UNIT-I
AGRICULTURAL ECONOMICS
Agricultural economics is that branch of economics which deals with all aspects of problems related to agriculture. Agriculture is the principal component of primary sector, which focuses on production through exploitation of natural resources.
• Agriculture is the main and primary sector of economy.
• Use of technology is lesser in agriculture because most of the farmers are illiterate and unskilled.
• Availability of fertile land is very important in Agriculture while in industrial sector it’s not.
• Most of the Agricultural products are necessities whose demand cannot change even when their price increases. Hence price elasticity is lesser than utility.
• Mostly Agricultural products are perishable and are not possible to be stored for long duration.
• Countries with changing climates needs to focus on variation for better production.
• Includes Distribution, consumption, production and activities of govt. Related to Agriculture.
• Can analyzed on the basis of self-sufficiency, can reduce dependency on foreign goods and raw material.
• Wider concept than Economizing of resources.
• Various sectors of economy are interdependent on one another.
• Agriculture helps in providing raw material and labor force to industrial sector.
1) Termination of Intermediaries: Zamindari system, Ryotwari system and, Mahalwari system were terminated, to end the tyranny and exploitation of farmers.
2) Scrutinize on rent: Since IV FYP (five, year plan) rent on Agriculture product was abolished, this probably brought an end of illegal extortion of farmers.
3) Land consolidation: It means amalgamation of different scattered lands and make them efficient. Till 2004, about 1633 lakh hectare land was under consolidated hold.
4) Ceiling landholdings: State set a limit under which it distributed lands to farmers, with a view to promote social justice and equality.
5) Computerize land records: This scheme of computerization of land records was started in 1988-89. In about 582 districts this scheme has been successfully implemented.
1) Cooperative farming: It refers to farming practice where farming operation are done with cooperation of two or more farmers.
(Denmark: 100% of farmers belong to Cooperative farmer societies)
Features:
• Farmers can join voluntarily.
• Farmers Hold on their right to land.
• Farmers rent out their land, implements and livestock.
• It’s still in practice (India, Denmark, Russia, Netherland)
2) Capitalist farming: Those farming activities which are controlled by individual farmer or entrepreneurs, mostly these activities of farming are indirectly controlled.
(This type of farming activity is predominant in South America, North America and Europe)
3) Collective farming: When a group of farmers rent out their land, Agricultural implements and Domestic animals retaining as private property which are enough only for the member's own requirement.
(Model of this farming system was given by erstwhile Soviet Union (1991), named as kolkhoz.
Features:
• Boost Agricultural production for self-sufficiency.
• Promotes socialism
• Exception work is rewarded by state.
• Taxes are levied by states on hiring machinery.
• Yearly targets used to set up by govt. And production used to sell at fixed price to the govt.
• This system is not in practice. (It was dissolved in 1991)
Nature of Agricultural economics:
Following are the characteristics of Indian Agriculture:
These characteristics of Indian Agriculture lead to an important conclusion: Indian Agriculture is extremely backward, despite the fact that it is significant importance in Indian economy. Because a significant sector of the economy is extremely backward, Indian economy as a whole continues to grapple with backwardness, even when there is glimpse of growth through modernization.