Industrial Sector and the Development of Agricultural Sector

In this article we will discuss about the contribution of industrial sector towards the development of agricultural sector. 

1. Industry provides market for the products of the agricultural sector:

No doubt, in the initial stages, industrial sector develops through the help of the agricultural sector. However, once it has reached maturity in the technical sphere and is able to use minerals as raw materials, its dependence on agriculture for supply of capital or labour or even for raw materials goes down.

Demand for wage goods, however, continues. After this stage in industrial development, demand for more raw materials from the agricultural sector is only a matter of choice for the industrial sector. Only a growing industrial sector will provide an expanding market for the products of the agricultural sector and thus create incentives for further growth of the latter.

The expansion of the industrial sector will strengthen the commercial motives of the farmers and they are likely to shift from the food crops to the cash crops. They will produce for the market ad this will lead to the development of some allied processing industries also. Nicholls is not wrong when the says, “A favourable market for agricultural products tends to breakdown the relatively stagnant sector of agriculture.”

2. Provision of modern agricultural inputs:

This is the most important ‘ contribution of industry to agriculture. It has been found that industrial sector has provided a new technological base to agriculture. Agriculture in the developed economies, is highly capital intensive, using sophisticated machinery, heavy doses of fertilizers and insecticides and high yielding variety seeds.

The use of these inputs has brought about a spectacular increase in agricultural output. All these inputs have been provided by the industrial sector. Not only that. Agriculture has, as it is said, moved to empty lands, because of the revolution in the system of transportation and communication. These facilities obviously are a gift from the industrial sector.

3. Reduction in the pressure of population on land:

No doubt, labour was initially drawn from the agricultural sector for the development of the industrial sector. However, this withdrawal of labour has helped agricultural also, especially in heavily populated countries Excessive population in the agricultural sector, too, has been responsible for low productivity in agriculture.

Sub-division and fragmentation of holdings and also low saving have kept the agriculture completely backward. These problems are solved to some extent when the developing industrial sector helps in the out movement of population from agriculture sector. Size of farms in U.S.A. and U.K. has increased over time mainly because of transfer of population from agricultural sector to the industrial sector.

4. Supply of consumption goods:

The developing industrial sector supplies not only modern inputs to the agriculturists but also the consumption goods. Their consumption pattern is diversified. Some comfort and luxuries also find their way into their consumption schedule and their standard of living rises. The urge to maintain the new standard of living, in turn, induces the agriculturists to work hard.

5. Provision of infrastructure for agricultural development:

No doubt, modernization of agriculture depends upon the use of modern agricultural – inputs. But for their use many supportive services are required. We need, for example, good means of transport for carrying the inputs to the farms and the products of the farms to the market.

Means of communication are required for disseminating information about modern technology to the farmers. Power is needed to run the machines to be used in agriculture. Schools, agricultural research etc. colleges, hospitals, electricity and power and warehouses etc., are some of the other components of the infrastructure required for the development of agriculture. These are all the gifts of the industrial sector.

6. Intellectual environment:

It is obvious that a modern industrial sector, when in contact with the agricultural sector, will transmit its less tradition bound intellectual environment to the latter. Such an environment which is very favourable for the creation of new skills, capital formation, decreasing birth rate, technical innovations and above all, for creation of an entrepreneurial class will obviously help the agricultural sector its development.