Importance of Agriculture

2023/03/08

Agriculture plays an essential role in the global economic system. In addition to providing food and cloth, agriculture is an important source of livelihood, a substantial contribution to national revenue and international trade.

Contribution to Employment

Employment in agriculture worldwide was reported at 27% in 2019, according to the World Bank collection of development indicators. As country develops, the percentage of the population working in Agriculture is declining. While less than 5% of the population in prosperous countries working in agriculture, more than 30% do so in developing countries. For example, in 2019 the share of the labor force employed in agriculture in Kenya was 54%, India 43%, Brazil 9%, Australia 3%, and the United States was 1%, Thus, Agriculture is considered to be the backbone of the economy for less developed countries.

Country	Employment in Agriculture,(% of total employment), in 2019
World	27
Niger	73
Kenya	54
Myanmar	49
India	43
Thailand	31
Indonesia	29
Thailand	31
Philippines	23
Colombia	16
China	25
Mexico	12
Brazil	9
Spain	4
Japan	3
Australia	3
Canada	2
United States	1

Source: Data from World Bank

Labor force is an important factor contributing to the country’s development. China is one of world’s largest agricultural countries by GDP. It uses 7% of the world’s arable land to feed 20% of the world’s population. The number of total employed people of the country was 750 million, of which 190 million jobs were related to agriculture sector, that’s 25% of total employment. The rest 28% workforce are related to industrial sector and 47% are in service sector. To secure the domestic food security, China is virtually self-sufficient in producing rice and wheat, which are staple food for the majority of the population. China is also a leading producer and exporter of cotton.

Contribution to GDP

According to open data of World Bank, the average global Agriculture, forestry and fishing as a share of gross domestic product (GDP) was reported at 4.3% in 2021. For high-income countries, agriculture accounts for 1.3% of GDP. For middle-income countries, the number is 8.8%. However, for some low-income countries, the share of agriculture in GDP is more than 25%, which plays a predominant role in the economy.

Agriculture plays different roles at different stages of national development. With the progress of the economy, the proportion of agriculture in the GDP gradually declines. Japan is the world’s third largest economy by GDP after the United States and China. Japan is known for its small-scale, high-quality and high-value-added farming. As a high-income country, farming only accounts one percent of the country’s GDP. In contract, Indonesia is the largest economy in Southeast Asia and world’s fourth most populous nation. It is categorized as a middle-income country. Its agriculture sector is much more important to national economy compare to its rich neighbor. Indonesia’ agricultural sector comprises 13.3% of the country’s GDP. Rice, corn, cassava, soybeans, peanuts are the major food crops planted in the country. Rubber, palm oil, cocoa, spices are the significant exports for Indonesia.

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