Contribution of Agriculture to Development
In most, if not all developing countries, agriculture plays an important role and forms the backbone of these economies. In Uganda, agriculture contributes over 70% of the total population (households) is employed in agriculture and related activities.
The contribution of agriculture to economic development is reflected in:
a. supply of foodstuffs and raw materials to other sectors of the economy. In developing countries food production dominated the agricultural sector. The increase of the population growth rate due to rapid decline in the mortality rates, slow reduction of fertility and expansion of population in industrial area raises demand for food. Similarly, agricultural out put is used in industrial, such as textile and food processing and the services sector as raw materials.
b. Another role is forming a market for industrial products such as farm tools and implements, fertilizers, and farm machinery, the increase in demand for industrial output leads to the expansion of the industrial sector.
c. Growth in agricultural output relaxes foreign exchange through exports or by earning foreign exchange through exports or by saving foreign exchange through imports substitution.
The additional foreign exchange earned can be used to import capital goods for the development of agricultural sector and other sectors of the economy.
d. To provide an “investable surplus’’ of savings and taxes to support investment in other expanding sectors of the economy. Tax revenue from the agricultural sector can be utilized in expanding the industry or service sectors.
e. The expanding agricultural sector generates more productive employment, increases rural incomes and improves the general welfare of the rural population. it allows the rural farmers (peasants) to start consuming high nutrition food, accumulate durables like better houses fitted with electricity and better furniture, provide themselves with bicycles and motorcycles and receive direct satisfaction from services like schools, health centres transport and communication.
Considering these various contributions of agriculture development, economies such as Eider (1988) and Clearcer (1993) have argued that if there is to be, in the long run, a structural transformation in output and labour force, in developing economies, into other sectors, there must be in the short-run successful policies of agricultural development to facilitate this transformation.
Written and drawn by: A. B. Kintu