Agricultural economics is an applied field of economics concerned with the application of economic theory in optimizing the production and distribution of food and fiber. Agricultural economics began as a branch of economics that specifically dealt with land usage, it focused on maximizing the crop yield while maintaining a good soil ecosystem. Throughout the 20th century the discipline expanded and the current scope of the discipline is much broader. Agricultural economics today includes a variety of applied areas, having considerable overlap with conventional economics. Agricultural economists have made substantial contributions to research in economics, econometrics, development economics, and environmental economics. Agricultural economics influences food policy, agricultural policy, and environmental policy.

Progress in farming

That fact would have surprised most economists of the early 19th century, who feared that the limited supply of land in the populated areas of Europe would determine the continent’s ability to feed its growing population. Their fear was based on the so-called law of diminishing returns: that under given conditions an increase in the amount of labour and capital applied to a fixed amount of land results in a less-than-proportional increase in the output of food.

Peasant agriculture

One characteristic of undeveloped peasant agriculture is its self-sufficiency. Farm families in those circumstances consume a considerable a part of what they produce. While a number of their output could also be sold within the market, their total production is usually not much larger than what's needed for the upkeep of the family. Not only is productivity per worker low under those conditions, but yields per unit of land also are low. Even where the land was originally fertile, the fertility is probably going to possess been depleted by decades of continuous cropping. The available manures aren't sufficient, and therefore the farmers cannot afford to get them elsewhere.

Peasant agriculture is usually said to be characterized by inertia. The peasant farmer is probably going to be illiterate, suspicious of outsiders, and reluctant to undertake new methods; food patterns remain unchanged for many years or maybe centuries. Evidence, however, suggests that the apparent inertia could also be simply the results of a scarcity of alternatives. If there's nothing better to vary to, there's little point in changing. Moreover, the self-sufficient farmer is sure to want to attenuate risks; since a failure can mean starvation in many parts of the planet, farmers are reluctant to adopt new methods if doing so would expose them to greater risks of failure.

The increased use worldwide of high-yielding sorts of rice and wheat from the 1960s showed that farmers were willing and ready to adopt new crops and farming methods when their superiority was demonstrated. Those high-yielding varieties, however, required increased outlays for fertilizer, also as expanded facilities for storage and distribution, and lots of developing countries were unable to afford such expenditures.

The role of agriculture within the economy features a long history. this subject are often discussed in various ways, like how various elements of the economy are often utilized to enhance the profitability of agriculture.