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Agri Chap 1

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24 views8 pages

Agri Chap 1

lecture slide

Uploaded by

ኤደን Dagne
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Hawassa University

Department Of Economics

Economics Of Agriculture
By Hiwot D.A
CHAPTER ONE
1. Introduction
Definition And Scope Of Economics Of Agriculture
 Agriculture, is the cultivation and/or production of crops or
livestock products.
 Economics is the study of how societies choose scarce resources
(land, labor, capital and management)
 Agricultural economics is defined as a discipline that adopts the
principle and methods of economics to the problem of
agricultural production and people engaged in agriculture
activities.
It can also define as an applied science which is mainly concerned
with economic problems that are associated with farmers’ efforts to
make a living. (Production, Processing, Marketing, and Financing &
Consumption)
Economics of agriculture concerned with:
- The functional relationship between inputs and output
- The efficiency of resource use under risk and uncertainty
- The impact of technological change on productivity and profitability
- Factors influencing agricultural production, etc.
Evolution of the Subject Matter
The severity and length of the agricultural depression beginning in the
1880s caused increasing attention to be devoted to its causes and possible
solutions.
 Primarily agronomists and horticulturalists made the most notable
early efforts.
 The origin of the field, now known as Agricultural Economics reach
back in many directions and over a long period of time.
 The filed came from two separate sources: - from the physical sciences,
and later, from economic theorists.
Scope of Economics of Agriculture

It uses theoretical concepts of economics to provide answers to the


problems of agriculture or farmers. Such as:
 What to produce? –Selection of enterprises to be produced
 How to produce? – Choice of methods of production
 How much to produce?-decision about amount to be produced depend
on dd&ss
 For whom to produce? – concerned with distribution in order to secure
the largest net profit for him-self consistent with the best interest of the
society as a whole.
Specific feature of agricultural production

1.Production-related features of agricultural goods


 Seasonal production
 Small size of holding and Scattered Production
2. Marketing-related features of agricultural goods
 Perishable products
 Bulky products
 Quality and quantity variation
3. Consumption-related features of agricultural goods
 Continuous consumption
 Inelastic demand
 Price fluctuation
Main attributes of traditional agriculture

 Traditional agriculture is characterized by having very little


technicality and very low use of technology.
It use;
 Small production
 Indigenous knowledge
 Traditional tools
 Natural resources
 Organic fertilizers
Agricultural systems
1. Low external input agriculture (shifting cultivation, pastoralism, peasant
agriculture)

 is a type of agriculture that relies on low amounts of


external inputs such as synthetic fertilizers, pesticides,
and fossil fuels.
 This approach focuses on using local resources and
knowledge to promote sustainable farming practices
that improve soil health, conserve natural resources,
and increase biodiversity.
Advantages of Low External Input Agriculture (LEIA): Disadvantages of Low External Input
Agriculture (LEIA):
 Environmental sustainability
 Lower yields
 Improved soil health
 Higher labor requirements
 Lower carbon footprint
 Limited access to external inputs
 Reduced health risks
 Dependence on local resources
 Increased biodiversity
• 2. High external input agriculture ( i n d u s t r i a l a n d g r e e n r e v o l u t i o n )
T h i s type of agriculture that relies heavily on external inputs such as synthetic fertilizers,
pesticides, and fossil fuels.
This type of agriculture often focuses on maximizing yields and profits in the short-term,
without considering the long-term impacts on the environment or on the health and well-being
of farmers and consumers. Disadvantages of High
Advantages of High External External Input Agriculture
Input Agriculture  Environmental degradation
 High yields  Soil degradation
 Increased food production  Health risks
 Lower labor requirements  Contribution to climate change
 Lower food prices  Dependency on external inputs
Increase in Income and profit  Traditional varieties of seeds face
margin extinction

Productivity of land is increased

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