, Nottinghamshire, NG5 7PJ. Agriculture is also important for export purposes as well. It will provide a market for increased production. Initially, agriculture absorbs a large quantity of labour force. 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