The agricultural sector plays a vital role in the growth of many developed countries. In developing countries, agriculture helps the economy grow and prosper. The agricultural industry, particularly in New Zealand, is a major player in the country’s economy. It contributes around 5% ($10.6 billion) to its gross domestic product (GDP).
Farmers invest in agricultural machinery because it yields faster. Governments subsidize many components of what farmers need because they are aware of the important role that agriculture plays in the economy. Even in the U.S., where the main industries now are real estate and computer manufacturing, agriculture remains a strategic source of jobs and economic growth.
Domestic and Global Impact
The domestic economy benefits from the agricultural sector in many ways. Farming is an integral job in local economies. It creates jobs for the locals and opens up business opportunities for the farmers. Today, farmers can sell their produce directly on the market or by distributing it to big-time supermarket chains. They also open up their farmers to visitors and tourists who want to get a taste of the farm life.
Many farmers have also opened their own restaurants with a farm-to-table concept. This means bringing in produce directly from the farm to the restaurant’s kitchen and onto the guests’ tables. This concept is especially successful today when people are more health-conscious.
But it’s not only on the domestic economy that agriculture plays a vital role. Globally, the population is increasing. This means that in many developing and underdeveloped countries, food supply is a real problem. And where do governments look when there’s a shortage in the food supply? The western world will reap the rewards of increased exports.
Think of it like this: 95% of potential consumers live outside your country. You make up a tiny portion of the number of global consumers. The market for agricultural products is far and wide. The demand for agricultural products such as meat and dairy will continue to grow because of rapid consumerism.
Industrialization and Agriculture
Underdeveloped countries made the mistake in the past. They focused on industrialization and urbanization. Who would have thought that prioritizing industries over agriculture can hurt the economy? Today, governments have learned their lessons. Agriculture and industrialization are complementary. They should exist together.
Agriculture makes economic growth in developing nations possible. Among its many outputs are providing raw materials to industries, creating demands for goods in the non-agricultural sector, and opening job opportunities to uneducated and unskilled laborers. Experts believe that for a country’s economic development to be self-sufficient, it must begin with the agricultural sector.
The leading industrialized nations of today began as agricultural giants. They started building their economy by growing food products and exporting them. Take India as an example. As a developing country, 28% of India’s national income comes from agriculture.
Agriculture bends and adjusts to the needs of the society it serves. It is the most basic supply of food in all countries — underdeveloped, developing, and developed. If it fails, the whole economy will fail. Such is the critical role that agriculture plays in all levels of the global market.