The agricultural sector is more important in the economies of those countries where there are opportunities for agricultural development. The life of society and the prosperity of the state directly depend on this industry. The development of the agricultural sector is influenced by several interrelated factors.
The main factor on which the level of agricultural development depends is support from the state. In almost all countries, this sector of the economy needs subsidies, allowing, in a market economy, to eliminate the disparity in prices for agricultural products. Funds are needed to create modern production facilities, master new technologies, and purchase equipment.
It is believed that the main factor of production in this area of the economy is land resources. The presence of vast areas suitable for agriculture and livestock raising increases the competitiveness of the country's agriculture in the world market. In order for the land to remain fertile, it must be used rationally, carrying out regular restoration work.
Another condition for the efficiency of agriculture is natural and climatic conditions. Human activities on earth are often associated with unfavorable conditions: droughts, prolonged rains, frosts on the ground. The harsh climate can turn the area into an area of risky farming. Soft conditions make it possible to develop the industry sometimes throughout the year.
In the agricultural sector, the depreciation of fixed assets occurs much faster than in most other areas of activity. Agricultural work is risky, often dependent on changing external conditions and harmful factors. The risk arises, for example, when using pesticides and mineral fertilizers. State insurance helps to cope with these problems, which is becoming one of the economic factors supporting agriculture.
The state of science and technology greatly influences the activity of the agro-industrial sector. As a rule, innovations in this area are introduced slowly and take a long time to take root. And yet, both an increase in the productivity of rural labor and an increase in production volumes depend on scientific and technological progress. Scientific and technological progress is also becoming the main factor in reducing the cost of food products.
The next factor relates to the peculiarities of the market structure of the economy. A healthy competitive environment is essential for the development of agriculture. This area in developed countries is regulated by special state antimonopoly structures. Their task is to prevent the rise of monopolies and to promote the all-round development of small and medium-sized producers. These measures allow keeping prices for agricultural products at an acceptable level.