L9

Question 1

Agriculture contributes to growth through

Answer 1

1. Product markets
   More productive agriculture leads to food surplus which enables industry for other products
   
   2. Capital contributions
      More tax enables financing to other sectors in country
   3. Foreign exhange contributions
      Foreign currency that can be used to import industrial goods for manufacturing
      Easy to tax export
   4. Labor and welfare contributions
      Realesed labor for industry
      Education in agriculture but then move to rural area
   5. Market contributions
      Increased demand (market) for industrial machinery
      Increased demand for other goods when higher income
      Virtuous cycle

Question 2

Effect of agriculture on poverty is determined by:

Answer 2

• Who participate in and benefits form growth in sector
Big vs small player
Poor people might benefit from cheaper food prices but if agriculture is focused in export crops it would not impact prices
• Size of agricultural sector
If sector is small improvement does not have so big impact
• Strength of economy wide linkages to other economic activities
Spillover effects
• Socio economic setting
Stage of development - if not so developed country agriculture has big impact
Topography conditions

Question 3

Optimism theory for population growth and food production

Answer 3

Production growth enhances food production

• Demand driven theory (increased demand for innovation will create innovation)
• Supply-driven theory (increased population will increase supply of innovative people)

Question 4

Pessimist theory for population growth and food production

Answer 4

Food production constrains population growth. Food production does not keep up with growth.
Population grows at exponential rate
Malthusian catastrophe occur = war or something that reduce population to rate that can be sustained by food production

Question 5

Determinants of food demand

Answer 5

Population size
Urbanization (Change in food habits, they become food buyers)
Income (Demand increase with income, Engel’s law, Change in consumption, other goods, better quality, ecological)
Non-food users (Energy, biofuels, Animal feed)

Question 6

Determinants of food supply

Answer 6

Inputs (Water, land, seeds, fertilizers)
Agricultural productivity (Quality of land, water, seeds, Water use efficiency, Crop characteristics, Type of fertilizers etc.)

Question 7

Future challenges of production

Answer 7

Population grows at exponential rate
Agriculture yield is slowing down
Climate change negatively impact productivity

Question 8

Solutions for future production

Answer 8

Increase agricultural yields (technology, input-saving systems)
Reduce environmental impact on agriculture
(Reduce food loss =accidental loss, falling out of truck etc.)
(Reduce food waste = not eat food that not looks perfect etc.)
(By reducing food waste and loss environmental impact can be reduced because producing and transporting the food impacts the environment, and it will also increase food supply. Can do this by improving storage, re-use, animal feed, creating food from byproducts and composting and change behavior of consumers)
Technological (Changing diets - nudging, Price mechanisms = price that includes cost for impact on environment, Consume more resource efficient food (less meat))

Question 9

Three important elements in agriculture value chain

Answer 9

1. Chain as operation and coordination between actors
   
   2. Size of actors
2. Value (quality demand from customers)