Meaning, Scope and Facts of agricultural economics


Meaning, Scope and Facts of agricultural economics

Agricultural production economics is a branch of Agricultural Economics and therefore you need to know something about Agricultural Economics. Agricultural Economics is also a specialized branch of Agriculture Agriculture remains the economic heart of most developing countries.

In Africa, agriculture provides about two-thirds of employment, generates over one-third of the National Income and over half of export earnings. Given the large contribution of this sector to the overall economy, agricultural production can then be regarded as the key component of growth and development.

Read on: Definition, Scope, Nature of Agricultural Economics


Meaning of Agricultural Economics

Agricultural economics is regarded as an arm of general economics. Agricultural economics as an applied branch of general economics which deals with the allocation of scarce resources which include land, labour, capital and management among different types of crops, livestock and other enterprises to produce goods and services which satisfies human wants. They further stressed that agricultural economics also involves the study of the relationship between agriculture and the general economy, because all economic relationships are interdependent.

Similarly, Nweze (2002) defined agricultural economics as an applied branch of general economics that deals with the application of techniques and principles of economics to agricultural problems. In the application of economic techniques and principles, agricultural economists strive to increase efficiency of resource use in agriculture. Other definitions of agricultural economics by different authors also exist.

Reddy et al. (2009) defined agricultural economics as an applied field of economics in which the principles of choice are applied in the use of scarce resources such as land, labour, capital and management in farming and allied activities. It deals with the principles that help the farmer in the efficient use of land, labour, and capital. Its role is evident in offering practicable solutions in using scarce resources of the farmers for maximization of income.

In the opinion of Olayide and Heady (1982), Agricultural economics is an applied social science dealing with how humans choose to use technical knowledge and the scarce productive resources such as land, labour, capital and management to produce food and fibre and to distribute it for consumption to various members of the society over time. From these definitions of agricultural economics one can conclude that the field of agricultural economics involves the use of economic principles for the purpose of solving practical problems in agriculture.


Scope of Agricultural Economics

The scope of agricultural economics is as wide as the scope of economics itself, because there is hardly any aspect of economics that is not relevant to agriculture. There are wide areas of specialization in agricultural economics and these areas include: farm management, production economics, agribusiness, agricultural marketing, price analysis, resource development and land economics. Other areas include; Agricultural policy, agricultural fiancé, international agriculture, agricultural cooperatives, and project evaluation and planning.


Uses of Economics in Agriculture

Economics is very relevant in the field of agriculture. Some of the uses of economics in agriculture are highlighted below:

i. Economics helps in deciding the level of production that will be more profitable to the farmer. In order to achieve this goal, economist advice the farmer on what type of crop to grow or animal to rear and at what scale of operation.

ii. Economics will also assist in explaining the market situation for this product and the general distribution.

iii. Economics is very useful in the area of formulating agricultural policies as well as implementing agricultural policies and its interpretation.

iv. Economics also borders on financing of agricultural projects, formation of agricultural cooperatives and efficient management of the finance.

v. Other areas of usefulness of economics in agricultural production include: the study of availability of farm inputs and their costs. For example, farm land and the rent paid, type of capital and the interest rate etc.

vi. There are also study of farm organization and allocation of the resources to achieve the optimum level of production.

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