As a result of this, the economic gap between the rich and the poor shrinks. Nigeria is a country that is highly endowed with material and human resources. The increase in agricultural productivity and production causes increase in the home market for manufactured goods and services and thereby speeds up rate of economic development. The size of agricultural sector in developing countries is quite large as around 60 per cent of their population is engaged in it and therefore it can release a significant amount of labour to be employed in the industrial and other non-farm sectors. February 2014 Online at https://mpra.ub.uni-muenchen.de/55536/ MPRA Paper No. Chapter one consists of the introduction aspect of the project. It follows from above that rapidly growing agricultural sector is a precondition for rapid industrial growth. These are: 1.Product contribution i.e., making available food and raw materials. In the discussion of the role of agriculture in economic development, a leading questio n is how agriculture contributes to economi c growth, and especially to pro-poor growth. Because agriculture is a large part of most developing economies, both in terms of employment and share of GDP, agricultural economists have been at the forefront of empirical research on development economics, contributing to our understanding of agriculture's role in economic development, economic growth and structural transformation. For example, agriculture is the main support for India's transport system, since railways and roadways secure bulk of their business from the movement of goods. Perhaps the most prevalent approach in older, developed countries might be called the integrative view. Role of Agriculture in Economic Development. There seems to be a paradox in the role of agriculture in economic development. Since it fulfills the basic necessities of the people, all nations across the globe make special provision to improve the productivity. Importance of Agriculture in Nigeria Economic Development. A large proportion of the According to World Development Report of the year 1979, “a stagnant rural economy with low purchasing power holds back industrial growth in many developing countries.”. Thus whatever the development strategy a particular country adopts, the role of agriculture will often be crucial. The concepts of economic growth and economic development are often used in-terchangeably, and the distinction be-tween the two is very vague. Farmers in these developing countries have to produce food over and above their subsistence needs so as to provide necessary food to their urban population. The sector is plagued by evils such as underemployment, disguised unemployment and low productivity employment. Agriculture is seen as a more or less equal partner with industry and other sectors of society. Lower agricultural prices are good for industry as it would get cheaper food and raw material, which would lower its cost of production and raise its profitability. Agriculture plays a major role in economic development. Article shared by. The role of agriculture in economic development is discussed in the second part. The vision 20-20-20 program this country is currently pursuing is a major step to achieve this goal. Therefore, if agricultural growth is sluggish, these agro-based industries would not get their required supplies of raw materials. Welcome to EconomicsDiscussion.net! In villages, about seventy per cent of the people earn their livelihood from cultivation and allied agro-industries. The main reasons for the favourable result of ADLI strategy are that: (1) The strong domestic linkages of agriculture with manufacturing, through both the demand and the input sides, lead to high domestic demand multipliers for agricultural output; (2) Investment in agriculture is less import- intensive and more labour-intensive than investment in industry and so is agricultural production; (3) The rate of return to investment in agriculture is high, equal or be exceeding that of investment in industry. Since it fulfills the basic necessities of the people, all nations across the globe make special provision to improve the productivity. With higher agricultural prices the farmers, according to this view, produce and supply less agricultural output. However, there are few exceptions. Most of the developing countries depend on their own agriculture to provide food to be consumed by their population. It is here worth mentioning the concept of marketable surplus. between agriculture and the rest of the economy, which goes on changing along with economic growth, has been recognized as an important factor In the development process. But as coercion is ruled out in democratic countries like India, the release of labour from agriculture for use in industrial sector can be achieved if there is rise in agricultural productively and therefore the increase in marketable surplus. Six out of every ten persons in India depend upon agriculture. Since taxing agriculture is a State subject, no State has levied agricultural holding tax or agricultural income tax because no party can turn farmers who are voters against it. By doing so, agricultural productivity will be increased on the one hand and on the other, new industrial units would be set up with the use of surplus labour. Therefore, the role of agriculture for the development of an economy may be stated as below: 1. Development of banking sector: Agriculture has also contributed a great role toward the development of banking sector. According to Ragnar Nurkse, surplus population in agriculture should be removed and used in newly started industries and public works in rural areas. Agriculture plays a very vital role for economy of Pakistan and its development. India is primarily an agricultural country. Not only is agriculture a source of demand for various industrial products but it also supplies food and raw materials (such as sugarcane, jute, cotton, oilseeds etc.) Besides, various agro-based industries such as rice-husking, sugar manufacturing, oil-crushing, handloom weaving also depends on agriculture for the raw material supplies. “Agriculture is the of process of cultivation of land or soil for production purpose”. What is needed is the increase in capital investment for expansion of irrigation facilities and other infrastructure for agriculture so that farmers throughout India can draw benefits from the new high-yielding technology. So it is the main source of living or income of the major part of economy population. Agricultural economists emphasize the important role of the agricultural sector in economic development. Even the ancient civilization has given it … Introduction Those of us who preach the gospel of agriculture with evangelical zeal find the text compelling and convincing. The role that agriculture plays in society changes during the process of economic development. The importance of agriculture in the national economy can be best explained by considering the role of agriculture under the following heads. However, to realise the full employment potential of agricultural growth, reckless mechanisation of agriculture should be avoided. That the farmers respond positively to incentive prices is also shown by the fact that the farmers in India and other developing countries adopted the green revolution technology (i.e., use of HYV of seeds along with fertilizers and pesticides) when higher prices of food-grains were offered to them as incentives. Agricultural sector plays a strategic role in the process of economic development of a country. In the discussion of the role of agriculture in economic development, a leading question is how agriculture contributes to economic growth, and especially to pro-poor growth. Role of Agriculture in Economic Growth Development: Nigeria Perspective Yusuf, Sulaimon Aremu University of Lagos, Akoka, Lagos, Nigeria. If the increase in real national income is greater than the increase in population growth, the real per capita income would increase. However, with the expansion of branches of nationalised banks farmers are voluntarily depositing their savings in these banks, which the banks can lend for industrial growth of the country. Background: some facts In the discussion of the role of agriculture in economic development, a leading question is how agriculture contributes to economic growth, and especially to pro-poor growth. In the case of groundnuts, India stands first in the world, for rice production it ranks second and in the case of tobacco it occupies third rank in the world. Raj recommended ‘Agricultural Holding Tax’ to mobilise savings from agriculture for economic development. Iowa State University, Ph.D., 1970 Economics, agricultural University Microfilms, A XEROXCompany, Ann Arbor, Michigan THIS DISSERTATION HAS BEEN MICROFILMED EXACTLY AS RECEIVED Agriculture provides raw materials to the industries. It is also recognized that a favorable situation in terms of resources and planning expertise alone is not suffi­ cient to promote rapid economic development.^ If planning Ï There seems to be a paradox in the role of agriculture in economic development. Published in volume 92, issue 2, pages 160-164 of American Economic Review, May 2002 The data used were collected from the statistical bulletin of the Central Bank of Nigeria and World Bank’s development indicators, and covered the … Major source of Livelihood. World economic development has implications for every human being. Our mission is to provide an online platform to help students to discuss anything and everything about Economics. If the increase in real national income is greater than the increase in population growth, the real per capita income would increase. Contribution to National Income. The distribution of national income by industrial origin for the period 1950-51 to 1979-80 shows that the share of various agricultural commodities, animal husbandry and ancillary activities has always been more than 40 percent. The government can also extract savings from the farmers by taxing the agricultural sector. Thus, according to this viewpoint for raising agricultural production, agricultural prices should be kept at low levels. Besides, small farmers can deposit their small savings in banks operating in the rural areas and then these banks can provide loans to the industrialists for investment purposes. Share Your PDF File However, the empirical evidence shows that far from withdrawing surplus labour from agriculture, the modern industrial sector being highly capital-intensive generates very little employment opportunities which are not enough even to employ all the openly unemployed persons in the urban areas.