Importance of Agriculture

For any country to successfully sustain a stable economic growth, improvement in agricultural productivity and fiscal discipline are require. All stakeholders from both the public and private sector must work together to ensure food security as well as the creation of jobs. Moreover, the economic benefits of agriculture go beyond just food security and creating job opportunities. The importance of agriculture in any national economy cannot be underestimated.

With that in mind, we’ve compiled a list of issues that highlight the importance of agriculture in the national economy.

1) Contributes to national income

This is arguably the most important contribution of agriculture to the national economy. In many developed and developing countries worldwide, agriculture contributes a huge percentage of the national income. In fact, most developing countries’ annual revenue is over 50% dependent on agriculture. Taxes collected from industries, workers, as well as those imposed on agricultural products are very important towards the effective development of the national economy.

However, recent studies have revealed a decreasing pattern of agriculture’s contribution to the national economy. It has been noted that the more the country is develope, the less the agricultural contribution. This factor can be attribute to the rapid rise of industrialization around the world. All in all, agriculture still has a big role to play in national income.


Importance of Agriculture


2) The basic source of food

Now, this seems pretty straight forward, isn’t it? Well, whether developed, developing or underdeveloped country, having a stable source of the food supply is very important. Heavy population pressure especially in developing and underdeveloped countries leads to increased demand for food.

That being said, if the agriculture doesn’t meet the increased demand for food, the country’s economic growth rate can be adversely affected. In short, if your workforce is well fed, then the production will definitely increase.


basic importance of agriculture


3) Source of employment

Creating employment to the masses is also another important role that agriculture plays in any economy. Many laborers depend on agriculture to get their wages. They can include, grass cutters, tractor drivers, farming apparatus technicians, or anyone who is directly involved in farming activities. That said, agriculture allows manpower to be shifted between the agricultural and non-agricultural sectors.

Furthermore, agriculture plays an important role in decreasing rural poverty in developing countries. Improved irrigation methods, seeds, and fertilizers have led to increased agricultural production in rural areas. Therefore, most developing and under develop countries are embracing agriculture to combat their high rate of unemployment in their fast-growing population.


importance of agriculture to man


4. Provide raw materials for industries

In developing countries, industries play a very important role in developing their economies. Apart from being a great source of employment, industries also need to buy raw materials for producing finished goods. A huge chunk of these raw materials is directly from agriculture. Materials such as cotton are use in textile industries as raw materials. In addition, products like tea, coffee, sugar, tobacco, and dairy products provide raw materials for various important industries like leather and sports industries.


importance of agriculture in everyday life


5) Infrastructural development

Almost every country in the world is constantly trying to improve its infrastructure with agriculture playing an integral part. With well-organized infrastructure, the country will also experience rapid economic development. This is because good infrastructure enables quick means of transport and communication for agricultural goods – both raw and finished.

Infrastructures such as roads, railways, market yards, airports, postal services, and many more will be quickly develop or improve to facilitate quick transportation of agricultural products.


importance of agriculture in developing countries


6) Source of foreign exchange

Especially in developing countries, agricultural goods are mainly for export. Products such as tea, coffee, sugar, and many more are predominantly meant for export. That being said, if a country is able to export a lot of agricultural products as a result of increased productivity, the foreign exchange earnings will also increase.

Also, as development gains momentum because of industrialization, the total percentage of the country’s agricultural export is likely to decrease as they’re need domestically. This, in turn, conserves foreign currency. In short, increased production of agricultural products not only earns and conserves foreign exchange but also expand other economic sectors.


importance of agriculture in economic development


7) Development of the banking sector

As agriculture becomes more and more commercialized, the banking sector has in turn experienced tremendous growth. As most governments realize how important agriculture is, measures have to be taken to ensure farmers’ earnings are safely kept. Additionally, farmers require credits at low interest rates, thus formation of lots of financial institutions with credit facilities. This way, the banking sector is quickly developed.


ten importance of agriculture


8) Decreased discontent

If a country is experiencing slow growth in the agricultural sector, this can lead to a lot of discontentment amongst the masses. It could be that the masses are unemploye or they’re simply hungry. This kind of environment is certainly not good for any democratic government to effectively run the economy. Also, investors can be scare away from investing in such a country.

That said, minimal political and social tensions are very important for economic development. Agricultural progress can give most people hope of a better tomorrow. Hence agriculture is very important on social and political grounds.


importance of agriculture in national economy


9) Improved research

It’s not a secret anymore that agriculture and science influence each other in a very positive way. Many researchers get their research materials from agriculture. In return, researchers have unearthed vital information on agriculture that has helped increase agricultural productivity. Inventions such as Artificial Insemination, pesticides, enriched fertilizers, and other farming technologies for mass production have been very helpful. This way, we can properly control and increase what we cultivate and eat.


Improved research



All said and done, the importance of agriculture in any national economy cannot be underestimated. In fact, if you’re thinking about joining agribusiness, then it’s not a bad idea because you’ll be greatly contributing to your country’s economy. Apart from the readily available market for your agricultural produces, you should also enjoy the advantages of being self-employed.