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Agri - Ekonomista

1st Semester 2020 - 2021

INTRODUCTION
AGRICULTURAL
ECONOMICS
1st Semester 2020 - 2021
OUTLINE
Chapter 1: Lesson 1
i. Why is Agriculture Important
ii. The Agriculture Sector
iii. What is Agricultural Economics
iv. Basic Role of Agricultural Economics
v. Brief History of the Evolution of Agriculture
vi. Scarcity Problem: Land, Output, and Yields
vii. From Traditional Farming to Modern Farming

viii. Entities Involved in the Agriculture Sector

 U R E
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Y I S A N
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1st Semester 2020 - 2021

Why is Agriculture Important?
 It’s the source of our food supply
 Human necessity
 Crucial for survival
Why is Agriculture Important?
 It’s the main source of raw materials
 Inputs for production
 Supplies needs of the industrial sector
 Rubbe
Biodiesel r
Why is Agriculture Important?
 It provides employment
 Rural folk
 Agroprocessing sector
Why is Agriculture Important?
 It’s crucial to a country’s development
 important to international trade
 plays a big role in a nation’s revenue
 drives innovation in technology
 Grains
and
Legumes
Agriculture Models for various Economic Goals
 Role of technology in agricultural development
Why is Agriculture Important?
 The state of agriculture reflects our future
 Sustainable Agriculture
 Environmental sustainability in agriculture means good
stewardship of the natural systems and resources that farms
rely on
 Sustainable agriculture is a type of agriculture that
focuses on producing long-term crops and livestock while
having minimal effects on the environment. This type
of agriculture tries to find a good balance between the need
for food production and the preservation of the ecological
system within the environment.
 Triple bottom line frameworks include social and
environmental alongside a financial bottom line
 A sustainable future can be feasible if growth in
material consumption and population is slowed
down and if there is a drastic increase in the
efficiency of material and energy use
 To make that transition, long- and short-term
goals will need to be balanced
enhancing equity and quality of life
SUMMARY

A. It’s the source of our food supply

B. It’s the main source of raw
materials
C. It provides employment
D. It’s crucial to a country’s
development
E. The state of agriculture reflects
our future
The Agriculture Sector
 Agriculture, in many ways, has been
the fundamental economic industry
throughout history. The production
and exchange of food laid the
groundwork for all bartering,
making it likely to be the oldest
market in history.
Basic Role of Agricultural Economics

 Agricultural economics plays a

role in the economics of
development, for a continuous
level of farm surplus is one of
the wellsprings of technological
and commercial growth.
What is Agricultural Economics?

 Agricultural economics, is the

study of the allocation,
distribution, and utilization of
the resources used, along with the
commodities produced, by
farming
Brief History of the Evolution of Agriculture

The history of agriculture is complex, spanning back thousands of years across a

wide variety of different geographic regions, climates, cultures, and technological
approaches.
 
 The roots of agriculture are derived over 10,000 years ago, with tribes executing

forest gardening alongside the domestication of animals in the Fertile Crescent

region.

 The existing form of agricultural production before was subsistence farming.

 As population expanded dramatically over time (especially in the western world),

the population had began to feel the effect of the law of diminishing returns: that
under given conditions an increase in the amount of labour and capital applied to a
fixed amount of land results in a less-than-proportional increase in the output of
food.
Types of Subsistence Farming
 Primitive or Simple Subsistence Farming

 Peasant agriculture
Scarcity Problem: Land, Output, and Yields

 about one-tenth of the world’s land is arable

 arable land is defined as land planted to crops
 The Malthusian Trap theory predicted that as
population growth expands way ahead of
agricultural growth, there must be a stage at which
the food supply is inadequate for feeding the
population
 originally devised by Robert Malthus in An Essay on the Principle of
Population in 1798, arguing that food supply expansion is linear
whereas human growth is exponential.
From Traditional Farming to Modern Farming

Traditional agriculture
 methods of production have changed little over a long

period of time, production is largely determined by the

quality and quantity of land available and the number
of people working on the land.
Agriculture however evolved to address this concern
 early years of the 20th century, most of the world’s

increase in crop production came either from an

increase in land under cultivation or from an increase in
the amount of labor used per unit of land.
Evolution of Agriculture
 shift to crops that would yield more per unit of
land and required more labour for their cultivation.
 Staple crops
 Wheat, rye, and millet require less labor per unit of
land and per unit of food output
 rice, potatoes, or corn (maize), yield more food per
unit of land.
Evolution of Agriculture
 As agriculture becomes modernized, its
dependence upon land as well as upon human
labour decreases
 Animal power substituted for human labor
 mechanical power then replaces animal power
 The increased use of fertilizer, herbicides and
insecticides
 asmodernization occurs these also acted as a substitute for
both land and labor
Evolution of Agriculture
New developments in farming were devised and
practiced such as:
 Intensive Subsistence Farming

 characterized by high output per unit of land and

relatively low output per worker.
 double- or treble- cropping is practiced
 Crop rotation
 Use of machines can plough, plant and harvest the padi
Evolution of Agriculture
 Plantation Farming
 specialized commercial cultivation of cash crops on
estates or plantations
 export-oriented specialized farming method
 It involves not only cultivation of crop but also
processing, packaging, transporting
 profit is the sole objective
Evolution of Agriculture
 Green Revolution (aka Third Agricultural Revolution)
 research technology transfer initiatives occurring between
1950 and the late 1960s, that increased agricultural
production worldwide.
 chemical farm inputs such as new chemical fertilizers and
synthetic herbicides and pesticides.
 High-yield crops (HYVs) particularly cereals (dwarf wheat
and rice)
 multiple cropping
 controlled water-supply (usually involving irrigation)
 mechanization
Malthusian Trap Debunked!!!
 Not only did households were supplied
with enough produce to consume but the
surplus was huge enough to be traded
for other commodities which were
scarce or unavailable in each respective
locality
 Unprecedented societal progress and economic
development gave rise to a complex system of
entities and institutions that form what we know
now as the modern economy
 Economic activity has become highly specialized
wherein the consumption of a food commodity
goes through a series of stages and through
multiple hands before it reaches the final consumer
 Entities Involved in the Agriculture Sector

 Agricultural activity has also become complex

resulting to a web of individuals and/or groups
with various roles performed within the
system such as
t io n!!! s!!!
 Capitalists Spec i a l iz a
p e cific Ro l e
i p of
rm S e r sh
 laborers or farm workers Perfo tion of own
a
Separ s!!!
rce
 traders or middlemen resou
 regulatory agencies (usually the government)
Entities Involved in the Agriculture Sector
Brief history of agricultural systems modeling
https://doi.org/10.1016/j.agsy.2016.05.014
https://www.sciencedirect.com/science/article/pii/S0308521X16301585
From Simple to Complex
“The evolution of commodity and factor markets
is a reflection of changes in the production
structure. In turn, the growth of markets
influences the development of the structure of
production.
The study of agricultural markets over a period
of time, therefore, offers a means to
understanding the dynamics of the agrarian
structure.”
M. Ashoka
Main Agriculture Sub-sectors
 Crop Farming
 Fisheries and Aquaculture

 Forestry

 Livestock
More Information on the following videos:

 Agricultural Economics
 https://www.youtube.com/watch?v=fbOiwV3gBLg
 Importance of Agriculture
 https://www.youtube.com/watch?v=GKBMbuW0XFA
 https://www.youtube.com/watch?v=Hx6-m510hjU
 Agriculture and Sustainable Development
 https://www.youtube.com/watch?v=BVRsY7m8p7g
 https://www.youtube.com/watch?v=twGev010Zwc
 The Future of Agriculture
 https://www.youtube.com/watch?v=uAM4Si_WhDk
 https://www.youtube.com/watch?v=hWkYtZxpQUo