The economic potential of agriculture extends beyond farm fields, businesses, supply chains and local food. Farming incorporates natural resources, agriculture and food industries. These economic activities associated with farming generate income and employment while also producing goods and services. It has been established that the share of farming populations’ amounts to over 60% where farming contributes to 40 % of the GDP and 44% of all exports are made of farming goods and products (Ward, Benjamin Logan, et al. 23). Moreover, a quarter of the earth’s land surface is under cultivation for farming practices. More land has been converted to crop production. In many parts such as Australia, North America, Europe, China, India and Brazil, the human population is continuously embracing farming. Farming activities have been enhanced through the use of pesticides, fertilizers and organic manures. In many developing countries with low productivity rates and growing populations, farming continues to expand fragile and marginal areas (Ziolkowska, 17). Improvements in farming, as well as land use, are critical factors towards achieving food security. Farming in such areas has been instrumental in alleviating poverty and in enhancing overall sustainable development.
Farming in most parts of the world, including the United States, is becoming trade-oriented. They, therefore, farming contributes to the economic growth and development of countries. Farming plays a critical role in the economy of all nations, including developing nations. It provides the main source of food, employment and income for the rural populations. In cases where per capita real income is low, a lot of emphasis is put on farming and other primary industries associated with Agriculture (López, Stephanie, et al. 13). Considerably, an increase in farming and agricultural production alongside the rise in the per capita income of developing countries, for instance, boost industrialization and urbanization. These subsequently, result in increased demand in industrial growth and production.
Farming is an important aspect of the economy as it provides food supply. According to Tsyplakova and Elena et al., farming is the primary source of the food supply in all countries Tsyplakova, Elena, et al. 25). This applies to both underdeveloped, developing and developed countries. As a result of ever-increasing world’s population, there is a rapid increase in demand for food. If farming fails to meet the increasing demand for food products in the market, the world would be adversely affected in the aspect of the growth rate of the economy. Therefore, farming is very critical in raising the supply of food, thus significant for the economic growth of countries. Nevertheless, faring sector is a source of fodder for domestic animals and wild animals López, Stephanie, et al. 9). Domestic animals, through their valuable products, contribute to economic development. Wild animals are also very critical for economic development as they act as a source of income through foreign exchange and tourism. Increase in food demand in a country’s economy is determined by the equation:
D = P + 2g
Where
D represents the Annual Rate of Growth in demand for food.
P represents the Population Growth Rate.
g stands for Rate of Increase in per Capita Income.
2 stand for Income Elasticity of Demand for Agricultural Products.
Farming is also very important for the establishment of infrastructure. Farming practices, for instance, require roads, storage facilities, and transportation networks such as railways, market yards and postal services. In turn, the development of infrastructure is fundamental and a prerequisite for economic development. Farming infrastructures creates demand for industrial products, thus enhancing the development of commercial sector (Ward, Benjamin Logan, et al. 33). Roadways and railways from the farms to factories transport bulks of farming proceeds and products.
Farming is also affects the economy through its impacts on the shift of labor. Considerably, farming absorbs a large quantity of labor force. In most countries, an estimate of about 65% of labor is attributed to the farming sector. Farming progress facilitates the shift of labor from farming sector to non-farming sectors. The diversion of labor from farming sector to non-farming sector is more significant in the economic development of a country (Zamora, 24). For example, it eases the pressure of labor force over the limited land. The release of surplus labor from the farming sector is essential for the advancement of the farming sector as well as the expansion of non-farming sectors. The fundamental shift of labor to other sectors is facilitated by an increased output per worker by the improvement of farming. It is worth noticing that multiple factors support the increase in output. In places where the land resource is adequate, the output per farmer is more likely to be higher since the farmers can apply more machinery and farm inputs such as fertilizers.