Agricultural economics

Agricultural economics originally applied the principles of economics to the production of crops and livestock — a discipline known as agronomics. Agronomics was a branch of economics that specifically dealt with land usage. It focused on maximizing the yield of crops while maintaining a good soil ecosystem. Throughout the 20th century the discipline expanded and the current scope of the discipline is much broader. Agricultural economics today includes a variety of applied areas, having considerable overlap with conventional economics.

Evolution of Agricultural Economics:

The field of agricultural economics has evolved over many decades. One scholar summarizes its development as follows:

"Agricultural economics arose in the late 19th century, combined the theory of the firm with marketing and organization theory, and developed throughout the 20th century largely as an empirical branch of general economics. The discipline was closely linked to empirical applications of mathematical statistics and made early and significant contributions to econometric methods. In the 1960's and afterwards, as agricultural sectors in the OECD countries contracted, agricultural economists were drawn to the development problems of poor countries, to the trade and macroeconomic policy implications of agriculture in rich countries, and to a variety of production, consumption, and environmental and resource problems."[4]

Agricultural economists have made many well-known contributions to the economics field with such models as the cobweb model,[5] hedonic regression pricing models,[6] new technology and diffusion models (Zvi Griliches),[7] multifactor productivity and efficiency theory and measurement,[8][9] and the random coefficients regression.[10] The farm sector is frequently cited as a prime example of the perfect competition economic paradigm.

Since the 1970s, agricultural economics has primarily focused on seven main topics, according to a scholar in the field: technical change and human capital; agricultural environment and resources; risk and uncertainty; consumption and food supply chains; prices and incomes; market structures; and trade and development.[11]