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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