What is Agricultural Economics?

Agricultural economics is one of the applied areas of economics which is focused on optimizing production and distribution of food. Land usage is also a theme that agriculture economics is concerned about its study.

“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.

Origins of agricultural economics

” Economics has been defined as the study of resource allocation under scarcity. Agricultural economics, or the application of economic methods to optimizing the decisions made by agricultural producers, grew to prominence around the turn of the 20th century. The field of agricultural economics can be traced out to works on land economics. Henry Charles Taylor was the greatest contributor to the establishment of the Department of Agricultural Economics at Wisconsin in 1909.

Another contributor, 1979 Nobel Economics Prize winner Theodore Schultz, was among the first to examine development economics as a problem related directly to agriculture. Schultz was also instrumental in establishing econometrics as a tool for use in analyzing agricultural economics empirically; he noted in his landmark 1956 article that agricultural supply analysis is rooted in “shifting sand”, implying that it was and is simply not being done correctly.

One scholar summarizes the development of agricultural economics as follows:

“Agricultural economics arose in the late 19th century, combined the theory of the firm with marketing and organization theory, and developed throughout the 20th century largely as an empirical branch of general economics. The discipline was closely linked to empirical applications of mathematical statistics and made early and significant contributions to econometric methods. In the 1960s and afterward, as agricultural sectors in the OECD countries contracted, agricultural economists were drawn to the development problems of poor countries, to the trade and macroeconomic policy implications of agriculture in rich countries, and to a variety of production, consumption, and environmental and resource problems.” Source: https://en.wikipedia.org/wiki/Agricultural_economics