Agri Chapter 1
Agri Chapter 1
Agri Chapter 1
1.1 INTRODUCTION
In this unit we will see the definition and scope of agricultural economics. Then after the
characteristics of agriculture in developing countries in general and Ethiopia in particular
will be discussed. The concept of farming system and the different types of farming
systems will also be explained.
1.2 THE SUBJECT MATTER OF AGRICULTURAL ECONOMICS
The subject matter of agricultural economics has both broadened and deepened in recent
years. The field originated early in the twentieth century with a focus on farm
management and commodity markets, but has since moved far into analysis of issues in
food, resources, international trade, and linkages between agriculture and the rest of the
economy. In the process agricultural economists have been pioneering users of
developments in economic theory and econometrics. Moreover, in the process of intense
focus on problems of economic science that are central to agriculture market expectations
behavior under uncertainty, multimarket relationships for both products and factors, the
economics of research and technology adoption, and public goods and property issues
associated with issues like nonpoint pollution and innovations in biotechnology
agricultural economists have developed methods of empirical investigation that have
been taken up in other fields.
Agricultural Economics VS General Economics
Economics is the science which studies human behavior as a relationship between ends
and scarce means which have alternative uses. A common theme in most definitions of
economics is scarcity and choice. Society must choose between competing uses when
resources are wanted for different productive activities, and must choose between
competing ends when products are desired by different individuals. The science of
economics is therefore concerned with the way society organizes the allocation of scarce
resources in order to satisfy alternative wants.
An agricultural activity is one in which mankind attempts to control groups of plants or
animals in order to fulfill certain human wants, mainly by producing food. This process
of control normally takes a form which we know as farming, but farming is often only the
start of a long sequence of productive operations. The agricultural economist retains an
interest in the process which leads ultimately to the satisfaction of a human want as long
as a major part of what is produced is derived from agricultural activity. In the case of
most food products, this means following the process through to the point of final
consumption. On the other hand, the agricultural economist would normally not retain an
interest in many non-food products beyond the point at which these products are
purchased as raw materials by manufacturing industry.
The discipline of agricultural economics adapts the principles of economics to the
problems of agriculture and people engaged in agriculture.
1.3 THE SPECIFIC FEATURE OF AGRICULTURE