Economics of World Agriculture

L11112

Lecture 1
Agriculture in Economic Growth

Dr. Tim Lloyd

School of Economics
In study of economic development . . .

 agriculture a good place to start

 foundation of all economies

 “oldest profession”

 industry from which all others grow

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Agriculture in Economic Growth

 At dawn of development agriculture :

 Food (determines population)

 Employment
 Raw materials and final output
 technological change

 Agriculture is the economy

 Contributes to all aspects
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The Triangle of Population, Food Production
and Economic Growth

Economic
Growth

Food Production Population

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This triangle has implications . . .
 Food is wealth creation
 Food is income (consumption) and a . . .
 Store of wealth (cattle)

 Population governed by food availability

 More food faster population growth
 But are growing pops larger but equally poor?
 Relationship between food & population changes
 What triggers this change?
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What triggers change ?

Relationship between food production

and population . . .
. . . changes with economic growth

Economic growth in peasant economy

means rising food available per capita

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When food availability rising faster
than population . . .

 Emergence of ‘Marketable Surplus’

 Marks onset of economic growth

 Signals diversification of economy

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When food availability rising faster
than population . . .
 Workers released to other sectors

 Industrial output produces technology

improving agricultural productivity

 Process accelerates economic growth

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 As technology is adopted agriculture
becomes more productive

 Each acre of land, each worker

produces more

 Technology makes factors increasingly

productive

 Technology is the “engine of growth”

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However . . .
 Dawn of economic growth represents
the ‘zenith’ of agriculture

 In relative terms at least, agriculture

begins its decline

 Economic growth requires structural

change in economy (agriculture)

 Ironically, virtually all farm policy seeks

to maintain the status quo
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