However, primary goods face declining prices in international market and the prospects of increasing export earnings through them are limited. Agriculture and Poverty Alleviation: A majority of poor people live in rural areas. This political economy question is addressed in the third section, which also discusses the causes and consequences of the observed policy bias against agriculture. The agriculture sector also provides a large amount of raw material to the industrial sector. A more sophisticated analysis needs to be undertaken to uncover the causal relationships. That the farmers respond positively to incentive prices is also shown by the fact that the farmers in India and other developing countries adopted the green revolution technology i. Provision of Surplus: The progress in agricultural sector provides surplus for increasing the exports of agricultural products.
. The leaders committed to increasing support for agricultural development and trade capacity-building in the agricultural sector in developing countries. The rising agricultural surplus caused by increasing agricultural production and productivity tends to improve social welfare, particularly in rural areas. These are highly simplified findings from a very complex analysis, and it is hard to know what policy conclusions to draw. As a result, for many crops, of which the supply is also inelastic in the short-run, the growth rate of export earnings is held to a relatively low level and prices fluctuate. Ethiopia and Ghana were chosen to highlight the variation that exists across Africa.
The importance of this sector is more pronounced in developing countries, like Nigeria, where it is one of the main thrust of national development. I don't understand why they are doing this. With higher agricultural prices the farmers, according to this view, produce and supply less agricultural output. Agriculture ensures a constant food supply and food security for the population, this ensures that the work force fed with energy to supply labour to industries and other economic sectors. The main exported agricultural commodities are tea, oil cakes, fruits and vegetables, spices, tobacco, cotton, coffee, sugar, raw wool and vegetable oils.
Provider of Employment Agriculture provides employment and work to an overwhelming majority of the Indian masses. Indeed, with globalization, agriculture and manufacturing have become increasingly integrated and interdependent, suggesting that African manufacturing should be a mechanism to transform rather than replace agriculture. This comparison is further complicated by the discrepancies that exist between the shadow and market prices in the factor market. The empirical evidence now clearly shows that farmers respond positively to higher agricultural prices. Not only is agriculture a source of demand for various industrial products but it also supplies food and raw materials such as sugarcane, jute, cotton, oilseeds etc. New Doha Round commitments could put further constraints on subsidies provided by some U.
Based on Democratic Notions: If the agricultural sector does not grow at a faster rate, it may result in the growing discontentment amongst the masses which is never healthy for the smooth running of democratic governments. Finally, the book examines why India's industrial policy from Independence until very recently has stifled entrepreneurship and undermined technical change in industry. For economic development, it is necessary to minimize political as well as social tensions. Agriculture and Poverty Alleviation 6. Foreign exchange earner The agriculture sector the major source of foreign exchange earning in this country. In parts of Latin America and Asia, the bringing under cultivation of new land areas entails very large capital resources in infrastructure e. The basic problem thus is low investment-returns caused by the small size of the market.
The significance of India arises also from the fact that the development in agriculture is an essential condition for the development of the national economy. Raising supply of food by agricultural sector has, therefore, great importance for economic growth of a country. Moreover, the demand for such inputs as fertilizers, better tools, implements, tractors, irrigation facilities in the agricultural sector will lead to the greater expansion of the industrial sector. Although the share of agriculture has been declining gradually with the growth of other sectors but the share still remained very high as compared to that of the developed countries of the world. In the case of groundnuts, India stands first in the world, for rice production it ranks second and in the case of tobacco it occupies third rank in the world.
Through all this multiplier effects agriculture is perceived to an engine of economic growth and development. Does increased agricultural output and employment actually contribute to increases in non-agricultural output and employment? Thus, the release of surplus manpower from the agricultural sector is necessary for the progress of agricultural sector and for expanding the non-agricultural sector. It is a practice adopted for financing the excess expenditure with outside resources. In Japan a tax on agriculture was levied to mobilise savings for capital accumulation. National projections need to be aggregated and differences in planned global and regional output and demand reconciled, before a rational efficient production and trade pattern can be established. In Africa, land is still abundant and output can continue to increase through land expansion.
If exports of agricultural goods fail to increase at a sufficiently high rate, these countries are forced to incur heavy deficit in the balance of payments resulting in a serious foreign exchange problem. Of course, this doesn't mean that every country has to produce every good and make enough food to feed themselves completely. Besides, the means of transport and communication will expand when the agricultural surplus is to be transported to urban areas and manufactured goods to the rural areas. When increases in local agricultural production are used to meet demand in various locations, opportunities are created for the development of agriculture-related services such as transformation, storage and trade. The Government is getting a substantial income from rising land revenue. In the most developing countries the level of receipts from traditional exports — determined as it is by exogenous forces — is largely outside of the control of the country; large output and efficiency gains are often negated by perverse price effects. Source of Food Supply: Agriculture is the basic source of food supply of all the countries of the world—whether underdeveloped, developing or even developed.
As of result, the economy will reach a stationary state. 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 plays a crucial role in the economy of developing countries, and provides the main source of food, income and employment to their rural populations. The current or contemporaneous effect is more difficult to interpret because it incorporates all of the identified effects and additionally the spurious relation between agricultural and non-agricultural developments within a region, i. But as coercion is ruled out in democratic countries like India, the release of labour from agriculture for use in industrial sector can be achieved if there is rise in agricultural productively and therefore the increase in marketable surplus.