Agriculture's importance economic progress Essay

Agriculture's importance economic progress - Essay Example Agriculture which is predominantly the base of systems of economy in most of the under developed countries is the primary occupation of rural people in those countries. It is primary because it supplies basic necessities of human life, provides basic inputs for industries and, in addition to these, purveys goods for exports and other purposes. â€Å". . . the rise in agricultural production . . . makes important contributions to general economic development and that, within considerable limits at least, it is one of the preconditions which must be established before a take off into self sustained economic growth becomes possible† (Nicholls, 1970). Earlier development economists like Arthur Lewis (1954), Hirschman (1958) and Fei and Ranis (1961) have identified and analyzed how agriculture contributes to the overall economic growth of a country (Higgins, 1982). They highlighted that the ‘unlimited labor supply’ in the agricultural sector of an underdeveloped countr y can be transformed to industrial sector and the ability of agriculture to transfer its abundant resources to other sectors actually lead the economic growth of any country. Contribution of agriculture in an economy is judged by the value of the total quantity of output in the Net National Product (NNP). A ratio between the output of agricultural sector and the output of non-agricultural sector or the proportion of the former in the NNP furnishes reasonable evidence not only of the nature of economy but also its stage of development. Simon Kuznets (1961) observes that â€Å"an increase in the net output of the agriculture is, in and of itself, sum of the increases in the net products of the several sectors† (61). So long as the rate of growth of the non-agricultural sector is higher than that of the agricultural sector, the proportional contribution of agriculture in the total product will decline. His model for assessing the product contributions to the NNP quite explicit a nd it is delineated as follows: dP=A.a+O.o Where, A= Product of Agriculture; O = Product of all other sectors; P= Total Proudct =(A+O); a=rate of growth of A ; o=Rate of Growth of O; d= change. The increment in the total product is the aggregate of products of sectarian outputs as multiplied by their respective rates of growth. Role of Agriculture in Economic Development- Traditional approach The traditional and earlier approaches proposed by development economists like Lewis, Fie and Ranis highlighted the important roles of agriculture sector in the economic development of any country (Vogel, 1994). A fast track development of this sector is crucial for other sectors as well. Only a strong and efficient agricultural sector can feed the growing population of a country, provide employment, play vital role in the foreign trade and earning of foreign exchange and give a strong base to the industries. Because of these multifaceted functions of agriculture, it has got a multiplier effect on any country’s socio-economic and industrial scenario. Thus according to the traditional analysis the role of the agricultural sector is confined to the source of food, source of livelihood, role in foreign trade, capital/savings transfers and its role in industrial development (Stringer, 2001). Source of Lively hood Most of the developing countries depend on agriculture and allied activities for their livelihood. Agriculture provides immense employment opportunities to the masses and this assumes much significance when the growing working force does not come out of the yoke. The figure may be varied from 10 percent to 60 percent in the contemporary scenario generally prevailing in the developing and underdeveloped countries across the globe (Stringer, 2001). Importance in the context of food security The character and content of a country’s economic structure alongside the potential for its further growth and development are largely dependent not only upon the quan tity but also upon the type of its output generated and distributed in the economy (FAO, 2001). For example, an