Overall agri-economic climate

A summary and look into the global economy

According to a report done by the World Bank in September of 2020, growth in the agricultural sector is more effective than other sectors at raising incomes among the poorest by two to four times comparatively in any economy. Agricultural development, when executed correctly by governments and participating organizations can end extreme poverty, boost shared prosperity, and feed a people within said population of an economy per country within a span of 10-30 years of well execution.

The study goes on to show that development in the agricultural sector despite the constant battle to not be overlooked in the global economy can help encourage trade among African countries, which will feed other sectors and has a more growing potential at raising as well as providing incomes per fortnight among the poorest in a community compared to other economic sectors. This is because, should trade be encouraged and executed correctly within the AU, employment and skills will be encouraged, and the sector will be able to provide constant seasonal and casual manual labor that in most cases will not require in service training or a qualification.

It is safe to deduce from reports and studies worldwide that the agricultural sector has a direct impact on ending extreme poverty in the most remote areas within the sub-Saharan region, and can also stimulate shared prosperity, agricultural trade within the continent as well as encourage job creation through many technological advancements that are now available or yet to be discovered in the sector. This is mainly because agricultural growth is more effective and relatively practical in boosting the incomes of the poor and the middle class more than any other single sector in that; the more production that occurs in a country, the more opportunities will be available for the economy to import and export, bringing the collective continental or even the country’s GDP into a position of sound competition and growth.

There are management factors which play a role in the agricultural production and economics, and these are:

• Capital
• Land
• Labour
• Management

In order to be able to achieve maximum profits from production, the farmer needs to have a good understanding of the above-mentioned factors, and should have a good understanding of the management practices involved with these factors. However, there are also economic factors which will have an impact on agriculture, and these are:

• Supply and Demand
• Prices/Exchange Rates
• Government Intervention and the global economy
• Population
• Consumer Preferences
• Inflation

 

The Function of land in Agric production and economics.

In Geology, Land is described as the part of the Earth’s surface that is not covered by water, as opposed to the sea or the air. However, the term soil refers to a thin layer of organic matter, minerals, as well as weathered rocks which cover the entire area of a land. Agriculture, forestry, mining, and other uses are conducted on land but, for the sake of readily identifying the difference between land and soil, it is important to note that in agriculture, the focus is on soil. The dominant particle size of soil particles determines the type and type of soil, which include sand, clay, silt, peat, chalk and loam.

 

The functions of land (in economic terms):

Land provides space for economic activities, such as the transport of produce, the holding of agricultural markets etc. It is undeniable that land will always be the primary provider of a platform for various production processes and economic farming activities to take place.

Land houses soil, and soil is the medium in which crops grow. Land provides food for plants, animals and human beings.

Crops obtain most of the water, nutrients and air that they need from soil. The soil also provides a suitable temperature and enough air for the supply of food. The chemical reactions that take place in the soil ensure that good quality crops are produced and also maintains a good platform for livestock to obtain food from the soil in the form of grass.

Land is the foundation of all agricultural practices, and the food that we eat comes from the soil, whether it be fruits, vegetables and herbs.

Land also provides raw materials for agricultural production and other industries. Raw materials are resources that are used to produce or manufacture other products. Plants obtain raw materials from the soil such as water, carbon dioxide and nutrients. These are used by the soil to manufacture carbohydrates through photosynthesis. The soil also provides plants, such as trees, that can be used as raw materials to make furniture.

 

Land provides minerals. A mineral is a compound found in rock. There are very few minerals found in their purest form, that is, not bound to any other elements and the land provides different minerals that serve different purposes. They can be classified into three categories:

• minerals of monetary value, e.g. gold, silver and diamonds
• minerals used as raw materials in industries, e.g. coal, copper, iron and
• platinum
• minerals used as nutrients by plants and animals, e.g. calcium, phosphorus and zinc.

 

Economic characteristics of land as a production factor

Land is durable. This means that land is able to withstand production pressure, or damage and will be able to remain functional, without requiring excessive maintenance or repair. Development processes in the soil ensure that the soil is able to renew itself. This makes it a useful and viable commodity.

Soils have different production potentials Soils have characteristics such as texture, structural type and the environment in which they are found. This means that soils have different production potentials.

 

Availability of agricultural land is limited

Only 25% of the Earth is covered by land and only half of this land can be ploughed. Only a small percentage of soil can be used for agricultural production. Despite the fact that land is durable, the nature of soil restricts agricultural activities. Soils have important direct and indirect impacts on agricultural productivity, water quality, and other important aspects of agricultural production. Some soils are shallow and restrict plant growth and some soils have a very good production potential with good farming soil characteristics. the nature of the soil, the cropping and tillage practices used, and mechanical farming practices will affect the productivity of the soil in the long run and thus farmers need to maintain good tillage and soil management practices. Soil management can either improve or degrade soil quality. Erosion, compaction, salinization, sodification, acidification, and pollution with toxic chemicals can and do degrade soil quality. This lets us know that soil is subject to the law of diminishing returns

 

The law of diminishing returns

In order to measure the effect of increasing units of something upon the output of something, whether it is the outcome of plant growth or animal production, it is important to understand how the law of diminishing returns is applied and expressed as a principle.

The law of diminishing marginal returns stipulates that adding more factors of production will reduce output and result in lower productivity. This means that, as soon as a factor of production has reached an optimal level of capacity utilization, any increase in its percentage will decrease incremental returns per unit. Chemical fertilizers are a good example of diminishing returns. A small quantity of these fertilizers can increase yields substantially. If its use is increased further, however, the chemical’s efficacy may reduce, resulting in a declining Marginal Product.

 

 

Techniques or methods to increase land productivity

Techniques or methods to increase land productivity must be considered and implemented withing the context of environmental sustainability so that future generations have access to this natural resource. A farmer needs to be able to understand technological and scientific ways in which he will optimize and adapt his production to scientific methods.

Scientific methods, such as precision farming, will ensure maximum sustainable production. A scientific approach to irrigation will also be more effective than traditional methods. In this way, using scientific methods will allow for both maximum productivity and environmental sustainability.

There is also the consolidating of uneconomical farm units. Consolidation of similar farm units will reduce management and running costs because separate farm units are more expensive to manage than combined, smaller units. Also, the use of technology is very advantageous in this situation. Technology can be used to complete tasks in less time and with lower production costs.

Water supply through irrigation allows crops that are watered by irrigation systems show higher production levels than crops that obtain their water naturally from the water table. The quality of irrigated crops is also better.

Increasing access by building roads. Increased accessibility to land will allow machinery, tractors and laborer’s to be transported to the land as needed. Products can also be more easily transported for processing or to the market.

 

Another way to increase land productivity is to choose a farming type that suits the nature of the soil. A poor choice of farming type, one that does not suit soil (or climate) conditions will result in total failure of the farming enterprise. Gathering enough information on the land to be used is also very vital. An example is a soil analysis. A soil analysis should be carried out at least every four years to give an indication of major nutrient levels within the soil. Larger fields should be split into smaller areas for sampling purposes to make sure each sample is as representative as possible.

It is also important to remember to diversify the land. Different soil types will suit different forms of production and so the farm should be divided into units according to the soil type and different forms of farming practiced on each one. This is called diversification and it can ensure a continuous source of income for the farmer.

Modifying farm land also helps. This is to say that farm land that has proved to be uneconomical could be modified. For example, the land could be excavated and farm infrastructure could be built on it. One can also lean towards practices that improve the physical condition and productivity of the soil. Problems with soil texture and slope can be solved in several ways, for example, textural problems can be overcome if you: add organic matter, improve drainage, avoid over cultivation, do not cultivate the soil when too dry or too wet, improve the pH value of the soil. (Another example is a slope. A slope on land can be dealt with by the use of contour ploughing, contour banks, stone banks and/or terraces.