Agricultural economics

Agricultural economics has been one of the leading branches of applied economics since the 1920s. Now it is developing rapidlу and successfully as it is important for most countries of the world.

In order to understand agricultural economics it is necessary to know how crops are sown, cultivated, fertilized, and harvested, how livestock are bred, raised, fattened, and sold.

One of the main characteristics of agricultural sector is its great dependence on natural conditions, such as climate, weather, soil, etc. For example, there are differences between farms growing crops or fattening cattle in the central part of Russia and in its southern regions, as well as between farms growing wheat in the Ukraine and Kazakhstan. Farms of the same type working under different natural conditions use different livestock breeds, crop varieties, harvesting machinery, etc.

In developed countries the productivity in agricultural sector including agriculture and processing of agricultural products is being raised as fast as in economy as a whole. The main reasons for rising efficiency are: a) better agricultural technology; b) better capital inputs¹, such as machinery; c) achievements in biological sciences.

However, there are two main factors limiting further rise in efficiency: increasing energy scarcity as well as the loss of topsoil² and water.

Unlike incomes in most industries, farm incomes vary from year to year. They depend on weather conditions and changes in demand for and supply of most farm products.

All these problems are considered by agricultural economics.