Agricultural Economics

Examples of Agricultural Economics in the following topics:

• The Agricultural Market Landscape

  • The agricultural market landscape is the economic system that produces, distributes, and consumes agricultural products and services.
  • Agriculture, in many ways, has been the fundamental economic industry throughout history.
  • As population expanded dramatically over time (see ), so did the efficiency of agriculture economics.
  • Agricultural economics is defined as the economic system that produces, distributes, and consumes agricultural products and services.
  • The politics and economics of agriculture are also relevant issues on the global scale.

• Price Supports

  • Price supports are subsidies or price controls used by the government to artificially increase or decrease prices in the agriculture market.
  • This is an interesting economic factor in farm subsidies, as these subsidies are largely going to corporations of substantial size, as opposed to small farmers.
  • Agricultural economics is a highly complicated market as a result of these price supports and controls, particularly from the perspective of subsidization and price control.
  • This is the most relevant chart to agricultural economics specifically.
  • Assess the way in which price controls affect supply, demand, and equilibrium pricing in agricultural economics.

• Supply Reduction

  • Agricultural aggregate supply can be reduced through external capacity potential or governmental interventions.
  • Agricultural economics is largely bound by concepts of climate and overall world food producing capacity (i.e. farmlands and infrastructure), while simultaneously being enabled by government policy, technological advances, and the continued growth of developing nations.
  • Understanding the reductions in aggregate supply in this industry, as a result of governmental policy or economic limits, is a critical component in understanding agricultural economics.
  • Government policy has a large impact on the agriculture market.
  • Environmental concerns have also been widely cited as a reductive influence on the agriculture market.

• Subsidies and Income Supports

  • An agricultural subsidy is a government grant paid to incumbents in the industry to reduce costs and influence the supply of commodities.
  • This is generally in the form of subsidy and income supports, which alleviate some competitive dynamics and operating expenses to maintain reasonable price points in the market economically.
  • These subsidies play a large role in enabling higher supply at lower price points, supporting the domestic agricultural industry.
  • The International Food Policy Research Institute has estimated a total loss of economic growth in developing nations at $24 billion in 2003, all of which translate to lost income for individuals who desperately need it.
  • Analyze the positive and negative affects of subsidies on agricultural economics.

• Evaluating Policies

  • Agriculture requires a vast support system and a great deal of oversight, addressing industry threats and utilizing policy-based tools.
  • The purpose of this atom is to outline the various trends in agricultural economic policy, and how these governmental policies can be evaluated for efficacy in their respective markets.
  • Below is a list of core questions to keep in mind when evaluating agricultural policy:
  • Infrastructure: Transporting goods, irrigation facilities, land utilization, and a variety of other logistics concerns are required by the government to enable effective economic trade (domestically and internationally).
  • Technology: This is a critical driving force in increasing yield and lowering costs in the agriculture business.

• Agricultural Interest Groups

  • Agricultural interest groups are a type of economic interest group that represent farmers.
  • Economic interest groups are varied.
  • Categories of economic interest groups include those representing business, labor, professional, and agricultural interests.
  • Agricultural interest groups represent the economic interests of farmers.
  • By sourcing local foods these programs also provide direct economic benefits for local farmers.

• Commercial Farmers

  • New technologies rapidly transformed and commercialized the agricultural sector in the American South and West.
  • Prior to the Revolutionary War, agriculture created the livelihood for 90 percent of the population.
  • International markets were important for commercial agriculture, especially for cotton.
  • The commercialization of agriculture changed the economic base for the South and West.
  • The invention of the cotton gin revolutionized the cotton industry in the South and increased economic dependence on slave labor.

• Farm Policies and World Trade

  • Almost every agriculture-producing country provides some form of government support for farmers.
  • These policies helped shrink international markets for agricultural commodities, reduce international commodity prices, and increase surpluses of agricultural commodities in exporting countries.
  • From Americans' point of view, the European Community failed to follow through with its commitment to reduce agricultural subsidies.
  • Vice President Al Gore called again for deep cuts in agricultural subsidies and tariffs worldwide.
  • Meanwhile, efforts to move toward freer world agricultural trade faced an additional obstacle because exports slumped in the late 1990s.

• Market-Oriented Theories

  • The free market refers to a capitalist economic order in which prices are set based on competition.
  • For example, in countries with huge pools of unskilled agricultural laborers but limited agricultural land, agricultural land is very poorly compensated.
  • According to market-oriented theories, over time the low wages earned by agricultural laborers will induce more people to learn other skills, thus reducing the pool of agricultural laborers.
  • Thus, the status of agricultural laborers will rise, and inequality will be reduced.
  • Generally, market-oriented theories hold that when supply of labor and goods meets demand, the economic order will reach equilibrium, and inequality will either be non-existent or will be stable.

• Agricultural Initiatives and Recovery

  • Unlike urban areas, many of which witnessed fantastic growth in the 1920s, rural areas in the United States experienced economic crisis long before the onset of the Great Depression.
  • Because of the war effort, agricultural production and prices were record high.
  • However, in the aftermath of WWI, the agricultural sector began collapsing under the weight of its own success.
  • In the aftermath of this decision, the Agricultural Adjustment Act of 1938 followed.
  • Many small landowners and tenants, particularly sharecroppers, were forced to leave rural areas and seek employment in economically struggling cities.