Land: Meaning, Significance, Land as Renewable and Non-Renewal Resource

Land: Meaning, Significance, Land as Renewable and Non-Renewal Resource!

Meaning:

The term ‘land’ has been given a special meaning in economics. It does not mean soil, as in the ordinary speech, but it is used in a much wider sense.

In the words of Marshall, land means “the materials and the forces which nature gives freely for man’s aid, in land and water, in air and light and heat.” Land stands for all natural resources which yield an income or which have exchange value.

“It represents those natural resources which are useful and scarce, actually or potentially.”

In every stage of economic evolution, nature has been man’s most useful ally. In the hunting and the fishing stage, nature supplied food freely and sustained human life. In the pastoral stage, but for land surface and the pastures and meadows, herds of cattle and sheep could not have been reared and kept.

The utility of land is obvious in the agricultural stage for how else could man grow his crops without soil, air and sunshine? When the agricultural stage has given place to the industrial stage, land still remains essential.

Land is the chief agent in the production of wage goods, such as food-grains, cloth and sugar. Every commodity that we use can, directly or indirectly, be traced ultimately to land. Look in whatever direction we may, our debt to nature is deep and obvious. Our very existence would be impossible without it. In Marshall’s worlds. “Earth’s surface is a primary condition of anything that a man can do, it gives him room for his action.

The quantity and quality of natural resources (including agricultural land) plays a vital role in the economic development of a country. Important natural resources are those of agricultural land, minerals and oil resources, water, forests, climate, etc.

The quantity of natural resources available in a country puts a limit on the level of output of goods which can be attained. Without a minimum of natural resources there is not much hope for economic development. It should, however, be noted that resource availability is not a sufficient condition for economic growth.

For instance, India, though sufficiently rich in natural resources, has remained poor and under-developed. This is because resources have not been fully utilised for productive purposes. Thus, it is not only the availability of natural resources but also the ability to use them for production, which determines growth of an economy.

Supplies of natural resources can be increased as a result of new discoveries of resources in a country and technological changes which facilitate new discovery or transform certain previously useless materials into highly useful ones. It should also be noted that the scarcity, of certain natural resources can be overcome by synthetic substitutes.

For example, the synthetic rubber is being increasingly used in place of natural rubber in advanced countries. Further, nylon which is a synthetic commodity is being largely used in place of silk which is a natural commodity.

Significance:

The use of natural resources and the role they play in the process of economic growth depends, among other things, on the type of technology. One does not have to go back very far in history to find that an item currently as valuable as petroleum was of little or no significance.

In many developing economies there are deposits of many minerals which are not being used because of technological deficiencies. Thus, natural resources are in themselves passive in their influence on economic growth. They remain dormant and largely unknown till such time as the change in technology reveals their use-value. They acquire a dynamic character largely through changes in technology introduced by man.

Land as a Renewable and Non-Renewable Resource:

Natural resources are often divided into two categories:

(a) The exhaustible resources or nonrenewable resources,

(b) the renewable resources.

The exhaustible resources are those natural resources which when used once cannot be renewed. Natural resources such as mineral deposits of iron ore, copper, deposits of coal and petroleum get depleted as they are used by the economy. Their stocks are limited and cannot be renewed, that is, their stocks cannot be increased.

According to the data available with the Planning Commission if we assume roughly an annual average growth rate in exploitation of say about 6% to 7%, cooking-coal reserves will be exhausted by about 2150 A.D., iron ore by’ about 2050 A.D., manganese ore and chromite by about 2000 A.D. and bauxite by about 2033 A.D.

It may, however, be noted that all potential stock of these non-renewable resources may not be known at a given time and therefore their supply may increase through new discoveries as has happened in India where deposits of mineral oil and gas have been discovered at several places in the last few years.

On the other hand, renewable resources are those which go on being used again and again and year after year for production. Thus, agricultural land which is a very important natural resource can be cultivated again and again for production of food-grains and other crops without much loss of productivity.

Moreover, not only the productivity of land can be maintained but it can be signifi­cantly improved by human efforts. Thus, land in the sense of agricultural soil is renewable resource. Water resources, fisheries and forest resources are other examples of renewable resources: If some parts of the forest resources are used, they can be replanted and their stock can be increased in the long run.

It is clear from above that land in its wider meaning which includes all natural resources is in part renewable and in part non-renewable. Agricultural land, water resources, forest resources, etc. are renewable but mineral and power resources such as deposits of iron ore, coal, petroleum, etc., are non-renewable resources.

Inelastic Supply of Land:

An important characteristic of land is that it is fixed in supply. Land is a free gift from nature and its quantity is fixed by nature. Therefore, more land cannot be produced in response to greater demand for it. Whatever the rent, high or low, for the use of lands its supply to the economy as a whole remains unchanged. In other words, the supply of land to the entire economy is not dependent on the price i.e., rent for its use.

Hence, from the standpoint of the whole economy, the supply of land (which includes natural resources) is perfectly inelastic. Since supply of land is a free gift from nature and not a produced factor, cost of production has no relevance for supply. For the society as a whole, land has got no cost of production, since society did not produce it; it got it free from nature.

But the supply of land to a single use or a particular industry is not perfectly inelastic. The supply of land to a particular use or industry can be increased by the shifting of land from other uses or industries. By offering attractive rents, the supply of land for a particular use can be taken away from other competitive uses. Therefore, the supply curve of land to a particular use or industry is elastic and slopes upward from left to right.