The role of agriculture in economic growth and development

Economic development is a process whereby the real national income of a country is increases over an accrued period of time. However, if the increase in the real national income is greater than the increase in population growth, then the real per capita income would increase. Thus the increase in real GNP is a representative of economic development.

It has always been an issue of interest for the experts that how the GNP of a country would increase or what determines economic development and growth. It is given that manpower, capital accumulation, natural resources, technology and entrepreneurial abilities play important role to determine economic growth. Among the factors of economic growth listed above, it is the capital accumulation which plays the important role. The capital accumulation depends upon the creation of surplus, as in an industry, the surplus is created through profits of the industrialists. The creation of agricultural surplus becomes possible by increasing agricultural production, utilizing the surplus labour in agricultural sector, imposing tax on agricultural sector and keeping terms of trade against agricultural sector.