How Agriculture Contributes to Economic Development

Agriculture has always played a pivotal role in shaping the economy of countries. Since it fulfills the basic necessities of the people, all nations across the globe make special provision to improve the productivity. Even the ancient civilization has given it due importance. The agriculture sector not only provides food but also a means of employment to millions. It contributes to resolving sociopolitical issues and building a civilized society. Countries where the real capital income is less, more emphasis is given on developing the agricultural sector and its related industries since it can become the driving force to boost the economy. Whether under developing or developed, agriculture is still the basic occupation of the world.

Role of Agriculture

Prior to the advent of currency in the world, the neanderthal population was dependent on the barter system for the exchange of commodities between two communities. With the discovery of agriculture, the hunter-gatherer community found a source for food, settling down at one place, and reduce hunting. The agricultural revolution changed the way the farming sector would impact the overall economy of a country.

The agricultural development assisted greatly for industrialization in countries like U.S. and Japan as evident from the significant progress made by them. As a result, it became clear to the underdeveloped and developing countries that instead of putting limitations on a particular sector, the industrial and agricultural industries must co-exist for contributing to the development of the nation. The agricultural industry plays a big role in driving an economy being a major source of raw materials. It not increases the employment ratio, but also strengthens the purchasing power of the people. This sector can also help individuals for playing an instrumental role in country's foreign exports, and providing job opportunities for all types of skills.

Ways in Which Agriculture Boosts a Country's Economy

Whether it is a developed country or a developing one, agriculture forms an important sector in improving GDP, which is important to determine the economic performance of a nation For the industries which are agro-based, it is the backbone of their products as major raw materials are obtained from the farm. The agricultural industry plays a significant role in boosting the national income in various ways such as:

• Improving employment ratio

The agriculture sector and livestock industry are interlinked. Together, they create ample job opportunities for the population. While the agriculture sector employs people for agricultural production, the livestock industry does it for producing and selling animal products. Since both these industries need to function through a chain of ancillary support such as warehouse and logistics, it helps in generating employment for the people. For those who love to have their own business, they can also work as a mediator between the local farmers and industry wholesale dealers.

• Promotes infrastructure creation

When the focus is shifted towards development of agriculture, naturally, it boosts the small-scale industries situated in the vicinity of that area. As it involves a lot of operations, it would eventually mean the development of roads, storehouses, packaging units, and transportation services thus adding to the development of new infrastructure.

• Helps to supply raw materials

Agriculture helps to produce raw materials that are required by other industries. Processing of these raw materials helps in manufacturing products for several uses. If the supply of materials is not as per the demand, then it can affect the entire supply chain thereby impacting the economy, and can cause hindrances in the growth of a country. As a result, the nation's economic turnover might take a hit thus adding to more expenses for the people.

• Generates a source of foreign exchange for the country

Most of the primary products that are required in industries are obtained from the agricultural sector. For instance, the refined quality cotton dresses which you purchase from the mall get their basic material from the farm. When the raw material is available in abundance, the country can become a primary exporter of the products and generate a good income. As the international market is very dynamic and since the price of raw material is constantly fluctuating, the developing countries have now started focusing on the export of manufactured foods to increase the percentage of foreign income.

The agricultural sector can assist to contribute significantly in generating capital income for a country in many ways. For example, when there is a surplus demand for the raw materials, it will, in turn, lead to the production of more goods supporting industrialization and increasing employment.

Hence, when a country focuses on making advancements in the agricultural sector, it is, in turn, contributing to its own economic development by starting to address the problems at the root level. Giving significance to the issues at the base level can help to cut down the obstacles in the later stages, and also boost income for an economy.