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Investing in the Agribusiness Value Chain and Changes in GDP

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  • Krupa, Dorota
  • Walczak, Damian

Abstract

The goal of the research was to present the role of investing in the agribusiness value chain as a factor impacting the change in the share of agriculture in GDP and, secondly, to show the dependencies between the share of the agricultural sector in GDP and the level of GDP per capita. In the article the authors drew attention to a potentially conflicting issue connected with the development of agriculture. On the one hand, investment in agribusiness and the rural sector contributes to the development of rural areas; on the other hand, countries with a large share of the agricultural sector in GDP have a much lower GDP per capita than countries with a low share of the agricultural sector in GDP. Therefore, it seems significant not to make investments only but to place them properly in the appropriate links of the agribusiness value chain. It could be better not to invest directly in agricultural areas, but in other agribusiness stages, decreasing the share of the agricultural sector in GDP. Increasing the share of the services and manufacturing sectors, which are directly or indirectly related to the agricultural sector can contribute to the decline in the share of agriculture in GDP. These changes can be made by re-training of persons connected with agriculture and searching for jobs for them in large urban areas or by enabling such persons to create jobs in the agriculture-related sector or by establishing non-agricultural companies in rural areas.

Suggested Citation

  • Krupa, Dorota & Walczak, Damian, 2014. "Investing in the Agribusiness Value Chain and Changes in GDP," Roczniki (Annals), Polish Association of Agricultural Economists and Agribusiness - Stowarzyszenie Ekonomistow Rolnictwa e Agrobiznesu (SERiA), vol. 2014(3).
    • Handle: RePEc:ags:paaero:204919
    DOI: 10.22004/ag.econ.204919
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    References listed on IDEAS

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    4. Robert P. King & Michael Boehlje & Michael L. Cook & Steven T. Sonka, 2010. "Agribusiness Economics and Management," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 92(2), pages 554-570.
    5. Richard L. Meyer, 2011. "Subsidies as an Instrument in Agriculture Finance : A Review," World Bank Publications - Reports 12696, The World Bank Group.
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