COMCEC Agriculture Outlook 2016
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1. Macro Agricultural Indicators
Macro agricultural indicators provide an overview of agricultural sector in an economy.
They take the big picture and show the overall agricultural performance in a country. At a first
glance, the importance and size of agriculture sector, the progress in agricultural development,
and the main social and economic trends can be understood by looking macro agricultural
indicators. While they give a great idea of the sector, they also present the comparison of
agriculture sector and other sectors, and agricultural performance in the world.
The value of total agricultural output, the share of agricultural production in an
economy, the growth rate of the sector, agricultural population, contribution of agriculture
sector to total employment, the share of agriculture in total export and import, and
export/import ratio are useful indicators to assess the performance of agriculture sector in an
economy.
1.1. Agricultural Value Added
The agriculture sector in developing countries is one of the leading sectors in terms of
its contributions to income. It is also the most effective sector in generating income for the
poorest segment of the population, which shows its crucial importance for their welfare.2
Suitability of ecological conditions, availability of natural resources and human capacity to
carry out agricultural activities, and existing of production and marketing infrastructures play
a crucial role to create agricultural output and income. Therefore, agriculture sector has a
critical importance for many OIC Members; especially for the LDCs and the level of dependence
on agriculture for overall economic growth is very high in many of the Member Countries.
The significance of agriculture in national economies varies extensively. While in many
least developed countries, agriculture accounts for more than 50 percent of GDP, in many high
income economies such as the members of
(OECD), agriculture constitutes less than 1.5 percent of overall economic output.
Thus, the role of agriculture in overall economic growth will vary from country to country, and
in general agriculture is more important in poorer countries. In other words, in the least
develop countries one of the major drivers of overall economic growth is agriculture. This is
largely due to higher income elasticity of demand for non-agricultural goods and services. As
their incomes grow, consumers increase their consumption of manufactured goods and
services faster than their consumption of agricultural goods.3 This characteristic of the
agriculture can be clearly observed in the OIC as a whole in line with the theory of economic
development.
2 Comcec, 2012
3 Cervantes-Godoy and Dewbre