Agricultural growth of an economy is directly linked with the economic development of the country. The reason is that when the agricultural reforms are provided to the farmers, they get more able to invest in inputs and produce much better output. In this way the economy gets stable in its agricultural output and instead of importing the economy can export the agricultural goods. This makes trade stronger. Now, through exports the economy gets more foreign exchange and its reserves start increasing. Moreover, inflation goes down and the value of goods and services are improved in the world market. In this way the economy moves on the way of economic development.
You need the ability to feed the population otherwise you will have no one to be part of the economy as they would all die from starvation. Agriculture gives the economy the ability to survive on it's own and eliminates the dependency of others for food.
A rise in rural purchasing power due to agricultural development is a great stimulus to industrial development. The market for manufactured goods is very small in developing countries, where peasants, farm laborers and their families male seventy to eighty percent of the total population, and are too poor to buy industrial products. The basic problem thus is low investment returns caused by the small size of the market. Increase in rural purchasing power caused by expansion of agricultural output and productivity will tend to raise the demand for manufactured goods and extend the size of the market. This will lead to the expansion of market.
Product contribution:
A developing country is likely to specialize in the production of a few agricultural commodities for export. as output and productivity of the exportable goods expand, their export increase and resulting larger foreign exchange earnings. Thus agricultural surplus leads to capital formation when capital goods are imported with this foreign exchange. As development gains momentum due to industrialization, the proportion of agricultural export. In country's total exports is likely to fall, because they are now needed in larger quantities for domestic production of imported articles.
Foreign exchange earnings can be used to increase the efficiency of existing industries and to establish newer ones by importing scarce raw materials, machines, capital equipment and technical know how.
A self depend agriculture economy requires no foreign dependence in meeting it's food needs with no foreign currency lose or import take place of such goods. It feeds Industrial sector with cheap raw material. It brings in a lot of demand for goods and services produced by other sectors of economy with increase in farmers wealth. Agriculture sector is the backbone of any economy.
