Agricultural Economics-Definition, Nature, Traditional and its modernisation

Meaning

Agricultural Economics is a branch of economics that applies economic principles, theories, and methods to agriculture. It deals with how farmers, agribusinesses, and the government make decisions about the use of scarce resources (land, labour, and capital management) for providing, distributing and consuming agricultural goods.

Nature

1. It is an applied branch of general economics, especially focusing on agriculture.

2. Agriculture has limited land, labour, water and capital. Agricultural economics studies how these scarce resources are used effectively.

3. It is not only theoretical but also applied—used to solve real-world problems, such as low productivity, price instability, and rural poverty.

4. It is a combination of art & science. Science, because it uses principles, laws and models. Art, because it requires practical skills in applying them to a farming situation.

5. It is micro and macro in nature. At the micro level, studies about the farm, farmers’ decisions, the cost of cultivation and farm management. At the macro level, it deals with the national policies, food security, agricultural trade, subsidies, etc.

Traditional Agriculture-Meaning

Traditional Agriculture is the old method of farming that has been followed by farmers for centuries. It is mainly based on experience, customs, and practices handed down from one generation to another. Farmers using this method usually aim to produce enough food they need for their families rather than earning a profit.

Traditional Agriculture-Features

1. Subsistence-Oriented

2. Low level of Technology

3. Dependence on Monsoons

4. Low productivity and Yield

5. Labour Intensive

Subsistence-oriented

• The main objective is to be self-sufficient rather than earning profit.

• Farmers grow food crops like rice, wheat, millets and pulses just to feed their families.

Low level of Technology

• Their tools are simple, such as wooden ploughs, bullock carts, sickles and spades.

• Scientific methods like soil testing, hybrid seeds or crop rotation are rarely used.

Dependence on Monsoon

• Rainfall is the main source of water, and irrigation facilities are either absent or very limited.

• Droughts or Floods lead to crop failures, making agriculture risky.

Low productivity and yield

• Output per hectare is low because of poor-quality seeds, less fertiliser use and weak irrigation.

• Ex: Before the Green Revolution, India was not self-sufficient in food grains and often depended on imports.

Labour Intensive

• Farmers rely on manual labour and animal power rather than modern machines.

• Labour productivity is low, and farmers remain trapped in poverty.

Modernisation of Agriculture-meaning

Modernisation of agriculture refers to the process of shifting farming from a traditional, subsistence-based practice to commercial, technology-driven, and market-oriented activities.

Modernisation of Agriculture-Features

1. Use of HYV seeds, Fertilisers

2. Mechanisation of Farming

3. Expansion of Irrigation Facilities (Assured Irrigation)

4. Commercial & market-oriented

5. Use of Information Technology and Biotechnology

Use of HYV seeds, Fertilisers

• High-yielding variety (HYV) seeds, fertilisers, and pesticides were introduced during the Green Revolution.

• These increased the production of wheat and rice significantly in India.

Mechanisation of Farming

• Modern tools like tractors, harvesters, seed drills, threshers and irrigation pumps are used.

• These reduce human drudgery, save time and increase efficiency.

Expansion of Irrigation Facilities (Assured Irrigation)

• Instead of depending only on monsoon, modern agriculture uses canals, tube wells, drip irrigation, and sprinkler systems.

• Large dams support irrigation.

Commercial and Market-oriented

• Farmers now grow food crops like sugarcane, cotton, oilseeds, and vegetables not just for family but also for sale in the market.

• Agriculture becomes profit-oriented.

Use of Information Technology and Biotechnology

• Digital platforms, mobile apps and weather forecasting tools help farmers make better decisions

• Biotechnology introduces pest-resistant and drought-resistant crops.