Role of Agriculture in the Economy
The agricultural sector plays a planned role in the procedure of economic development of a country. Agriculture plays an important role in rural development by way of employment creation, food production, and livelihood. It is the basic source of the food supply of all the countries of the world—whether underdeveloped, developing or even developed.
The agriculture sector is one of the primary sectors of an economy. It is the backbone of an economy that provides the basic ingredients to mankind and now raw material for industrialization. Agriculture also plays a significant role in making the village economy self-sustainable and independent. If agriculture fails to meet the rising demand for food products, it is found to influence harmfully the growth rate of the economy.
The shortage of agricultural goods has an impact on industrial production and a consequent increase in the general price level. Agricultural products are transported to markets, in turn providing employment in the transport sector. The flour mills, rice shellers, oil & dal mills, bread, meat, milk products sugar factories, wineries, jute mills, textile mills, and numerous other industries are based on agricultural products.
The contribution of agriculture in an economy is judged by the value of the total quantity of output in the Net National Product (NNP). While the products breach markets, small vegetable vendors, shop keepers purchase the products for direct selling, thereby generating tremendous employment opportunities. The countries with high agricultural growth rates have got the simultaneous experience of high growth in non-agricultural sectors. Needless to say that the agriculture sector employs skilled and unskilled laborers at all levels and in all allied sectors. Agriculture contributes to the building up of the foreign exchange reserve and its contribution is so significant that it may reverse the terms of trade as well as the balance of trade of any country in which it plays a vital role.
Agriculture has been a constant source of inputs for major industries in most of the developing countries. Agriculture plays a great role in the overall development of rural areas; though, it is not the only factor in which rural development depends. For economic development, it is necessary to minimize political as well as social tensions. Overall rural development includes development in agriculture along with other sectors, like development in education, health facilities, transportation, basic amenities like water and electricity, proper infrastructure, etc. Agriculture provides an expanding market for the products of the other sectors in the initial stages of development of the economy. There is no doubt that the development in terms of infrastructure, water and electricity will support the agriculture sector and hence the village economy.