Agricultural Economics and Impacts

The study of agricultural economics encompasses all aspects of food production, from farm to table. Agricultural economists use economic principles to make decisions and formulate economic plans for agribusiness. They study the economics of basic management functions such as production, marketing, and break-even analysis. They also examine how market forces impact capital investment and other economic variables. They study institutional changes and emphasize market-type and incentive-based policy mechanisms. Agricultural economists study the impact of policy on agricultural production, trade, and consumption.

In recent decades, relatively little new land has been brought into agriculture, and even moderate land conversions have resulted in substantial biodiversity loss and impacts on the livelihoods of poor communities. While yields have improved in recent decades, most of the gains in production are attributable to improved production methods, not land expansion. In Europe, there is limited room for further agricultural expansion. In sub-Saharan Africa, some future land conversion could still be possible, but would come with substantial environmental costs, likely resulting in the further destruction of rainforest.

In recent decades, investment in agricultural research and innovation has decreased dramatically. As a result, countries have moved from public to private sectors, resulting in increased pressure to convert new land to agriculture. This inevitably results in greater restrictions on intellectual property rights, limiting the transfer of new technology to low-income countries. In addition, these policies tend to have a less focus on the needs of poor countries. This is a concern that will only compound the problems faced by small-scale farmers.

The study of agricultural economics has been largely instrumental in influencing agricultural policy. In the early twentieth century, agricultural economists focused on land use, crop yield, and soil ecosystem. With the emergence of globalization, agricultural economics expanded to encompass a range of applied areas, with much overlap with conventional economics. It has also made significant contributions to economics and econometrics. Its influence on food and agriculture policy is noteworthy.

Currently, food production is one of the most important competitors for land, energy, and freshwater. Moreover, food production is integral to global climate change and competition. To meet this challenge, our food system must be able to withstand a variety of shocks. The spike in global commodity prices in 2008 hinted at the importance of food policy in the coming decades. But there is also a long way to go before we reach the goal of doubling global production.

In recent decades, trade in food products has increased globally. The development of cheaper transportation, decreased trade barriers, and lowered agricultural tariffs have contributed to globalization. While developing countries historically exploited their agricultural sectors, these subsidies are now declining. The population of the developed world will reach 9 billion in 2030, and that of the developing world will double by 2020. But there will be no global surplus if we don’t address the issues of globalization.

Sustainability In Agriculture

The three components of agricultural sustainability have different levels of significance. The economic component refers to the ability to provide goods and services with values exceeding the cost of production. These factors are easily quantified. The social component, on the other hand, relates to the capacity to meet the expectations of society. These expectations include food security, community health, rural vitality, and gender equity. As a result, agricultural sustainability is important for a just society.

The public sector has a role to play in agriculture sustainability. In addition to regulating agriculture and promoting environmental protection, public institutions must work with civil sector groups to promote sustainable agriculture practices. The public sector must provide access to science and technology while simultaneously fostering an ecosystem-based approach. It is important to consider the inter-relationships of these three sectors. Agribusinesses and farmers’ groups are two of the most important actors in agricultural sustainability.

Public sector controls over food and environmental quality have provided reasonable checks. However, centralized controls can have undesirable social, political, and environmental consequences. As such, public sector institutions can only make modest technological contributions in poultry, cereal processing, and hog production. However, they have the power to influence the commercial marketplace through financial policy. For example, in Brazil, soybean farming is an excellent example of intensification. This process produces a higher yield on fewer acres.

Modern agriculture relies heavily on nonrenewable resources. One of the most prominent examples of this is petroleum. It would be a major economic catastrophe to abruptly abandon such sources of energy. To combat this situation, sustainable agriculture reduces the amount of external energy input by substituting renewable energy sources. This could include solar power, wind power, and agricultural waste. Increasingly, farmers are using biofuels produced from agricultural waste. A key factor in ensuring agricultural sustainability is its ability to reduce the burden on the environment.

Agroecological approaches are essential for increasing the productivity of less-favored lands. Farmers should avoid using pesticides or fertilizer, and should practice manual harvest methods to minimize the impact of fossil fuels. In addition to minimizing synthetic inputs, they should protect soils by planting cover crops, increasing organic matter, and reducing tillage. They should also encourage biodiversity by planting non-crop vegetation for pollinators and predators, and incorporating forestry into their farming.

Agricultural systems are a complex system, with different layers of complexity. The intentional management domain involves crop varieties and agrochemical use, while the unintentional drivers are climate change and exposure to invasive species. In addition, farmers must be aware of the unintended drivers of their systems and develop adaptive management strategies to adapt to them. The iterative system allows for testing different linkages between the biophysical and social domains. As a result, agricultural sustainability is a key component of a sustainable food system.

The other layer of the agricultural sustainability equation concerns the social equity issue. Since most agricultural activities depend on migrant labor, their low wages leave farmers exposed to immigration policies and place a burden on government social services. Also, workers’ legal status can contribute to the low wages. The low wages, lack of job security, and limited upward mobility create a negative impact on social equity. The lack of social protections and job security create a situation whereby farmers depend on migrant labor from poor countries.

These two layers of agriculture sustainability are intertwined. In fact, farmer organizations often form networks with the commercial and public sectors to coordinate their efforts and develop sustainable practices. This model helps farmers reduce nutrient loss by 50%, but in the process it creates tensions between these two sectors. It is a good example of how the two sectors interact. So, how can farmers benefit from the nutrient-based system? It can be the basis for a sustainable food system.

The concept of sustainable agriculture is rooted in a philosophical base and the science of systems-level analysis. Science identifies the different components of the system, but the social dimension makes it important to understand the societal values behind sustainability. Agriculture is a social construct, and society prioritizes the outcomes it wants, which ultimately determines which policies and behaviors are required. For the most part, sustainable agriculture is a societal process and therefore requires social and economic factors to become a reality.

The growing number of food manufacturers has squeezed farmers’ wheat profit margins. To counteract this, farmers can join a cooperative and build direct marketing opportunities. By building direct marketing relationships, farmers can bypass middlemen and eventually obtain their own farms. The development of policies that regulate consolidation will help protect smallholder farmers in the long run. The benefits will be felt for generations to come. All of these measures are important for agriculture sustainability.