47.

AGRICULTURAL ECONOMICS

Unit 1: Economic Theory

Nature and tools of economic analysis; theory of consumer behavior; production
theory; costs theory; theory of firm; price determination under different markets, price
discrimination, effect of taxation under different market conditions; welfare
economics; market failure; nature of macroeconomic analysis; national income;
consumption; saving and investment, employment, theory of business cycle, functions
and demand for money; inflation; income and interest determination; IS-LM functions;
general equilibrium analysis; monetary and fiscal policies, economic reforms.

Unit 2: Agricultural Development and Policy

Role of agriculture in economic development, economic growth and development;
present development challenges, theories of development; role of economic,
technological, social, political and environmental factors; Green GNP, nature, sources
and impact of technological change; agricultural development in Asia; poverty,
inequality and development; growth models – Harrod-Domar, Neo-Classical, Rostow’s
growth stages, Lewis-fei-Ranis model, induced innovation model, five-year plans and
agriculture, land reforms; theory of share tenancy; institutions and development;
agricultural growth analysis-determinants of agricultural growth and their
measurements; features of planning in capitalists, socialist and mixed economics; role
of infrastructure and technological change; agricultural policy analysis and reforms –
input and output price policy, rural and irrigation infrastructure; credit policy etc;
policies and programmes for development of agro-industry, dairy and fisheries; policy
options for sustainable agriculture development, measurement of poverty and
poverty alleviation programmes.

Unit 3: Natural Resource and Production Economics

Characteristics and classification of natural resources, sustainability issues in natural
resource, property rights, externalities, transaction costs ,need for collective
action, role of economics in natural resources accounting, planning, management
and policy formulation; social welfare function; allocation of renewable and non-
renewable resources (forests, fisheries, minerals water, land etc.) under various
market structure; valuation of non-market resources; government programmes for
conservation and development of natural resources; climate changes, mitigation
and policies, environmental regulations basic principles of farm management-
marginal returns, opportunity cost, input-output, output-output and input-input
relationships; time comparison and comparative advantage, cost principles, farm
efficiency measures and financial analysis, farm planning and budgeting, farm
records, measurement and management of risk and uncertainty in agriculture;
diversification and insurance in agriculture and allied sectors; forms and applications
of production functions – linear, quadratic, square root, spillman, cubic, semi-log,
Cobb-Douglas, constant elasticity of substitution (CES), variable elasticity of
substitution (VES), etc; dualities between production, cost and profit functions;
derivation of supply and factor demand functions from production and profit
functions, optimization of resource allocation, resource-use efficiency and returns to
scale, frontier production function; total factor productivity, decision making under
risk and uncertainties.
Unit 4: Agricultural Finance and Project Management
Importance of agricultural finance, objective, functions and principles of agricultural
finance, sources of capital acquisition; rural credit structure-demand, supply, credit-
gap; classification of agricultural credit – sources and forms; cost of credit/ capital;
credit appraisal-3Rs, 3 Cs and 7Ps of credit, estimation of credit requirement;
supervisory credit system, reforms in agricultural credit policy; financial system in
India-commercial banks, cooperatives. RRBs, micro-finance institutions (MFIs) global
financial institutions; innovations in agricultural financing-microfinance, Kisan credit
cards; e-banking, credit inclusion, definition and characteristics of projects; need for
project approach for agricultural development; SWOT analysis and project
identification, project life cycle, project feasibility-market technical, financial and
economic feasibility, social cost-benefit analysis; project risk analysis; project
scheduling and resource allocation; financial and economic appraisal/measures ,
choice of discount rate, - net present value (NPV), internal rate of return (IIR),
benefit-cost ratio (BCR); network analysis – PERT & CPM; fundamental of accounting
and book-keeping; analysis of financial statements-balance sheet, income statement
cash flow statement.

Unit 5: Agricultural Marketing and Price Analysis

Concepts of agricultural marketing; marketing functions-processing, transportation,
storage and ware housing; channels of marketing agricultural produce-price spread
and efficiency, structure, conduct and performance analysis; market integration;
marketing institutions-role and functions; government interventions including
administrated price policy; regulated markets, marker segmentation, supply chain
and value chain analysis in agril. commodities, buffer stock operations, price
stabilization measures and policies etc. price forecasting for crop area allocation,
marketing of agricultural inputs, role of private sector in input and output marketing;
forward trading and futures market e-NAM, commodity boards and contract farming;
marketed surplus models; competitive and comparative advantage in trade, trade
policies, models and agreements; regulations and reforms for marketing and trade,
WTO, SPS measures and competitiveness; ecological concerns and marketing ethics.

Unit 6: Operations Research and Research Methods

Objective, types and process of research; role and uses of quantitative technique in
business decision making; sampling techniques and sample size determination;
sampling and non-sampling errors; index numbers, hypothesis testing. ANOVA,
factor analysis, cluster analysis; measures of central tendency, measures of variation,
skewness and kurtosis; correlation and regression, discriminant and dummy variable
analysis; OLS, MLE estimation-assumptions and their violations, properties,
simultaneous equations systems: identification and estimation; Linear programming;
objective, assumptions, formulation of linear programming problem, simplex method;
primal and dual LP problems, role of business decision making models.