What does an agricultural economist do?
The roots of agro-economy can be traced back to ancient Egypt, arguably the first agro-economist Joseph. Joseph interpreted Pharaoh’s dream in Egypt and accurately predicted seven years of feasting and seven years of famine.
What is agricultural economics?
If you were to say that “agricultural economics is the application of economic principles to agriculture” you might be technically correct – but in a narrower context. This definition does not recognize the economic, social and environmental problems identified by the agricultural economics profession.
It would be a mistake to think of the agricultural economy as limited to agriculture and animal husbandry. These operations represent only 2 to 4% of the national product.
Indeed, the field of agricultural economy extends far beyond the farm to expand the wide range of activities of food and fibre.
As can be seen from this broad view, agriculture represents about 12 to 15% of the national product.
Agricultural economics is an applied social science that deals with the use of scarce and natural resources in the production, processing, marketing and use of food and fibre products by producers, consumers and societies.
Microeconomics vs. Macroeconomics
Like most branches, the field of economics can be divided into several branches.
Microfinance and macroeconomics are the two main branches of economics. Microeconomics focuses on the economic activities of individuals or specific groups of individuals.
For example, macroeconomists are interested in goods and services claimants and manufacturers of goods and services and in economic behaviour in pricing these products and services. Macroeconomics focuses on broad aggregates such as the growth of the country’s gross domestic product (GDP), the gap between the potential GDP of the economy and its current GDP, and closing trade between unemployment and inflation.
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For example, macroeconomics seeks to identify fiscal and monetary policies that can reduce inflation, boost the national economy, improve the country’s trade balance (improved minus imports), and reduce national depreciation.
Macroeconomics is clearly responsible for the interrelationships between the nation’s labour, commodity and money markets and for the economic decisions of governments and foreigners. Despite the differences between microeconomics and macroeconomics, there is no conflict between these two branches. After all, the overall economy is certainly affected by events arising in individual markets.
A caution: caution must be exercised when generalizing the overall or macroeconomic consequences of an individual or a small eccentric event. Otherwise, we run the risk of making a structural error, which means that what is needed in an individual situation is not entirely true.
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For example, suppose Walt Whitman adopts a new technology that doubles his wheat production. If the United States and thousands of other wheat growers
The Scope of Economics
Two frequently used clichés describe economic problems: “You can’t keep your cake and you can’t eat too much of it” and “There’s no free lunch.” Since we can’t get what we have – individually or collectively – we have to make choices. For example, consumers must decide to spend with a budget in mind.
Their goal is to maximize the satisfaction they receive in spending and saving, taking into account costs and rates, starting from allocating their time at work and leisure and allocating their disposable income.
Producers must decide on production, marketing and investment with a budget in mind. Their purpose is to make a profit on the company’s current resources and current relative prices.
After considering the costs and benefits involved, society also needs to choose how to allocate scarce resources more efficiently through various government programs.
What Does An Agricultural Economist Do?
In a complex market economy like the United States, the United States has a long and rich history of applying economics to agriculture. We can summarize this activity by discussing the activities of agricultural economists at the microeconomic level and at the macroeconomic level. Below are the roles that agricultural economist play.
- The Role of Agricultural Economist in Microeconomic Level
Microeconomic economists are concerned with problems related to the production, processing, distribution and use of resources in food and fibre systems.
Manufacturing economists examine companies’ responses to the demand and supply of resources.
Market economists focus on the flow of food and fibre through market channels to their final destination and pricing at each stage.
Financial economists are concerned about the financing of companies and the provision of capital to these companies.
Resource economists focus on the use and conservation of the country’s natural resources.
Other economists are interested in creating government programs for specific products that will support farmers’ incomes and provide food and fibre products to low-income consumers.
- The Role of Agricultural Economist in Microeconomic Level
Agricultural economists involved at the macro level are interested in how agriculture and agro-industries affect national and global economies and how events in other sectors affect these businesses and vice versa. For example, agricultural economists hired by the Federal Reserve need to evaluate how policy changes affect the prices of various food products.
Larger economists interested in research can use computer models to analyze the direct or indirect effects of specific monetary or fiscal policy proposals in the computer business sector.
Macroeconomists employed by multinational food companies examine foreign trade relations for food and fibre products. Others solve problems in international development.
- Marginal analysis
Economists often worry about what happens in margins. A macroeconomist can focus on how adding another input by a business, or buying another product by a customer, can change the economic well-being of the business and the customer.
On the other hand, a macroeconomist can focus on how changes in personal income tax rates can affect domestic production, interest rates, inflation, and the federal budget deficit.
The keyword in this example changes, or more precisely, how changes in prices, quantities, etc. will affect other prices and quantities in the economy and how this situation can change the economic well-being of consumers, businesses. And the overall economy.
The following chapters include a discussion of marginal analysis to better understand the economic decisions made at the firm, household, or economic level.
An agricultural economist specializes in understanding the economic activity within agricultural markets. The research statistics and data pertaining to the agricultural industry and project possible patterns and trends within the economy. Must hold a graduate degree in economics.
Essential Information About Agricultural Economist
Agricultural economists examine data and statistics to identify trends and make predictions for the agricultural market. These professionals can work in a variety of agricultural sectors and often perform their own research. Education in this field is variable but can include formal education, typically a master’s degree.
Required Education Variable; most often a master’s or Ph.D. degree in economics, but sometimes a bachelor’s degree is acceptable Projected Job Growth (2018-2028)* 8% (for economists) Median Annual Salary (May 2018)* $104,340 (for economists)
Source: *U.S. Bureau of Labor Statistics
Job Description for an Agricultural Economist
Agricultural economists employ principles and concepts of economics to learn more about the supply and demand of goods and services in the agricultural sector. This includes analysis of production, consumption, and distribution. These professionals often choose an area of expertise, such as crop and livestock sciences, environmental economics, policy analysis, agribusiness, food safety, international trade, rural development, or marketing systems.
Agricultural economists typically work with agricultural data and statistics in office settings, but they may travel as part of a research group to collect information. Additionally, they may teach and conduct research at colleges and universities with undergraduate or graduate programs in agricultural economics.
Duties of an Agricultural Economist
Agricultural economists examine data to determine patterns and trends in economic activity. They also conduct research to collect data and market samples. They use the predictions obtained from their research to inform, influence, and improve the business decisions of clients and agricultural organizations. As agricultural economists better determine market indicators like farm income and food prices, they study many areas, such as:
- Natural resource management
- Agricultural policy
- Food science
- Farm credit
- Agricultural marketing systems
- Commodity exchanges
Whether they want to offer a short-term forecast or long-term prediction for some part of the agricultural market, these professionals must have an excellent understanding of agricultural production and relevant economic forces. This involves devising data collection methods and using appropriate statistical methods to obtain useful information. Agricultural economists may also communicate their findings at seminars and conferences to encourage further research or investment in a particular area.
Agricultural Economist Salary
In May 2018, the BLS reported that workers in the 90th percentile or higher earned $182,560 or more per year, whereas the bottom 10th percentile earned $58,130 or less per year. The highest paid economists worked in management, scientific, and technical consulting services; however, the legal services was the largest employer of economists as of 2018.
Although some positions require only a bachelor’s degree in economics, most agricultural economist positions require a master’s or Ph.D. in the field. The courses aspiring agricultural economists could study include food science, agricultural policies and marketing systems, and farm credits. These professionals need to have a solid understanding of agriculture, statistics, and market forces in order to make their projections.