Agricultural economics
Encyclopedia
Agricultural economics originally applied the principles of economics
Economics
Economics is the social science that analyzes the production, distribution, and consumption of goods and services. The term economics comes from the Ancient Greek from + , hence "rules of the house"...

 to the production of crops and livestock
Livestock
Livestock refers to one or more domesticated animals raised in an agricultural setting to produce commodities such as food, fiber and labor. The term "livestock" as used in this article does not include poultry or farmed fish; however the inclusion of these, especially poultry, within the meaning...

 — a discipline known as agronomics. Agronomics was a branch of economics that specifically dealt with land usage
Land use
Land use is the human use of land. Land use involves the management and modification of natural environment or wilderness into built environment such as fields, pastures, and settlements. It has also been defined as "the arrangements, activities and inputs people undertake in a certain land cover...

. It focused on maximizing the crop yield
Crop yield
In agriculture, crop yield is not only a measure of the yield of cereal per unit area of land under cultivation, yield is also the seed generation of the plant itself...

 while maintaining a good soil ecosystem
Soil science
Soil science is the study of soil as a natural resource on the surface of the earth including soil formation, classification and mapping; physical, chemical, biological, and fertility properties of soils; and these properties in relation to the use and management of soils.Sometimes terms which...

. Throughout the 20th century the discipline expanded and the current scope of the discipline is much broader. Agricultural economics today includes a variety of applied areas, having considerable overlap with conventional economics.

Origins

Economics is the study of resource allocation under scarcity. Agronomics, or the application of economic methods to optimizing the decisions made by agricultural producers, grew to prominence around the turn of the 20th century. The field of agricultural economics can be traced out to works on land economics. Henry Charles Taylor
Henry Charles Taylor
Henry Charles Taylor was an American agricultural economist. As an early pioneer in the field, he has been called the "father of agricultural economics" in the United States. Taylor established the first university department dedicated to agricultural economics in the United States during his...

 was the greatest contributor with the establishment of the Department of Agricultural Economics at Wisconsin in 1909.
Another contributor, Theodore Schultz
Theodore Schultz
Theodore William Schultz was the 1979 winner of the Nobel Memorial Prize in Economic Sciences....

 was among the first to examine development economics
Development economics
Development Economics is a branch of economics which deals with economic aspects of the development process in low-income countries. Its focus is not only on methods of promoting economic growth and structural change but also on improving the potential for the mass of the population, for example,...

 as a problem related directly to agriculture. Schultz was also instrumental in establishing econometrics
Econometrics
Econometrics has been defined as "the application of mathematics and statistical methods to economic data" and described as the branch of economics "that aims to give empirical content to economic relations." More precisely, it is "the quantitative analysis of actual economic phenomena based on...

 as a tool for use in analyzing agricultural economics empirically; he noted in his landmark 1956 article that agricultural supply analysis is rooted in "shifting sand," implying that it was and is simply not being done correctly.

Development

One scholar summarizes the development of agricultural economics as follows:

"Agricultural economics arose in the late 19th century, combined the theory of the firm
Theory of the firm
The theory of the firm consists of a number of economic theories that describe the nature of the firm, company, or corporation, including its existence, behavior, structure, and relationship to the market.-Overview:...

 with marketing and organization theory, and developed throughout the 20th century largely as an empirical branch of general economics. The discipline was closely linked to empirical applications of mathematical statistics and made early and significant contributions to econometric methods. In the 1960's and afterwards, as agricultural sectors in the OECD countries contracted, agricultural economists were drawn to the development problems of poor countries, to the trade and macroeconomic policy implications of agriculture in rich countries, and to a variety of production, consumption, and environmental and resource problems."

Agricultural economists have made many well-known contributions to the economics field with such models as the cobweb model
Cobweb model
The cobweb model or cobweb theory is an economic model that explains why prices might be subject to periodic fluctuations in certain types of markets. It describes cyclical supply and demand in a market where the amount produced must be chosen before prices are observed. Producers' expectations...

, hedonic regression
Hedonic regression
In economics, hedonic regression or hedonic demand theory is a revealed preference method of estimating demand or value. It decomposes the item being researched into its constituent characteristics, and obtains estimates of the contributory value of each characteristic...

 pricing models, new technology and diffusion models (Zvi Griliches
Zvi Griliches
Hirsh Zvi Griliches was an economist at Harvard University. He was born in Kaunas, Lithuania in an assimilated Jewish family that spoke Russian at home. During World War II he was sent to the Dachau concentration camp...

), multifactor productivity and efficiency theory and measurement, and the random coefficients regression. The farm sector is frequently cited as a prime example of the perfect competition
Perfect competition
In economic theory, perfect competition describes markets such that no participants are large enough to have the market power to set the price of a homogeneous product. Because the conditions for perfect competition are strict, there are few if any perfectly competitive markets...

 economic paradigm.

Since the 1970s, agricultural economics has primarily focused on seven main topics, according to a scholar in the field: agricultural environment and resources; risk and uncertainty; consumption and food supply chains; prices and incomes; market structures; trade and development; and technical change and human capital; .

In terms of technical change, there have been increasingly rapid developments and innovations in the equipment designed for agricultural research. This equipment includes instruments for plant physiology research, and monitoring soil conditions and atmospheres.

Areas of concentration

  • Econometrics
    Econometrics
    Econometrics has been defined as "the application of mathematics and statistical methods to economic data" and described as the branch of economics "that aims to give empirical content to economic relations." More precisely, it is "the quantitative analysis of actual economic phenomena based on...

  • International development
  • Community and rural development
    Economic development
    Economic development generally refers to the sustained, concerted actions of policymakers and communities that promote the standard of living and economic health of a specific area...

  • Food safety
    Food safety
    Food safety is a scientific discipline describing handling, preparation, and storage of food in ways that prevent foodborne illness. This includes a number of routines that should be followed to avoid potentially severe health hazards....

     and nutrition
    Nutrition
    Nutrition is the provision, to cells and organisms, of the materials necessary to support life. Many common health problems can be prevented or alleviated with a healthy diet....

  • International trade
    International trade
    International trade is the exchange of capital, goods, and services across international borders or territories. In most countries, such trade represents a significant share of gross domestic product...

  • Natural resource and environmental economics
    Environmental economics
    Environmental economics is a subfield of economics concerned with environmental issues. Quoting from the National Bureau of Economic Research Environmental Economics program:...

  • Production economics
  • Risk and uncertainty
  • Consumer behavior and household economics
  • Health economics
    Health economics
    Health economics is a branch of economics concerned with issues related to efficiency, effectiveness, value and behavior in the production and consumption of health and health care...

  • Labor economics
  • Forestry economics
  • Analysis of markets and competition
    Competition
    Competition is a contest between individuals, groups, animals, etc. for territory, a niche, or a location of resources. It arises whenever two and only two strive for a goal which cannot be shared. Competition occurs naturally between living organisms which co-exist in the same environment. For...

  • Agribusiness
    Agribusiness
    In agriculture, agribusiness is a generic term for the various businesses involved in food production, including farming and contract farming, seed supply, agrichemicals, farm machinery, wholesale and distribution, processing, marketing, and retail sales....

  • Agricultural marketing
    Agricultural marketing
    Agricultural marketing covers the services involved in moving an agricultural product from the farm to the consumer. Numerous interconnected activities are involved in doing this, such as planning production, growing and harvesting, grading, packing, transport, storage, agro- and food processing,...

  • Agricultural policy
    Agricultural policy
    Agricultural policy describes a set of laws relating to domestic agriculture and imports of foreign agricultural products. Governments usually implement agricultural policies with the goal of achieving a specific outcome in the domestic agricultural product markets...

  • Industrial organization
    Industrial organization
    Industrial organization is the field of economics that builds on the theory of the firm in examining the structure of, and boundaries between, firms and markets....

  • Marketing of agricultural products
  • Rural economics
    Rural economics
    Rural economics is the study of rural economies, including:* farm and non-farm industry.* economic growth, development, and change * size and spatial distribution of production and household units and interregional trade* land use...

  • Rural sociology
    Rural sociology
    Rural sociology is a field of sociology associated with the study of social life in non-metropolitan areas. It is the scientific study of social arrangements and behaviour amongst people distanced from points of concentrated population or economic activity...



Agricultural economics tends to be more microeconomic oriented. Many undergraduate Agricultural Economics degrees given by US land-grant universities
Land-grant university
Land-grant universities are institutions of higher education in the United States designated by each state to receive the benefits of the Morrill Acts of 1862 and 1890....

 tend to be more like a traditional business degree rather than a traditional economics degree. At the graduate level, many agricultural economics programs focus on a wide variety of applied microeconomic topics. Their demand is driven by their pragmatism, optimization and decision making skills, and their skills in statistical modelling. Graduates from Agricultural Economics departments across America find jobs in diversified sectors of the economy:
  • Accounting
  • Agriculture
  • Breweries, distilleries, bottling plants
  • Cigarette manufacturing
  • Food processing - e.g. flour mill
  • Food manufacture - e.g. cake factory
  • Furniture manufacturing; production of linens, drapes, carpet
  • Government & NGOs
  • Information technology
  • Leather tanning, footwear manufacturing, handbag production
  • Logistics & supply chains
  • Pulp and paper
  • Sawmills, lumber mills, wood products
  • Textiles processing and garment manufacturing

See also

  • Agrarian law
    Agrarian law
    Agrarian laws were laws among the Romans regulating the division of the public lands, or ager publicus.There existed three types of land in ancient Rome: private land, common pasture, and public land...

  • Agrarian reform
    Agrarian reform
    Agrarian reform can refer either, narrowly, to government-initiated or government-backed redistribution of agricultural land or, broadly, to an overall redirection of the agrarian system of the country, which often includes land reform measures. Agrarian reform can include credit measures,...

  • Agribusiness
    Agribusiness
    In agriculture, agribusiness is a generic term for the various businesses involved in food production, including farming and contract farming, seed supply, agrichemicals, farm machinery, wholesale and distribution, processing, marketing, and retail sales....

  • C. Arden Pope
    C. Arden Pope
    C. Arden Pope III is an American professor of economics at Brigham Young University and one of the world's foremost experts in environmental science. He received his B.S. from Brigham Young University in 1978 and his Ph.D. in Economics and statistics from Iowa State University in 1981...

  • Electrical energy efficiency on United States farms
    Electrical energy efficiency on United States farms
    Electrical energy efficiency on United States farms covers the use of electricity on farms and the methods and incentives for improving the efficiency of that use.U.S...

  • Farm crisis
    Farm crisis
    A Farm Crisis is a term describing times of agricultural recession, low crop prices and low farm incomes that can lead to farm bankruptcy, family break-ups, and increased rate of farmer suicides. In the US, most recently this was during the 1980s...

  • Land economics
  • Subsidizing
  • Transport economics
    Transport economics
    Transport economics is a branch of economics that deals with the allocation of resources within the transport sector and has strong linkages with civil engineering. Transport economics differs from some other branches of economics in that the assumption of a spaceless, instantaneous economy does...


External links







The source of this article is wikipedia, the free encyclopedia.  The text of this article is licensed under the GFDL.
 
x
OK