Arguments for prioritizing agriculture in LDCs
Many economists have always favoured the arguments that several resources could be earmarked for agricultural production.
Agricultural sector is the major and if not the sole supplier of food for a high population, generally and the nation's potential force especially industries.
In poor countries, unemployment still remains a serious socio-economic hazard. It is true that agriculture provides employment to various categories of labour.
Industrial production mainly depends on raw materials which are basically supplied by the agricultural sector.
Taxes are a major source of government revenue for its recurrent and development expenditures. Incomes from the agricultural sector provide adequate tax revenue necessary for planning purposes of a developing nation.
It is always argued that the material and general welfare of people i.e. their standards of living can be improved by a better agricultural sector.
In poor countries, income inequality is rampant i.e. the economic distance between the poor and the rich. Agriculture could be instrumental in minimizing income inequalities.
Rural urban migration which is common can be reduced by massive participation of the people in agricultural production activities.
It has been always argued that agriculture can improve on people's skills especially in the longrun. Individuals used to simple agricultural tools and machinery can easily be absorbed in the industrial sector later.
Emphasis on agriculture will increase incomes of the majority and therefore, purchasing power, demand i.e the market which is argued to be small and limiting expanded industrial activities.
Agriculture has more linkages than industry with other sectors at the intermediate stages of production processes. It provides raw materials for industry as well as expanded market for industrial output.
Foreign exchange is quite inadequate in LDCs. Agricultural output destined for the outside market (export), help the country to earn the required foreign exchange to purchase the scarce capital equipment.
Agriculture contributes a large percentage to the national income in most developing countries and therefore, in the immediate future, a large percentage of the national income should be invested in this sector to expand the aggregate national product more rapidly.
In agricultural investment, each unit of currency invested will produce hi surplus output than in industry and therefore, investment per unit is likely to bring about higher accumulation of capital for further investment.