Agriculture plays a multifaceted role in economic development, reducing poverty, improving food supplies, and increasing exports. Developing countries can benefit from stimulating agricultural growth, while countries with unique natural resources can capitalize on demand for their products to improve economic conditions. As countries develop economically, they tend to turn to more advanced business options, but agriculture can still provide opportunities for trade and market development. Agriculture also has a significant impact on local communities, providing jobs and contributing to tax revenues.
The role of agriculture in economic development is multifaceted. Food manufacturing and similar agricultural businesses have the potential to feed a nation, provide jobs, and contribute to the tax base of local and national governments. Developing nations can dramatically reduce poverty through efforts to stimulate the growth of agricultural enterprises. Studies indicate that whether a developing country is poor or rich, focused efforts to grow the agricultural sector have the same effects: reducing poverty, improving food supplies and increasing exports.
Historically, as populations increase both domestically and internationally, so does the demand for more abundant and unique food sources. When it comes to agriculture in economic development, countries with unique natural resources benefit from offering the resulting agricultural products to other countries and regions. For example, in the 20th century, products specific to the nation of Chile were desired by citizens of the United States and surrounding countries. Chile capitalized on the demand for its agricultural products, and the resulting export-generated revenues improved economic conditions there. Demand for Chile’s produce has helped grow farms, increase employment, and increase the country’s gross domestic product.
As seen in the early history of the United States, many countries begin to develop economic strength and international trade through agriculture. Once a country gets stronger economically, many turn to more advanced companies and business options, such as natural resources, technology, or industrial products. Fewer and fewer citizens produce agricultural products for a living. Economic growth naturally produces higher average earnings, more advanced and stable infrastructure, and better educational opportunities. Citizens can expand simply by acquiring necessities and seeking to satisfy wants and interests, including exotic foods, imported fibers, and other agricultural products from around the world.
Changes in the median income and spending power among citizens of more developed countries offer opportunities for developing countries. Like their predecessors, these developing countries can use natural resources to increase trade with other nations. In addition to exotic or unique products, developing countries can also provide additional stores of staples such as grains and natural fibers. Not only does agriculture’s role in economic development serve to increase trade in these specific goods, but it also serves to establish trade relationships and develop markets for future goods and services, other than agricultural products.
While international trade is important, local communities typically feel the effects of agriculture on economic development long before they become apparent on a national scale. A single farm can provide a few dozen or more jobs for local citizens, as well as provide healthy and plentiful food for area residents. Taxes paid on property, produce sold, and subsequent farm income help increase tax revenues for the community, providing funding for community programs and critical infrastructure. Several farms in the same area naturally have a greater impact on the local community. Expanding agricultural growth to include an entire county, state, or other region then begins to affect economic conditions nationwide.
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