2c) Agriculture has a multitude of functions in the development
Within the interrelated system of elements in the development
process, agriculture has a number of very important functions:
The most basic one is the production of food and raw materials
for its own consumption, for the non-agricultural population,
and for the developing industry. The increase in agricultural
productivity sets the whole development process into motion.
At the start, the increase of soil productivity is of the
greatest importance, but, soon, it must be followed by growing
labour productivity to increase the incomes of agricultural
labour and free manpower for the secondary and tertiary sectors.
The high population increase in many countries, for some time,
makes it imperative for agriculture to absorb the surplus
population for which there is no ether alternative, but, sooner
or later, the other sectors will develop and draw on the human
resources in agriculture.
This process is related with the transformation of subsistence
agriculture into market-integrated agriculture, which not
only sells its products, but requires non-agricultural goods
and services. With this process, agriculture fulfils its third
function, the creation of demand for non-agricultural goods
which is a precondition for the expansion of the secondary
and tertiary sectors. On the one hand, this demand meets the
requirements of market-integrated agriculture, such as fertilizer,
machinery and tools, etc.; on the other hand, an increase
in farmers' income results in a demand for consumption goods
on the part of the rural population.
In order to fulfil the fourth function of agriculture, part
of the increased agricultural income has to be skimmed off,this
leading to capital formation in various forms. This may take
place in monetary form through taxes, rents or prices. Especially
for agriculture, two other forms play a great role. The upbringing
of children, who, later on, leave agriculture, is an important
form of creating human capital. Agriculture also creates physical
capital in the form of infrastructure and means of production.
Especially the numerous small increments of capital stock
through fencing, planting of trees, improvement of livestock,
levelling of land, etc., in time and on thousands of farms
contribute greatly to the capital stock of a society.
It may be added that, in some countries, agriculture has
the tasks of contributing towards improving the situation
of the balance of payments by providing export goods or substitution
for imports. Likewise, in recent times, the function of preservation,
careful handling and protection of environment has been gaining