Summary AGRICULTURAL ECONOMICS

Agriculture in Economic Development 5 – 37 2 Production Function 38 – 96 3 Balancing of Demand, Supply and Agricultural Prices 97 – 152 4 Agricultural Marketing 153-186 5 Production Productivity 187-259 MODULE I AGRICULTURE IN ECONOMIC DEVELOPMENT Introduction A study of economic principles, with emphasis on their application to the solution of farm, agribusiness, and agricultural industry problems in relationship to other sectors is known as Agricultural Economics. In other words, it applies principles of economics to issues of agricultural production, natural resources, and rural development. It mainly focuses on principles of microeconomics. Agricultural economics began in the 19th century as a way to apply economic principles and research methods to crop production and livestock management. The roots of the discipline, however, can be found in the writings of the classical economists like Adam Smith. The word, agriculture comes from the Latin word ager, referring to the soil and cultura, to its cultivation. Agriculture, in its widest sense can be defined as the cultivation and /or production of crop plants or livestock products. It is synonymous with farming: the field or field –dependent production of food, fodder and industrial organic materials. Having known the meaning of agriculture, let us know what economics is. Economics is the science that studies as to how people choose to use scarce productive resources to produce various goods and to distribute these goods to School of Distance Education 6 various members of society for their consumption. Now having defined agriculture and economics, we look into the field of agricultural economics. As a separate discipline, agricultural economics started only in the beginning of 20th century when economic issues pertaining to agriculture aroused interest at several educational institutes. The depression of 1890s that wrecked havoc in agriculture at many places forced organized farmers groups to take keen interest in farm management problems. The study and teaching of agricultural economics was started at Harvard University (USA) in 1903 by Professor Thomas Nixon Carver. Agricultural economics may be defined as the application of principles and methods of economics to study the problems of agriculture to get maximum output and profits from the use of resources that are limited for the well being of the society in general and farming industry in particular. Definition Agricultural economics is 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. Prof. Gray has defined agricultural economics as “The science in which the principles and methods of economics are applied to the special conditions of agricultural industry” According to Prof.Hibbard, “Agricultural economics is the study of relationships arising from the wealth-getting and wealth-using activity of man in agriculture”