What is Agricultural Economics?
Economics is the study of the allocation of scarce resources. Economic theories and methods can be applied anywhere constraints are faced, so that choices must be made.
Agricultural economics is an applied field of economics concerned with the application of economic theory in optimizing the production and distribution of food.
Agricultural economists employ principles and concepts of economics to learn more about the supply and demand of goods and services in the agricultural sector. This includes analysis of production, consumption, and distribution. They often choose an area of expertise, such as crop and livestock sciences, environmental economics, policy analysis, agribusiness, food safety, international trade, rural development, or marketing systems.
The primary objective of agricultural economists is to maximize profitability in agriculture to the benefit of society. They advise the agricultural sector on issues such as financing, marketing, agricultural development, policy, research and production. Agricultural economics can be divided into seven broad components, namely:
inputs, production, profit and labour utilization relationships
processes, agricultural planning and the principles of financing
pricing systems and market types
interactions with trade, production, price and income policies
role in the economy, government and private sector
problem solving with economic simulation and optimization techniques
Agricultural environmental economics
interaction between production processes and nature
Environmental and resource economics deals with the scarcity and sustainability of the natural resources, particularly how it relates to humans’ uses of those resources, whether renewable or non-renewable. Studies are performed to determine the theoretical or empirical effects of resource and environmental policies on the economy.
Food economics uses tools of economic analysis to examine applied problems in the general area of food markets (e.g., trade and regulated markets, food demand analysis, food safety and biotechnology).
Agribusiness is the business of agricultural production. Agribusiness involves all the steps required to send an agricultural good to market: agrichemicals, breeding, production, farm machinery, processing, distribution, and seed supply, as well as marketing and retail sales. Trade is an important component since agricultural products can be exported.
A growing world population requires more food be produced on a finite amount of land facing climatic change. Food production must be integrated with the needs of both people and the environment. These complex challenges demand professionals who can identify opportunities and devise innovative solutions. Students earning a degree in agricultural, resource, environmental or food economics are qualified for a wide variety of challenging careers that answer this demand.
Depending on the program of study you choose, career opportunities are available in business, industry, government, education, and research. These broadly include, but are not limited to, the following areas:
- Agricultural Finance and Management
- Industrial Organization
- Consumer, Demand and Price Analysis
- Institutional, Experimental & Behavioral Economics
- Econometrics and Statistical Methods
- Natural Resources, Water, & Environmental Economics
- Food & Agricultural Policy
- Rural and Community Development
- Food Safety, Health and Nutrition
- Teaching, Learning and Communication
- International Trade
Types of Employers
- Consulting firms
- Private research firms
- Marketing firms / boards
- Community colleges
- Farm organizations
- Producer groups
- Promotion and marketing
- Commercial banks
- Service organizations
- Commodities companies