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Current Category » Introduction to Agriculture Economics

Agriculture Economics and Importance of Agriculture in National Economy

Agriculture Economics:

Application of principles of general economic to agriculture is called as agricultural economics.

Importance of agriculture in the National Economy:

Indian is an agricultural country, where 70 per cent population is dependent on agriculture. This forms the main source of income. The contribution of agriculture in the national income in India is more, hence, it is said that agriculture in India is a backbone of Indian Economy.
The importance of agriculture in the National Economy is explained by the following points.

1) Share of Agriculture in the national income:

   Year                         Contribution of agriculture in National Income
1950-51                                                         57%
1970-71                                                         43%
1930-31                                                         40%
1938-39                                                         33%

It is seen that agriculture contributes a major share in the national income of India.
Secondly, the share of agriculture in national income has been decreasing. At present the contribution is about 28%. This steady and gradual decline is due to the rapid Industrialization in the difference part of the country.
The contribution of agriculture in national income in case of some development countries are as follows. USA – 3% Canada 4% Australia 5%
This indicates that the role of agriculture in the national income in the developed countries is negligible. More developed a country, smaller is the contribution of agriculture in the national income and vice-versa.

2) Agriculture as a source of livelihood:

In India about 65 to 70 per cent population dependent on agriculture, the population remains almost constant for number of years. On the other hand in the developed countries less than 10 per population dependent on agriculture

3) Indian agriculture and pattern of employment:

 Year                           Percentage of working population in agriculture
1961                                                               69.5%
1981                                                               59.4%
While in U.K.                                                     23%
France                                                             7%

4) Importance of agriculture in Industrial development:

Many industries dependent on agriculture, raw material from agriculture is supplied to many industries e.g. sugar industries, Cotton Industries, Paper Industries, tobacco industries, Chilies, turmeric etc. Many industries supply the inputs to the agricultural industry e.g. fertilizers, insecticides, pesticides, implements and machineries like tractors etc.

5) Role of agriculture in the field of international trade:

Many agricultural products like tea, sugar, oilseeds, tobacco, spices contribute the major share in export. In addition to this, we are exporting fruits some vegetables and flowers to the other countries. Now days we are exporting basmati rice to foreign countries. The proportion of agri. goods is to the tune of 50%. In addition to this goods manufactured from agriculture products contribute 20 percent. Thus, agriculture contributes 70% in export.
In addition to the above the role played by agriculture in Indian is as under.

  • Many agriculture produce like food grains, fruits are transported by roadways and railways. Thus, it helps in employment of many people in this field.

  • If the agricultural production is good, cultivators will earn more income. They will be in position to purchase manufactured products and other inputs required in agriculture. In short, we can say that the prosperity of the country will depend upon the prosperity of agriculture.

Current Category » Introduction to Agriculture Economics