Agriculture vs industrialization

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Agriculture vs industrialization

Agriculture vs industrialization

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Agricultural vs Industrial Economic Development Different countries have different approaches to economic development; some focus on economic development through industrialisation while others focus on high-value agricultural production.

Several factors determine which model a country should focus on in order to foster economic growth.


However, to achieve growth in both urban and rural areas, it is necessary that growth-promoting strategies be emphasized in both models as development of the agricultural sector is a necessary precursor for industrialisation, and the development of the industrial sector may lead to agricultural development.

Without cohesion between the two sectors, there will be Agriculture vs industrialization to wholesome development and most likely an increase in dependence on external factors of production and inputs. Focusing solely on industrial development and neglecting the agricultural sector may lead to increasing income inequalities, particularly in countries with large rural sectors that depend on basic agrarianism.

As the overwhelming success of the Green Revolution in Asian countries has shown, an emphasis on rural agricultural development can prove to be an integral precondition for urban industrialisation while creating viable opportunities to increase the lives of the poor and promote overall economic development.

This paper aims to show the differences in an emphasis on agricultural development and industrialisation using examples from an Asian country.

Agriculture vs industrialization

It also aims to demonstrate that an emphasis on both sectors is necessary to achieve sufficient growth. In addition, it shall be posited that public sector intervention, capital market development, and land inequality are relevant factors to consider in the development of both sectors.

Because most of the citizens in a developing economy live in the rural areas and participate in agriculture, it has been proved that the development of this sector enhances economic development.

Agriculture vs industrialization emphasis on the agricultural sector leads to increases in income for the lowest percentile, while supplying food and other commodities for other domestic sectors and, if possible, the international economy. According to Ray Further, development of the non-agricultural sector can only thrive if agriculture produces more food than its producers need for their own consumption.

Without this cycle, there may be an unwelcome reliance on imports from other countries and a susceptibility to price, supply, and other exogenous shocks. As seen in the Green Revolution of several Asian economies, an emphasis on high value agriculture spurred economic development.

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With the backing of the government and numerous research institutions, the development of high yielding crop technology led to increased efficiency in the agricultural sector and consequently raised the economic well-being of not only the rural sector, but the entire economy. In the case of India, there was far-reaching government commitment to the rural areas and the technological advancement of the agricultural sector, while particular emphasis was placed on the research and development of genetically engineered, high yielding crops.

This political commitment entailed subsidized electricity, guarantees of minimum prices, incentives for farmers to adopt modern methods, public investment in roads and farming infrastructure, which resulted in greater market integration, as well as the availability of advanced technological inputs such as seeds and fertilizers Johnson This led to an overall dramatic increase in per capita agricultural production along with an overall reduction in agriculture expenditure due to efficiency gains Johnson These technological and efficiency increases resulted in an overhaul of the agricultural sector and led to productivity gains in high value agriculture such as dairy products, seafood, and meat, among others, that were mainly utilized to boost agricultural exports Johnson In addition, the improvements in supply chain-driven agricultural development along with the introduction of large-supply industrial-scale contract farming made available through foreign direct investment in agriculture led to increased employment and incomes for the poorest in the rural sector.

It also led to an overall increase in high value food exports and export income Maertens Therefore, the development of the agricultural sector will lead to reductions in income inequality and overall economic growth because the rural poor will be fully involved in the development process.

However, another constraint faced by the rural agricultural sector that may result in under-development and reductions in efficiency is the general lack of access to credit, a concept which is propagated by initial income, asset, and land inequalities.

The agricultural sector has largely been untargeted by private investors and lenders due to environmental risks, market risks such as logistic challenges, asymmetric information and lack of collateral, as well as underdeveloped credit markets in rural areas of developing countries Beck As a result, small farmers cannot buy land on mortgage and tenancy becomes the more suitable alternative.

It has been hypothesised that very unequal land distribution retards agricultural development in countries facing labour surplus and land constraints, while further restricting their access to credit for capital development due to lack of collateral Sabates-Wheeler It is therefore necessary for a government to intervene and attempt to correct this credit market failure in order to promote a productive agricultural sector.

As seen in the case of India, it is imperative for the government to intervene in the financial market by enabling farmers access to input through the availability of credit and insurance through private sector involvement, particularly from the banking sector, in order to lower transaction costs, increase productivity and, inevitably, boost output ratios Dorward Another important sector of the economy, the industrial sector, takes into account the modernized manufacturing urban sector of an economy that creates large scale goods and services through an emphasis on technological prowess.

As stated previously, it is necessary the development through the industrial sector is also emphasized as developing economies, in particular are largely sectoral.

Agriculture - Wikipedia

The rural-agricultural and the urban-industrial sectors are separated in terms of goals, relative incomes, and economic outcomes. The process of industrialization has become increasingly important within economies due to globalization and the high world-wide demand for modern products and services.

The development of industry globally has increased due to the liberalization of trade, available capital, efficient services, and technology flows. These have facilitated the integration of multi-national product systems, and have led to high economic growth and export competitiveness in developing countries United Nations Development Organization Globalization and cooperation between countries has encouraged development through the transfer of technology, resources, and expertise from major industrialized economies to developing economies.

In addition, they receive equipment and inputs, as well as reserve knowledge and technical expertise through copying, imitating, and professional interaction Szirmai Developing countries also benefit from intermediate capital inputs from developed countries, while the increase in global demand for manufactured goods enhanced export competitiveness, leading to the industrial growth of developing countries.

Most economists have posited that an economic focus on industrialization is the road toward economic development, given the past experiences of modernized economies during the Industrial Revolution, as well as the recent export-oriented growth of Asian economies.

Productivity is higher in the industrial sector than the agricultural sector due to technological advances.The Trans-Atlantic Slave Trade Database has information on almost 36, slaving voyages that forcibly embarked over 10 million Africans for transport to the Americas .

Import substitution industrialization (ISI) is a trade and economic policy which advocates replacing foreign imports with domestic production. ISI is based on the premise that a country should attempt to reduce its foreign dependency through the local production of industrialized products.

The term primarily refers to 20th-century development economics policies, although it has been advocated.

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1. The process by which traditionally nonindustrial sectors (such as agriculture, education, health) of an economy become increasingly similar to the manufacturing sector of the economy. Sustainable vs. Industrial Have you ever wondered exactly how sustainable agriculture is better than industrial?


The chart below is an easy reference that quickly and easily shows how sustainable farming is much more beneficial than industrial agriculture.. Health • Sustainable farms produce foods without excessive use of pesticides and other hazardous chemical inputs.

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The Industrial and Agricultural Revolutions