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By Pranav K Desai

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Two most im portant factors which a developing agricultural sector contributes towards the development of other non-agricultural sectors are capital and labour. Capital Contribution An underdeveloped country that is making determined efforts to achieve economic progress faces formidable requirements for capital to finance the creation and expansion of manufacturing enterprises. These requirements are certain to outstrip the supply of funds in most of the underdeveloped countries. "Since there is scope for raising productivity in agriculture by means that require only moderate capital outlays, it is possible for the agricultural sector to make a net Economic Development and Agriculture 39 contribution to the capital requirements for infrastructure and for industrial expansion without reducing the low levels of consumption characteristic of the farm population in an underdeveloped country".

Agriculture as a Source of Livelihood Agricu lture has a greate r role in econom ic develo pment in the less develo ped countr ies as it provid es livelih ood to a vast majori ty of people living in the countr y. This figure is not signifi cant in terms of percen tages only, but more so in terms of absolu te numbe rs. The agricultural sector provid es livelih ood to about three-f ourths of the Indian popula tion, that is, seven out of every ten person s in India depen d on agricu lture. 5 per cent of the total labour force was engag ed in agricu lture and this situati on has not change d until now.

Above where OY measures quantities of corn and OX measures the amount of labour employed in agriculture. The curve AP represents the Agricultural Economics 22 average product of labour and MP, the marginal product of labour. With OM am punt of labour employed in agriculture sector, OQRM total corn is produces. Rent, according to Ricardo, is difference between AP and MP. At the subsistence wage rate Ow, the supply curve of labour WL is infinitely elastic, and the total wage bill is OWLM. e. WPTL = OQRM - ( PQRT + OWLM) Total output increases with economic development and with it the wage fund also rises.

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