RAYA UNIVERSITY
COLLEGE OF BUSINESS AND ECONOMICS
DEPARTMENT OF ECONOMICS
COURSE OUT LINE
Course title: Economics of Agriculture
Course code: Econ 3111
Pre-requisites: None
Credit hours: 3 hrs
Instructor: Abadi Teferi
Contact hour per semester: 48
Academic year: Semester I- 2019/20
1. Course Description and Objectives
Economics of Agriculture is a study of economic principles and their application to the problems
of agriculture. More specifically, it is an applied field of economics in which the principles of
choice are applied in the use of scarce resources such as land, labor, capital and management in
farming and allied activities. Thus, this course is expected to enlighten students with issues such
as agricultural production economics, principles of supply and demand, resource economics,
world food situation, marketing of agricultural products, and risks and uncertainties associated
with agriculture. Other topics include a survey on the nature and current status of agriculture in
Ethiopia.
Upon successful completion of the course, student will learn to
Apply a basic knowledge of the principles of economics and their application to
agricultural problems.
Scholarly describe the role of agriculture in Ethiopian and world economies.
Pin point, from economics point of view, the challenges and opportunities of the
agricultural sector in Ethiopia.
2. Contents
Introduction (3 Hrs)
1.1 Definition and scope of economics of agriculture
1.2 Historical development of agriculture
1.2 Role of agriculture in economic development
1.3 Interdependence of agriculture and industry
1
1. Economics of Agricultural Development (10 Hrs)
2.1 Structure of Agricultural System in Developing and Developed World
2.2. Stages of agricultural transformation
The need for agricultural transformation
Peasant characteristics: Subsistence farming: risk, uncertainty and survival
Mixed farming
Modern commercial farming
2.3. Conditions for agricultural development
Technology and innovation
Conducive institutional and pricing policies
Education
3. Producer Decision making (9 Hrs)
3.1 Production with single variable input
The production function
Physical Input-output relationship
Value input-output relationship
3.2 Production with two variable inputs
The production function
Input-input relationship
Least cost combination of inputs
Product-product relationship and enterprise selection
4. Agricultural marketing (6 Hrs)
4.1. marketing characteristics
4.2. Functions of agricultural marketing
4.3. marketing agents and enterprises
4.4. Integration and diversification of marketing
4.5. Transaction costs and marketing efficiency
5. Agricultural Finance (6 Hrs)
5.1. Sources of agricultural finance
5.2. Credit Worthiness Analysis
5.3. Loan repayment Plans
5.4. The old and new agricultural credit policies
6. Uncertainty and farm Decision making (5 Hrs)
6.1. Sources of Uncertainty
6.2. Decision Making under Uncertainty
6.3. Mechanisms of Mitigating risk and uncertainty
Risk-averse peasant
Drudgery-averse peasant
The Sharecropping peasant
7. Farm Decision Making Methods (9 Hrs)
7.1 Farm Budgeting
2
7.2 Linear Programming
7.3. Farm Management Simulation
7.4. Farm Strategy Decisions
Planning Stages
Cropping and Livestock Decisions
Farm Size
3. Evaluation
Students shall be graded according to a variety of activities. Composition of Final Grade will be:
Group assignment 1 – 10% Indiv. assignment 2 – 15%
Group assignment 2 – 10% Quizzes – 15%
Indiv. assignment 1 – 10% Final Exam--40%
TOTAL=100%
4. References
David L. Debertin (2012).Agricultural Production Economics Second [Link]
Publishing Company, Upper Saddle River, N.J.
Drummond E. andGoodwin J.W.(2010). Agricultural Economics, 3/E. Prentice Hall, pp408.
Forgács and Csáki (2008).Agricultural economics and transition: What was expected, what we
observed, the lessons learned. IAMO Proceedings: A Joint IAAE- EAAE Seminar,Corvinus
University of Budapest (CUB) Budapest, Hungary.
Mansfield E. and Yohe.W.W. (2003).Microeconomics: Theory and Applications Norton &
Company, Inc., New York, 11th Ed.
Nicholson W. and Snyder C(2011). Microeconomic Theory: Basic Principles and Extensions by
Thomson South-Western, Ohio, 11th Ed
Penson J.B., Capps Jr., Rosson C.P. and Woodward RT. (2009).Introduction to Agricultural
Economics [Link]-Hall, Inc., New York, 5th Ed.