The Traditional Approach to the Economics of Agriculture

Abstract

It is difficult to delineate the boundaries of agricultural economics, ranging as it does from the technical level of much farm-management work to psychology, sociology and planning. The problem is partially solved by accepting E. S. Mason’s argument (‘The Political Economy of Resource Use’, in Perspectives on Conservation, ed. H. Jarrett; Resources for the Future, Johns Hopkins University Press, 1958) that the output and consumption of food products is sufficiently different from that of manufactured goods to justify it as an area of separate study, and may necessitate intervention by government agencies. According to Mason, the essential difference between manufacturing industries and agriculture is that the latter is characterised by inelasticity of supply and demand, which causes malfunctioning of the market mechanism, resulting in widespread repercussions on the operations of the industry and those engaged in it.¹