Relationship Between Agriculture and Industry

INTRODUCTION

The relationship between Agriculture and Industry is very important in any given economy. The whole process of economic development is understood in the context of the relationship between agriculture and industry and its evolution. This is because first, agriculture and industry are usually the biggest and primary material production sectors in the economy; they provide physical goods for a society’s survival and the foundation of further development. Second, it becomes more and more clear that one sector cannot develop without the other. The purpose of this paper is to explore the agriculture/industry relationship from the point of view of the inter-sectoral terms of trade, which is considered as the most important factor in agriculture industry relationship because the connection between the two is mainly through commodity exchanges. For instance, many industries running in Zambia are dependant on agricultural raw materials that come from the agriculture sector. The examples are sugar industry from sugarcane, cotton industry from cotton, leather industry from animal skin, tea factory from tea leaves etc. To run these industries raw material must come from the agriculture sector.

Therefore, Agriculture and industry have been traditionally viewed as two separate sectors both in terms of their characteristics and their role in economic growth. Agriculture has been considered the hallmark of the first stage of development, while the degree of industrialization has been taken to be the most relevant indicator of a country’s progress along the development path.

AGRICULTURE

Agriculture has been known as the foundation of civilizations. It plays a vital role in the survival of mankind. The agriculture sector in Zambia has been indentified as a key driver for the economy due to its high potential in order to diversify the economy from total dependence on mining which suffered major setbacks following the fall in metal prices on the international markets in the early 1990s. For instance, agriculture sector makes contributions to the process of economic development through Product Contribution, Factor Contribution, Market Contribution and Foreign exchange contribution.

In the same vein, agriculture has been positively affected by urbanization through an increased scope of economies of scale in food marketing and distribution that has resulted in a remarkable increase in the volume of food marketing handled by supermarkets, but also substantial organizational and institutional changes throughout the food marketing chains, agro-processing industries and production. In addition, agriculture has not only increased market for agricultural products, but also for labour.

Product Contribution

This refers that agriculture must supply food above subsistence needs in order to feed the workforce in various sectors of the economy. Agricultural growth depends on the industrial demand for agricultural commodities. The agriculture sector must produce enough food for the workforce if other sectors of the economy are to develop. This is evidenced during the Industrial Revolution in Britain, where an increase in agriculture productivity resulted in surplus labour and food released to support industrial development.